Eskom’s profit after tax more than doubled to R30.3 billion in the year to 31 March 2026, supported by higher tariffs, improved plant performance, cost discipline and lower reliance on emergency diesel generation.
However, electricity sales fell by 6.2% to 178TWh, while the utility retained a qualified audit opinion relating to the completeness of irregular-expenditure reporting, the financial results released on Monday showed.
The profit compared with R14bn in the previous year. Revenue increased by 4.1%, mainly because of a 12.74% regulatory standard tariff increase. This was partly offset by lower sales volumes.
Eskom attributed the decline in demand to weak industrial activity, embedded self-generation and energy-efficiency gains. Industrial electricity consumption fell by 9.7TWh, or 22.5%, year on year.
Mteto Nyati, Eskom’s chairperson, said the utility had an estimated surplus capacity of between 2GW and 3GW for the next few years. This marked a reversal from the tight system margins experienced in recent years, but also created risks for revenue and asset utilisation.
“This is the second consecutive year that Eskom has delivered a profit. That performance was earned through operational recovery and cost discipline,” Nyati said.
He said the stronger financial position would allow Eskom to reinvest in Eskom Green, distribution services, the reliability of its coal-fired fleet and grid expansion to connect new generation.
Eskom said its capital expenditure programme was expected to increase from about R45bn in the 2026 financial year to more than R70bn from 2029. Total capital expenditure of R343bn was planned over the next five years.
Eskom’s cash position was also strengthened by an R80bn government debt-relief payment received in March 2026. Eskom subsequently used R38bn of its cash balance to settle bonds that matured in April 2026. Its debt securities and borrowings stood at R356bn at March 31, 2026,
The debt-relief payment is important context when assessing Eskom’s improved financial position, as the profit was reported alongside substantial government support.
Independent auditors retained a qualified opinion concerning the completeness of irregular expenditure reported under the Public Finance Management Act.
Eskom said qualifications relating to losses from criminal conduct and inaccuracies in irregular-expenditure reporting had been removed. The auditors nevertheless found that the financial statements were fairly stated, and complied with International Financial Reporting Standards.
Of the R4.9bn in irregular expenditure recorded during the year, Eskom said only R28m related to new matters. The balance related to existing, multi-year contracts that would continue to attract irregular expenditure until they were condoned or removed.
Two historical incidents involving the procurement of fuel and construction equipment accounted for about 70% of the irregular expenditure incurred during the year, Eskom said.
Eskom’s Distribution division is pursuing measures to retain customers and stimulate demand. These include negotiated pricing agreements for ferroalloy and other smelter customers, supplying data centres, electric-vehicle charging, improved wheeling arrangements, renewable-power purchase agreements and flexible-load initiatives.
The utility also plans to run a Bitcoin-mining pilot. Eskom should provide further detail on the pilot’s size, status, electricity pricing and expected impact.
The initiatives aim to stabilise electricity sales at about 178TWh over the medium term, with potential growth as new products and customer segments are introduced.
Employee-benefit costs increased, mainly because of average remuneration increases of 7%, a 3% rise in staff numbers, production bonuses and a provision under the short-term incentive scheme linked to improved organisational performance.
edward.west@nationalmg.co.za
THE NATIONAL