Performance lift in first half in line with FY26 $160m full year target

• H1 FY26 operating surplus $73.4m, up $47.6m on H1 FY25
• Freight volumes up 7 per cent to 1.8 billion net tonne kilometres
• Total Recordable Injury Frequency Rate stabilised at 22.54
• $601 million invested across the network and in key capital projects
• Continuation of a highly competitive freight market over H2 expected

The first six months of FY26 saw KiwiRail continue to strengthen its performance in a challenging environment, make progress on its change programme and deliver on the significant government investment in rail.

Board Chair Suzanne Tindal and KiwiRail Chief Executive Peter Reidy have welcomed the result.

“Taken together the results represent a period of quiet, disciplined execution that strengthens the business day by day,” says Ms Tindal.

 KiwiRail’s operating surplus for the half year was $73.4 million, compared with $25.8 million for the same period last year.

 “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,” Ms Tindal says.

 “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 says safety remains the top priority for KiwiRail.

 “We have recorded sustained improvements in key safety indicators, reflecting our long-term focus on leadership, coaching and critical risk management.

“While progress is encouraging, we acknowledge there is more to do and remain committed to ensuring everyone goes home safely every day.”

 The company strengthened its performance in the freight sector, with total freight volumes up 7 per cent to 1.8 billion net tonne kilometres, reflecting a normalisation of bulk volumes and a modest lift in domestic demand.

 “These gains were achieved while we continued to navigate network constraints, particularly in Auckland, and weather-related impacts across parts of the network.”

 Mr Reidy says the six months also saw KiwiRail continue to deliver on the Government’s multi‑year investment programme to restore and modernise New Zealand’s rail 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.”

 Lifting the standard of the Auckland metro network ahead of City Rail Link opening later this year has been a major focus of the investment.

 The programme was part of the multiyear Rail Network Rebuild, which has seen the equivalent of more than 15 years of work completed in the past four years.

 “While it has been disruptive, this rebuild will support more frequent services, shorter journey times, fewer delays, and improved resilience for both commuter and freight customers.”

 At the same time, 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.

“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 says: “KiwiRail remains focused on relentlessly improving customer experience and service reliability, with initiatives under way 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.

 “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.

 “These choices are building momentum and resilience, and they are essential to KiwiRail’s journey toward a more financially sustainable and enduring future.”