Post on 18-Mar-2020
Financial Results Presentation 31 March 2018
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 2
Executive summary
Revenue increased by 11,3% to R72,9 billion, driven by: a 6,5% increase in railed automotive and
container volumes; a 4,3% increase in railed export coal
volumes; and a 6,1% increase in port container
volumes.
Operating expenses increased by 6,5% to R40,4 billion.
Savings of R3,1 billion were achieved against planned costs.
EBITDA increased by 18,0% to R32,5 billion, with the EBITDA margin increasing from 42,1% to 44,6%.
Net profit for the year increased by 75,4% to R4,9 billion (2017: R2,8 billion), a significant increase from the prior year.
Gearing improved by 0,8% to 43,4% and cash interest cover at 3,0 times, are both comfortably within loan covenant requirements.
The Company recorded a DIFR ratio of 0,73 – the seventh consecutive year that a ratio below 0,75 has been achieved with the global benchmark of 1,0.
Cash generated from operations increased by 12,6% to R34,9 billion.
Capital investment of R21,8 billion, bringing expenditure over the past six years to R165,6 billion.
2,9% of personnel costs invested in training, focusing on: Artisans; Engineers; and Engineering technicians.
B-BBEE spend amounted to R25,8 billion or 86,9% of total measured procurement spend, per DTI codes.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 3
Five-Year review + Volumes
+ Financial ratios
• The launch of the Transnet Africa Locomotive
during April 2017 marked a crucial step in its
strategy of becoming a leading manufacturer and
supplier of rolling stock on the African continent.
• The locomotive, designed, engineered and
manufactured in Africa, is suitable for use on
branch lines and in the yard for shunting, while
also being able to travel on old rail tracks originally
designed to carry light axle loads.
• In addition, the diesel-powered Trans-
Africa Locomotive is appropriate for aged railway
lines that operate on the Cape Gauge system,
offering a cost-effective solution for the majority of
the continent’s railway lines that are currently
unused.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 4
5-Year review
2014 2015 2016 2017 2018 % VARIANCE*
VOLUMES
General freight (GFB) (mt) 88,0 90,6 84,0 88,1 90,8 3,2
Export coal (mt) 68,1 76,3 72,1 73,8 77,0 13,1
Export iron ore (mt) 54,3 59,7 58,1 57,2 58,5 7,7
Total rail 210,4 226,6 214,2 219,1 226,3 7,6
Containers (TPT) ('000 TEUs) 4 503 4 571 4 366 4 396 4 664 3,6
Petroleum (Mℓ) 16 583 17 186 17 426 16 978 16 345 (1,4)
FINANCIALS
Revenue (including claw back) 56 606 61 152 62 167 65 478 72 887 28,8
EBITDA (including claw back) 23 639 25 588 26 250 27 557 32 515 37,5
Capital investment 31 766 33 565 29 561 21 438 21 781 (31,4)
Total assets 240 073 328 439 356 393 353 139 369 823 54,0
Total borrowings 90 444 110 377 134 517 124 780 122 550 35,5
RATIOS/STATISTICS
EBITDA margin (%) 41,8 41,8 42,2 42,1 44,6
Gearing (%) 45,9 40,0 43,1 44,2 43,4
Cash interest cover (times) 3,7 3,6 3,1 2,9 3,0
* Absolute comparison to 2014. ** Decrease due to value engineering and optimisation efforts.
**
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 5
Summary financial performance
+ Actual performance
+ Revenue and volumes
+ Net operating expenses
+ Earnings before interest, taxation and
depreciation (EBITDA)
+ Depreciation, impairment and finance costs
+ Property, plant and equipment
+ Total borrowings, gearing and cash interest cover
+ Abridged cash flow statement
• The fully autonomous safety inspection device (SID)
prototype – one of a kind globally - is used and tested
by Transnet to detect:
• Obstacles such as livestock or humans;
• Defects on the track in front of trains; and
• Cable theft or overhead traction issues.
• A cow-catcher at the front removes small obstacles on
the track, like stones.
• Six engineers spent 18 months developing the concept
and working on the prototype in collaboration with the
CSIR.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 6
Actual performance
* Absolute variance. #Excluding working capital changes.
Pipelines volumes lower than prior year due mainly to a customer shutdown, and lower market demand.
