South Africa’s Eskom profits halved from a year ago

South Africa’s power producer Eskom said Tuesday that profits in the last year fell 49 percent, as rolling power outages continued to take a toll on the continent’s most advanced economy.

The group reported a net profit for 2014/15 of 3.6 billion rand ($280 million, 253.6 million euros), down from 7.1 billion rand just a year earlier.

The state-owned power utility blamed the plummet on a 0.7 percent decline in electricity sales, a third of which were caused by the rolling blackouts imposed across the country to ease the pressure on its stable of ageing and poorly-maintained power stations.

Known in South Africa as load shedding, the scheduled power cuts also led to primary energy cost increases of 13.6 billion rand, as Eskom turned to independent power producers to lighten the strain on the system.

The company is also struggling with a debt of billions in unpaid fees from local municipalities, which increased by 2.4 billion rand in the last financial year.

“The future of our company is dependent on a solid financial foundation,” the company’s report said.

South Africa’s ongoing electricity woes have undermined economic growth, disrupting the manufacturing and mining sectors especially hard.

“Electricity shortages are costing the economy close to one percentage point in growth and remains a big challenge,” President Jacob Zuma told a separate media briefing Tuesday.

In May, Statistics South Africa fingered the rolling power cuts for slowing the country’s growth to a disappointing 1.3 percent in the first months of 2015.

Eskom generates more than 95 percent of South Africa’s electricity and has been weakened by years of underinvestment, ageing coal-fired infrastructure and governance problems.