Transnet, which operates nearly three quarters of all Africa's rail
network, is embarking on a major expansion drive in the rest of the
continent after struggling with declining commodity exports due to a
slump in minerals prices.
South Africa's Transnet lifts FY revenue as container volumes rise
South African state-owned logistics firm Transnet reported a slight rise in full-year revenue on Monday, due to a jump in railed cargo, offsetting a slump in commodity prices.
Transnet,
which operates nearly three quarters of all Africa's rail network, is
embarking on a major expansion drive in the rest of the continent after
struggling with declining commodity exports due to a slump in minerals
prices.
Revenue increased by 1.7 percent to 62.2
billion rand in the year to the end of March, while earnings before
interest, taxation, depreciation and amortization (EBITDA), or core profit, rose by 2.6 percent to 26.3 billion rand.
Iron
ore and coal have been major cash cows for Transnet for the past
decade, but lower prices and weak global demand have hit revenues for
one of the best-run state-owned firms in Africa's most industrialised
country.
Coal export volumes fell by 5.5 percent
to 72.1 million tonnes while iron ore export volumes were down 3 percent
to 58 million tonnes, the company said.
Lower commodity prices are forcing Transnet's key customers such as Kumba Iron Ore and Glencore to defer their expansion programmes.
Transnet
said it was on track with a 10-year 380 billion rand ($25 billion) plan
to expand railways, ports and pipelines, and was almost fully financed
from existing credit lines with no plans to issue any bonds.
Transnet
has spent 124 billion rand on new infrastructure in four years and the
company is looking at a mix of funding options to continue the firm's
10-year investment plan.
"We will continue to
tap into the domestic bond market, especially over the coming years.
There is still quite a bit of appetite for Transnet. Globally I don't
think that we would be looking at the global issuance... anytime soon," Chief Financial Officer Garry Pita said.
The
company's performance has improved thanks to a turnaround, compared
with many of South Africa's 300-odd state entities are a drain on the
government's purse.
The firm is also building
three freight rail terminals in Gauteng province, the country's
commercial hub, handling cargo for import and export ranging from cars
to grain and commodities such as iron ore.