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Availability of Interim Financial Results - TRANSNET SOC Limited
TRANSNET SOC Limited
Issuer Code: BITRA
(“TRANSNET” or “the Issuer”)
Availability of Interim Financial Results
In terms of section 6.17 of the JSE Debt Listings Requirements,
Noteholders are advised that the Reviewed Interim Financial
Statements for Transnet for the six months ended 30 September 2020,
are available on the Issuer’s website:
http://www.transnet.net/Media/Pages/PressReleases.aspx
Transnet’s half year financial results on the back of an
unprecedented Covid-19 pandemic
Transnet’s half year results are on the back of the South African
economy suffering a significant contraction during April, May and
June of 2020, when the country operated under nation-wide lockdown
restrictions in response to Covid-19.
The general slowdown in economic activity saw a decline in key
sectors of the economy, including the mining sector which resulted
in the decline of rail (-16,4%) and port(-20,7%) volumes, for the
period ended 30 September 2020 in comparison to the prior period.
Container ports, which were closed for the duration of the lockdown
weighed heavily on the exports of iron ore and chrome. After the
initial hard lockdown, output was still impeded by regulations
that prohibited mines from operating at full capacity in the
interest of ‘flattening the curve’ and protecting the safety of
workers.
Port volumes were also impacted by the limited availability of
operational employees due to the effects of positive Covid-19
cases, whilst pipeline volumes were significantly impacted by the
total shutdown of airports and minimal auto-mobile movement with
lockdown imposed travel restrictions, and the negative impact of
fuel theft incidents.
During this period Transnet supported the economy by focussing
operations on moving essential cargo, operationalising container
terminals and ports as well as essential rail corridors.
As a result, in comparison to the financial performance posted at
30 September 2019, revenue decreased by 17,3% to
R32,0 billion and a loss of R3,0 billion was posted for the half-
year ended 30 September 2020. Transnet’s costs are largely fixed
with personnel contributing approximately 59%, which resulted in
an EBIDTA of R9,8 billion, a reduction of 47.3% compared to the
prior reporting period.
Transnet continues to be a cash generative business with
R12,6 billion cash generated from operations after working capital
changes. R4,9 billion was invested in capital expenditure, largely
to maintain the assets. Gearing of 48,7% and rolling cash interest
cover including working capital changes at 2,5 times is within
lenders requirements.
Transnet is a going concern, and has continued to adopt the going
concern principle in preparing its financial results.
The half-year results have been reviewed by the Auditor General of
South Africa.
Outlook
There are indeed signs of volume improvements in the third quarter
of the current financial period, however the emergence of a second
wave of the Covid-19 pandemic brings about a level of uncertainty
on the 2021 financial year performance. The executive team however
remains committed to drive the turn-around plans of Transnet.
Transnet acknowledges the support and strong relationship with
stakeholders and lenders during this challenging period.
11 December 2020
Debt Sponsor
The Standard Bank of South Africa Limited
Date: 11-12-2020 03:25:00
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