South Africa’s state-owned logistics group Transnet has returned to annual profit for the first time in four years, but its latest results also show how much work remains before the company’s underlying operations can be considered financially sustainable.
Transnet reported a net profit of R4.6 billion for the financial year ended 31 March 2026, compared with a R1.9 billion loss a year earlier. Revenue increased 7.1% to R88.6 billion as volumes improved across its rail and pipeline operations.
The headline profit, however, was substantially supported by the transaction involving Durban Container Terminal Pier 2. Transnet’s audited annual financial statements show that the disposal and related fair-value adjustment generated a R12.5 billion profit during the reporting period.
Under the 25-year concession arrangement with International Container Terminal Services Inc., Transnet transferred management control of the terminal while retaining a 50.001% shareholding. The transaction formed part of wider efforts to bring private capital and operating expertise into South Africa’s freight logistics system.
Operational performance improved during the year. Freight rail volumes rose to 167.9 million tonnes from 160.1 million tonnes a year earlier. The result nevertheless remained below Transnet’s previously stated target of 180 million tonnes.
Chief Executive Michelle Phillips said reaching that volume target was important for the underlying business to break even, according to Reuters reporting on the results.
Transnet is also opening parts of its rail network to private operators. Eleven private operators have been granted access, with some expected to begin operations by 2027. They are expected initially to add about 24 million tonnes of capacity, potentially rising to 52 million tonnes.
The company’s balance sheet remains under pressure. Borrowings increased to about R150.7 billion from R144.8 billion a year earlier, although gearing eased slightly to 49.4% from 49.6%.
Transnet plans to invest R129.1 billion over the next five years, including R115.9 billion for maintaining and rehabilitating existing infrastructure. Phillips said government guarantees were sufficient to support the five-year programme.
The results therefore mark an improvement in Transnet’s financial and operational position, but they do not establish that its core operations have fully recovered. The next test will be whether higher freight volumes, private rail participation and infrastructure investment can produce sustained operating improvements without relying on exceptional transaction gains.
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