Eskom Achieves First Profit in 8 Years, Reports Dramatic Reduction in Loadshedding

30 September 2025

Eskom has announced its first profitable year since 2017, reporting a pre-tax profit of R23.9 billion for the 2025 financial year ending 31 March. This marks a significant turnaround from last year's R25.5 billion loss, with the power utility also reporting a dramatic reduction in loadshedding days from 329 to just 13 days during the reporting period.

Financial Performance Highlights

The utility's profitability was driven by a stronger EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) margin of 29.05%, up from 14.67% in the previous financial year. This improvement was supported by the 12.74% standard tariff increase implemented last year and a 14% reduction in primary energy costs.

A significant contributor to the cost reduction was the decreased reliance on expensive diesel-powered Open-Cycle Gas Turbines (OCGTs), which resulted in diesel savings of R16.3 billion compared to the previous year.

The financial results were also boosted by the recovery of previously disallowed fuel levy rebates from SARS. Even after adjusting for this once-off recovery, Eskom still recorded a normalized pre-tax profit of R11.9 billion.

Dramatic Reduction in Loadshedding

Perhaps most relevant to everyday South Africans, loadshedding has seen a remarkable decline. Energy not supplied due to loadshedding dropped to below 0.4TWh, compared to 13.2TWh in the previous year. This translates to:

• Total loadshedding duration: 175 hours (down from 6,367 hours)
• Loadshedding days: 13 (down from 329 days)
• Days with reliable electricity supply: 96% of the year (up from just 9%)

According to a report cited by Eskom CEO Dan Marokane, the economic impact of loadshedding decreased by 83%, from an estimated R2.8 trillion in 2023 to R481 billion in 2024.

Ongoing Challenges

Despite the positive financial results, Eskom continues to face significant challenges. Municipal arrear debt increased by 27% to R94.6 billion as of 31 March 2025 (up from R74.4 billion). Most municipalities participating in the National Treasury's debt relief programme are failing to meet their current payment obligations, posing a serious risk to Eskom's distribution operations and the broader legal separation process.

The utility also received a qualified audit opinion due to incomplete or inaccurate records relating to the Public Finance Management Act (PFMA), specifically regarding irregular expenditure and losses due to criminal conduct. This continues issues raised in previous audits, though Eskom reports that approximately 90% of external audit findings raised since FY2021 have now been addressed, pending verification.

Future Investment Plans

Eskom plans to reinvest its profits back into infrastructure, with more than R320 billion earmarked for sustaining and expanding its assets over the next five years. The utility has also established a Cost Optimisation and Revenue Enhancement (CORE) programme targeting cumulative efficiencies of over R50 billion by FY2029.

CFO Calib Cassim highlighted ongoing challenges with regulatory uncertainty and the need for a predictable long-term tariff trajectory to support strategic planning and investment in the electricity supply industry.

Outlook

While Eskom's financial results and operational improvements represent a significant turnaround from the crisis of 2022-2023, the utility still faces substantial challenges. The qualified audit opinion and going concern uncertainty flags indicate that fundamental issues remain unresolved.

The dramatic reduction in loadshedding days is encouraging, but the sustainability of this improvement will depend on continued implementation of the Generation Recovery Plan and management's ability to maintain the improved plant performance seen over the past year.

The growing municipal debt remains a critical issue that threatens to undermine Eskom's financial recovery, particularly as the utility progresses with its unbundling into separate generation, transmission, and distribution entities.

For South African consumers and businesses, the immediate outlook appears more positive than in recent years, but long-term energy security will depend on Eskom's ability to maintain operational improvements while addressing governance issues and completing its structural transformation.

Key Terms Explained

EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization - a measure of a company's operational performance without considering financing decisions, tax environments, or accounting decisions.

OCGTs (Open-Cycle Gas Turbines): Diesel-powered generators that Eskom uses during peak demand or when coal plants cannot meet demand. They're effective but extremely expensive to run - similar to running your home on a diesel generator instead of grid electricity.

TWh (Terawatt-hour): A unit of energy equal to one trillion watt-hours. For context, the average South African household uses about 6,000-8,000 kilowatt-hours annually, so 1 TWh could power roughly 125,000-166,000 homes for a year.

PFMA (Public Finance Management Act): Legislation that regulates financial management in national and provincial government in South Africa, designed to ensure transparency, accountability and sound management of revenue, expenditure, assets and liabilities.

NERSA: National Energy Regulator of South Africa - the regulatory authority responsible for approving electricity tariffs and overseeing the energy sector in South Africa.