Eskom doubles annual profit
South Africa’s national electricity utility, Eskom, has more than doubled its profit for the 2026 financial year, recording its second consecutive profitable year as it implements its turnaround strategy.
Eskom reported group profit after tax of R30.3 billion for the year ended 31 March 2026, compared with a restated profit of R14 billion in 2025.
“We are rebuilding an economic asset for South Africa,” said Dan Marokane, Eskom’s group chief executive.
“When Eskom cannot fulfil its mandate, the impact on the economy and consumers is significant. The scale of the turnaround is best understood against where we were as an organisation and as a country three years ago.”
The Council for Scientific and Industrial Research estimated that load-shedding cost the South African economy up to R2.8 trillion in 2023. This fell by 83% to R481 billion in 2024.
Eskom recorded just four days of load-shedding in the 2026 financial year, totalling 26 hours.
“With four days of load-shedding in FY2026 totalling 26 hours, the impact on the economy was minimal,” Marokane said.
Profit with purpose
Eskom chairman Mteto Nyati said the return to profitability would allow the utility to reinvest in its operations and infrastructure.
“Profit is not the opposite of that public purpose. It is what makes the purpose possible,” he said. “This is the second consecutive year that Eskom has delivered a profit. That performance was earned through operational recovery and cost discipline. It now allows us to reinvest in Eskom Green, in a better customer experience in distribution, in the reliability of the coal fleet, and in grid expansion so that new generation can connect.”
Eskom’s earnings before interest, tax, depreciation and amortisation (EBITDA) margin increased to 30.63%, from a restated 28.75% in 2025.
The improvement was attributed to more efficient electricity production, improved generating-plant availability, tighter cost controls and reduced reliance on emergency diesel generation.
Operational recovery
Eskom group chief financial officer Calib Cassim said the utility’s operational recovery had been matched by an improvement in its financial position.
“Operations and finances are inseparable,” Cassim said. “Our operational recovery has been matched by a financial turnaround. Eskom delivered a second successive year of strong profitability, with a healthier balance sheet, materially improved liquidity and positive credit-rating actions from S&P Global, Fitch and Moody’s.”
Eskom received its first credit-rating upgrade in more than a decade, which Cassim said would improve its access to lower-cost borrowing to support future capital expenditure.
Revenue increased by 4.1%, driven by a regulatory tariff increase of 12.74%. This was partly offset by a 6.2% decline in electricity sales volumes to 178TWh.
Eskom attributed the decline to weak industrial demand, embedded self-generation and energy-efficiency gains.
Industrial demand recorded the largest decline, falling by 9.7TWh, or 22.5%, year on year.
“With excess production capacity, sales retention and growth are critical areas of focus going forward,” Eskom said.
Restated 2025 figures
Eskom’s 2025 profit was restated downwards by R2.006 billion. This comprised R980 million in guarantee fees payable to the National Revenue Fund and R1.026 billion relating to public liability claims against Eskom.
The utility’s Cost Optimisation and Revenue Enhancement (CORE) programme delivered R22.4 billion in savings and revenue contributions, exceeding its FY2026 target.
Eskom is targeting cumulative savings and revenue contributions of R112 billion between FY2026 and FY2030.
The utility said profits would be reinvested in its capital expenditure programme, which is expected to increase from R45 billion in FY2026 to more than R70 billion a year from FY2029.
Total capital investment across the group is projected at R343 billion over the next five years.
Municipal debt remains Eskom’s biggest financial threat. Arrears increased by 17.9% to R111.6 billion at the end of the financial year and reached about R119 billion by June 2026.
Eskom warned that municipal debt could reach as much as R358 billion by FY2031 if decisive intervention is not implemented.
Stronger liquidity
Eskom reported cash and cash equivalents of R124.9 billion at 31 March 2026, bolstered by an R80 billion debt-relief payment received in March.
About R38 billion of the cash balance was subsequently used to settle the ES26 bonds, which matured in April 2026.
Debt securities and borrowings stood at R356 billion at 31 March 2026, falling to about R320 billion by 30 June 2026.
However, independent auditors issued a qualified opinion relating to the completeness of irregular expenditure reported under the Public Finance Management Act (PFMA).
Eskom said qualifications relating to losses due to criminal conduct and inaccuracies in irregular expenditure had been removed. The completeness of irregular expenditure remains the only outstanding qualification.
Environmental compliance
Eskom said it had made significant progress in addressing reportable irregularities identified in previous years.
In FY2025, the utility had five reportable irregularities relating to environmental compliance; investigations into fraud and misconduct; the completeness and accuracy of PFMA irregular expenditure reporting; delays in PFMA investigations and consequence management; and the completeness and accuracy of its financial statements.
Four of the five matters were closed during FY2026, leaving environmental compliance as the only outstanding reportable irregularity.
“Corrective actions are being implemented to address the underlying compliance gaps on environmental non-compliance, with strengthened oversight and monitoring to enhance accountability,” Eskom said.
