| Tue 10 Jul 2012, 15:19 | | TN25 - Transnet Annual Results 2012- Media Release |
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TN25
Transnet Annual Results 2012- Media Release
TRANSNET SOC LIMITED
10 July 2012
2012 Transnet media release
Transnet impresses with record rail volumes, adds over 3 000 new employees
HIGHLIGHTS
10,4% growth in rail volumes to an unprecedented 201 million tons
Operational efficiencies and productivity up 18,0%
Revenue up 20,9% to R45,9 billion
EBITDA up 19,8% to R18,9 billion
Capital investment up to a record R22,3 billion (excluding IA acquisition)
Safety performance up, disabling injury frequency rate down from 0,82 to 0,65
3 159 new jobs created
Transnet SOC Ltd today announced an impressive set of
results for the financial year to March 2012, driven by strong
volume growth across all commodity segments, higher
productivity and improved efficiency levels, particularly at
Freight Rail -Transnets biggest operating division.
Freight Rail moved an unprecedented 201 million tons (mt) of
freight, a 10,4% increase compared to the previous year the
highest tonnage moved in Transnets history. This performance
includes a significant improvement in the number of trains
operated per day. In October 2011, we ran the highest number
of trains per day at 1 444, from about 800 trains per day in
the previous period.
General freight volumes rose 9,9% to 81,0mt from 73,7mt in
the previous financial year, while containers on rail increased
21,5% to 762 760 twenty-foot equivalent units (TEUs) from
627 825 TEUs, indicating a growth in market share and
significant strides in taking rail-friendly cargo off our roads.
Export coal volumes increased by 8,8% to 67,7mt from
62,2mt, while iron ore volumes jumped by an impressive
13,2% to 52,3mt from the previous years 46,2mt. Both heavy
haul lines achieved record weekly throughput (productivity)
levels of 1,7mt and 1,2mt, respectively. Our new railways
operating strategy is beginning to pay off, with on-time
departures and arrivals for General Freight Business
improving by 18,9% and 17,7%, respectively, compared to the
previous year.
Freight Rails performance during the year confirms the
effectiveness of our focused interventions, including revising
the operating divisions philosophy, reinstating scheduled
railway, introducing more certainty at top leadership levels
and boosting employee morale.
Group revenue for the year increased by 20,9% to
R45,9 billion from R38,0 billion in the previous period, mainly
due to growth in volumes in the general freight, export coal,
export iron ore and container volumes as well as an 18,0%
improvement in productivity.
Elsewhere in the business, our rolling stock maintenance and
manufacturing unit, Rail Engineerings external revenue was up
by an impressive 123,4% to R1,5 billion from R661 million
previously. The increase was due to higher sales of coaches to
the Passenger Rail Agency of South Africa (PRASA) as well as
growth in locomotive and wagon sales into the African market,
where we expect significant growth opportunities.
The operating division, which recently completed the
manufacturing of 200 wagons for Rio Tintos Mozambique
operations, offers the best opportunities for us to expand into
the rest of the African continent.
At the ports, Port Terminals continued to boost its efficiency
levels with average moves per gross crane hour (GCH)
increasing by 8,1% to 26,6 GCH from 24,6 GCH in the previous
period. In addition, average tons loaded per hour at the
Saldanha iron ore terminal improved by 4,1% to 7 242 tons
per hour, and the Richards Bay dry bulk terminals loading rate
was up 2,7% to 678 tons per hour.
We also celebrated the official opening of the Port of Ngqura,
just outside Port Elizabeth in the Eastern Cape. This, we
plan to develop into a transshipment hub for the Southern Africa region.
Pipelines celebrated the successful commissioning of the
Kendal Waltloo, Jameson Park Alrode and Alrode Langlaagte
sections of the New Multi-Product pipeline on 31 May 2011.
During the year, the southern portion of the 16-inch pipeline
network transported in excess of 990 million litres of fuel,
while over 275 million litres were moved in the
northern section.
The 24-inch trunk-line from Durban to Jameson Park started
operating in January 2012 and carried over 348 million litres
of diesel for the year ended March 2012. All construction
activity on the NMPP is expected to be completed by
December 2013.
As a consequence of the solid operational performance across
the company, our key measure of profitability, earnings before
interest, taxation, depreciation and amortisation (EBITDA)
increased by 19,8% to R18,9 billion from last years
R15,8 billion. This was in spite of a 21,8% increase in
operating costs to R27,0 billion from R22,2 billion in the
previous period.
The main drivers of the higher expenses were a 46,4%
increase in material costs, an 18,8% increase in personnel
costs as well as a 31,4% jump in energy prices. These
increases were in line with our rising activity levels
accompanied by higher maintenance costs to support volume
growth, costs of improving safety in the workplace a key
priority as well as higher electricity tariffs and fuel price
increases.
Encouragingly, improved operational performance in our
operations was accompanied by increased employment a key
priority in Governments economic growth objectives. During
the period, we increased our employee numbers by 3 159
people mainly to support Transnets investment and
operational activities. In addition, our activities resulted in the
creation of 27 964 new jobs in supplier-related industries
across the economy.
One of the key focus areas for the year was safety, especially
of our colleagues. In that respect, Transnet has recorded
significant improvements. The disabling injury frequency rate
(DIFR) an internationally accepted standard of measuringsafety
in operations improved to 0,65 from 0,82 during the
previous period. The focus on safety of our assets resulted in
a 35,8% reduction in the number (and severity) of loss
incidents from 1 652 to 1 060. The total cost of these
incidents was reduced by a significant 60,3% to R432 million
compared with R1,1 billion in the previous period.
