Cape Town – Transnet’s first-half profit was boosted by a 6.4% increase in revenue of R32.2bn, while it spent R16.1bn on infrastructure investment, it announced on Thursday.
Cash generated from operations in the six months ended September increased by 11.6% to R15bn, it said.
Transnet, which is in its fourth year of a seven year upgrade and expansion programme, will spend between R340bn and R380bn over the next 10 years, compared with a previous plan to invest R337bn over seven years, Bloomberg reported Transnet acting CEO Siyabonga Gama as saying during in a presentation in Johannesburg.
“The horizon has shifted," Gama said, according to Bloomberg. “Some of those investments that were going to be made inside that period may be deferred, but when you defer something it does not mean you have stopped - it means you continue but the period in which you do it might fall outside.”
Transnet's growth was attributed to the export of iron ore, which increased its volumes by 7.5% to 30 million tonnes (mt), while the container and automotive business increased volumes by 4.2% to 7.5mt.
“The growth in market share for CAB (containers and automotive business) is evidence of the success of Transnet’s efforts to shift rail friendly cargo from road to rail,” Gama said in a statement.
The rise in revenue was also driven by higher volumes at ports, particularly in the bulk and break-bulk sectors, which increased by 11.8% to 50.3mt.
Transnet’s infrastructure investment programme pushed forward, with the entity spending R16.1bn, bringing its total since 2012 to R108.9bn.
“The infrastructure investment plan is buttressed by a comprehensive funding programme on the strength of the company’s financial position,” said Gama.
“In the six months under review, Transnet raised R12.5bn from various funding sources, including R6.33bn from China Development Bank and KFW Development bank; R2.33bn of commercial paper issuance; and a domestic bond issue of R2.83bn.”
Transnet said it would not cut spending on infrastructure expansion for the next 10 years budgeted at R336bn, Gama told Reuters.
"We are not cutting capital, at the end of the day we are a commodity driven business," said Garry Pita, the acting chief financial officer of Transnet.