Eskom Reports Second Consecutive Profitable Year

• Group profit after tax increased to R30.3 billion (2025: R14.0 billion, restated), representing a second successive year of strong profitability and supported by an Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) margin of 30.63% (2025: 28.75%, restated). The year-on-year EBITDA margin improvement reflects Eskom’s more efficient costs of producing electricity, underpinned by improved generating plant availability, cost discipline and lower reliance on emergency diesel generation, enabling real efficiencies and decisive cost discipline.
• For the year under review, revenue grew by 4.1%, driven by a regulatory standard tariff increase of 12.74%; this was partially offset by a 6.2% decline in sales volumes to 178TWh. Sales volumes declined, driven by weak industrial demand, embedded self-generation and energy efficiency gains. The decline in demand was most pronounced in the industrial sector – which reduced by 9.7TWh or 22.5% year-on-year. With excess production capacity, sales retention and growth are critical areas of focus going forward.
• FY2025 profit was restated downward by R2 006 million, reflecting R980 million in guarantee fees payable to the National Revenue Fund and R1 026 million relating to public liability claims against Eskom.
• The Cost Optimisation and Revenue Enhancement (CORE) programme delivered R22.4 billion in savings and revenue contributions, exceeding its FY2026 target and supporting Eskom’s target of R112 billion in cumulative savings and revenue contributions from FY2026 to FY2030.
• Profits will be reinvested in Eskom’s capital expenditure programme, which is set to grow from R45 billion per annum in Financial Year (FY) 2026 to over R70 billion per annum from FY2029, with total capital investment across the group of R343 billion over the next five years.
• Municipal debt remains Eskom’s biggest financial threat: arrears increased 17.9% to R111.6bn at year-end and reached about R119bn by June 2026, with projections of up to R358bn by FY2031 if decisive intervention is not implemented.
• Liquidity strengthened, with cash and cash equivalents of R124.9 billion at 31 March 2026. The closing balance was bolstered by the R80bn Debt relief payment received in March 2026. A significant portion (R38 billion) of this cash balance was subsequently used to settle the ES26 bonds, which matured in April 2026.  Debt securities and borrowings reduced to R356 billion at 31 March 2026. This further reduced debt to approximately R320 billion by 30 June 2026, strengthening Eskom’s balance sheet and improving its financial risk profile.
• Independent auditors issued a qualified opinion relating to the completeness of irregular expenditure in terms of the Public Finance Management Act (PFMA) reporting. The opinion demonstrates a significant shift as a result of actions by leadership. The qualification on losses due to criminal conduct and on inaccuracies of irregular expenditure have been removed, with the last remaining qualification relating to the completeness of irregular expenditure. Notwithstanding the PFMA qualification, it should be noted that the financial statements were found to be fairly stated, in all material respects, and compliant with International Financial Reporting Standards.
• Significant progress has been made in addressing Reportable Irregularities raised in prior years. In FY2025, Eskom had five Reportable Irregularities relating to environmental compliance, investigations into fraud and misconduct, the completeness and accuracy of PFMA irregular expenditure reporting, delays in PFMA investigations and consequence management, and the completeness and accuracy of the financial statements. Four of these matters were closed during FY2026, with environmental compliance remaining the only open Reportable Irregularity. Corrective actions are being implemented to address the underlying compliance gaps on environmental noncompliance, with strengthened oversight and monitoring to enhance accountability.

Eskom today announced its group annual results for the 2026 Financial Year (FY) ended 31 March 2026, reporting a second successive year of profitability and continued progress in restoring operational and financial sustainability.

“Eskom’s purpose is to power growth sustainably. That means holding two mandates at once: a commercial duty to run a financially sound business, and a developmental duty to keep South Africa connected, growing and included. Profit is not the opposite of that public purpose. It is what makes the purpose possible,” said Mteto Nyati, Eskom Chairman.

