‘Impressive’ Transnet results fail to impress port users

As Transnet posted what its executives termed “impressive” results for the first half of the financial year, shipping executives were not so happy with the gold-tinted figures. The report showed revenue was up 20.3% to R22.4 billion and profit before tax up 27.4% to R9.4 bn. Overall weighted average volume growth was up by 7.1%, containers handled at the ports up 9.9%, and the general freight business (GFB) volumes in particular up 6.3%. But the group’s attempts to cut costs through numerous cost-saving initiatives failed – and operating costs increased by 15.9% to R13.0 bn, blamed on material costs (up 26.5%), personnel costs (14.4%) as well as energy costs (26.0%). One unnamed shipping executive told FTW that Transnet’s lack of logic surprised him. “On the one hand they are praising the profits and revenue earnings, while on the other they are still looking for a tariff increase,” he said. “Transnet should focus on achieving higher income and profits through improved efficiency, and not simply look to plug the holes of inefficiency by calling for increased tariffs from the port users. I certainly give them a 2/10 for efficiency right now – that is TPT and TFR combined.” Ron Frick, MD of Deutsche Afrika Linien (DAL), was equally critical. “They’re not the result of efficiency and cost control, and they’re asking for an 18.06% tariff increase for next year – part of which, according to the Port Regulator, is to guarantee their expected revenue. “They’re also taking out a berth next year in Durban, for berth deepening and rail line installations, so they’re penalising the port users and trucking companies by offering less, but asking for more. “Any increase should be inflation-linked.” Sam Moffitt, MD of Hamburg Süd, was much more brief, but similarly sharp in his comment. “If it’s a parastatal showing a big profit, that means trouble,” he said.