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Transnet delivers sterling results

Oct 31 2012 12:14 James-Brent Styan

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Cape Town - State-owned transport giant Transnet has released an impressive set of interim results for the six months to September 30.

The company, one of the few state-owned entities not to be downgraded by rating agencies, on Wednesday reported an 11% rise in revenue to R25bn and a 34.5% increase in capex expenditure for the period.

Transnet spent R12.8bn on capex for the period. This includes the acquisition of the former Durban airport site.

Transnet CEO Brian Molefe also reported that Transnet had managed to creat 8 456 new jobs in the period, delivering on government's new growth path objectives.

“This figure includes Transnet employing 1 752 new people while creating 6 704 additional new jobs in supplier-related industries,” Molefe said.

At Transnet Freight Rail (TFR), Transnet’s biggest operating division, volumes continued to grow with the automotive and container unit growing 19% on the previous period.

The manganese and iron ore unit grew volumes by 11.2% to 31.7 million tonnes. Coal volumes rose by 7.8% to 41.6 million tonnes, compared with 38.6 million tonnes in the same period last year.

Molefe said the TFR volumes performance was achieved despite numerous customer-related issues.

“This includes a protracted dispute between mining giants and key customers Kumba Iron Ore [JSE:KIO] and ArcellorMittal South Africa [JSE:ACL] over pricing.”

Molefe said Transnet will use the old airport site to build a dig-out port to accommodate its rising cargo-handling needs.

“The project, which is likely to be South Africa’s flagship private sector partnership initiative, is planned to commence the first phase of construction in 2016. It is scheduled to receive its first container vessel in 2020.”

International rating agencies Moody’s and S&P have both maintained Transnet’s investment grade credit rating.

Molefe said it is important to note that Moody’s decided to maintain Transnet’s rating, despite downgrading the state.

 - Fin24

Follow James-Brent Styan on @jamesstyan.
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