Eskom more than doubled its annual profit despite selling less electricity, posting a second consecutive year in the black even as industrial demand kept shrinking. The utility reported profit after tax of R30.3bn for the year to March 2026, up from a restated R14bn a year earlier, while electricity sales volumes fell 6.2% and industrial demand dropped 22.5%.
Acting CFO Calib Cassim, who has spent 24 years at Eskom and is due to retire during the 2027 financial year, expects profitability to continue, though at a somewhat lower level. Much of this year’s jump came from a swing in a non-cash charge tied to fair-value and foreign-exchange movements, which fell from R10.5bn to about R1bn, flattering the comparison by roughly R10bn. Cassim said a repeat of that scale is unlikely.
Revenue rose 4.1%, helped by a 12.74% tariff increase, while primary energy costs rose just 1% to about R152bn, and would have come in R11.5bn lower still had the prior year not included a large diesel rebate. The clearest saving came from open-cycle gas turbines, where spending fell from roughly R18bn to R7bn as Eskom leaned less on the costly diesel-fired plants, a figure Cassim expects to drop below R3bn this year.
| Metric | FY2026 | Prior year |
|---|---|---|
| Profit after tax | R30.3bn | R14bn (restated) |
| Electricity sales volumes | -6.2% | — |
| Industrial demand | -22.5% | — |
| OCGT expenditure | R7bn | ~R18bn |
| Municipal arrears (March) | R111.6bn | — |
| Load-shedding | 4 days, 26 hours | — |
Better generation performance has created an unusual problem of its own. Eskom now estimates it could carry between 2GW and 3GW of surplus capacity over the next few years, just as demand keeps softening under weak industrial activity, growing self-generation and energy-efficiency gains. Cassim said Eskom needs to convert that spare capacity into sales partly because of take-or-pay contracts with some coal suppliers, which obligate it to take delivery of contracted coal regardless of demand.
Part of the response has been discounted tariffs for large industrial users, including smelters, to stop their baseload demand migrating elsewhere, arrangements Cassim said would run for roughly three to five years. Eskom is also chasing newer demand, including data centres and electric-vehicle charging, alongside expanded wheeling services. The timing suits it: the African Energy Chamber projects South African data centres could consume more than 16 terawatt-hours annually by 2030, about 6.5% of national electricity demand.
Municipal debt remains the more stubborn threat. Arrears grew 17.9% to R111.6bn by end-March and had reached roughly R119bn by June, with Eskom projecting the figure could balloon to R358bn by 2031 if left unaddressed. That is more than double the roughly R55bn owed when government’s debt-relief mechanism began three years ago, meant to write off a third of historical debt annually in exchange for 12 consecutive months of current payments. Only R4.2bn has actually been written off, which pushed Eskom to work with the Treasury to withhold equitable-share allocations from defaulting municipalities, an approach that helped secure a R5.2bn payment from the City of Johannesburg.
The debt problem reaches beyond cash flow. Cassim said resolving it is central to Eskom’s restructuring plans, since the utility must meet solvency and liquidity requirements before it can unbundle its distribution business, part of a three-way split into generation, transmission and distribution first announced in 2019. The transmission leg of that plan has already been repeatedly delayed, with a presidential task team only established in March 2026 after Ramaphosa rejected a revised structure that would have kept transmission assets on Eskom’s own balance sheet; full unbundling is now not expected before 2029.
Eskom ended March with R124.9bn in cash against R356bn in debt securities and borrowings, with debt falling to about R320bn by June after settling a R38bn bond. It did not recognise R15.8bn of revenue during the year over doubts about collecting municipal, metropolitan and residential accounts. Cassim said Eskom does not intend to borrow during the 2027 financial year, funding its R343bn five-year capital programme, split 46% to transmission and 36% to generation, from operating cash and existing development-finance facilities.