Sport, like markets, has a habit of turning opinions into facts if they are repeated often enough.
We are seeing it in the absolutely absorbing Rugby’s Greatest Rivalry series. After the Springboks levelled matters against the All Blacks in Cape Town, New Zealand coach Dave Rennie planted a particularly useful narrative: the Boks were “walking around” rather than scrumming straight.
Bok coach Rassie Erasmus was understandably incandescent, accusing Rennie of trying to turn opinion into fact. The technical merits can occupy rugby tragics until Saturday’s fourth Test in Baltimore. What interests me is the method. Introduce a proposition through the media, repeat it often enough, and soon everyone begins discussing the consequences of something whose premise remains contested. Rennie has indeed said New Zealand intends taking its concerns to World Rugby.
Something similar is happening around Eskom’s latest financial results.
“Eskom made a R30bn profit” is rapidly becoming shorthand for a utility swimming in money. Calls are being made on social media and in other more respected circles to take some of these “profits” and subsidise struggling smelters, accelerate renewable investment or even fund infrastructure elsewhere in the state.
Before this narrative walks around the facts, some scrumming straight is required.
Eskom did make a profit. Profit after tax more than doubled from R14bn to R30.3bn. Ebitda rose 11% to R108.6bn and operating profit increased 9% to R72.3bn. Better plant performance reduced reliance on ruinously expensive emergency generation, and Eskom calculates that underlying primary energy costs fell R11.5bn after adjusting for the fuel levy distortion.
That is real progress. Management, CEO Dan Marokane and chair Mteto Nyati deserve credit for it.
But a R30.3bn accounting profit does not mean Eskom suddenly has R30.3bn lying around waiting for politicians to decide where to spend it.
Let’s start with the most important distinction. The National Treasury provided Eskom with another R80bn of debt relief during financial year 2026. That R80bn is not revenue and does not appear in the income statement as profit. It is financing support from the shareholder — ultimately taxpayers — and sits on the balance sheet as part of the shareholder loan pending conversion arrangements.
So simply subtracting R80bn from R30bn and declaring that Eskom actually lost R50bn is equally wrong. But look at the cash flow statement and the significance of the bailout becomes impossible to miss.
Eskom generated an impressive R96.6bn of operating cash. Yet after capital spending, investments and debt servicing, the Treasury’s R80bn intervention was crucial to the liquidity position. Eskom finished the year with R124.9bn cash. Mechanically removing that R80bn payment, all else being equal, leaves about R44.9bn.
Then remember that Eskom paid a R38bn bond in April, immediately after its year-end.
On that deliberately simplified basis, you are down to about R7bn before considering the utility’s continuing capex, debt-service and decommissioning requirements.
Eskom itself warns that the R124.9bn year-end balance should not be regarded as surplus cash because it was earmarked for precisely those obligations. And this was hardly Eskom’s first visit to the taxpayers’ ATM. The debt-relief programme has already delivered R76bn, R64bn and R80bn — R220bn in three years.
For perspective, that is more than the government plans to spend on water and sanitation infrastructure across the entire country over the next three years. It is almost four times the education infrastructure spending over three years and more than five times the equivalent health infrastructure programme. That is the opportunity cost of Eskom’s failure.
The proper conclusion is therefore subtler than either cheerleaders or critics suggest.
Eskom’s operational recovery is genuine. Its balance sheet recovery is also taxpayer-assisted on an enormous scale.
Death spiral continues
There are other reasons to keep the champagne corked.
Revenue increased just 4% despite a 12.74% tariff increase. This is because electricity sales fell 6.2%. Industrial sales collapsed 22.5%. The death spiral continues. Eskom now says it has 2GW–3GW of surplus generation capacity and is searching for new demand through data centres, exports and even a bitcoin-mining pilot.
And municipal arrears have reached R111.6bn, which Eskom itself calls the single biggest threat to financial sustainability. On the present trajectory, they could exceed R300bn by 2031.
Which brings us to the unbundling. Eskom repeatedly insists that transferring transmission assets to an independent system operator must be “carefully sequenced” to safeguard its financial sustainability and lender rights. Those are legitimate concerns. But these results complicate that argument.
You cannot simultaneously celebrate a structurally recovered Eskom, with R108.6bn ebitda and materially improved liquidity, while using financial fragility as an open-ended reason that the grid can’t leave Eskom.
President Cyril Ramaphosa has now been unequivocal: the end state is a fully independent, state-owned transmission system operator owning and controlling the transmission assets. Eskom and Business Leadership South Africa have formally (and at least publicly) endorsed the same destination, albeit with that crucial qualification about “careful sequencing”.
And here another dangerous narrative could take hold, arguing that prudence requires an indefinitely extendable timetable. Eskom Green is not waiting. It is targeting 32GW of renewables and storage. Distribution is developing trading products. Eskom is preparing aggressively for competition.
Structural reform cannot be the one part of Eskom’s strategy that’s forever asked to wait for the perfect conditions.
The danger now is that “careful sequencing” becomes another opinion repeated so often that we end up flying dangerously close to delay eventually passing for reform.
