Transnet, the state-owned freight and logistics company, has released its audited annual financial statements for the year ended 31 March 2023, showing a net loss of R1.6 billion.
The company attributed the loss to various operational challenges, such as decreased locomotive availability, cable theft, infrastructure vandalism, load-shedding, floods, and a wage strike, which resulted in lower rail volumes and revenue.
According to the financial report, Transnet’s revenue increased by 0.6% to R68.9 billion, driven by positive port and pipeline performance. However, net operating expenses rose by 2.0% to R45.9 billion, mainly due to increased personnel, energy, security, and maintenance costs.
Transnet’s earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 2.1% to R23 billion, while net finance costs increased by 16.7% to R12.2 billion, due to higher interest rates and debt levels.
The company also recorded impairment of assets of R3.6 billion, mainly related to trade and other receivables, and property, plant and equipment.
Transnet’s gearing ratio, which measures the extent to which the company is funded by debt, increased to 44.4%, within its target range of less than 50%. The company said it received a R47 billion guarantee from the government to raise additional funding to settle current obligations, fund operations and capital expenditure.
Transnet’s capital investment for the year amounted to R6.3 billion, of which 19.9% was invested in expanding capacity and 80.1% in maintaining current capacity. The company said it continued to execute its capital investment programme despite the difficult operating environment.
Transnet’s chief executive, Portia Derby, said the company was implementing a recovery plan to address the challenges and improve its performance. She said the plan included improving operational efficiency, enhancing customer service, optimising the asset base, strengthening governance and risk management, and transforming the organisational culture.
“We are confident that our recovery plan will enable us to restore our operational performance, deliver on our mandate, and contribute to the economic recovery and growth of our country,” she said.