“This is the second consecutive year that Eskom has delivered a profit. That performance was earned through operational recovery and cost discipline. It now allows us to reinvest in Eskom Green, in a better customer experience in distribution, in the reliability of the coal fleet, and in grid expansion so that new generation can connect,” Nyati continued.

“Operations and finances are inseparable: when the generation fleet performs, Eskom relies less on diesel burn for the open cycle gas turbines and the financial benefit is immediate. To reduce reliance on the fiscus, we must earn our sustainability through reliable operations, disciplined cost management and stronger sales revenue. To deliver on our objectives without placing undue pressure on the balance sheet, we are pursuing alternative funding models, including public-private partnerships, private sector participation and finance mechanisms that blend commercial and concessional capital,” said Calib Cassim, Eskom Group Chief Financial Officer.

“Our operational recovery has been matched by a financial turnaround. Eskom delivered a second successive year of strong profitability, with a healthier balance sheet, materially improved liquidity and positive credit-rating actions from S&P Global, Fitch and Moody’s. We received our first credit-rating upgrade in over a decade, which will enhance Eskom’s access to lower borrowing costs to support future Capex, which also contributed to South Africa’s own sovereign upgrade. Government’s debt relief support has been a critical enabler, freeing up cash from operations to be reinvested in the business – notably the generation recovery plan – rather than being consumed by debt servicing, the benefits of which the country is experiencing today,” continued Cassim.

“We are rebuilding an economic asset for South Africa. We have moved from recovery to transformation, shifting our focus from stabilising the business to building a financially sustainable, competitive and future-ready Eskom. Sustained profitability, significant progress in our audit recovery program aimed at strengthening internal controls, and improved efficiencies enable Eskom to continue to address electricity affordability with our shareholder, as we aspire to remain within single-digit price increases. We continue to reinvest profits back into the business to spend on maintaining and expanding critical infrastructure, as well as to develop and introduce the technologies that will drive our decarbonisation journey for the benefit of all our customers and drive investment in the economy,” said Dan Marokane, Group Chief Executive, Eskom.

“When Eskom cannot fulfil its mandate, the impact on the economy and consumers is significant. The scale of the turnaround is best understood against where we were as an organisation and as a country three years ago. The Council for Scientific and Industrial Research estimated that loadshedding cost the economy up to R2.8 trillion in 2023, reducing by 83% to R481 billion in 2024. With four days of loadshedding in FY2026 totalling 26 hours, the impact on the economy was minimal. When Eskom is not financially sustainable, it weighs heavily on the national budget, the sovereign credit rating and borrowing costs, ultimately reducing resources available for other priorities. When Eskom is financially sustainable, we can deliver government reform policy faster through providing the energy security that is vital to give confidence to new competitors to enter the marketplace, as well as integrate variable renewable energy into the grid, none of which is possible without our 24/7, 365 baseload energy supply,” continued Marokane.

“The Board shares President Ramaphosa’s vision of an independent Transmission System Operator that will own the transmission assets at the appropriate point in the future. Equally, we have a clear fiduciary responsibility to keep Eskom financially sustainable so that energy security can continue to power South Africa’s growth. That is why we support treating electricity sector reforms as a carefully sequenced process with clear stage gates,” concluded Nyati.

Managing the emergence of structural overcapacity and sales volume decline

Sustained improvements in generation performance, combined with a structural decline in sales volumes, have for the first time in more than a decade given rise to an estimated surplus capacity of between 2GW and 3GW over the next few years. While this represents a marked reversal of the constrained system margins of recent years, it also introduces new risks to revenue and asset utilisation.

Eskom’s sales volumes have declined by around 2% annually over the past decade, driven by depressed economic conditions, embedded self-generation, energy efficiency gains, wheeling and reduced demand from energy-intensive industries.

Eskom’s Distribution division is responding with a diversified sales-retention and demand-activation plan. This includes negotiated pricing agreements to support ferroalloy and other smelter customers, structural growth into data centres, electric vehicle charging, wheeling optimisation, renewable power purchase agreements and flexible load activation, including a Bitcoin mining pilot. These initiatives are targeted to stabilise sales at around 178TWh over the medium term, with the potential for growth as new products, services and customer segments come on stream.

