Transnet profit returns after four years of losses
Asset sale drives the return to profit
Transnet‘s audited results for the year to 31 March 2026 show a net profit of R4.6 billion. That compares with a loss of R1.9 billion in the prior year, according to company financial statements. Revenue rose 7.1% to R88.6 billion, supported by higher volumes across rail and pipeline networks.
The core driver was the partial sale of Durban Container Terminal Pier 2, now trading as Durban Gateway Terminal. Transnet completed the sale of a 49.999% stake to International Container Terminal Services Inc (ICTSI) on 1 January 2026, following a legal process spanning roughly two years. The transaction was valued at R10.5 billion and generated a profit on disposal of around R12.5 billion — the single biggest contributor to the reported Transnet profit.
Headline earnings, which strip out capital gains, remain negative. Freight Rail posted a pre-tax loss of R13.25 billion, and Transnet Engineering also stayed loss-making. By contrast, the National Ports Authority, Port Terminals and Pipelines divisions all reported solid profits, highlighting the uneven nature of the turnaround.
One local analyst captured the investor question clearly: “Transnet’s profit is a milestone, but sustainability depends on rail recovery, not asset sales.”
Are higher freight volumes the start of a durable recovery?
Transnet’s freight rail volumes rose to 167.9 million metric tons in 2025/26, up from 160.1 million tons a year earlier. Improvements on key corridors and better operational reliability supported the gain. However, the company missed its 180 million-ton target, showing how far performance still sits below plan.
Port volumes also improved. Transnet’s ports handled more than 300 million tonnes in 2025/26 — the strongest result in roughly 15 years, according to company figures. Pipeline volumes rose as well, adding to revenue growth and divisional earnings.
At the policy level, Transnet is advancing a structured programme of private-sector participation in rail and terminals. The Durban Gateway Terminal partnership with ICTSI is the flagship example. Under a 25-year arrangement, the private operator assumes day-to-day management while Transnet retains majority ownership. The model aims to attract capital and expertise while keeping strategic assets under state control.
What does the Transnet turnaround mean for investors?
Transnet has outlined plans to open parts of its rail network to 11 private operators. Some are expected to begin operations by 2027. Initial added capacity could reach 24 million tons, potentially rising to 52 million tons as concessions scale up. That volume, if delivered, would materially shift the supply picture for bulk commodities and general freight.
Transnet still carries a large debt load, backed by extensive state guarantees. Its freight rail unit faces significant renewal needs for rolling stock, infrastructure and signalling. However, rising port and pipeline profits, growing volumes and the entry of private rail operators position the group for a more balanced earnings profile over the next three to five years, if execution holds.
Investors and policymakers should watch how quickly private rail operations come onstream, whether freight volumes approach the 180 million-ton target, and how Transnet deploys the Durban windfall into core rail recovery rather than short-term debt relief.
Quick answers
Transnet reported a net profit of R4.6 billion for the year to 31 March 2026, compared with a loss of R1.9 billion the previous year, according to company financial statements.
The primary driver was the sale of a 49.999% stake in Durban Container Terminal Pier 2 to ICTSI for R10.5 billion, which generated a profit on disposal of around R12.5 billion in Transnet’s income statement.
Transnet has outlined plans for 11 private operators to access parts of its rail network, with some expected to begin operations by 2027, potentially adding up to 52 million tons of capacity as concessions scale up.
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