FIRST half 2026 financial year performance by KiwiRail has seen a massive increase in operating surplus, year-on-year.
The H1 FY26 operating surplus was NZ$73.4 million, up $47.6 million on H1 FY25, as a result of KiwiRail continuing to strengthen its performance in a challenging environment, make progress on its change programme and deliver on the significant government investment in rail, it said.
Freight volumes were up 7% to 1.8 billion net tonne kilometres and the company says the reduction in the Interisland Line fleet from three to two Cook Strait vessels has seen steady commercial freight levels, although passenger figures have slipped due to the reduction in sailings.
Board chair Suzanne Tindal and KiwiRail chief executive Peter Reidy welcomed the result: “Taken together the results represent a period of quiet, disciplined execution that strengthens the business day by day,” Ms Tindal said.
“We remain on track against a full year Operating Surplus target of $160 million. This reflects improved operating performance across our commercial businesses and early progress from initiatives to strengthen productivity and reduce our cost base,” she said.
“While we have made gains in the first half, we do see a continuation of a highly competitive freight market where there is increasing financial pressure on sector participants.”
Mr Reidy said the company’s better freight performance reflected a normalisation of bulk volumes and a modest lift in domestic demand, while the gains were achieved during network constraints, particularly in Auckland, and weather-related impacts across parts of the network.
More than $9 billion has been invested to upgrade track, signalling and infrastructure assets and to modernise rolling stock. In HY26, $601 million was invested across the network and in key capital projects.
The Interislander operation has adapted effectively to operating with a two-ship fleet following the retirement of Aratere in August to support the Government’s Ferry Replacement Project,” Mr Reddy said.
“We have strengthened our road bridging capability to maintain the movement of rail freight across Cook Strait, increasing staffing and equipment at terminals. While passenger numbers were lower due to the shift from three vessels to two, commercial freight volumes remained steady for the half year reflecting improved capacity utilisation.”
Ms Tindal said more initiatives are underway to lift delivery performance and consistency, productivity and asset utilisation.
“We are well-positioned to handle higher demand through our MetroPort product on the Auckland–Tauranga corridor. The reset of this product with our partner, the Port of Tauranga, has been highly successful — attracting positive market feedback and reinforcing our role in supporting more efficient supply chains,” she said.
“And the ongoing delivery of new DM locomotives and rail wagons provides an important boost to future operational performance and resilience.
“As we move through the remainder of FY26, our focus remains on safe and reliable delivery, deepening customer value and maintaining tight financial discipline.”