Despite lower sales volumes and revenue collection challenges, the containment of primary energy costs supported the group’s profitability. Primary energy costs increased marginally year-on-year; however, when excluding the impact of fuel levy refunds, costs in fact declined by 7%.

Improved coal fleet performance and the return to service following scheduled maintenance of both units at Eskom’s Koeberg nuclear power station – which have the lowest primary energy unit cost – reduced reliance on more expensive sources of generation. Most notably, utilisation of open-cycle gas turbines (OCGTs) more than halved year-on-year, resulting in a combined R10.6 billion reduction in spend on Eskom-owned OCGT fuel and storage costs, as well as IPP OCGT costs.

The reduction in costs was partially offset by higher employee benefit costs, driven mainly by average remuneration increases of 7%, a 3% growth in staff complement, as well as production bonuses and a provision under the short-term incentive (STI) scheme to reward employees for improved organisational performance. A total STI obligation of R5.1 billion, including a 13.5% employer pension contribution, was recognised at year-end (2025: R4.2 billion).

The increase in incentives is directly linked to the measurable performance gains achieved during the year. These incentive schemes are structured to reward employees for delivering improved performance for our turnaround and remain self-funded from the performance gains and operational cash flows they generate.

The non-payment of municipal, metro and residential accounts continued to constrain our financial performance, with a net amount of R15.8 billion (around 4.5% of revenue) not recognised as revenue due to the elevated risk of non-collectability (2025: R11.9 billion).

Looking ahead, Eskom will continue to optimise its cost base by driving higher productivity across the workforce and improved organizational performance, while aligning rewards with operational and financial outcomes.

Addressing a qualified audit opinion

The independent auditors, Deloitte & Touche, issued a qualified opinion relating to the quantification and disclosure of irregular expenditure required in terms of the PFMA, as associated financial records were not complete in terms of both the current year and cumulative balances. Notably, the qualification no longer extends to the accuracy of irregular expenditure reported or to losses due to criminal conduct, reflecting the progress made through the audit recovery programme and associated PFMA remediation initiatives. While this represents meaningful progress, addressing the remaining qualification is a priority for management and the Board. Except for the above qualification, the financial statements are considered to be fairly presented in terms of IFRS Accounting Standards.

During the year, the Board intensified its oversight of Eskom’s control environment, PFMA compliance, audit recovery programme and the combined assurance model. The focus moved beyond enhancing structures towards improving control execution, strengthening accountability, and embedding more disciplined assurance and remediation practices across the group are sustainable. There are visible positive results already, but more needs to be achieved in the coming year.

Eskom’s audit recovery programme continued to strengthen governance, improve audit readiness and address systemic control weaknesses. Management is focusing on root-cause remediation, clearer accountability, and improved evidence quality to support sustainable improvements in audit outcomes. PFMA compliance remains a priority and is being addressed through a coordinated, multi-year response supported by stronger controls, enhanced oversight, and consequence management.

Assessing the control environment through the Audit Recovery Programme

Based on key observations from audit work performed during the year, the Internal Audit department concluded that Eskom’s overall system of internal control across the group is adequate but only partially effective. This indicates that, while the design of controls and key governance frameworks is generally adequate, key challenges remain around consistent execution, accountability, and monitoring of controls.

The Board recognises that Eskom’s challenge is less about a lack of policies, frameworks, or control structures, and more about strengthening execution discipline, ownership by management, first-line assurance and accountability for control failures.

Driving progress through the audit recovery programme

A significant area of Board oversight has been the implementation of Eskom’s audit recovery programme to address the internal control challenges. The programme was established in FY2025 to strengthen governance, restore audit discipline and address systemic control weaknesses that have contributed to recurring audit findings and qualified audit opinions in recent years.

