Transnet records 11.3% increase in revenue

Monday, August 20, 2018

Transnet has recorded an increase in revenue by 11.3% to R72.9 billion for the year ending in March 2018.

The company’s Group Chief Executive, Siyabonga Gama, announced the company's financial results for the year which ended on 31 March 2018 on Monday.

Gama attributed the increase in revenue to a 4.3% increase in railed export coal volumes; a 6.5% increase in railed automotive and container volumes and a 6.1% increase in port container volumes.

The reform pledge was included in Transnet’s financial results for the year through March, which showed an 18% rise in earnings before interest, taxes, depreciation and amortisation to R32.5 billion rand ($2.2 billion). That was driven by rising volumes of rail-transported coal and automotives.

Transnet continued to execute its infrastructure investment programme, spending  R21.8  billion,  a  1.6%  increase  from  the  previous  year. This takes total investment under the Market Demand Strategy (MDS) to R165.6 billion in the past six years.

Transnet said it expected to invest a further 163.7 billion rand over next five years, with the aim of “aggressively growing volumes” and also “seeking new markets to compensate for lower growth expected within Transnet’s traditional markets”.

Among the company’s most significant investments, it listed the acquisition of locomotives to  modernise  its  fleet  in  anticipation  of  a  rise  in  general  freight  volumes  and  the  solidifying of the ‘road to rail’ strategy.

“As at 31 March 2018, the cumulative expenditure incurred on the 1 064 locomotive contract amounts to R30.1 billion, with R7.3 billion spent in the year under review.

“A total of 402 locomotives have been accepted into operations while 16 have been delivered and are currently undergoing acceptance testing,” said Gama. 

While Transnet boasted an increase in revenue, it said an action plan is in the works that will assist the state-owned entity curb irregular expenditure, which has tainted its reputation.

“The  year  under  review  though, has  been  characterised  by  a  number  of  serious  procurement related governance  challenges  which  has  impacted  on  the  company’s reputation and the ability to attract investment. 

“The board, together with management, is developing a comprehensive corrective action plan to prevent the recurrence of such instances,” said Gama.

The plan will focus on developing additional controls to prevent irregular expenditure while a mechanism to ensure the completeness of reported irregular expenditure is developed and implemented. –