State-owned transport infrastructure operator Transnet has posted a marginal profit in what it called ”tough times”.
Releasing its results for the year ended March 31 2009, on Wednesday, the parastatal said profit had increased by 3% to R13,2-billion compared with the previous year.
This was on the back of an 11,6% increase in revenue to R33,6-billion, the company added.
Acting CEO Chris Wells told a results presentation in Sandton, Johannesburg, that the steep downturn in economic activity both internationally and locally had resulted in certain commodity and container volumes handled by Transnet being below expectations, especially in the last quarter of the financial year.
”The view we have of 2009 is that it will continue to be a tough year when it comes to commodity and container volumes … it’s difficult to say when we’ll see growth resume.”
General freight rail volumes declined 19% from 42,7-million tons in the six months from April to September last year, to 34,5-million tons in the second half of the financial year.
Transnet said, however, that it was not presently thinking of retrenchments.
”We are determined to avoid retrenchments and at this stage we don’t think we need to retrench,” Wells said.
However, he added Transnet would implement a series of cost-saving measures and there would be a continuous focus on efficiency and productivity improvements.
Wells said Transnet would proceed with its infrastructure investment programme of R80,5-billion over the next five years ”despite the current recessionary conditions”.
He added that in spite of the financial crisis, Transnet had still managed to raise the debt capital it required to fund its programmes.
The company raised a net R11,6-billion primarily through issuing domestic bonds, he said.
It also concluded bilateral loans with local and financial institutions and it signed an agreement for 35-billion yen in untied funding from the Japan Bank for International Co-operation.
Wells added that Transnet had concluded a R915-million transaction with Finnvera, the Finnish export credit agency.
Turning to the construction of its new refined products pipeline, Wells said it was of concern that the National Energy Regulator of SA had given the parastatal a 10,4% tariff decrease in a year where there would be a significant cash outflow.
”Transnet is in discussions with government regarding an alternative funding mechanism for new infrastructure under construction.”
Wells added that it was critical that tariffs going forward were predictable. — Sapa