Power utility Eskom has recorded net profits of R26 billion in the first half of its 2025/26 financial year, with the Department of Electricity and Energy projecting a net profit of R15 billion for the full year.
The department presented the latest financials to the Portfolio Committee on SOE Performance on Wednesday (12 November), revealing the data.
Revenue for the year to date, ending 30 September, climbed to R191.3 billion, it showed, which is R1.2 billion higher than the budgeted expectation.
The higher revenue is mainly due to the favourable electricity price increases granted by the national energy regulator (NERSA), which amounted to 12.7% this year.
Notably, this trajectory for Eskom’s revenue is set to continue, with NERSA not only granting Eskom far-above-inflation price hikes for 2026 and 2027, but also allowing the utility to recover a further R54 billion.
This would see tariffs increase by close to 9% in both years, bringing a significant windfall for Eskom.
According to the energy department, Eskom also managed over R6.3 billion in primary energy cost savings thanks to lower costs incurred in coal and from Independent Power Producers.
Combined with savings in net finance costs—due to lower interest on debt securities and borrowings—and some municipal compliance in sticking to debt relief plans, Eskom made a healthy profit over the period.
Eskom reported a net profit of R25.87 billion for the six months ended September 2025. This is R8.8 billion more than budgeted.
The utility’s latest projections to the department indicate that it will remain profitable at year’s end. The current estimate is that it will turn a profit of R15 billion, it said.
A profit of R15 billion would be slightly lower than the R16 billion profit reported for the 2024/25 financial year, but still reflects a remarkable and continued turnaround for the state-owned utility that has been running losses since 2017.
Eskom has announced a profit after tax of R16 billion for the full year ending March 2025, up from a massive R55 billion loss recorded in the previous year.
As appears to be the case in the current year, the profit was largely thanks to massive tariff hikes.
However, the group has also seen much of its favourable variances come as a result of the R250 billion bailout given by taxpayers, which it used to decrease its debt costs.
So far, R140 billion has been disbursed to Eskom, with another R40 billion being allocated for the 2025/26 financial year, and expected to be delivered in Q4.
The group also secured billions of rands in diesel rebates from SARS, which also helped boost its numbers.
Big problems still persists
While Eskom’s finances are looking much healthier, the Energy Department flagged the group’s audit outcomes, noting that its performance against the compact it has with the government is unsatisfactory.
Not only is it unsatisfactory, but it has also deteriorated in the second quarter of the year compared to the first.
In Q1, the group achieved 21 of the 31 targets set, giving a 71% performance rating. In Q2, it managed 22 of 33 targets, dropping the rating to 57%.
The non-achieved targets mainly relate to operations, municipal payment levels, investigations, industrialisation and the repowering and repurposing of power stations, the department said.
Even though Eskom expects to achieve 63% of these targets by year-end, this remains unsatisfactory, the department said, requiring urgent intervention from the Eskom board.
The department noted that Eskom is the only entity under its purview that is struggling to improve its audit outcomes, and that it still has unresolved findings dating back to 2021.
Non-compliance with the Public Finance Management Act (PFMA) has been a recurring issue, contributing to repeated qualified audit opinions over the years.
However, the department added that an audit and recovery plan is in place and it is being monitored, with improved audit findings attached to executives’ performance contracts.
The other big issue at the utility is the mountain of municipal debt that it is struggling to recover.
At the end of March 2025, municipal arrear debt amounted to R94.6 billion, representing a 27% increase from the previous year. It amounted to R103.5 billion as of the end of August 2025, and is just climbing.
This long-standing debt is growing at an alarming rate, and by Eskom’s own admission, interventions and programmes to address it have not yielded any success.
Without urgent intervention, municipal debt could exceed R300 billion by the end of the 2030 financial year, the group warned.
