Transnet said on Friday it had turned the corner after narrowing its losses 74% to R1.9bn in financial 2025, from a R7.3bn loss the previous year. The improvement comes almost two years after the state-owned ports and rail company presented its turnaround plan.
Transnet, which is facilitating the unprecedented entry of private-sector rail operators to its six rail corridors as part of the logistics sector shake-up, said more work was needed to improve volumes and profits in the year ahead. It reported a 10Mt year-on-year increase in rail volumes by Transnet Freight Rail to 160.1Mt.
Group CEO Michelle Phillips said at the group results presentation in Johannesburg on Friday that the improved volumes and narrowing of losses showed the Transnet strategy was working and its recovery plan was succeeding.
“This is a journey, and we are not done yet, we have not arrived, we still have a long way to go,” she said.
Transnet had arrested the decline that saw volumes plummet to historic lows of 149Mt in financial 2023. Five years earlier, volume had hit 226Mt.
“We had the robust conversations; we had to change, and we had to do something. In the first six months, we took the volumes to 151.7Mt, the promise we made to the customer is ‘you will not be worse off than you were in 2022/23’,” Phillips said.
Performance of the ports was, however, slightly weaker than the prior year. Transnet reported 4,090 TEUs (20-foot equivalent units) in financial 2025 compared with 4,152 TEUs the previous year, a 1.5% decline.
“Let us go back to 2023, with 21 vessels waiting outside pier 2; go there today, vessels are berthing on arrival, across the country, and I can tell you we are already above the prior year,” Phillips said.
“The ports are breaking records; I worry now that I have to wait for vessels. That is my big concern, but we will continue to push.”
She acknowledged that profit targets set in the turnaround plan had not been met. The group had wanted to achieve a profit of R5.2bn and volumes of 193Mt in the year under review.
“Targets have not been met. We also understand there is still a lot of work that needs to be done. Obviously, if the targets were met, we would be profitable now.”
Last year Transnet revised profit forecasts down to R1bn but still failed to achieve this.
If everything worked 100%, we would have been in a profitable space this year. It did not happen, [but] I think we have to celebrate the improvement that has been achieved
— Michelle Phillips, Transnet CEO
“Last year we said R1bn because I think we were ambitious about what we were doing ... If everything worked 100%, we would have been in a profitable space this year. It did not happen, [but] I think we have to celebrate the improvement that has been achieved.”
Phillips said cutting losses 74% was no mean feat. “It could have been a lot worse if we did not have dedicated people working hard.”
The company reported a 7.8% year-on-year increase in revenue to R82.7bn, driven by tariff increases, a moderate recovery in rail volumes and an increase in capital investment to R24bn from R16.7bn a year earlier. However, its debt pile rose to R144.8bn from R137.7bn as the company addressed critical infrastructure maintenance and service delivery needs.
Board chair Andile Sangqu said over the next five years Transnet plans to invest R127.7bn in key rail and port infrastructure, with the majority of that going to maintenance and refurbishment projects.
“The recovery plan has enabled investment in critical equipment, thereby reducing backlogs and improving terminal efficiency. Capital investment is an important indicator of our commitment to long-term growth and competitiveness. These investments are not just about money; they demonstrate our intentions to enhance capacity and efficiency.”
Phillips said while cable theft and vandalism had dropped 23%, they remained a challenge. Transnet lost 4.1Mt due to cable theft and vandalism while spending almost R4bn a year on security. It lost 7.1Mt due to derailments.
“Everyone is suffering from the theft of cabling, and we need to resolve this problem.”
The introduction of extra private players on the network would help increase efficiency.
“We want South Africa to be a destination where the cost of transport is cheaper. This must be the place where people want to go because we have reduced the overall logistics costs,” she said.
Phillips said the group has locked in labour stability after negotiating a three-year wage agreement with trade unions this year. “We negotiated a further three years of peace.”
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