Transnet reports R5.7bn loss for 2022/23 financial year

State-owned logistics company Transnet reported a R5.7bn loss in the financial year that ended in March, compared to a R5bn profit the previous year.

This is after rail constraints hit volumes moved by Transnet Freight Rail (TFR).

A shortage of locomotives, underinvestment in maintenance and theft, including vandalism, had a knock-on effect on TFR during the year under review. 

Transnet said TFR normally contributes between 47% and 50% of its revenue. However, the challenges faced by its rail division had a profound impact on the group. 

“The approximate 43% contribution to Transnet’s revenue in the year under review shows the poor performance achieved in the last financial year by TFR,” it said.

Speaking during a results presentation on Friday, Transnet CFO Nonkululeko Dlamini said the TFR performance weighed on the group which could have performed better given its improved revenue and cost containment in the face of rising inflation.

“There are other elements we cannot move away from. You have got a significant amount of debt, and we pay significant interest in that regard, in line with what we owe to our lenders,” said Dlamini.

“There was not much movement in a number of areas other than an impact of the reduction in volumes from 173-million tonnes to 149-million tonnes. If you multiply that by cost per tonne, you can see how much you have lost in that regard.”

Transnet’s total revenue increased marginally to R68.9bn from R68.5bn in 2022, mainly on the positive port and pipeline operational performance.

The group said a turnaround strategy for the business is currently being developed which will be submitted to the board. “This will consist — among others — of business improvements, optimisation of operational performance and processes,” said Transnet.

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