Transnet returns to profitability but long road to recovery remains

Transnet has swung back into profitability for the first time in four years, an early indication that the state-owned company’s rail and port operations are starting to stabilise.

On Thursday, Transnet unveiled its financial results for the year ended 31 March 2026, showing a profit after tax of R4.6 billion, compared with a loss of R1.9 billion last year.

The last time Transnet was in the black was during its 2022 financial year, when it declared a profit of R8 billion.

Transnet’s financial books received an unqualified audit, which means that the Auditor-General believes they are an accurate reflection of the company’s financial position.

While Transnet Group CEO Michelle Phillips hailed the return to profitability as positive, she was frank that the company’s turnaround journey was still far from complete.

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“Is the turnaround job finished? Not by a long shot. We have a lot of work to do. The business still has to be financially sustainable,” Phillips said during the results presentation.

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Rail volumes recover, but remain below target

Transnet Freight Rail (TFR), the biggest division of the R88.6 billion-turnover transport group, has shown a recovery in rail volumes.

TFR is responsible for transporting most of the iron ore and coal South Africa produces to ports for export – and that is before considering its vital role in carrying freight and fuel domestically. When TFR is not operating effectively, businesses and exports suffer disruptions.

During Transnet’s latest financial year, TFR moved 167.9Mt, a modest but important improvement from 160.1Mt the previous year.

Rail volumes are still below the 170Mt target set by Transnet management and the board.

“We have arrested the decline in volumes. The next test is whether we can sustain these volumes and ensure that there is growth. The more volumes we move, the more money we make,” said Phillips.

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Rail volumes are still being hampered by shortages of locomotives (the heavy-haul ones that are supposed to pull the coal and iron ore wagons), maintenance backlogs, derailments, crime, and vandalism on the rail network. The latter is a key cause of underperformance in TFR’s rail network, as cable theft and vandalism led to financial losses amounting to R2 billion.

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Phillips said if Transnet arrested cable theft incidents, the entity would have been more profitable.

The coal line running from Mpumalanga’s coalfields to Richards Bay in KwaZulu-Natal – the backbone of South Africa’s export network, as it accounts for a major share of its annual freight volumes – showed a clear recovery, operating at a 58.5Mt annualised tempo.

To fix its rail operations, Transnet has started the process of partnering with private sector companies that are set to bring their locomotives and use the group’s vast rail network across South Africa to operate trains independently.

Read: Transnet signals turnaround as private operators enter rail and ports

In its port operations across South Africa, Transnet handled 4.580 million TEUs (20-foot equivalent units, a measure of trade volumes at container ports), which was 7% more than the previous year.

The same efficiency-improvement initiatives seen in freight rail are being implemented at Transnet’s port operations, especially with the upgrade of equipment, including ship-to-shore cranes, ship loaders and unloaders, mobile harbour cranes, trailers, and haulers.

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