Transnet sees decline in rail freight volumes in tough economic environment

Transnet, the state-owned South African company, has reported a 1.3% decrease in rail freight volumes for the year ending March, reflecting the challenging economic environment and low demand in industries such as construction and manufacturing. The company's Chief Financial Officer, Nonkululeko Dlamini, highlighted the tough year but also pointed out commendable aspects of Transnet's performance. Despite facing headwinds, Transnet managed to achieve a revenue of around 75 billion, showcasing a 2.1% increase in cash generation. However, the net profit took a hit, declining by 34% to 3.9 billion. Dlamini explained that part of this decrease was due to the revaluation of properties that had previously boosted profits, emphasizing that without this one-off item, the profit would have been around 3.0 billion. Transnet's strategic focus remains on growth and repositioning, even amidst the COVID-19 pandemic. As the company navigates the impact of the lockdown on its operations, it is looking for new opportunities to sustain revenue and ensure business continuity beyond the crisis. Dlamini assured that the company is committed to avoiding job losses and aims to continue serving the South African economy effectively. In terms of financial independence, Transnet aims to stay self-sufficient and not rely on government support. Dlamini emphasized that the company has not sought government assistance since 1999 and is gradually reducing its borrowing guarantees. Transnet's long-term goal is to become a dividend-paying entity to the government, underlining its dedication to financial autonomy. While recognizing the challenges posed by COVID-19, Transnet remains determined to weather the storm independently.