Mozambique: EDM posts around US$27.1 million loss in 2019

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Mozambique: EDM posts around US$27.1 million loss in 2019

10:02 CAT | 10 Dec 2020

in file CoM

Although Electricidade de Moçambique – EDM argues that, in 2019, it secured “optimistic results”, the fact is that, in the last financial year, the company with the monopoly of the distribution and sale of electricity in Mozambique, recorded another loss, this time of around two billion meticais (US$27.1 million at current exchange rates).

This scenario has been repeating itself for five years now, allegedly because of investments in the production, acquisition and distribution of energy.

In its 2019 Annual Report and Accounts, published a few days ago, EDM’s Fiscal Council states that, in fact, the loss represents a reduction of 61.5% compared to 2018, when the company recorded an estimated 3.4 billion meticais.

EDM’s balance sheet for 2019 shows that the company’s total assets stood at 228.6 billion meticais until 31 December of that year (compared to 215.2 billion meticais in 2018), against a total liability assessed at 155.5 billion meticais (compared to 129.4 billion meticais in 2018).

Loans obtained by the company amounted to just over 551 million meticais in 2019, a reduction when compared to 2018, in which the debt reached 1 billion meticais. EDM’s equity, in turn, fell from 85.8 billion meticais in 2018 to 83 billion meticais in 2019.

EDM’s Board of Directors, Fiscal Council and independent auditor, Ernest & Young, agree with these results and have no doubt that that public company will continue to operate.

The independent auditor emphasises, however, that “(…) due to the declared pandemic of Covid-19, there has been, in 2020, a significant instability in the financial markets and in economic activity, whose future impacts are not quantifiable at this time”, but states that its “opinion is not changed in relation to this matter”.

By Evaristo Chilingue

Source: Carta de Moçambique