South Africa’s power utility, Eskom, has reported a remarkable financial turnaround, posting a profit after tax of R16 billion for the financial year ending March 2025. This marks a dramatic recovery from the R55 billion loss recorded in the previous year.
Eskom attributed the return to profitability to significant cost reductions, particularly in its primary energy generation costs and lower expenditure on open-cycle gas turbines. The utility achieved a profit before tax of R23.9 billion, compared to a loss of R25.5 billion in FY2024, its first positive result since FY2017.
This turnaround was supported by a stronger EBITDA margin of 29.05%, up from 14.67% in the previous year. Contributing factors included a 12.74% increase in standard electricity tariffs and a 14% reduction in primary energy costs.
Operational performance also saw significant improvements. Energy not supplied due to load shedding dropped to below 0.4TWh, a sharp decline from 13.2TWh in 2024. This translated to a total load shedding duration of just 175 hours, compared to 6,367 hours the previous year, and a reduction in load shedding days from 329 to just 13.
Eskom noted that it was able to supply electricity on 96% of the days during the reporting period, a stark contrast to just 9% in 2024.
The utility also benefited from the recovery of previously disallowed fuel levy rebates from SARS, which provided a boost to both earnings and liquidity. After adjusting for this once-off gain, Eskom reported a normalized profit before tax of R11.9 billion.
According to the Council for Scientific and Industrial Research (CSIR), load shedding cost the South African economy up to R2.8 trillion in 2023. In 2024, this figure dropped by 83% to R481 billion, underscoring the effectiveness of Eskom’s turnaround strategy.
Eskom CEO Dan Marokane emphasized the utility’s commitment to reinvesting profits into national infrastructure. The company plans to invest over R320 billion over the next five years to expand and modernize its energy infrastructure, aiming to support sustained economic growth and job creation.
Despite the financial recovery, Eskom acknowledged ongoing governance and compliance challenges. It received a qualified external audit opinion for FY2025, citing incomplete or inaccurate records under the Public Finance Management Act (PFMA). These issues relate to irregular expenditure and losses due to criminal conduct, with several internal control deficiencies persisting from previous years.
Eskom reported that it had addressed 90% of external audit findings raised between FY2021 and FY2024 and is implementing various initiatives to strengthen internal controls, including the establishment of investigation and security units and the hiring of additional finance professionals.
A major concern remains the mounting municipal arrear debt, which reached R94.6 billion as of 31 March 2025, a 27% increase from the previous year’s R74.4 billion. Eskom noted that despite the National Treasury’s municipal debt relief programme, most municipalities continue to fail to pay current accounts on time and in full, posing a serious risk to the viability of Eskom’s standalone Distribution company and hindering progress in its legal separation process.
To address this, Eskom is exploring alternative interventions, including prepaid supply models and distribution agency agreements aimed at improving revenue collection and service delivery.
Marokane concluded by highlighting Eskom’s efforts to restructure its cost base in anticipation of future single-digit tariff increases approved by NERSA. The utility is focused on driving efficiencies and taking control of internal factors to ensure the affordability and sustainability of electricity supply.
