Wrap Text
BITRA - Availability of Annual Financial Statements
Transnet SOC Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1990/000900/30)
Issuer Bond Code: BITRA
(Transnet, the Company, the Group or the Issuer)
TRANSNET RELEASES AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE
FINANCIAL YEAR ENDING 31 MARCH 2023 WITH AN UNMODIFIED AUDIT
OPINION
Noteholders are advised that the Company’s unmodified audited annual financial statements
for the year ended 31 March 2023 have been published and are available on Transnet’s
website: https://www.transnet.net/InvestorRelations/Pages/Annual-Results-2023.aspx
The annual financial statements are available for inspection at the registered office of
Transnet, 138 Eloff Street, Johannesburg and the offices of the debt sponsor (Absa
Corporate and Investment Bank (a division of Absa Bank Limited)), 15 Alice Lane, Sandton,
from 09:00 to 16:00 on business days.
Transnet’s performance for the financial year ended 31 March 2023 improved in certain areas
compared to the prior year, despite various operational challenges and the current economic
climate.
Salient features of the financial performance compared to the prior financial year are as
follows:
- Revenue increased by 0,6% to R68,9 billion
- EBITDA (Earnings before interest, taxation, depreciation and amortisation) declined
by 2,1% to R23,0 billion
- Loss for the year is R5,7 billion from a profit of R5,0 billion in the prior year
- Cash generated from operations after working capital changes decreased by 12,8%
to R25,4 billion; and
- Gearing at 43,6%, is within debt covenant requirements.
Performance overview
The Company experienced a difficult operating environment, particularly in the rail business,
with decreased locomotive availability (a key unit of production) and high levels of cable theft
and infrastructure vandalism, resulting in lower volumes railed. This was exacerbated by other
factors: the reporting year started with extensive floods in KwaZulu-Natal, which had a hugely
negative impact on operations on the Gauteng-Durban corridor; higher levels of loadshedding;
and the employee wage strike in October 2022.
Despite these headwinds, Group revenue for the year increased by 0,6% to R68,9 billion
(2022: R68,5 billion) in line with positive port and pipeline operational performance.
Automotive and break-bulk volumes improved significantly (+21,0%) and petroleum volumes
increased by 1,0% when compared to the prior year. Rail volumes however, decreased by
13,6%, adversely affected by the aforementioned operational challenges.
Net operating expenses rose by a tolerable level of 2,0% given inflationary pressures. This
was a demonstration of financial resilience and commitment to various cost containment
initiatives. That said, the entity recorded a decrease in EBITDA of 2,1% to R23,0 billion for
the year. Considering other non-cash cost elements, (i.e depreciation, derecognition and
amortisation, impairment, fair value adjustments) and the impact of net finance costs, the net
loss for the year is R5,7 billion.
Operational outlook
A turnaround strategy for the business is currently being developed which will be submitted
to the Board, together with an implementation plan with key milestones, targets and
deadlines. This will consist - amongst others - of business improvements, optimisation of
operational performance and processes.
A key priority will be increasing locomotive availability to service in particular key export flows
such as export coal and chrome. Transnet Freight Rail (TFR) is also pursuing collaboration
with existing rail partners such as Caminhos De Ferros De Mocambique (CFM) to increase
volume movements to neighbouring countries. TFR began implementing outcomes-based
security solutions on 1 August 2023, which is expected to result in improvements in incidents
of cable theft moving forward.
As announced by the President in the State of the Nation Address in February 2023, there will
be accounting separation between the Rail Operator and the Infrastructure Manager, with an
interim Infrastructure Manager in place by 31 October 2023, in preparation for, and as part
of rail reform. This is in line with the White Paper on the National Rail Policy that aims to
enable full use of the rail infrastructure by providing access to TFR and other rail operators in
a fair and non-discriminatory way.
Another key focus area is successfully bedding down the recently announced DCT Pier 2
partnership. Transnet is now at the due diligence phase and the operating teams have
commenced engagements with the international terminal operator partner, International
Container Terminal Services Inc. (ICTSI).
The conclusion of the first LNG terminal section 56 transaction is expected to be announced
by the end of the 2024 financial year. The Leasing Company project, plans for which were
announced in the current reporting year, is an essential intervention for successful third-party
access, and is expected to commence operations in the next financial year.
Going forward the organisation will focus on closing all strategic transactions and best utilise
the Group’s asset base with due care in line with government’s objectives and Transnet’s
corporate strategy.
Audit opinion
The Auditor-General of South Africa, the Company’s independent statutory external auditor,
has expressed an unmodified audit opinion on the annual financial statements for the year
ended 31 March 2023.
Emphasis of matter
External audit drew attention to note 40 in the consolidated and separate financial
statements, which discloses material non-adjusting subsequent events. This includes a debt
service account with a lender, changes in the Board of Directors and a settlement reached
with a locomotive Original Equipment Manufacturer. Their opinion was not modified in
respect of these matters.
Johannesburg
1 September 2023
JSE Debt Sponsor
Absa Corporate and Investment Bank (a division of Absa Bank Limited)
Date: 01-09-2023 10:02:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
