Transnet delivers improved 2017HY earnings

Transnet delivers improved 2017HY earnings

Profit for the period is R3.4bn, a significant increase compared to R1bn profit the previous reporting period.

State-owned freight and logistics company, Transnet, on Monday pointed to improved operational performance and a slight rise in consumer demand and mineral production output in the country as it delivered an increase in revenue for the six-months ending 30 September 2017.

Transnational said that although the economic environment largely remains under pressure, the company’s strategy to move ‘rail-friendly’ cargo from road to rail was starting to pay dividends with the company gaining market share in general freight cargo and coal volumes.

Revenue for the six months of the financial year rose 13.8 percent to R37.1 billion, up from R32.6 billion in 2016.

This was driven by a 7.9 percent increase in general freight volumes, a 6.5 percent increase in export coal railed volumes and an 11.4 percent increase in railed container and automotive volumes. Chrome and manganese volumes performed particularly well, increasing by 19.2 percent to 3.1 million tonnes and by 25.9 percent to 6.8 million tonnes respectively.

The company’s key measure of profitability, earnings before interest, taxes, depreciation and amortization (EBITDA) improved by 17.7 percent to R16.3 billion.

Profit for the period is R3.4 billion, a significant increase compared to R1 billion profit the previous reporting period.

Poor volumes were experienced in sectors such as granite which registered a decline of 13 percent, as well as cement and lime recording an eight percent decline in volumes due to an unavailability of mix product and plant breakdowns.

Transnet said it continued to focus on cost-containment initiatives that have resulted in a R1.2 billion saving in planned costs. These initiatives include limiting overtime, reducing professional and consulting fees and limiting discretionary costs.

Operating costs increased by 10.9 percent to R20.8 billion due to the increase in the variable costs in line with higher volumes with resultant increases in personnel, fuel and electricity costs.

A total of R9.5 billion of debt was repaid during this period.

 – African News Agency (ANA)

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