Eskom turns profit after eight years, eyes bond market by 2028

Key topics:Eskom posts first profit in 8 years, cuts debt to 372B randUnpaid municipal debts 94.6bn rand hinder distribution unbundlingEskom invests 320bn rand in renewables, grid, and future energy growth.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Loni Prinsloo.Africa’s biggest power utility reported its first full-year profit in eight years, even as it grapples with ballooning debts owed by South African cities and is preparing to go to the bond markets without government help within two years. State-owned Eskom Holdings SOC Ltd. made 16 billion rand ($926 million) in profit after tax in the year ended March 31, compared with a loss of 55 billion rand a year earlier, it said Tuesday. Auditors Deloitte and Touche issued a qualified opinion on the results, with a material uncertainty relating to the utility’s status as a going concern.The country’s biggest corporate issuer managed to reduce debt to 372 billion rand from 412 billion rand, and plans to get that down to 300 billion rand as it works on improving its credit rating, Chief Financial Officer Calib Cassim said in an interview. .Read more:.Eskom forecasts first profit since 2017 despite mounting losses and municipal debt.“The worst thing to do is to get short-term money,” he said. “We want long-term money, so we are only looking to go back to the market at around 2028.”The utility has largely stabilised South Africa’s electricity grid after years of record blackouts caused by breakdowns at coal-fired power plants that weighed on its revenue and crimped economic growth.The government is moving forward with a plan to split Eskom into transmission, generation and distribution units and open the system to private generators that may offer cheaper prices for power. Uncertainties around debt owed to Eskom by municipalities — which surged 27% to 94.6 billion rand through March, is holding up the unbundling of the distribution business, Chief Executive Officer Dan Marokane said. “Eskom is working with government to see if we can leverage access to an equitable share of what municipalities owe us,” he said. Most participating municipalities are “failing to meet the basic requirement of paying their current accounts on time and in full,” the utility said, adding that this also “threatens progress in the broader legal separation process.”.The company is also planning a so-called distribution urgency agreement that will see Eskom work closely with municipalities to stem the losses, he said.Eskom is investing 320 billion rand over five years to sustain and expand its infrastructure, Marokane said. He is in the process of establishing Eskom Green, which will house the utility’s renewable business. The utility is “sounding out the market” for potential partners for the new business that will help de-risk the balance sheet and bring in renewable-energy expertise. For its part, Eskom has access to land located close to current grid connections, utility-scale expertise and technical know-how, said Marokane. While the first step is to get the renewable business up and running, listing the unit may be an option in the future, he said.“We see growth for Eskom coming from renewable, nuclear, gas to power and hydro,” said Marokane. “We also see services in terms of the stabilisation of the grid as more renewables come up and targeting data centres that require a lot of base load and other services.”.© 2025 Bloomberg L.P.

Eskom turns profit after eight years, eyes bond market by 2028

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