March 2018 volume growth (%) vs prior year
3,3
6,1
(3,7)
Rail Ports Pipelines
Mar 2018 vs prior year
Weighted group volume performance +6,5%
Revenue excluding clawback +10,0%
+18,0%
Depreciation +1,6%
Capital investment +1,6%
Cash interest cover (times)*# +0,1
Gearing* (0,8%)
Finance cost +12,9%
+11,3% Revenue including clawback
EBITDA excluding clawback +14,8%
EBITDA including clawback
Mainly due to a decrease in borrowing costs capitalised and the impact of the credit rating downgrade.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 7
Revenue and volumes
* Including clawback. ** Excludes specialist units and intercompany eliminations.
Revenue* (R million)
65 478 72 887
+11,3%
2018 2017
* Variance % prior year.
Rail volumes (mt)
Port containers (‘000 TEUs)
Petroleum (mℓ)
4 396
2017
+6,1%
2018
16 345
-3,7%
2018 2017
Revenue contribution by core Operating Division** (%)
TE
14 TNPA
15
52 TFR
14
5 TPT
TPL
77,0
2018
226,3
+3,3%
58,5 57,2
219,1
90,8 88,1
2017
73,8
Export coal +4,3%*
Export iron ore +2,3%*
General freight +3,1%*
Resilient performance and above expectations in an economy showing signs of recovery.
4 664
16 978
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 8
Net operating expenses (R million) Net operating expenses contribution by cost element (%)
Net operating expenses 6,5%
in costs in line with higher volumes, with resultant increases of: 12,8% in personnel, 13,6% in fuel and 5,7% in electricity costs.
Cost-optimisation initiatives: • Rationalising overtime, reducing professional and consulting
fees; • Rolling out programmes to measure condition-assessment
versus time-based maintenance execution; and • Limiting discretionary costs relating to travel, printing,
stationery and telecommunications.
Represent 75% of operating expenses
R3,1 billion against planned
costs
Net operating expenses
18
7
7
10
58
Other operating expenses
Material and maintenance
Fuel costs
Electricity costs
Personnel costs
40 37237 921
+6,5%
2018 2017
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 9
EBITDA
EBITDA contribution by core Operating Division (%)
EBITDA growth of 18,0%, with EBITDA margin increasing from 42,1% to 44,6%.
EBITDA (R million)
EBITDA margin (%)
*
* Absolute variance.
TE
12
TNPA** 21 TFR 59
TPL**
9 TPT
** Regulated entities.
32 51527 557
2018
+18,0%
2017
Regulated entities represent 30% of Group EBITDA.
42,1
2017 2018
+2,5%
44,6
-1
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 10
Depreciation, impairment and finance costs
Depreciation, derecognition and amortisation (R million)
Finance costs (R million)
Impairment of assets (R million)
Depreciation, derecognition and amortisation of assets by 1,6% Due to: • The revaluation of property, plant and equipment, partially offset by: • A significant decrease in derecognition costs.
Impairment of assets of R1,4 billion Due to: • The impairment of property, plant and equipment (derailments and
index valuation impairments on port operating assets). • Impairment of trade and other receivables.
Finance costs by 12,9%, Due to: • Lower capitalisation of borrowing costs. • Increased cost of borrowings impacted by the credit rating downgrade.
13 68613 471
2017
+1,6%
2018
1 442
2 538
2017 2018
-43,2%
10 2119 045
+12,9%
2017 2018
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 11
Property, plant and equipment (R million)
Return on total average assets (%)**
PPE by 7,0% to R335,5 billion Due to: • Capital investment of R21,8 billion.
Expansion: R5,4 billion. Sustaining: R16,4 billion.
• R165,6 billion invested in the past six years. • Transnet is seeking new growth paths to compensate for a lower growth
phase in traditional markets.
Return on total average assets of 5,9% • Represents an absolute of 1,3% compared to the prior year, mainly due
to a 33,7% increase in operating profits.
*
Property, plant and equipment
2 933
11 678
21 781
(13 303)
Reval. Additions 2017
313 431
+7,0%
2018
335 488
Impairment and other
(1 032)
Borrowing costs
Deprec.
+1,3%
5,9
2018 2017
4,6
* Absolute variance. ** Excluding capital work in progress and Regulator claw backs.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 12
The gearing ratio by 0,8%. • Below the target range of <50,0%. • Well below the triggers in loan covenants.
The gearing ratio not expected to exceed the target ratio over the medium-term.
Long-term borrowings raised of R9,9 billion, without government guarantees and net short-term facilities accessed of R3,4 billion. The Company borrows on the strength of its financial position and has maintained an investment-grade credit rating for its stand-alone credit profile.
