Transnet posts positive results

As the freight industry licks its wounds after the crippling 17-day Transnet strike, the transport parastatal has, in its own words, “shrugged off the recession with impressive financial results”. Releasing the details last week, acting CEO Chris Wells hinted at a series of bold initiatives that would be released in the coming year to partner with the private sector and ensure capacity is built wherever appropriate to enable economic growth. This is welcome news for an industry that is paying the price for lack of service delivery in contracts cancelled as South Africa’s reputation as a reliable source comes under pressure. The following highlights from Wells’ presentation paint an upbeat picture: • Revenue up 6% to R35.6 billion despite the impact of the recession; • Costs up 4.0% as cost cutting saves R1.9 billion; • EBITDA (earnings before interest taxation depreciation and amortisation) up 9.2% to R14.4 billion; • Cash generated from operations up 61.9% to R17.6 billion; • Capital expenditure down 4.4% to R18.4 billion. The recession-led dip in volumes clearly took its toll with an 8% decrease in general freight business (GFB) volumes compared to the previous year, the disappointing performance of the export coal line which was virtually unchanged at 61.8mt and the 4.5% drop in container volumes, said Wells. Volumes have slipped from from 68.8-million tons in 2005/6 to the dismal 61.8-million-tons figure for 2009/10. GFB was however offset by a 6% gain in market share for containers on rail, while the export iron ore line between the Port in Saldanha and the mines in Sishen increased volumes to record levels of 44.7mt in line with customer commitments.