Mineral and Petroleum Resources Committee Welcomes Significant Turnaround in Central Energy Fund’s Financial Performance

 

The Portfolio Committee on Mineral and Petroleum Resources has welcomed the Central Energy Fund’s (CEF) marked improvement in financial performance for the 2024/25 financial year, following the entity’s briefing to the committee on Tuesday on its annual report.

The CEF Group reported a net profit of R553 million for the year under review, representing a 194% turnaround from the previous financial year’s R552 million loss. The improvement is attributed to stronger cash generation across the Group as well as the accounting profit realised from the acquisition of the SAPREF Refinery, which has significantly strengthened the Group’s position.

Committee Chairperson Mr Mikateko Mahlaule said that the committee is encouraged by the progress made. “The profitability recorded this year demonstrates that strategic interventions, including the acquisition of SAPREF Refinery, are beginning to yield tangible benefits for the Group,” he said.

Despite the improvement in profitability, the CEF Group reported a decline in overall revenue compared to the 2023/24 financial year. This reduction is due mainly to PetroSA securing lower volumes and the African Exploration Mining and Finance Corporation (AEMFC) facing Eskom’s intermittent suspensions of its coal supply contract during the reporting period.

Mr Mahlaule appealed to the Department of Mineral and Petroleum Resources to intervene in the ongoing matter between PetroSA and the South African Revenue Services to create an enabling environment for the company to focus on its mandate.

The Group’s assets increased by 6% (R2.2 billion) while liabilities rose by 7% (R1.8 billion). The committee also noted the 16% growth in net asset value since 2020/21, as well as improvements in cash balances, which increased from R13 billion in 2023/24 to R16 billion in 2024/25, a 21% rise.

Mr Mahlaule said the financial indicators presented show encouraging upward trends, saying that the committee acknowledge the reported gains of 2.4% in profit margins and 8.5% in cash balance improvements across the past five years.

On audit outcomes, the CEF Group reported that two of its 10 entities have maintained clean audits since 2020/21, while iGas regressed from a clean audit in the previous financial year to an unqualified audit with one material finding.

Eight entities recorded material misstatements in their annual financial statements, though four of these had only a single finding. The Group has successfully closed 10 material findings since 2020/21, with only one outstanding finding in the year under review.

Although welcoming measures outlined to strengthen internal controls, including capacitating the financial accounting unit, the committee emphasised its expectation for continued governance. It was firm on its long-held view that all entities within the Group must achieve clean audits.

The committee commended the CEF Group for its continued efforts and reiterated its commitment to ensuring that the entity fulfils its mandate of securing South Africa’s energy supply through sound governance, accountability and prudent financial management.

Distributed by APO Group on behalf of Republic of South Africa: The Parliament.