Transnet has recorded an increase in revenue by 11.3% to R72.9 billion for the year ending in March 2018.
The company’s Group Chief Executive, Siyabonga Gama, announced the company’s financial results for the year which ended on 31 March 2018 on Monday.
Gama attributed the increase in revenue to a 4.3% increase in railed export coal volumes; a 6.5% increase in railed automotive and container volumes and a 6.1% increase in port container volumes.
The reform pledge was included in Transnet’s financial results for the year through March, which showed an 18% rise in earnings before interest, taxes, depreciation and amortisation to R32.5 billion rand ($2.2 billion). That was driven by rising volumes of rail-transported coal and automotives.
Transnet continued to execute its infrastructure investment programme, spending R21.8 billion, a 1.6% increase from the previous year. This takes total investment under the Market Demand Strategy (MDS) to R165.6 billion in the past six years.
Transnet said it expected to invest a further 163.7 billion rand over next five years, with the aim of “aggressively growing volumes” and also “seeking new markets to compensate for lower growth expected within Transnet’s traditional markets”.
Among the company’s most significant investments, it listed the acquisition of locomotives to modernise its fleet in anticipation of a rise in general freight volumes and the solidifying of the ‘road to rail’ strategy.
“As at 31 March 2018, the cumulative expenditure incurred on the 1 064 locomotive contract amounts to R30.1 billion, with R7.3 billion spent in the year under review.
“A total of 402 locomotives have been accepted into operations while 16 have been delivered and are currently undergoing acceptance testing,” said Gama.
While Transnet boasted an increase in revenue, it said an action plan is in the works that will assist the state-owned entity curb irregular expenditure, which has tainted its reputation.
“The year under review though, has been characterised by a number of serious procurement related governance challenges which has impacted on the company’s reputation and the ability to attract investment.
“The board, together with management, is developing a comprehensive corrective action plan to prevent the recurrence of such instances,” said Gama.
The plan will focus on developing additional controls to prevent irregular expenditure while a mechanism to ensure the completeness of reported irregular expenditure is developed and implemented.