Eskom
Eskom has turned a corner with a profit before tax of R23.9 billion for the financial year ended 31 March 2025, marking its first profitable year since 2017. This shift comes after years of heavy losses and power cuts that hurt the economy, but now signals stronger operations and a push towards stability. The state-owned power giant shared these results at its Megawatt Park headquarters on Tuesday, highlighting better plant performance, cost cuts, and fewer blackouts as key drivers. Group Chief Executive Dan Marokane said the profits will go back into fixing and growing the country’s power setup, aiming to keep electricity affordable and reliable for everyone.
Key Financial Highlights
The latest numbers show a big improvement from the previous year’s loss before tax of R25.5 billion. Eskom’s earnings before interest, taxes, depreciation, and amortisation margin climbed to 29.05%, up from 14.67% last year. This boost came from a 12.74% increase in standard tariffs and a 14% drop in primary energy costs, thanks to more reliable coal plants and less need for costly open-cycle gas turbines. That change alone saved R16.3 billion on diesel compared to the year before.
After tax, the profit stood at R16 billion, a sharp turnaround from a R55 billion loss in the prior year. Part of the gain included a once-off recovery of fuel levy rebates from the South African Revenue Service, which added extra lift to earnings and cash flow. Without that, the normalised profit before tax was still a solid R11.9 billion. Revenue grew by R45 billion overall, helped by a 3.5% rise in sales volumes alongside the tariff hike. Finance costs fell by R5 billion due to lower borrowing, while employee expenses rose by R8 billion from a 7% salary adjustment, adding 1 400 more staff, and bonuses tied to better generation output.
Eskom’s total debt eased to R372 billion by the end of March, down from R412 billion the year before, though it remains higher than the sustainable level of around R250 billion. This progress followed a R254 billion government debt relief package spread over three years, with 2025 as the last instalment. Looking ahead, the company sees potential for more income, including R11.9 billion from municipalities if payments come through, and up to R28 billion by cutting non-technical losses like theft.
Operational Improvements and End to Power Cuts
One of the biggest wins was slashing load shedding. Energy not supplied because of blackouts dropped to under 0.4 terawatt-hours, way down from 13.2 terawatt-hours in 2024. That meant just 175 hours of power cuts over the year, compared to 6 367 hours before, and only 13 days affected instead of 329. As a result, Eskom kept the lights on for 96% of the days in the reporting period, a massive jump from 9% the previous year.
The energy availability factor at power stations hit about 70%, helping wipe out regular blackouts that once crippled businesses and homes. According to a report from the Council for Scientific and Industrial Research, titled “Utility-scale Power Generation Statistics in South Africa” and released on 17 March 2025, load shedding cost the economy up to R2.8 trillion in 2023. By 2024, that damage fell by 83% to R481 billion, showing how these fixes are paying off for the whole country.
Eskom also stepped up its fight against waste and wrongdoing. Through better board oversight and focus, it closed about 90% of external audit findings from the 2021 to 2024 financial years, though some are still under check. Vending fraud, linked to an old online system, has been cut back with smarter tech and stronger checks, protecting income and ensuring fair electricity access.
Ongoing Challenges and Audit Concerns
Despite the good news, hurdles remain. Eskom got a qualified audit opinion again, mainly due to gaps in records under the Public Finance Management Act, irregular spending, and losses from criminal acts. Issues from past audits lingered into 2025, pointing to weak internal controls in some spots. There’s also uncertainty about the company’s future as a going concern, tied to reliance on government backing, rules from the National Energy Regulator of South Africa, rising municipal debts, and ongoing energy losses.
Municipal arrear debt climbed 27% to R94.6 billion by March, up from R74.4 billion, even with the National Treasury’s relief scheme in place. Many towns and cities are not paying their current bills on time, risking Eskom’s distribution arm and the bigger plan to split up the company. Employee costs going up and the need for more fixes show that full recovery will take time.
Future Plans and Investments
Eskom is not stopping here. It plans to pump more than R320 billion into infrastructure over the next five years, focusing on upkeep and growth to serve the nation long-term. This fits within expected single-digit tariff hikes from the regulator, while the company reviews and trims its costs to keep power prices fair.
To tackle municipal payment woes, Eskom is pushing the Distribution Agency Agreement model. This lets it handle electricity services for struggling local governments, taking payments directly and splitting them for bills, costs, and old debts. It’s already in force in places like Maluti-a-Phofung and Emfuleni by court order, with 14 more in talks. Group Chief Executive Dan Marokane said announcements on this will come soon, and the Electricity and Energy Minister plans to take it to Cabinet.
The Cost Optimisation and Revenue Enhancement programme, overseen by a new Strategic Delivery Unit, targets savings of over R50 billion by 2029 through better buying, growth in income, and upgrades in tech and output. Eskom also aims to tap bond markets on its own within two years, moving away from full government support. Chief Financial Officer Calib Cassim noted that even without the rebate boost, the results stay positive, and the focus is on keeping this momentum.
Other steps include speeding up smart meter rollouts to curb theft, beefing up investigations with a new security unit, and working with the Ethics Office to root out fraud and corruption. These moves aim to make Eskom a strong player in a freer energy market.
Leadership Views on the Road Ahead
Executives are upbeat but realistic. Dan Marokane said, “The focused and ongoing efforts of Eskom’s 42 000 employees in delivering the turnaround strategy have produced tangible results. We are reinvesting profits back into national assets. Over the next five years, with continued rigorous focus, we will invest more than R320 billion in sustaining and expanding our infrastructure for the long-term benefit of the nation. In a break from the past, we are accelerating the review and restructuring of our cost base. This is being done within the framework of the expected future single-digit tariff increases allowed by NERSA, as we drive efficiencies and take control of the factors within our control to address the affordability of electricity.”
He added on the bigger picture: “Eskom’s stability and performance are vital to South Africa’s growth and development, through sustained economic growth and job creation.”
Board Chairman Mteto Nyati reflected on the changes: “Eskom is increasingly a sustainable, investable company ready to compete in a liberalised, competitive energy market, and is very different from the crisis that in October 2022 the current Eskom Board inherited when they took office. The comprehensive diagnostic review at the time reaffirmed Eskom’s strategic direction and highlighted the need to recalibrate execution timelines and intensify delivery against strategic objectives that we have supported the Executive Committee to deliver. The Board has remained utterly focused on using public money efficiently, and early interventions in governance and controls have delivered early measurable improvements in the fight against crime, fraud and corruption. Vending fraud as a result of our outdated Online Vending System is now reduced to lower levels, proving that a focus on stronger systems, smarter technology, and decisive action is protecting revenue and ensuring secure, reliable electricity for all South Africans, and we will continue to intensify our focus in this area.”
Chief Financial Officer Calib Cassim stressed planning for uncertainty: “Regulatory uncertainty and the absence of a long-term tariff trajectory continue to impede strategic planning for the electricity supply industry, our customers and investors. We require predictability to foster investment in South Africa. With the support of the Minister of Electricity and Energy, we will continue to engage with NERSA and other stakeholders on establishing a predictable long-term tariff outlook. Eskom is also supporting the restructuring of the electricity supply industry into a rules-based competitive market where players can compete fairly.”
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