Eskom swings to first profit in eight years as outages plunge, flags audit risks

South Africa’s power utility Eskom is in the black for the first time in eight years, posting a ZAR23.9bn ($1.33bn) profit before tax for the year to March 2025, reversing a ZAR25.5bn ($1.42bn) loss in the prior year.

Eskom said in a statement on September 30 that tariff hikes, cost cuts and a government $14.1bn debt-relief package contributed to the turnaround, along with reduced scheduled power outages (load shedding).

It credited a 12.74% tariff increase, a 14% fall in primary energy costs and reduced diesel use for the turnaround whilst noting diesel savings of ZAR16.3bn ($905mn) and improved coal fleet reliability boosted margins. EBITDA rose to 29.05% from 14.67%, Eskom said.

At the same time, load shedding dropped sharply: energy not supplied fell to 0.4 TWh from 13.2 TWh in FY 2024, with just 13 days of outages versus 329 the previous year. The utility said electricity was fully supplied on 96% of days.

Eskom also reported a normalised profit before tax of ZAR11.9bn ($660mn) after stripping out one-off revenue from recovered fuel-levy rebates. Management pledged to reinvest earnings in critical infrastructure, with ZAR320bn ($17.8bn) earmarked for projects over the next five years.

The turnaround has also been underpinned by the government’s ZAR254bn ($14.1bn) multi-year debt-relief package, which reduced Eskom’s gross debt from around ZAR412bn ($22.9bn) to ZAR372bn ($20.7bn). Analysts and officials alike have stressed that state backing remains critical to the utility’s balance sheet.

Despite the headline profit, an external auditor issued a qualified opinion, citing incomplete records, irregular expenditure and “material uncertainty” about Eskom’s going-concern status. The utility acknowledged ongoing governance challenges and committed to strengthening internal controls.

As reported by bne IntelliNews, South Africa’s National Energy Regulator (Nersa) has opened a market inquiry into the effects of rising fixed electricity charges, amid complaints that increases set by Eskom and municipalities outstripped the 12.74% tariff adjustment approved by Nersa for 2025/26. This means Eskom’s recently introduced Retail Tariff Restructuring Plan will come under scrutiny, as it split its generation charge into a generation capacity component, a legacy charge, and a variable energy element.

Meanwhile, Eskom said that municipal arrears rose to ZAR94.6bn ($5.3bn) by March 2025, up 27% y/y, underscoring persistent liquidity risks. Eskom said many municipalities were failing to settle current bills in full, threatening the financial viability of the distribution segment.

The company said profitability marked early success in its turnaround strategy but cautioned that regulatory uncertainty over tariffs and revenue rules remained a challenge. It called for a stable framework to attract investment and sustain recovery.