New Transnet chairperson Andile Sangqu has indicated that the troubled State-owned freight logistics group, which has hitherto prided itself on being financially self-sufficient, may require and equity injection to implement a turnaround strategy that is currently under development. The group reported a net loss of R5.7-billion for the 2022/23 financial year on the back of a fall in rail and port volumes and a rise in finance costs to R12-billion from R10.5-billion and in increase in borrowings to R130-billion. In the previous financial year, Transnet reported a R5-billion profit, largely as a result of a R10-billion fair value adjustment, most of which related to its property portfolio.
has indicated that the troubled State-owned freight logistics group, which has hitherto prided itself on being financially self-sufficient, may require an equity injection to implement a turnaround strategy that is currently under development.
However, he indicated that the yet-to-be-finalised turnaround plan would include financial restructuring to address the group’s high level of debt, which was translating into monthly repayments of R1-billion, and could require an equity injection. The Public Enterprises Minister indicated that the fiscal position could deteriorate further as a result of persistently low growth and a revenue-collection outlook that had been weakened by a decline in commodity prices and the fall in commodity exports as a result of Transnet’s underperformance.
TFR’s export coal volumes fell to 49.7-million tons , iron-ore to 51.1-million tons and general freight to only 49.7-million tons , which translated to a revenue decline at the unit of 7.9% to R34.8-billion and a 40.5% slump in earnings before interest, taxes, depreciation, and amortisation to R6.7-billion.
Gordhan, who travelled to China in May in an effort to negotiate a breakthrough, said “constructive discussions” with CRRC to secure the spares required to return idle locomotive to service, as well as to ensure the delivery of a further 99 units, had been held.
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