Durban port deal rescues Transnet from another nasty loss

Transnet, the state-owned logistics provider in South Africa, posted a R4.6 billion profit for the year ending March 2026, its first profit in four years. However, this profit was largely due to a R12.5 billion accounting gain from the concession of Durban Container Terminal Pier 2 to ICTSI, which took over the terminal's management.

Excluding this gain, Transnet would have reported a loss. The company's debt stands at R150.7 billion, with half of the debt a result of the Gupta-era state capture, leading to a crippling interest burden. Transnet paid R17 billion in interest in the latest financial year, accounting for nearly 11.5% of its average borrowings. The company is also facing a significant loss on its rail operations, with a R13.25 billion loss reported by Freight Rail and the Rail Infrastructure Manager.

While some private operators will soon commence services on the national rail network, the benefits may take years to materialize. The reforms aimed at restoring and upgrading the freight network are estimated to cost around R50 billion over five years. The reforms remain heavily dependent on state support, with Transnet's future debt repayments and capital program potentially relying on government guarantees.