Freight rail and logistics operator Transnet said on Monday that it had shunted the days of under-performance brought about by corruption to allay investor fears and to increase its revenue for the six months to September 2.9 percent to R38.7 billion year on year. Photo: Supplied
JOHANNESBURG – Freight rail and logistics operator Transnet said on Monday that it had shunted the days of under-performance brought about by corruption to allay investor fears and to increase its revenue for the six months to September 2.9 percent to R38.7 billion year on year.

Transnet chairperson Popo Molefe said the utility pushed its profits 3.5 percent to R2.9 bn during the period and intensified its efforts to recover funds and renegotiate irregular service agreements that were negotiated by past executives.

Molefe said there was a hive of activity to address the myriad corruption-era transactions.

“We are almost there in finding elegant solutions with service providers whose contracts were found to be irregular,” Molefe said. “This might not necessarily mean they were illegal, which is why we are looking for workable solutions in either recovering the company's money or getting the value we had signed for.”

Transnet recorded that its operating costs increased 1.2 percent to R21.2bn in tandem with a 5.1 percent increase in earnings before interest tax depreciation and amortisation, which rose to R17.5bn. The group said cash generated from operations increased 5.3 percent to R16.2bn.

It said it invested R7.9bn in infrastructure, with R1.3bn spent on rail, R2.9bn in the maintenance of rolling stock and about R1bn in marine and port terminal equipment. Transnet said financing costs fell to R5.57bn from R5.65bn, while freight volumes eased to 42.4m tons during the period.

Transnet said its gearing of 43.2 percent was comfortably within loan covenant requirements.

Molefe said the appointment of a permanent chief executive was in the pipeline. “Today we concluded the process of leadership assessment of all candidates and we will be sending that for further assessment and then the names of the shortlisted candidates will be submitted to the (Public Enterprises) Minister (Pravin Gordhan) for review,” Molefe said. “We might make an announcement of the appointment before the end of the year.”

Molefe said the group was keeping an eye on the litany of issues coming out of the Judge Raymond Zondo Commission. He said parts of the testimony of the commission includes the wherewithals of a R300 million advance payment for the acquisition of 1 064 locomotives and the largely inflated R9.7m which catapulted to R647m intended for the relocation of an assembly point for Transnet locomotives.

Acting chief financial officer Mark Gregg-Macdonald said Transnet was negotiating R13.5bn worth of loans with two local and three international banks, settling on interest repayment below the current average weighted financing costs of 10.5 percent.

BUSINESS REPORT