Transnet recovery gains pace as profit reaches R4.6bn

Transnet SOC has reported improved operational performance and stronger cash generation for the financial year ended March 31, 2026, as the South African state-owned logistics company continues to implement its reform and growth strategy.

The company said its latest financial results reflect progress across its operations, while efforts to strengthen financial sustainability and support long-term growth remain underway.

Transnet’s performance comes as the company advances its reform and growth agenda, with a focus on improving operational efficiency, strengthening its financial position and building greater capacity across its logistics network.

Revenue rose 7.1% to R88.6 billion, supported by higher rail and pipeline volumes as well as increases in weighted average tariffs. The company returned to profitability, reporting a profit of R4.6 billion, compared with a loss of R1.9 billion in the previous financial year. EBITDA increased marginally by 0.7% to R30.9 billion, although the EBITDA margin declined by 2.2 percentage points to 34.8%. Meanwhile, net operating expenses climbed 10.8% to R57.7 billion. Capital investment stood at R23.3 billion, with spending focused on infrastructure renewal, operational recovery and supporting future growth.

The stronger financial performance was underpinned by growth in rail and pipeline volumes, tariff adjustments across the business and ongoing measures to improve operational efficiency. Rail volumes rose 4.9% to 167.9 million tonnes, reflecting targeted interventions to strengthen network reliability, improve maintenance execution and increase asset availability. Pipeline volumes also increased during the year. While operational challenges persist, the progress made during the reporting period suggests that Transnet’s recovery initiatives are beginning to produce measurable improvements.

These gains have also received recognition from customers and industry stakeholders, with freight users noting better rail performance and service delivery, while industry bodies, including the citrus sector, highlighted improvements in port operations that supported stronger export performance.

Reinvent for growth driving recovery
The progress recorded during the year was supported by the implementation of Transnet’s Reinvent for Growth (R4G) strategy, which remains the company’s roadmap for operational recovery, financial sustainability and long-term growth. However, operations continued to face several challenges, including derailments, rail network and rolling stock constraints, security incidents, tippler and power supply disruptions, adverse weather, resource limitations, community unrest and fluctuations in customer demand. The rail and port businesses were also impacted by R658 million in take-or-pay penalty adjustments, adding pressure to overall operational performance.

Durban Gateway Terminal Transaction
A major milestone during the year was the execution of Transnet’s Private Sector Participation (PSP) strategy through the Durban Gateway Terminal (DGT) transaction, aimed at supporting the modernisation and long-term competitiveness of South Africa’s port infrastructure. Under the agreement, Transnet sold a 49.999% stake in DGT to International Container Terminal Services Inc. (ICTSI) for R10.5 billion, effective January 1, 2026.

The transaction resulted in a R12.5 billion profit on disposal, including a related fair-value adjustment, providing a significant boost to the Group’s financial performance. Transnet retains a 50.001% stake in DGT, while management control has shifted to ICTSI. The deal marks a significant step towards attracting private investment, enhancing port operations and accelerating the long-term modernisation of South Africa’s port infrastructure.

Investing in long-term growth
To support its recovery and long-term growth, Transnet invested R23.3 billion during the year in critical infrastructure, asset renewal and operational improvements. The investment was directed towards strengthening the rail network, enhancing port performance, improving asset reliability and boosting operational efficiency across the organisation. Meanwhile, National Treasury’s approval of R14.8 billion in grant funding through the Budget Facility for Infrastructure (BFI) for strategic rail and port projects is expected to provide further support for infrastructure development, improve network performance and help reduce future funding requirements.

Transnet continued advancing South Africa’s freight logistics reform programme during the year. Progress included steps towards establishing the Transnet National Ports Authority (TNPA) as a wholly owned subsidiary, while the accounting separation of Transnet Freight Rail (TFR) into the Transnet Freight Rail Operating Company and the Transnet Rail Infrastructure Manager (TRIM) was completed.

Transnet remains focused on enhancing operational reliability, increasing freight volumes, rebuilding customer confidence and fostering a safer, more efficient operating environment.