Transnet has reported a steady rise in revenue and maintained profitability as the company continues with its infrastructure investment programme, despite depressed economic conditions, weak demand for commodities and manufactured products, which continued to hamper growth in volumes.
Revenue for the six months ending 30 September 2016 rose 1.2% to ZAR32.6bn (2015: ZAR32.2bn), driven by a 12.8% increase in railed containers and automotive volumes and an increase in coal volumes of 1.8%.
The company spent ZAR9.4bn on its infrastructure investment programme despite the weak economy, taking overall spend on the Market Demand Strategy over the past five years to ZAR133bn. The bulk of the investment (ZAR7.1bn) was on sustaining capital and the remainder on new infrastructure and equipment.
Transnet’s EBITDA remained flat at ZAR13.9bn, whereas profit from operations after depreciation and amortisation decreased by 16.6% to ZAR5.9bn (2015: ZAR7bn). The company stated that this is due to a 16.3% increase in depreciation, derecognition and amortisation of assets driven by capital investments and depreciation on the revalued port and pipelines assets. This trend is expected to continue in line with the execution of the infrastructure investment programme.
The company’s operating expenses were contained at ZAR18.7bn, despite the hike in electricity and personnel costs. Transnet realised a ZAR1.8bn saving in planned costs.
Operationally, coal volumes increased to 45.2m tonnes. Similarly, manganese export volumes also went up 7.5% to 5.7m tonnes. Lower market demand for refined fuel products resulted in a 4.1% decrease in petroleum volumes to 8,575bn litres.
The company stated that its efforts to diversify sources of external revenue are gradually bearing fruit, with Transnet Engineering recording a 13.7% increase in external revenue to ZAR688m, including sales to the rest of Africa.
The Group’s operational efficiency increased by 13.7%. At the ports, average moves per ship working hour reflected varied performance across the four container terminals, the Ngqura Container Terminal, Cape Town Container and the Durban Container Terminal, Pier 1 and Pier 2.
During the reporting period the company invested in locomotives acquisition; sustaining current capacity; export coal line expansion; maintenance and acquisition of cranes, tipplers, dredgers, tugs, and straddle carriers; and in the New Multi-Products Pipeline.