Eskom has reported a substantial rise in profits for the first half of its financial year, driven by higher tariffs and improved operational performance. The utility recorded a profit of R24.3 billion in the six months to the end of September, marking a 36 per cent increase from the R17.8 billion achieved in the comparable period the previous year, according to the company’s latest interim results.
The improved financial position comes as Eskom has succeeded in stabilising the national grid and significantly reducing the rolling blackouts that plagued the country for much of the past decade. Plant availability has risen sharply after long-delayed maintenance was finally carried out, helping to restore a degree of reliability to electricity supply and supporting modest economic recovery. Analysts note that the end of severe load-shedding has been a key factor in the utility’s return to profitability, with the energy availability factor now consistently above 60 per cent for sustained periods.
Revenue for the period reached R191.3 billion, exceeding internal targets by R1.2 billion. Much of this outperformance can be attributed to tariff increases approved by the National Energy Regulator of South Africa (Nersa), which allowed a 12.7 per cent rise for the current financial year. As reported by Business Day, these above-inflation adjustments have been critical to Eskom’s cash flow, particularly as the regulator has also signalled further substantial hikes of around 9 per cent for both 2026 and 2027, alongside permission to recover an additional R54 billion in historical costs.
Over the longer term, electricity prices in South Africa have risen by 265 per cent since 2014, far outstripping consumer price inflation of 151 per cent over the same period, according to data compiled by Statistics South Africa. Household budgets have come under severe pressure, with average wages growing at less than half the pace of power costs, pushing many families towards energy poverty.
Despite the positive headline figures, significant risks remain. Municipal debt owed to Eskom ballooned to R105 billion by September, up from R90.1 billion six months earlier. The utility warned that this growing liability poses a material threat to its liquidity and long-term solvency, especially as it prepares for the eventual legal separation of its transmission and distribution businesses. In addition, National Treasury directed write-offs amounting to R3.6 billion during the period, further complicating the balance sheet.
Cost containment has provided some relief. Eskom achieved primary energy savings of more than R6.3 billion, helped by lower coal prices and reduced expenditure on independent power producers. Net finance costs also fell as the utility benefited from lower interest rates on its debt portfolio and partial compliance by some municipalities with agreed repayment plans.
Looking ahead, Eskom is planning a major expansion of the transmission network, estimated to require hundreds of billions of rand over the coming decade, while establishing a dedicated renewable-energy division to accelerate the integration of solar and wind projects. These initiatives are seen as essential if South Africa is to meet growing demand and honour its international climate commitments.
For households and businesses alike, however, the immediate reality remains one of sharply rising bills at a time when economic growth is forecast by the Reserve Bank to average below 2 per cent annually for the foreseeable future. While Eskom celebrates a financial turnaround, the cost is being borne directly by consumers already grappling with one of the highest electricity price trajectories in the world.