Eskom shooting the lights out

Eskom has reported a profit after tax of R24.3 billion for the first half of its 2026 financial year, setting the utility up for another record financial year.

On Friday, 28 November, Eskom released its results for the six months ended 30 September 2025. These results revealed a bumper interim period for the utility, with revenue up 4.13% to R191.3 billion.

This was driven by the 12.74% electricity tariff increase that took effect from 1 April 2025.

“While not fully addressing the inadequacy of tariffs, the higher tariff for the year is assisting to migrate the tariff path to more appropriate levels, positively impacting our financial sustainability,” Eskom said. 

“The higher tariff will also lessen the burden on the taxpayer by reducing the need for debt relief support from government once Eskom is financially sustainable on a standalone basis.”

However, the utility noted that the tariff increase was partially offset by lower sales volumes, which declined by 3% over the six-month period.

Eskom said its sales volumes were impacted by ferrochrome customers in the industrial sector that experienced unplanned plant breakdowns or halted production and took smelters offline for maintenance due to poor market conditions.

In addition, the utility noted that the increase in embedded self-generation – mainly through rooftop solar installations – continued to drive a decline in sales volumes.

Regardless, the utility reported an interim profit of R24.28 billion after tax, marking a roughly 37% increase compared to the six months through September 2024.

This is more than the R16 billion full-year profit Eskom reported for its 2025 financial year, which marked the utility’s first full-year profit since 2017.

However, the utility noted that its financial performance in the first half of the year tends to be better than the second half, with the winter period typically characterised by higher tariffs and sales volumes than the summer period. 

Therefore, it may not sustain this first-half momentum into the second half of the year.

In addition, Eskom explained that to ensure an adequate supply to sustain the increased demand in winter, less maintenance is performed in winter than in summer. 

“Given this seasonality, we face financial pressure in the second half of the financial year,” the utility said.

Eskom expects its profit after tax for the full 2026 financial year to be at a level similar to the prior year, i.e. around R16 billion, together with a projected improvement in the utility’s cash position.

The graph below shows Eskom’s EBITDA and free funds from operations over the past five years.

Keeping the momentum going

Eskom said its long-term profitability and sufficient liquidity levels remain dependent on several factors, including – 

• An adequate long-term tariff path that balances Eskom’s financial sustainability with customer affordability
• Curbing the growth in municipal arrear debt
• Containing controllable cost increases to appropriate levels
• Reducing finance costs by deleveraging the balance sheet
• Addressing the impact of crime, fraud and corruption. 

“This cannot be achieved without the continued focus on improving plant performance to enable reliable electricity supply to customers while limiting OCGT use,” the utility said.

“Eskom remains committed to consistently reducing the need for loadshedding by improving our own generation reliability through the recently launched Generation Operational Reliability and Sustainability Plan.” 

This plan builds on existing plans to integrate people, plant and process interventions, supported by international utility partnerships and enhanced governance structures.

“The progress Eskom is making with its turnaround plan gives potential investors more reasons to invest in South Africa and, in turn, create jobs and prosperity,” it said. 

The utility added that the ongoing delivery of its turnaround plan has boosted business confidence in South Africa.

In addition, Eskom’s recovery is a key contributor to positive sentiments regarding South Africa’s prospects for achieving an average GDP growth rate of 1.8% over the medium term.