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- Despite the crippling impact of civil unrest and a cyber-attack, Transnet shrank its net half-year loss from R3.3 billion in 2020 to R78 million this year.
- Revenue increased by almost 11% mainly to increased petroleum and container volumes, as demand recovered from peak pandemic lockdowns in 2020.
- The group is looking to cut its labour costs with voluntary severance packages.
Despite some of its operations being paralysed by civil unrest and a cyber-attack earlier this year, Transnet shrunk its net loss to R78 million in the six months to end-September – from a loss of R3.3 billion in the previous year, newly audited results show.
Its revenue increased by almost 11% to R35.4 billion thanks mainly to increased petroleum and container volumes, as demand recovered from peak pandemic lockdowns in 2020.
Transnet said initiatives to "restructure the company and contain labour costs" which make up a significant portion of net operating expenses are being completed. This includes a voluntary severance package offering, which was approved in October. Transnet estimates that fixed labour costs made up 67% of its total costs.
While Transnet has not confirmed how many employees will be affected, in September the United National Transport Union said almost 3 000 employees were granted voluntary severance packages in the process.
"It is expected that the labour cost will eventually decrease to a more sustainable level in line with the reduction in labour relating to redundancies, without compromising operational efficiency within the company and focusing effort in line with the group's operating segment strategy," Transnet said in its results.
"The aforementioned approach by Transnet, is expected to contribute to the overall efficiency and growth of the South African logistics environment to which the company is a key player and ultimately will have a positive impact on the economic growth of the country."
Transnet was hit by a crippling cyber-attack in July, with unconfirmed reports of ransomware usually used by Eastern Europe and Russia attackers. The group had to declare a force majeure, as the hit disrupted operations at container terminals.
This came shortly after the Transnet declared force majeure on one of its key rail lines, connecting Durban to Gauteng, amid widespread civil unrest.
"Operationally, Freight Rail was negatively impacted by the significant increase in cable theft, resulting in approximately 1 190 train cancellations, as a result of security related incidents, nationwide unrest and the cyberattack in July 2021, rolling stock unavailability and safety incidents, which ultimately resulted in total rail volumes declining by 1.8% to 89.8 megatonnes from 91.4 megatonnes in 2020," Transnet said.
- READ | Cyberattack, civil unrest, cable theft and Covid-19: Transnet turns corner on a tough 6 months
But Transnet National Ports Authority increased its revenue by 14% to R6.2 billion, thanks to a 20% rise in cargo revenue amid increased volumes.
In June, President Cyril Ramaphosa announced that Transnet National Ports Authority is set to become an independent subsidiary of the freight logistics parastatal. The authority is responsible for managing and governing eight of South Africa's major seaports.
This reform of Transnet has been delayed for more than 15 years since the promulgation of the National Ports Act.
Revenue at Transnet Port Terminals, which owns and operates 16 terminal operations situated at seven ports, increased by 24% to R7.4 billion.
Container volumes increased by almost 15% to more than 2.1 million twenty-foot equivalent units, but Transnet says productivity across the terminals was impacted by adverse weather conditions as well as poor equipment availability and reliability.
"Port Terminals are also focusing on business improvement initiatives to improve the overall equipment effectiveness across all terminals, which will have a positive impact on operational efficiencies," the results said.
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