South Africa’s state power utility Eskom announced it expects to post a second consecutive annual profit, forecasting an after-tax gain of approximately 16 billion rand ($937 million) by the end of its financial year in March 2026.
In a statement on Friday, Eskom said the anticipated profit would be similar to last year’s performance.
The outlook follows strong results in the first half of the year, with the utility reporting a net profit of 24.3 billion rand ($1.4 billion) for the six months ending September, according to Ecofin Agency
Lower interest rates and a reduced debt burden contributed to a 14 percent drop in finance costs, which fell to 15.3 billion rand. Additionally, a 12.7 percent increase in electricity tariffs in April lifted revenue by 4 percent to 191.3 billion rand.
Eskom noted that rolling blackouts occurred on only four days between March and September, a significant improvement compared with 2023, when more than 300 days of power cuts disrupted the continent’s most industrialized economy.
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The utility’s improved performance was cited as a factor in S&P Global Ratings’ recent decision to upgrade South Africa’s long-term foreign currency credit rating to BB from BB-, marking the first upgrade in 20 years.
“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,” said Eskom Chairman Mteto Nyati.
Despite these gains, the company continues to face structural challenges, including unpaid municipal debts, which reached 105 billion rand as of September 30. Eskom said the finance ministry has introduced measures to address this issue.
The utility is also working to strengthen cash flow while borrowing at acceptable rates to fund investment needs projected at 320 billion rand over the next five years.
These investments aim to maintain critical generation and network infrastructure and expand the transmission grid to integrate renewable energy and support projected electricity capacity growth from 66 gigawatts in 2024 to 107 gigawatts by 2034.
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Image Cedit: Reuters
