State-owned freight transport and logistics company Transnet is ready to move away from its turnaround strategy towards a growth strategy, Transnet group CEO Maria Ramos said on Monday.
”We felt well-placed at the end of last year to move from our turnaround strategy to our growth strategy,” she said.
Ramos was speaking in Sandton, Johannesburg, at the presentation of Transnet’s financial results for the year ending March 31 2008.
Revenue increased 11,9% to R30,1-billion while earnings before interest, tax depreciation and amortisation (Ebita) were up 18,3% to R13,2-billion.
Transnet said that gearing had improved to 29%.
Capital expenditure was up 35,2% to R15,8-billion.
Ramos said the company had faced a number of big challenges back in 2004 due to such factors as its loss-making non-core businesses.
Furthermore, Transnet had not invested much ”for decades” so there was ”a low return on investments”.
At that stage, Transnet had not been a company ”known for its efficiency”. There had therefore been a need for a turnaround strategy, she said.
The strategy involved business re-engineering, strategic balance-sheet management, corporate compliance and human capital by way of transforming the culture and behaviour of staff to support the strategy, Ramos said.
Now that the three-year turnaround strategy was complete, it was time for growth.
Growth strategy would focus on growing volumes, improving customer service, creating capacity and optimising financial and capital management, Ramos said.
Growth targets had been set for the next five years.
”Quite a lot of hard work is ahead, especially with the global economy slowing down,” Ramos said.
Growing the business was not without challenges. ”We’re facing not only an interesting time, but a challenging time,” she said.
She listed the challenges as the slowdown in international and domestic economic activity, economic regulation, as well as safety.
”Some people have fallen into bad habits where safety is concerned,” she said.
Other challenges were energy when it came to fuel and electricity, pricing and supply, as well as the delivery of planned capital projects on time and within budget. — Sapa