Eskom’s profit surges to R24.3bn as recovery plan boosts reliability and investor confidence

South Africa’s state-owned power utility Eskom reported a sharp rise in interim profit on Friday, saying continued execution of its turnaround plan had strengthened both operational stability and financial sustainability, with profit after tax climbing to R24.3 billion in the first six months of its 2026 financial year.

Eskom, which has for years struggled with plant breakdowns, chronic under-investment and mounting debt, said profit before tax rose 41% to R32.5 billion from R23 billion a year earlier, while Ebitda grew 11% to R68.5 billion. The utility said the improved results underline momentum built since the implementation of a multi-year recovery plan adopted in 2022.

Loadshedding, which has hobbled Africa’s most industrialised economy for more than a decade, was limited to only 26 hours over evening peaks on four days during the period, with no outages implemented at all since May 15, 2025. The company credited a combination of better plant performance, incremental new capacity and targeted distribution-level interventions for the improved energy availability.

Kusile Unit 6, adding 799 MW of baseload capacity, entered commercial operation during the period, while the long-awaited return to service of Medupi Unit 4 contributed another 720 MW. The utility said these additions helped offset the impact of persistent non-technical losses, including illegal connections and electricity theft, estimated at 7.9 TWh and representing R17.5 billion in lost revenue.

“These unaudited interim results demonstrate that our annual results for FY2025 were not a once-off achievement and that our progress in turning around operational and financial performance, supported by government and stakeholder collaboration, is positioning Eskom for a sustainable future. When this Board took over in October 2022, we found an organisation in crisis. These results reflect how strong leadership and expertise have guided Eskom’s 42 000 skilled employees to deliver the recovery by going the extra mile. Morale is at its highest in years and our people are now proud again to say who they work for. Although this Board’s term ends on 30 November 2025, I believe that we have laid a solid foundation for the incoming Board to build on and position Eskom for the future,” said Eskom’s Chairman, Mteto Nyati.

Eskom’s progress has also attracted attention from credit ratings agencies. The utility was cited as a contributing factor in S&P Global Ratings’ first upgrade of South Africa’s sovereign rating in two decades. S&P also lifted Eskom’s long-term foreign and local currency ratings from B to B+ with a stable outlook.

“Profits are critical to demonstrating that a business can invest in its future, to survive and grow. Eskom has to generate cash from operations consistently to meet our debt obligations while limiting future borrowings at acceptable levels to demonstrate that Eskom is sustainable and worthy of investment from funders at affordable interest rates, as well as to meet our capital expenditure (capex) requirements of R320 billion over the next five years,” said Eskom Group CEO Dan Marokane.

Revenue increased 4% to R191.3 billion, driven largely by a 12.74% tariff hike from April, though sales volumes fell 3% amid weakening demand. Municipal arrears – a long-running structural problem – rose to R105 billion by September despite a national debt-relief programme. The government has endorsed measures allowing Eskom to assume temporary operational control of defaulting municipalities’ electricity systems to stabilise collections and reduce losses.

Chief Financial Officer Calib Cassim said tariff reform remains essential. “While not fully addressing the inadequacy of electricity tariffs, the higher tariff for the year is assisting to migrate the tariff path to more appropriate levels, positively impacting our financial sustainability,” he said.

Eskom said it expects full-year profit after tax to align broadly with the previous year’s R16 billion due to seasonal pressures in the summer months, though cash flow is forecast to improve.

“Eskom stabilising its financial position and holding the necessary cash balances is essential for providing the financial headroom for strategic planning and execution,” Marokane said, adding that investment in maintenance, emissions reduction, transmission expansion and grid capacity will remain priorities.

BUSINESS REPORT