Eskom swung to a profit in the 2025 financial year, reporting R16bn after tax from a R55bn loss a year ago and underscoring the performance of the group’s three-year turnaround.
The group, which has a 70% electricity availability factor from 48% two years ago, has had 310 days without load-shedding under new executive management. However, group debt and the unpaid municipal debt remain a challenge.
Speaking during the results presentation in Johannesburg, chair Mteto Nyati said Eskom had moved into the area of performance, reflecting results of work done in the past two years.
“We saw 310 days of no load-shedding, or put differently, 13 days of load-shedding, after a disastrous year before in which we had record load-shedding. So, some of the results that we see here today, for the first time in eight years, we are going to be communicating that this company is back to profitability,” he said.
No more bailouts: Ramokgopa
Electricity minister Kgosientsho Ramokgopa said there is no longer financial support for Eskom and no government guarantees, so it has to resign itself to the new dispensation and see how it survived.
“In these new conditions, Eskom will not be getting any bailout. The state is going to allocate capital to other areas of spending pressures, so Eskom will not be getting any bailout,” he said.
Eskom has entered an era of single-digit tariff increases so had to learn to live in those conditions, Ramokgopa said.
“The reform agenda is irreversible. There are going to be new players. You can see trading licenses are going out, that’s a new complex. So Eskom must fit into that and position itself to participate in renewables as part of a generation agenda.”
Electricity prices had increased by 937% while inflation over the same period went up 155%, he said.
“It’s untenable, we have to change that situation. Eskom is a big part of that conversation, and I’m happy to say we are aligned with the chair and the board.“
To ensure that, Eskom had to become an efficient producer of electricity or risk being decimated by competition, he said.
“There are no protections. This is a market that is open for everyone. So whoever succeeds in new technologies or investing in research, the right skills, are going to dominate the generation side. And then we have to complete the legal separation. It’s non-negotiable, so we have to complete that.“
The company has to focus on protecting its revenue streams, especially the municipal debt, he said. Eskom is owed R120bn by municipalities, which threatens the future of electricity distribution in the country.
Targeting R50bn of costs to cut by 2029: Morokane
Eskom CEO Dan Morokane said South Africa cannot afford high electricity prices, and Eskom had modelled a business on single-digit tariff increases in future.
“That requires us in the business to tighten our belts, to do things smarter. And we are very clear around that part,” he said.
“Our core programme, which is our cost optimisation and revenue and enhancement programme, is under way. We’re targeting R50bn of costs to take out by 2029. This is one way we have to respond to this.
“We will be engaging with our suppliers and all our value chain stakeholders to help us.”
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