Transnet announces 6.4% growth in revenue
Transnet’s revenue grew by 6.4 percent to R32.2 billion during the six months ended September 30, Acting Group Chief Executive Siyabonga Gama said releasing the company’s interim results on Thursday.
“Transnet continues to grow revenue and strengthen its financial position while maintaining its record-breaking infrastructure investment programme, despite the impact of a sharp downturn in global and domestic economic activity hampering its major customers,” Gama said addressing staff at Esselen Park in Johannesburg.
Gama said the interim results showed growth in export iron ore and Containers and Automotive Business (CAB) volumes (CAB).
Export iron ore volumes increased by 7.5 percent to 30 million tonnes (mt) from 27,9mt, while the container and automotive business increased volumes by 4.2 percent to 7,5mt.
Gama said this growth was “evidence of the success of Transnet’s efforts to shift rail friendly cargo from road to rail”.
Higher volumes in ports, especially in the bulk and break-bulk sectors contributed to the company’s revenue growth, with volumes increasing by 11.8 percent to 50,3mt. Automotive volumes increased by 23 percent to 389,203 unites, and port terminals saw container volumes grow from 2.3 percent to 2, 341, 711 twenty foot equivalent units (TEUs).
The company increased its earnings before interest, taxation, depreciation and amortisation (EBITDA) by nine percent to R13.9 billion.
It’s infrastructure investment was at R16.1 billon, which Gama said, brought the company’s total Market Demand Strategy (MDS) spend to R108.9 billion.
“Transnet continues to ensure that its spend matches validated demand,” he said.
The infrastructure investment plan includes a R131 million investment in engineering and construction planning for rail and port in expanding manganese exports to 16mt per year, a R212 million investment in expanding the coal line to 81mt, and R551 million in the New Multi-Product Pipeline project.
Furthermore, cash generated from operations increased by 11.6 percent to R15.2 billion.
Gama said Transnet Pipelines “increased petroleum volumes by six percent to 8.940 billion litres due to higher crude oil transported as refineries boosted inland production to ensure security of supply”.
However, Gama said the company did experience “the full impact of muted global economic activity on several of its lines”.
The impact saw a decline in export coal by three percent to 35,4 mt as mines reduced a demand for trains, and significantly in the steel and cement sector.
To mitigate the impact a decline in volumes had on revenue, Gama said Transnet Freight Rail made high-yield commodities a priority.
To mitigate the impact of declining volumes on revenue, Freight Rail prioritised high-yield commodities. Additionally, ensuing managing costs were managed properly, the company saved R3.1 billion in planned costs.
Gama said Transnet continued to showcase South Africa as an attractive investment destination as the company was able to, during the interim period, raise R12.5 billion from various sources, including the China Development Bank and the KFW Development Bank. - ANA