JOHANNESBURG, Transnet, the State-owned South African logistics group, has announced that its net profit for the half year ended September rose to 3.4 billio Rand (about 260 million US dollars), increase of 230 per cent on the corresponding period last year.

The results, released here Monday, were driven by improved operational performance and a slight rise in consumer demand and mineral production output in the country. Revenue rose 13.8 per cent to 37.1 billion Rand, underscored by a 7.9 per cent increase in general freight volumes; a 6,5 per cent increase in export coal railed volumes; and an 11.4 per cent increase in railed automotive and container volumes.

Operating costs at the company were contained at 20.8 billion Rand, with 2.2 billion Rand in savings.

Although the economic environment largely remains under pressure, Transnet’s strategy to move rail-friendly cargo from road to rail is starting to pay dividends with the company gaining market share in general freight cargo and coal volumes, the company said.

The company’s key measure of profitability, earnings before interest, tax, depreciation and amortization (EBITDA), improved by 17.7 per cent to 16.3 billion Rand. An exceptional improvement was noted in profit from operations after depreciation and amortization which rose by 69.1 per cent to 9.9 billion Rand compared with 5.9 billion Rand in the prior period, said Transnet.

Transnet railed a record 37.8 million tons of export coal volumes compared with 35.5 million tonnes in the prior period, a 6.5 per cent increase, despite various operational challenges, including equipment failures, unprecedented community unrest and security challenges.

However, poor volumes were experienced in sectors such as granite which registered a decline of 13 per cent, as well as cement and lime recording an 8.0 per cent decline in volumes due to an unavailability of mix product and plant breakdowns.

Meanwhile, export iron ore volumes were impacted by volatile market conditions, accompanied by lower demand from customers and a number of safety incidents reported during the six month period, resulting in a modest volume increase of 1.7 per cent.

The timely delivery of newly-built and refurbished rolling stock to freight rail, coupled with the delivery of locomotives for the 1 064 locomotive programme, and the delivery of coaches to the Passenger Rail Agency of South Africa by Transnet Engineering led to an increase in revenue by 29.4 per cent to 4.8 billion Rand in this operating division.

Revenue increased by 16.1 per cent to 6.5 billion Rand at Transnet National Ports Authority, mainly as a result of increases in cargo dues revenue and the release of clawback provisions informed by regulatory decisions.

The company also saw growth in container volumes due to local and international consumer demand. The demand resulted in a 6.1 per cent increase in container volumes to 2.4 million TEUs (twenty-foot equivalent units).

However, performance was hampered in the pipeline operating division. “A decline in market demand, for refined petroleum products, as well as production challenges at an inland refinery continue to hamper the performance in the pipeline operating division. Petroleum volumes transported decreased by 2.9 per cent to 8.3 billion litres compared to 8.6 billion litres in the prior period.

The company was also able to raise 9.9 billion Rand without government guarantees. The funds were raised from development finance institutions (R1.5 billion); commercial paper and call loans (R5.8 billion); export credit agencies (R1.4 billion); and domestic bonds (R1 billion).

Transnet further announced that it has invested 560 million Rand in the New Multi-Product Pipeline during the reporting period. The coastal terminal in Durban (excluding tanks), the 24-inch main pipeline and 16-inch inland pipelines have been fully commissioned and are operational, with four different petroleum products now being transported from Durban to the Gauteng region.