Sadly, we lost seven colleagues in our operations during the
year four of these colleagues were lost as a result of road
accidents. We are encouraged by the drop in these numbers,
but it is still way below our self-imposed target of zero
fatalities. Most of these incidents can be avoided and we have
in place several awareness initiatives to ensure adherence to
standard operating procedures.
Capital investment for the year increased to a record
R22,3 billion (excluding capitalised borrowing costs) with
R11,6 billion being invested in capacity expansion and
R10,7 billion in maintenance of existing capacity. The years
investment lifts the total amount spent over the last seven
years to R115,5 billion. Including the R1,2 billion part payment
for the acquisition of the former Durban International Airportsite
from the Airports Company of South Africa, the totalcapital investment
for the year is R23,5 billion a 9,3% improvement on last years
R21,5 billion.
Capital investment highlights include, amongst others, the
following:
Invested R4,2 billion in the New Multi-Product Pipeline
during the year, taking the total to R15,8 billion since
commencement of the project.
Invested R3,8 billion in expansion projects and acquisition
of locomotives to increase capacity to 60mt on the iron
ore line and 81mt on the coal line.
Spent R10,3 billion on the upgrade and maintenance of
infrastructure and rolling stock.
Approved the accelerated acquisition of an additional 43 diesel
locomotives.
Issued a tender to acquire 95 electric locomotives for GFB.
Invested R70 million in the reengineering of the Durban Container Terminal.
Bought 33 hauler trailer sets, six additional mobile harbour cranes, and eight
reach stackers for Maydon Wharf and Point (Ro-Ro) terminals at a total cost
of R438 million.
Invested R652 million in the Cape Town Container Terminal.
Spent R257 million on the Ngqura Container Terminal
which was officially opened by President Jacob Zuma in
March 2012.
Transnet has committed to invest R31,2 billion in the current
financial year as part of its Market Demand Strategy the
companys R300,1 billion investment programme over the next
seven years. This includes the acquisition of more than 1 200
locomotives for Freight Rail, 1 064 of these locomotives are
to be deployed in GFB.
Transnets capital investment programme is supported by a
comprehensive funding strategy and over the year under
review, the company raised R11,1 billion from various funding
sources including commercial paper, domestic bonds, the
French Development Bank and bank loans.
We are confident that the company will be able to raise the
R14,1 billion funding requirement for the current year. The
gearing ratio was up to 42,1% at year-end compared to 41,1%
over the same period last year, but still comfortably within the
50% ceiling which we do not expect to breach. It is even more
encouraging that the cash interest cover ratio improved to
4,2 times from last years 3,9 and significantly above our
target of three times, thanks to our operations strong and
sustainable cash generating ability. The latter rose by 27,6%
to R20,6 billion, aided by better collections and inflows due to
improved working capital management and a 7,5 cents a litre
security of supply levy for Pipelines.
Transnets total recognised broad-based black economic empowerment
(B-BBEE) spend as per the Department of Trade and Industry Codes, rose
to R25,8 billion or 80% of total measurable procurement spend of R32,2 billion.
We view Transnets massive operational and capital expenditure spend as our
biggest contributor to empowerment. To that end, we insist on compliance to
the Department of Public Enterprises-led Competitive Supplier Development
Programme (CSDP) which focuses on skills development and job creation among others,
as it drives localisation of manufacturing of heavy equipment and machinery.
During the year, Transnet acquired 43 locomotives from the United States General
Electric. The agreement included CSDP obligations of 65% of the total value of the
contract up from 25% in the previous agreement for the purchase of 100 locomotives
from the same supplier.
Transnet has since shifted to include port-handling equipment in its CSDP programme.
The following key port-handling equipment transactions were concluded during the year:
Seven tandem lift cranes; six mobile harbour cranes; 28 straddle carriers; one pneumatic
ship un-loader; one ship loader; 33 haulers and eight reach stackers. The total contract
value since the inception of the CSDP amounts to R14,1 billion. To date, R3,0 billion or
55,0% of total supplier development obligations have been executed.
Issued on behalf of Brian Molefe, Group Chief Executive.
By: Mboniso Sigonyela, spokesman for Transnet SOC Ltd
011 308 2458/083 463 7701
mboniso.sigonyela@transnet.net
For further queries, contact Viwe Tlaleane
011 308 2384/083 979 0707
Viwe.tlaleane@transnet.net
NOTES TO EDITORS
DIVISIONAL HIGHLIGHTS
Transnet Freight Rail
Revenue for the year increased by 22,3% to R27,7 billion compared to R22,6 billion in the previous year.
Transnet Rail Engineering
Rail Engineerings internal revenue increased by 13,0% to R9,8 billion compared to R8,7 billion in the previous year.
Transnet National Port Authority
Revenue increased by 2,4% to R8,3 billion compared with R8,1 billion in the 2010/11 financial year on the back of an
improvement in volumes.
Transnet Port Terminals
Revenue was up by 11,1% to R7,1 billion against R6,4 billion previously as a result of higher volumes handled and
improved operational efficiencies. Container volumes increased by 7,2% to 4 305 066 TEUs from 4 016 564 TEUs; bulk
and break-bulk volumes rose 6,6% to 82,9mt against 77,8mt previously; and automotive volumes improved by 8,9% to
672 536 units compared with 617 588 units in the previous year.
Transnet Pipelines
Revenue for the year increased by 85,7% to R2,1 billion compared with R1,1 billion in the previous year. This is mainly
due to the 59,0% increase in allowable revenue including the F-factor granted by the National Energy Regulator of South
Africa in its 2011/12 Tariff Determination. Volume performance is 7,1% below the prior year. The combination of supply
and demand challenges contributed significantly to the underperformance for the year. However, Pipelines met 98% of all
orders placed on the pipeline system for delivery.
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