…as employee costs are almost N$1 billion
NamPower’s operational profitability has worsened compared to the previous financial year recording an operating loss before net finance income of N$2.3 billion, Board Chairperson, Daniel Motinga said in the power utility’s recently released annual report.
Motinga also noted that for the first time in many years, even EBIDTA came out negative, a serious blemish on the Group’s performance scorecard.
“One of the key cost drivers is employee related costs, which reduced from N$996.6 million in the previous year, to N$992.5 million for the 2021/2022 financial year. The decreased expenditure was primarily due to no salary increases granted to employees as well as a decrease of 2.7% in the head count (from 1,165 to 1,134),” he said.
He went on to say that this reporting cycle has seen revenue flatlining against the backdrop of significantly expensive electricity imports.
“The Group’s capacity to augment foreign currency denominated imports with local production was severely curtailed by limited generation by the Ruacana plant. The combined impact of Angola’s large water infrastructure developments in the catchment area along with relatively low rainfall in southern Angola contributed greatly to reducing Ruacana’s already limited capacity to a mere 781 GWh of energy generated during the reporting cycle, as opposed to 1,505 GWh generated in the 2019/20 financial year, he said adding that Ruacana is normally a significant contributor to NamPower’s in-country generation capabilities.
Consequently, there is a strong negative correlation between our cost of sales and local generation, Motinga added.
“The cost of electricity supply increased by nearly 14% from N$4.5 billion to N$5.1 billion. Ruacana produces electricity at comparatively low cents per kilowatt hour and thus impacts profitability positively when all turbines are operating optimally. I have pointed out last year that a significant part of the current power generation and distribution investment plan is to de-risk the excessive reliance on imports while simultaneously augmenting the importance of Ruacana. This is a key deliverable for future reporting cycles,” he said.