Eskom Profit Soars: R24.3bn in First Half Turnaround
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Eskom Reports Profit, Moves to Manage Municipal Electricity Debt
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Published November 28, 2023, at 20:07:19 GMT. Updated as needed.
Overview
Eskom, South Africa’s state-owned power utility, announced an after-tax profit of R24.3 billion for the first half of its 2026 financial year (ending September 2023). This positive result is attributed to increased electricity tariffs and improved plant performance, despite ongoing financial strain caused by meaningful municipal arrears. As an interim measure to address these arrears, the South African cabinet has authorized Eskom to utilize its distribution agency agreements to temporarily manage electricity services in defaulting municipalities.
Financial Performance
Eskom’s financial performance for the six months ending September 2023 demonstrates a significant improvement. profit before tax increased by 41% to R32.5 billion, and profit after tax rose by 37% to R24.3 billion. Earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 11% to R68.5 billion,as detailed in the interim results presentation released on Friday, November 17, 2023.
Eskom intends to reinvest these profits into critical infrastructure upgrades, including generation plant maintenance, emission reduction projects, and network expansion.These investments are designed to enhance grid reliability, increase grid connection capacity, and support the contry’s energy transition.
| Financial metric | H1 FY2026 (R billions) | % Change |
|---|---|---|
| Profit Before Tax | 32.5 | +41% |
| Profit After Tax | 24.3 | +37% |
| EBITDA | 68.5 | +11% |
Addressing Municipal Arrears
A persistent challenge for Eskom is the substantial debt owed by municipalities. To address this, the cabinet has approved the temporary use of Eskom’s distribution agency agreements for defaulting municipalities. This allows Eskom to directly manage municipal electricity services, including customer collections, providing skilled personnel, and implementing measures to reduce energy losses and establish appropriate tariffs.
This intervention aims to improve revenue collection and financial stability at the municipal level.The plan also includes the rollout of smart meters to enhance billing accuracy and reduce non-technical losses. Concurrently, National Treasury is working on longer-term reforms to strengthen the fiscal framework for local governments.