Transnet raises revenue

Cape Town - Transnet raised its revenue by 6.6% for the 2011 financial year to R38bn, boosting income before interest, taxes, depreciation and amortisation (Ebitda) by 9.4% to R15.4bn while capital investment climbed 16.6% to R21.5bn.

The group presented its annual report to parliament's portfolio committee on public enterprises on Tuesday.

Acting public enterprises committee chairperson Gerhard Koornhof (ANC) started the meeting by complimenting Transnet on its detailed and "pleasing annual results".

In its presentation, Transnet said that its Ebitda margin had risen to 41.5% in 2011 from 40.5% in in 2010, gearing had risen to 41.1% from 39.8%, while its cash interest cover had dropped to 3.9 times from 4.1 times in 2010.

Revenue contribution by the operating division showed that Transnet Freight Rail had provided the bulk at 58.8%, Transnet National Ports Authority had contributed 19.3%, Transnet Ports Terminals contributed 16.7%, Transnet Rail Engineering 2.2% and Transnet Pipelines 3%.

The rail sector's revenue increased to R21.7bn from R19.7bn in 2010. Coal exports accounted for R5.6bn, unchanged from 2010, export of iron ore increased to R2.7bn from R2.2bn and the general freight business lifted its revenue to R13.4bn from R11.9bn.

Revenue in the ports sector surged by 22.4% in 2011 to R12bn with containers contributing R7.1bn from R5.9bn, total bulk handling climbed to R4bn from R3.3bn and automotive handling bounced to R900m from R600m.

Acting Transnet chief financial officer Anoj Singh said the increase in depreciation and amortisation in 2011 by 18% to R7.184bn was largely due to the capital investment programme and revaluations of port facilities and pipeline networks.

Singh said that net financing costs had increased by 18.1% in 2011 to R2.878bn due to increased long-term capital investments.

He said that cash generated from operating activities increased by 8.8% to R13.159bn with R23.018bn utilised in investing activities.

Singh said that Transnet had generated strong, predictable and sustainable cash from its operations and that it had adequate liquidity and funding facilities to meet all its operational and capital investment funding requirements over the medium term.

Sources of the R18.4bn in funding that Transnet used in 2011 were the raising of R5.1bn worth of global medium-term notes; R7.7bn was raised in domestic medium-term notes, commercial paper accounted for R2bn, bank loans and assets-backed finance brought in R1.9bn and direct foreign investments raised another R1.7bn.

The committee hearings continue.