Transnet posts another R2 billion loss

South Africa’s state-owned ports and freight rail operator posted a narrower annual loss as it boosted cargo volumes.

Transnet’s loss narrowed to R1.9 billion in the year through March, from R7.3 billion a year earlier, Chief Financial Officer Nosipho Maphumulo told reporters on Friday in Johannesburg.

The volume of cargo handled increased from 160 million tons to 151.7 million tons, she said.

“The tide is beginning to turn, revenue is rising, losses are narrowing, and volumes are stabilising,” Chief Executive Officer Michelle Phillips said at the briefing. “The foundations of recovery are taking hold.”

Transnet moves the bulk of South Africa’s exports and imports, but its performance has been hamstrung by years of underinvestment, graft, theft and vandalism, which has in turn been a major constraint on the country’s economic growth. Shipments of coal and iron ore for export have both hit multi-decade lows.

The government plans to open up Transnet’s rail network to the private sector. On 22 August, it announced a shortlist of 11 operators that applied for access, a key step toward tackling the logistics bottlenecks. Plans are also afoot to bring in private firms to help run the nation’s ports. 

The government in July approved R94.8 billion in guarantees to support Transnet’s turnaround, R48.6 billion of which will be earmarked to ensure the company can cover all its debt redemptions over the next five years.

The support was in addition to a R51 billion guarantee facility that was approved in May.