Refocused CEF strategy yields improved financial results.
Tuesday, 08 November 2016
CEF SOC Ltd, South Africa’s national energy utility returns to profitability and celebrates a historic unqualified audit opinion issued by the Auditor General (AG).
Highlights for the 2015/16 financial year:
Recorded a net profit of R259 million (2014/15: loss of R14.2 billion)
R600 million invested into the renewable energy programme
R4.5 billion B-BBEE committed
R52.4 million spent to uplift most vulnerable communities
The normalised profit after tax is R2.8 billion
R7.4 billion generated from operations
Cash balance sitting at R16.2 billion
R2.2 billion invested in growth projects
Group balance sheet grew by 13% from R31.3 billion (201415) to R35.4 billion (2015/16)
Group generated revenue totalling R20.7 billion
Speaking at the release of the 2015/16 annual integrated financial results in Parliament today, Acting-Chief Executive of CEF, Mr Godfrey Moagi said “following an extensive implementation of the group’s strategy, the Group returned to profitability despite the low global oil prices. We focused our energies in stabilising the business operations of the Group geared to strengthen our long term financial sustainability”.
Moagi added: “Despite the massive fall in the crude oil price, the Group generated cash of R7.4 billion from operations and invested R2 billion into capital expenditure projects. For the period under review, the Group had amassed a cash balance of R16.2 billion, which in the future will be deployed into sustenance and growth projects.
The improvement in performance was largely due to the increase in demand for crude storage, and improved performance of Rompco, an associate company which owns gas pipeline from Mozambique, and an increase in coal sales.
During the year under review, the Group raised a R345 million loan to fund the capital expenditure for the PetroSA operations. The Group has appointed a panel of transaction advisers who will assist in raising R3.4 billion to support mining projects. An amount of over R1 billion has been set aside for two renewable projects (gas-to-power) that have been approved by the Board to contribute to the security of energy supply in South Africa.
The increase in revenue of R2.2 billion is attributable to income from rotation of strategic stock, tank rental income and coal sales.
“However, the Group’s comprehensive income for the year under review was negatively impacted by a loss of R764.000 from PetroSA due to a decrease of R2.3 billion in revenue. This decrease is attributable to low production volumes at Mossel Bay Gas-To-Liquids Refinery and a decrease in the basic fuel price.
In addressing these institutional challenges, we have been hard at work developing a turnaround plan for PetroSA. We’ve also been engaging with the relevant statutory bodies with a view of finding a solution to the decommissioning liability,” he added.
The Group is also pleased to announce that other entities within the CEF SOC Ltd fared much better year on year. The Strategic Fuel Fund (SFF) generated revenue totalling R4.5 billion, State mining company AEMFC also recorded an unprecedented upswing in performance that resulted in an increase in revenue to R376 million (2014/15: R235 million).
Gas development state agency (iGas) generated a profit of R148 million. The company has assets valued at R2.93 billion and at year end held cash reserves of R535.1 million.
“Over the next few years, the Group will be making strategic investments to put the company back into the growth trajectory. PetroSA will spending over R3bn with plant modifications and upgrades to improve refining capacity. This will also include an investment of about R500 million in Sales and Marketing assets to enhance its presence and customer service. AEMFC has appointed a panel of transaction advisors who will assist in raising R3.4 billion capital for mining project” Moagi said.
For more information, contact:
Corporate Affairs Manager
Cell: 071 485 6856