http://www.businessday.co.za/Articles/C ... ?id=124986
Higher volumes, productivity lift Transnet profit.
SHARPLY higher volumes on Transnet’s coal and iron-ore lines as well as improved productivity at the country’s ports propelled the group’s net profit 35% higher to R1,7bn in the six months to September.
by JULIUS BAUMANN
Published: 2010/10/27 07:42:10 AM
SHARPLY higher volumes on Transnet’s coal and iron-ore lines as well as improved productivity at the country’s ports propelled the group’s net profit 35% higher to R1,7bn in the six months to September.
The group yesterday reported that revenue rose 7,6% to R18,7bn due to the increase in volumes, while cost savings of R1,6bn helped contain operating costs, up 5,1% to R11,2bn. Headline earnings rose 17% to R1,57bn.
“Our Quantum Leap strategy aims at changing the trajectory of performance improvements to higher levels.... On rail, both the iron-ore and coal lines recorded their best levels during September, and are both likely to record strong growth in volumes compared to the previous year,†said acting CEO Chris Wells.
A main feature was the improvement in export coal volumes at Transnet Freight Rail, with a 0,9% rise to 30,5-million tons finally arresting a five-year decline. The division delivered a record 17,7-million tons of coal to the Richards Bay Coal Terminal for the third quarter this year, representing a 16% increase over the same period last year.
It sustained a monthly tempo of 5,7-million tons for July and August, topped by a record 6,2- million tons last month , and Mr Wells said the division was well on its way to delivering 67-million tons of coal in the full financial year. “The introduction of 30 new 19E locomotives to the coal-line fleet, a reduction in cable theft and 3% improvement in wagon turnaround times all helped efficiency,†said Transnet Freight Rail acting CEO Tau Morwe.
Mr Wells said the new locomotives would deliver substantial fuel savings as well as provide better efficiencies. Fifteen more locomotives will be delivered next year, 47 in 2012 and 13 in 2013. Mr Morwe said Transnet Freight Rail would invest R2,1bn to upgrade infrastructure and increase capacity this year, bringing it closer to the 81-million tons a year targeted for 2014.
While iron-ore volumes were not affected by a strike in May, volumes fell 2,7% to 20,5-million tons. This was mainly due to four derailments on the corridor. But Transnet Freight Rail had recovered well from that backlog, shipping record volumes last month.
These improvements, plus a 3,3% rise in general freight to 36,8-million tons, helped the division post an 8,8% increase in revenue to R10,8bn, while earnings before interest, taxation, depreciation and amortisation (ebitda) rose to R3,7bn.
Transnet Port Terminals also benefited from improved productivity, the global economic recovery and the World Cup, with container volumes increasing 15,7% to 2-million TEUs (20-foot equivalent unit) and automotive volumes rising 91% to 307000 units. The division recorded a 22% rise in revenue to R3bn and ebitda of R1,1bn.
Group spending on infrastructure upgrades was expected to reach about R20bn this year. Transnet plans to borrow a further R35bn over the next three years to fund capex requirements, having already raised R7,6bn in the first half of this year.