Eskom, South Africa’s state-owned electricity utility, has recorded a major financial turnaround, posting substantial profits for the first time in eight years — a development that many hope could mark the beginning of sustained recovery for the beleaguered company. The Africa Report+2Reuters+2
Return to Profitability
For the financial year ending March 2025, Eskom reported a profit after tax of R16.0 billion — a dramatic reversal from the R55 billion loss recorded the previous year. Reuters+2The Herald+2 The turnaround is attributed to a mix of higher revenue, cost savings, and improved electricity supply performance. Eskom+2Crown Publications+2
Key financial improvements include:
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A profit before tax of R23.9 billion, compared with a previous loss. Eskom+1
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A stronger EBITDA margin (29.05 percent, up from 14.67 percent). Eskom+1
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Reduced energy costs, thanks to better reliability of coal‑fired generation plants and lower reliance on expensive open‑cycle gas turbines, resulting in diesel savings of roughly R16.3 billion. Eskom+1
Eskom’s interim 2026 results show further signs of momentum: the company reported a unaudited profit after tax of R24.3 billion for the first half of the financial year. Eskom+1
Improvements in Power Supply and Reliability
Operationally, Eskom has also delivered — load‑shedding has dropped sharply, with the utility supplying electricity on most days and drastically reducing blackout frequency. Crown Publications+2OurPower+2 Two major coal‑power units were restored during the period, boosting generation capacity. Business Day+1
These developments have rekindled optimism across sectors dependent on reliable electricity, as consistent power supply remains critical for economic activity and investment.
But Challenges Remain — Sustainability Is the Question
Despite the good news, major structural risks still loom. One of the most pressing is the mounting municipal debt owed to Eskom — municipalities have failed to settle electricity bills amounting to tens of billions of rand. South Africa Today+1
Analysts warn that revenue recoveries and tariff hikes alone cannot secure lasting stability unless arrears are addressed. Continued nonpayment may undermine gains made, threaten cash flow, and risk a relapse into financial distress. Financial Times+1
Furthermore, Eskom must maintain and upgrade aging infrastructure, manage generation reliability, and guard against external shocks such as fluctuating fuel costs, regulatory pressure, and shifts in demand.
What Lies Ahead: Endurance Over a Single Turnaround
The half‑year profits and improved supply metrics represent a milestone for Eskom — but the real test lies in sustaining these gains over several years. Observers note that incremental reforms, effective debt collection from municipalities, disciplined cost management, and consistent maintenance will be essential.
Should Eskom consolidate this momentum, the turnaround could restore confidence in South Africa’s energy sector, attract new investment, and support broader economic growth. If not, the profit may yet prove fleeting.
