Fitch Ratings has reaffirmed Eskom's credit rating amid operational improvements
Image: Timothy Barnard /Independent Newspapers
Fitch Ratings made a significant announcement regarding Eskom Holdings SOC Ltd., reaffirming its Long-Term Local-Currency Issuer Default Rating (IDR) at 'B' and assigning a stable outlook.
This decision underscores a cautious optimism surrounding the struggling power utility's financial trajectory, particularly as the energy crisis in South Africa continues to loom large.
In a further sign of progress, Fitch Ratings revised Eskom’s Standalone Credit Profile (SCP) to ‘ccc+’ from 'ccc-', indicating a notable enhancement in the operational performance of the Group.
The ratings agency anticipates a material increase in earnings before interest, taxes, depreciation, and amortization (EBITDA) for Eskom during its Financial Years (FY) 2025 to FY 2029.
Fitch also affirmed Eskom's senior unsecured debt at 'B', with a Recovery Rating of 'RR4', and recognised its senior unsecured guaranteed debt at 'BB-'.
These projections signal potential stability ahead for the beleaguered entity.
“The affirmation and positive revision on our credit rating profile by Fitch reinforces our determination to continue our efforts to turnaround Eskom’s financial and operational performance,” stated Dan Marokane, Eskom’s Group Chief Executive.
“Our aim remains to ultimately reduce Eskom’s reliance on government support by driving the company towards financial sustainability,” he said.