By Nqobile Dludla
JOHANNESBURG (Reuters) -Eskom expects to report a full-year profit of more than 10 billion rand ($546 million), its first profit in eight years, thanks to operational stability and government’s debt relief package, its CEO said as the power utility reported a wider loss on Thursday.
Eskom Chief Executive Officer Dan Marokane told a press conference that the profit after tax for the year ended March 2025 would be a significant improvement from a loss of 55 billion rand reported in its financial year to March 31.
“Financial year 2024 was the most painful but also a year of building in which the generation recovery started picking up momentum,” said the CEO of the South African company.
Eskom’s power cuts, known locally as load-shedding, have curbed economic growth in Africa’s most industrialised nation for more than a decade. The company implemented scheduled power cuts on 329 days during the financial reporting period.
But a dramatic turnaround in Eskom’s electricity supply this year has seen South Africa go without power cuts for about nine months, lowering its diesel spend by 11.9 billion rand, a presentation on the company’s website showed.
Lower debt and debt service costs will also contribute to the improved profit outlook, in addition to a 12.7% tariff hike, Eskom’s Chief Financial Officer Calib Cassim said.
In this reporting period, its gross debt decreased by 11.7 billion rand to 412.2 billion rand, thanks to a government debt-relief package worth 250 billion rand over the medium term.
However, the benefits of this debt-relief “will be nullified” if nothing is done to tackle the escalating municipal debt of 95 billion rand as of November, Cassim told Reuters.
The higher loss after tax of 55 billion rand in current reporting period from 26.1 billion rand in 2023 was because of a one-off tax charge linked to the separation of its transmission unit.
Eskom is being split into three companies that will separately manage electricity generation, transmission and distribution, as part of a reform plan announced by President Cyril Ramaphosa in 2019 to make the utility more efficient.
($1 = 18.3056 rand)
(Reporting by Nqobile Dludla. Additional reporting and writing by Bhargav Acharya.Editing by Alexander Winning, Mark Potter and Keith Weir)
