Challenges, but Transnet sees green shoots

Transnet’s executives and board at a results presentation on Wednesday made no bones about its April 2021 to March 2022 financial year (FY2022) being one of its most challenging, despite eased Covid restrictions.

They were optimistic that the turnaround of the state-owned ports and rail company is gaining traction and business prospects are continuing to improve.

Transnet managed to return to profit, despite the riots last July affecting operations at its busiest container terminal – the Port of Durban – together with a major cyber attack hitting all port operations, spiralling incidents of cable theft, and force majeures affecting port terminal operations countrywide as well as coal deliveries to Richards Bay.

The group posted a R5-billion profit, compared to a R8.7-billion loss (restated) for the Covid-hit prior financial year. Revenues are yet to recover to pre-Covid levels.

FY2022 revenue increased by a modest 1.8% to R68.5 billion, compared FY2021. But revenue for its financial year ended March 2020 (pre-Covid) was almost R7 billion more, at R75.1 billion.

CFO Nonkululeko Dlamini said the group was pleased to see some “green shoots”.

Unqualified audit

She added Transnet securing an unmodified or unqualified audit from the Auditor-General’s office for FY2022 was a major milestone. It is the first unqualified audit for the group in four years.

Group CEO Portia Derby said notwithstanding all the challenges during the last financial year, it is positive the company has shown an improved financial performance following the Covid low.

Cyber attack and cable theft

Derby conceded the cyber attack on Transnet in July last year was “significant” and said the group continued to face challenges concerning the unavailability of locomotives and spiralling cable theft incidents, which were major contributing factors to the group’s rail coal supply woes.

“Until we break the back of cable theft, the impact is going to be devastating...”