Tuesday's release of the state-owned freight transport and logistics company's results for the six months leading up to September 2007 indicated that capital expenditure has surged 59% to R6.8 billion and that cash flow activity had raised 11% to R4.7 billion.
Transnet has also announced that it's Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) had grown by 8% to R6.4 billion, confirming that the company has largely completed its turnaround and is on a path of growth.
Commenting on the positive results, Transnet Chief Executive Officer (CEO) and Fortune Magazine's 16th most powerful woman in the world, Maria Ramos said: “The figures provide clear evidence that the turnaround is largely complete and that the new Transnet we've built in the last three-and-half years is positioned for further growth.
“Continuous re-engineering of the business should place Transnet at the centre of the country's growth drive.”
The company report indicated that four of its five divisions, except for Pipelines, have shown revenue growth in the interim period.
The CEO said it was pleasing that the strength and resilience of the balance sheet that they had constructed was evident in the numbers.
“Particularly satisfying is the solid cash generating ability of the business which is vital as we ramp up the rollout of our capital investment programme which will be funded on the strength of our balance sheet.”
She added that the progress Transnet was making in rolling out the Capital Expenditure Programme (Capex) was testimony to the efficacy of the measures Transnet had employed in strategically managing its balance sheet.
Chairman of the board of directors for Transnet, Fred Phaswana, welcomed the results saying: “The figures confirm the financial and operational health of the business and the success of the turnaround strategy thus far.
“They clearly point us to the areas that we need to focus on in taking the company to the next stage – that is, the position where its growth is inextricably linked to that of its clients and the country's economic growth occurs because, not in spite, of Transnet's performance. These results show that we're there now.”
For the first time in two decades, Freight Rail's general freight business (GFB), through which a range of products including steel, magnetite, agricultural produce and cement are railed, grew the volumes of cargo railed.
Phaswana said: “Not only is the company's health sound, but significantly, it is achieving the targets it agreed with its shareholder and delivering on its mandate of optimising the freight transport and logistics system in support of growth.”
In the past year, the company has renewed its focus on safety and risk management through a company-wide safety programme. The board appointed a committee of its directors focusing on safety and Ramos created a post of Chief Risk Officer in the Company's Executive Committee.
Transnet Pipelines' turnover increased by only 1.8% to R600 million due to a decision by the National Energy Regulator of South Africa, to grant a zero tariff increase to Pipelines this year as well as limited volume growth.
On the positive side, commented the report, Pipelines was awarded the license to construct the proposed 24-inch New Multi-Product Pipeline from Durban to Gauteng. The latest cost estimate for this project is R11.2 billion and, if construction starts on time, it is expected to be completed in 2010.
Article published courtesy of BuaNews
