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Large and small businesses in South Africa are feeling the effects of load-shedding on their performance, with one losing R400 million in income and another spending R138 million in additional costs to deal with the power cuts.
City Press spoke to The Foschini Group’s (TFG) CEO, Anthony Thurnström, who said it lost around R400 million in income during two weeks of stage 5 and 6 power cuts in September 2022.
Bloomberg recently reported that Checkers owner Shoprite Holdings said the group has to spend an additional R100 million a month on diesel to keep its lights on during stage 5 and 6 rotational power cuts.
“At load shedding stages five and six, it comes at significant cost,” it said.
JSE-listed poultry group Astral Foods told City Press that it spent an additional R338 million — split R138 million for extra costs and R200 million for alternative energy sources and water storage — in the year ended 30 September 2022.
Late Saturday night, Eskom announced an immediate escalation from stage 2 to stage 4 power cuts, stating that the higher load-shedding level would continue until 05:00 on Monday.
2022 has been South Africa’s most intense year of load-shedding, with power cuts in September alone being worse than the entirety of 2020.
EskomSePush data revealed that by July, this year was already South Africa’s worst regarding rotation power cuts, and there were still 170 days to go.
Council for Scientific and Industrial Research (CSIR) survey data shows that small and medium businesses in South Africa appear to be reducing their reliance on Eskom.
35% of respondents were still wholly dependent on Eskom power — a significant decline from 60% three years ago.
62% of respondents said they were mostly dependent on the power utility, compared to 75% previously.
Interestingly, the survey revealed that 20% of respondents don’t rely on Eskom power at all. The figure remains the same as three years ago.
The CSIR surveyed 478 small and medium-sized companies in South Africa, with the respondent pool having a median income of R300,000 a month.
On average, power cuts cost small and medium-sized companies R8,000 a month in loss of income, R5,000 per month for alternative power sources, and R1,250 monthly to repair damage caused by load-shedding and power surges.
South Africa’s mobile network operators are also running up significant costs trying to fight the effects of load-shedding.
When Eskom cuts power to a block, cellular towers in the area also lose power supply, meaning mobile networks had to install battery backups or generators for their sites.
While this alone can be very costly, mobile networks have to fork out more for security to prevent the theft and vandalism of their backup systems.
In May 2022, Vodacom revealed that it is spending more than R1 billion a year to fight load-shedding.
“When it comes to power outages, we spend over a billion rand a year on batteries,” Vodacom Group CEO Shameel Joosub said.
Joosub said the operator tries to ensure that its towers have sufficient battery backups to keep its network online.
“Creating resilience is the single biggest issue that we have today in terms of South Africa’s network performance,” he stated.
“We are constantly having to improve the standby time. First, it was four hours, then it became six hours, then eight hours.”
MTN’s quarterly trading update for the three months that ended September 2022 revealed that load-shedding had impacted its performance significantly.
The mobile operator reported service revenue of R10.15 billion — a slight improvement over the R9.93 billion in the third quarter of 2021 (Q3 2021).
MTN attributed the relatively flat service revenue growth to trading environment pressures and load-shedding.
“This result was delivered against high inflation, rising interest rates, unemployment and unprecedented load-shedding, which negatively impacted the overall network availability and some business functions,” the company said.
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