Eskom posted a R3.6-billion net profit for the 2009/10 year, the electricity parastatal said on Wednesday.

The previous year the utility had reported a R9.7-billion loss.

Revenue had increased by 31 percent to R71-billion in the 2009/10 year from R54-billion in 2008/09, the utility said.

This was due to an increase in Gigawatt hours sold and the National Energy Regulator of SA's (Nersa) decision in June 2009 to raise tariffs by 31 percent, Eskom said.

Commenting on the results, Eskom's finance director Paul O'Flaherty said that the previous year Eskom had sold electricity below operating costs and therefore it had incurred a loss.

The parastatal's greatest challenge remained its funding gap.

"Firm up" Eskom's credit profile

"However, we are at advanced stages of solving the issue," O'Flaherty said.

Eskom had researched the international bond market and believed that it offered opportunities.

"We have a government guarantee of R176-billion and of that we have utilised R117-billion so there is R60-billion left of that guarantee."

O'Flaherty said the R60-billion would be used to "firm up" Eskom's credit profile.

"We must maintain our BBB+ credit rating ? it has to be preserved."

Eskom to benchmark itself

In addition to relying on the international bond market, Eskom also intended to implement internal cost savings of R20-billion over seven years.

This, however, would not be attained through retrenchments.

"We must rather be efficient in the way we do things," O'Flaherty said.

He stressed that Wednesday's results were preliminary results.

"The full financial statements will be published later."

He said Eskom was trying to benchmark itself against the very best companies.

"That means listed companies... and releasing preliminary results is a norm with them... so we have released these results just to let everyone know where we are."