During the year, the programme progressed from initial recovery towards disciplined control improvement, enhanced audit readiness, and sustainable remediation of findings through clearer management accountability. The emphasis shifted from establishing governance structures and the administrative closure of audit findings to identifying root causes and management actions aimed at ensuring that underlying control weaknesses are addressed and prevented from recurring, while improving the quality and traceability of audit evidence. This shift is important because lasting improvement in audit outcomes will only be achieved by embedding better practices in day-to-day business processes.

Through these structures, prior-year findings were subjected to more disciplined oversight, with management actions assessed against the underlying root causes, the adequacy of control improvements and the risk of recurrence. This improved the group’s ability to identify systemic weaknesses, prioritise high-risk matters and hold responsible executives and management teams accountable, so that audit findings are closed in a manner that contributes to lasting improvements in the control environment. Controls were enhanced in several high-risk areas, including supply chain management, contract management, irregular expenditure, revenue-related processes, asset verification, and reconciliations.

Strengthening PFMA compliance

Strengthening PFMA compliance remains a key focus area. Management continues to implement targeted interventions to improve reporting, address historical backlogs, and strengthen organisational controls through a coordinated multi-year programme.

The efforts are yielding the desired outcomes. Of the total R4.9 billion irregular expenditure incurred during the year, only R28 million related to new matters. The remainder related to existing multi-year contracts that will continue to attract irregular expenditure until condoned or removed. Two historical incidents, relating to procurement of fuel and construction equipment, accounted for approximately 70% of the irregular expenditure incurred for the year.

Protecting critical infrastructure through physical security

Crime-related risks such as the theft of electrical cable, coal, diesel and fuel oil, as well as illegal connections, meter tampering, ghost vending, infrastructure vandalism and sabotage, continue to threaten primary energy security, operational performance, revenue protection and financial sustainability. Eskom recorded fewer crime-related incidents and lower associated losses compared with the prior year, while arrests and recoveries improved. Physical security crime-related incidents declined by 13%, estimated losses fell by 18% to R191 million, arrests increased by 18% to 505, and recoveries increased by 38% to R34 million, with 13 convictions recorded to date. (2025: 13)

Coal security remained an important focus area, given its link to primary energy security and generation performance. Targeted crime-prevention initiatives and disruptive operations across the coal supply chain supported the detection of potential theft, fraud and adulteration risks. Together with strengthened supplier oversight and coal quality verification processes, these interventions contributed to improved confidence in the integrity of coal deliveries.

Eskom has continued to modernise its security environment, including the rollout of a Security Incident Management Application with real-time monitoring and enhanced analytical capabilities. We are also evaluating and deploying advanced security technologies such as integrated surveillance, intelligent analytics, and drone-based monitoring.

We officially launched the Raptor Fusion Centre at Eskom’s Megawatt Park headquarters in Johannesburg on 6 February 2026. This dedicated unit within Group Investigations and Security is focused on addressing high-priority incidents involving organised crime, infrastructure sabotage and significant economic offences through intelligence-driven investigations and rapid response interventions.

Strengthening cyber security and digital resilience

Eskom continued to strengthen its cyber-security capabilities, with no ‘Priority 1’ cyber security incidents recorded during the year. Key initiatives included enhancing system security, improving monitoring capabilities and protecting critical digital infrastructure.

The organisation migrated the Online Vending System (OVS) infrastructure to a more secure environment, resulting in a significant control improvement against the generation of illicit prepaid electricity tokens and associated revenue and energy losses. Eskom is also accelerating implementation of a new secure vending platform to replace the current system.

Further initiatives include the implementation of a zero-trust network architecture, next-generation firewalls, strengthened endpoint protection and the development of an artificial intelligence (AI) security standard to support the safe adoption of emerging technologies.

Improving procurement and supply chain integrity

During the year, Eskom undertook several initiatives aimed at improving procurement integrity. These included the use of National Treasury’s Central Supplier Database for informal tendering requests for quotation, enhanced monitoring of low-value procurement mechanisms, the continued streamlining of supply chain management policies and procedures, and the reinstatement of proactive assurance and full-scope probity reviews for high-value tenders.

