Omuthiya — The Northern Regions Electricity Distributor (Nored) insists that the company is solvent amid concerns that the entity is financially crippled and failing to honour payments to creditors.
The company's chief financial officer (CFO) Ndapandula Tshitayi at an annual general meeting (AGM) with stakeholders held last week at Mokuti Lodge said the entity boasts a total asset worth N$2.5 billion as of 2018.
"The company has been doing fine and is not insolvent. For the financial years stemming from 2014, it indicates that the net asset value grew from N$646 million in 2014 to N$1.5 billion in 2018 based on the draft financial report yet to be finalised," said Tshitayi.
Nored paid about N$102 million in taxes in 2018 compared to N$12 million in 2014, which the CFO said was a clear testimony of the company's good performance as that meant it was also making more money hence huge payouts. Completed audit reports of 2016 and 2017, indicate that profit before tax of N$28 million and N$130 million was achieved, respectively.
"Therefore, now we are busy with the audit report of 2018, which we anticipate to be concluded by June, while those for 2019 and 2020 will also be carried out thereafter," further stated Tshitayi.
Media reports suggested that Nored was unable to honour payments to its creditors, including N$67 million to NamPower, but this was disputed by an executive of NamPower, who on condition of anonymity, said all dues have since been paid, and that future payment methods have been arranged.
It was also reported that Nored's financial woes were so severe that it was struggling to raise enough funds for employee salaries.
On the contrary, former Nored chairperson Sacky Kayone, in his farewell remarks, said the economic downturn and Covid-19 pandemic had adverse effects on its 2019/2020 financial year. Other challenges, he said, was vandalism of property as well as theft of copper wire.
"Our cash flow was affected by the pandemic due to delayed delivery of materials as borders were closed. Non-payment of consumer bills as well as migration of customers from business prepaid also reduced our finances," stated Kayone, who had been a director for about 15 years.
On a positive note, he said, a total distance of 207.15 kilometres was energised and added to the network grid to the value of N$38.3 million of medium voltage and a further N$60.9 million spent on low voltage connections.
"In 2015, the board of directors approved an electrification programme to create access to electricity for peri-urban areas and growth points with an annual budget of N$10 million. Therefore, for the year under review, ended June 2020, 13 connections were completed at a cost of N$6.2 million across our areas of operations. This presented an opportunity to 3 710 communities with access to the grid, although only 46% have made connections. I would like to encourage community members to connect," he added.
Nored chief executive officer Fillemon Nakashole informed stakeholders that after being castigated for delayed service provision, Nored has since constructed a warehouse in Ondangwa where it intends to store materials for connections.
Consumers have been frustrated by delayed connections over prolonged periods, which can go up to six months, despite having fully paid for the service.
"With this warehouse, we will try and store materials, cables and transformers, so that if a customer has fully paid, we can easily instal if all things are available, as opposed to now where we order from abroad which also delays the process as we sometimes wait for three to six months," he added.