Eskom has confirmed that it is forecasting to make a full-year profit of more that R10-billion for 2024/25, having reported a R17-billion profit for the interim period, up from the R1.6-billion recorded for the same period in 2023/24.

The group reported an after-tax loss of R55-billion in its full 2023/24 financial year, a performance that was negatively affected by the derecognition of a R36.6-billion deferred tax asset associated with the separation of the National Transmission Company South Africa.

Its loss before tax last year stood at R25.5-billion, which represented an improvement on the R34.6-billion reported in 2023/24.

Eskom’s going-concern status is currently being sustained only because of the R252-billion debt relief being extended by the National Treasury, of which R64-billion was released in the 2024/25 financial year.

CEO Dan Marokane told members of the Portfolio Committee on Electricity and Energy that the interim profit reflected the seasonal character of the business, which benefitted in the first half of its financial year from April to September from both higher demand and higher winter profits.

Nevertheless, he still anticipated a full-year profit of R10-billion, on the back of a far better operational performance, which he said was now filtering through to its financial performance.

For the six months to September 30,  plant availability rose to 62.97% from only 55.27% in the comparable period of the prior year.

In addition no loadshedding was implemented for the first 183 days of the 2024/25 financial year, resulting in an R11.9-billion fall in diesel cost period-on-period.

That loadshedding reprieve had since been extended to 301 days, but rotational cuts were reintroduced at Stage 3 on January 31, because diesel and pumped-storage reserves had been depleted, owing to extended use after six coal units broke down across the Matimba and Lethabo power stations.

Asked how the recently approved above-inflation tariff hike of 12.74% could be justified in the context of a R10-billion profit forecast, CFO Calib Cassim pointed to Eskom’s persistently supressed financial ratios.

These, he said, were making it impossible for it to meet its maintenance and expansion plans while also honouring repayments on debt, that remained above R412-billion at the end March last year.

He said a R10-billion profit would represent a 3% margin, which was well below the returns being achieved by independent power producers.

Eskom, which had applied for a 36.15% tariff hike, also indicated that the 12.74% was not in line with what was needed to restore the group’s financial sustainability, but stressed there were also three other key components.

These included self-help measures such as noncore disposals, implementing cost savings and addressing the municipal arrears debt problem.

Cassim warned that there was a growing risk that the rising municipal arrears debt, which stood at over R90-billion, would erode the benefits of the debt-relief package.

Marokane said Eskom would be integrating the 12.74% into its models to assess the impact and promised to provide feedback on the implication within weeks.

He gave no indication that Eskom intended to contest the outcome legally, saying that it would need to assess how the business could operate within the envelope provided, with priority to be given to asset maintenance and integrity.

Eskom also refused to be drawn on whether the fact that it received no allowable revenue for the carbon tax implied that it had secured an exemption, directing enquiries in that regard to Nersa and the National Treasury.