South African state-owned power utility company, Eskom, says it projects to return to profit making next year for the first time in eight years eight years after suffering a whooping $3 billion loss.
The CEO of the company, Dan Marokane, said this in a statement on Friday, as per a report from Reuters.
Markone said the company projects a return to profit by March 2025 following a government debt-relief package provided to the energy firm.
The CEO also mentioned that the company has improved its operational stability and efficiency as part of its intentional effort to drive growth in 2025.
Eskom forecasts a post-tax profit exceeding 10 billion rand ($546 million) for its 2025 financial year, marking a significant turnaround from a 55 billion rand loss within the same period in 2024.
“Financial year 2024 was the most painful but also a year of building, in which the generation recovery started picking up momentum,” Marokane said during a press conference in South Africa.
Power Cuts Reduced
In the past, the has struggled for over a decade with rolling power cuts, locally known as load-shedding, which have hampered South Africa’s economic growth.
In 2024 alone, the company implemented power cuts that lasted for about 329 days, resulting in intermittent power supply across the country.
However, operational improvements lately have brought dramatic relief. South Africa has gone without power cuts for nearly nine months, significantly reducing Eskom’s diesel expenditure by 11.9 billion rand ($649.9 million) , according to a presentation available on its website.
Tariff hikes to drive profit margin
The company further explained that the improved outlook is also supported by a 12.7% tariff hike, lower gross debt, and reduced debt servicing costs.
Eskom’s gross debt dropped by 11.7 billion rand to 412.2 billion rand during the reporting period, aided by a 250 billion rand government debt-relief package.
“Eskom’s financial recovery is closely tied to stabilizing its debt and achieving operational efficiencies,” Chief Financial Officer of the company, Calib Cassim, said on Friday.
Despite the gains, Cassim warned that municipal debt, which reached 95 billion rand as of November, remains a major challenge.
“The benefits of this debt-relief will be nullified if nothing is done to tackle escalating municipal debt,” he told Reuters.
Eskom’s higher loss of 55 billion rand in 2024, up from 26.1 billion rand in 2023, was attributed to a one-off tax charge linked to the separation of its transmission unit.
President Cyril Ramaphosa announced a major restructuring plan for Eskom ealier this year, dividing it into three independent entities to manage electricity generation, transmission, and distribution.
The reforms aim to boost efficiency and secure the sustainability of South Africa’s power supply.
