Transnet posts profit for the first time in four years, but still long way to go to recovery

South Africa’s state-owned freight transport and logistics company Transnet has posted a profit for the first time since 2022.

However, group CEO Michelle Phillips noted that it still has a long way to go to recovery.

Transnet released its financial results for the year ended 31 March 2026 on Thursday, revealing a profit of R4.6 billion, a “100% improvement” from last year. The company made a loss of R1.9 billion in 2025.

“The Company experienced significant improvement in the operating environment, particularly in the rail and pipeline business, owing to the implementation of the recovery plan,” said the company.

Transnet sees an increase in volume

The company declared a profit of R8 billion in 2022. For financial year 2026, Transnet’s revenue rose 7.1% to R88.6 billion, driven by weighted average tariff increases and volume gains.

“This was achieved despite various challenges that continue to impact the rail business, which include historic under-investment, theft and vandalism, and declining reliability of the legacy fleet, resulting in lower volumes railed,” said the logistics company.

Transnet also received an unqualified audit from the Auditor-General for the year, meaning the AG states the company’s financial statements are fair, accurate, and follow standard accounting rules.

Transnet shines through

The company said during the year, as part of implementing Transnet’s private sector participation strategy, Transnet established Durban Gateway Terminal (DGT), a 100% owned subsidiary of the group, which resulted in Transnet Port Terminal’s Durban Container Terminal (DCT) Pier 2 net assets (carrying value of R3,3 billion) transferring to DGT.

Transnet then disposed of a 49,999% interest in DGT to International Container Terminal Services Inc. (ICTSI) for R10.5 billion, with an effective disposal date of 1 January 2026.

“The profit on disposal of the interest in DGT (including the related fair value adjustment) of R12.5 billion was recognised in the current reporting period.

“This disposal also resulted in Transnet transferring management control of DGT to ICTSI and DGT therefore being recognised as an associate of the group, with Transnet retaining a 50,001% shareholding in DGT.

“The group did report a R4.6 billion net profit for the year. The improvement in the profit position is mainly due to the sale of Pier 2 terminal in the current year and improvement in rail and pipeline volumes.”

Auditor-General’s opinion

“I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion,” said the AG.

AG Tsakani Maluleke added that she tailored the scope of the audit to perform sufficient work to enable her to provide an opinion on the consolidated financial statements as a whole, considering the structure of the group and the accounting processes and controls.

“I considered the group’s structure and risk assessment when identifying components for purposes of planning and performing audit procedures. The group comprises of ten components,” she said.

“In determining which components would be subject to audit procedures, I assessed their significance to the group based on size and risk. All ten components were deemed significant, and full scope audit procedures were performed on each component.”

The future

According to the company, Transnet has fully transitioned into the execution of its Reinvent for Growth (R4G) Strategy.

“While continuing to build on the progress achieved through the Tactical Recovery Plan, the R4G Strategy is designed to transform and grow the business as Transnet repositions itself for long-term sustainability in an increasingly competitive and evolving logistics market,” said Transnet.

“Central to this strategy is the commitment to delivering a more reliable, predictable and customer-centric logistics network that supports South Africa’s economic growth and development objectives.

“This strategic transition continues to gain momentum across our operations, delivering an approximate 5% year-on-year increase in overall volumes. Key cargo segments recorded double-digit growth, led by containers at approximately 10% and automotive volumes at approximately 13%.”