The Board also approved a supplier integrity policy to strengthen expectations for supplier conduct, including confidentiality, fair tendering, avoidance of conflicts of interest, reporting of misconduct and consequence management when suppliers breach Eskom’s ethical, procurement or contractual requirements. This was complemented by the re-establishment of the Supplier Review Committee to support more responsive and consistent sanctions of suppliers for wrongdoing, including removal from Eskom’s supplier database, referral to National Treasury for restriction, or implementing temporary purchasing blocks on Eskom’s procurement systems.

Procurement has continued to be modernised by digitising workflows and strengthening automated controls, including the implementation of enhanced inventory, warehouse, and price-verification systems to improve stock visibility and procurement accuracy. Price benchmarking and contract renegotiations, supported by market pricing tools, are also being implemented to ensure that Eskom receives enhanced value for money.

Going forward, the digitalisation and optimisation of procurement processes, including the implementation of a full-scale eProcurement solution, aim to reinforce controls, improve master data quality, enhance fraud detection and support real-time analytics to support informed decision-making. The next phase will also require procurement integrity to be embedded in day-to-day operations, supported by a stronger control environment and a more mature, combined assurance model.

Advancing forensic investigations and reinforcing consequence management

During the year, the Group continued to prioritise the timeous assessment of reported incidents through whistle-blowing channels to identify potential misconduct at an early stage.

Performance in assessing reported incidents remained strong, but the timely commencement and conclusion of follow-up investigations continued to be affected by the significant volume of historical forensic cases requiring attention. At year-end, the majority of active forensic matters related to prior years, highlighting the scale of legacy matters still requiring resolution.

In summary, 96 employee disciplinary actions relating to forensic matters were concluded and 92 criminal cases completed.

Management is implementing several interventions to improve investigative throughput, quality and responsiveness. These include the establishment of a dedicated project management office to support resolution of long-outstanding forensic investigations and disciplinary matters. Furthermore, we have initiated a process to appoint a panel of specialised external forensic service providers to supplement internal resources and provide access to specialist capabilities – including digital forensics, advanced data analytics and other forensic disciplines – to accelerate the resolution of legacy matters, while strengthening the quality and consistency of investigative outcomes.

Delays in concluding investigative and disciplinary matters remain a challenge, particularly where cases are complex or relate to historical matters. A key focus is the strengthening of the integration between forensic investigations, control remediation, employee disciplinary processes, supplier sanctions and criminal referrals. We continue to collaborate closely with law enforcement by supporting external investigations as well as criminal and civil cases, to advance investigations, arrests, prosecution outcomes and recoveries.

Looking ahead, Eskom’s governance and integrity agenda will continue to focus on reinforcing ethical conduct, embedding stronger preventative controls, improving detection and monitoring, accelerating investigations and consequence management.

Retirement of Group Chief Financial Officer (GCFO)

After 24 years of service, including one year acting as Group Chief Executive, Calib Cassim will retire from his role as Chief Financial Officer in FY2027. The Board has initiated a succession process to ensure a smooth leadership transition and expresses its sincere appreciation for his contribution to Eskom.

The Board is managing the recruitment process for the incoming GCFO with a clear schedule and timelines, with the aim of having the successful candidate take office before the end of the 2026 calendar year.

Financial year ended 31 March 2026 suite of reports

Eskom’s results for the year ended 31 March 2026 are available in the investor relations section of the Eskom website.

• Results presentation 31 March 2026
  Presented to stakeholders on 31 August 2026.
• Integrated report 31 March 2026
  Provides an overview of our strategy, governance and performance, both financial and operational. Statistical information is included.
• Annual financial statements 31 March 2026
  Consolidated annual financial statements of the Eskom Holdings SOC Ltd group.
• Sustainability report 31 March 2026
• Supplements and provides more detailed information on Eskom’s sustainable development impact than that provided in the integrated report.

About Eskom and Electricity – Power Plants: Eskom operates over 27 power stations.