Reflects available capacity to continue the investment strategy, aligned to validated demand.
Total borrowings and cash interest cover
Gearing (%)
Total borrowings (R million)
Cash interest cover (times)
122 550124 780
2017 2018
-1,8%
*
2017
-0,8%
2018
44,2 43,4
+0,1
2018
3,0
2017
2,9
* Absolute variance.
Transnet’s strong cash-generating capability resulting in CIC of 3,0 times which is higher than the triggers in loan covenants of 2,5 times.
*
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 13
Abridged cash flow statement
Credit rating as at 31 March 2018
Foreign currency Baa3/stable outlook BB/stable outlook
Local currency Baa3/P-3/stable outlook
BB+/stable outlook
Stand-alone credit profile
bbb- baa3/stable outlook
2018 2017
% var R million R million
Cash flows from operating activities 22 958 25 104 (8,5)
Cash generated from operations 34 915 31 018 12,6
Changes in working capital (2 161) 1 747 >(100,0)
Other operating activities (9 796) (7 661) 27,9
Cash flows utilised in investing activities (24 891) (24 689) 0,8
Cash flows utilised in financing activities (109) (7 936) (98,6)
Net decrease in cash and cash equivalents (2 042) (7 521) (72,8)
Cash and cash equivalents at the beginning of the year 6 422 13 943 (53,9)
Total cash and cash equivalents at the end of the year 4 380 6 422 (31,8)
Borrowings raised
2018
R billion
Development finance institutions 3,5
Export credit agencies 2,8
Bank loans 2,5
Domestic bond issue 1,1
Total long-term borrowings raised 9,9
Net short-term facilities accessed 3,4
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 14
Capital investment + Capital investment analysis
+ Major capital deliveries
• DCT Pier 2 deployed 23 new Kalmar straddle carriers
assembled locally, marking Transnet’s commitment to
localisation and industrialisation of the country.
• The substantial capital investment of nearly R308 million will
increase the number of reliable straddle carriers available to
operations and lower the cost of maintenance due to less
equipment failures.
• TPT has sought the services of a global and leading cargo
handling maker, Kalmar, an original equipment manufacturer
(OEM), to supply a substantial portion of the sub-assembled
components for specialised cargo handling equipment of this
nature through Transnet Engineering.
• Phase 1 of the Manganese Rail project is complete and in
operation.
• Maydon Wharf Berths were reconstructed to allow bigger
vessels to berth.
• Transnet achieved multi-product operations of the NMPP in
August 2017.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 15
Capital investment (R billion)
Capital investment by operating segment
Expansion vs replacement
Capital investment by commodity
3%
2%
7%
4%
77%
2%
4%
1%
Manganese
Iron ore
Coal
Piped products
Automotive and other
General freight
Bulk and break bulk
Maritime containers
7%
11%
81%
Engineering and other
Pipelines
Ports
Rail
75%
25%
Replacement R16,4 billion.
Expansion R5,4 billion.
* CAGR from 2013 to 2018.
*
Capital investment analysis
2014
-4,5%
2016 2017
33,6
2018
29,6
2015 2013
27,5 21,4 21,8
31,8
Although capital investment has declined, the objective of providing capacity aligned to validated demand has been achieved, with R165,6 billion invested over the past 6 years. Transnet deferred certain non-critical capital investment due to the credit rating downgrades which caused a climate of restrained and more costly funding.
1%
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 16
* Cumulative since inception of contracts.
Asset type 2018
Port equipment
Haulers 33
Trailers 9
Straddle carriers 23
Workshop forklift 3
Reach stackers 7
Tugs 7
Major capital deliveries
Asset type FY 2018 Cumulative 2018*
Locomotives
233 class 44 diesel 86 203
359 class 22 electric 88 168
232 class 45 diesel 21 21
240 class 23 electric 10 10
Wagons
GFB 450
Iron ore 232
Asset type 2018
Rail refurbishment: Infrastructure
Turnouts (units) 30
Universals (units) 54
Rail (kilometers) 320
Screening (kilometers) 160
Sleepers (units) 349 786 Pipeline infrastructure
Coastal terminal phase 1A 96%
NMPP main trunk line 100%
Coastal terminal (tight-line operations) 100%
Inland terminal phase 1A 100%
• The programme achieved multi-product operations in August 2017.
Asset type Stage of completion
Rail infrastructure
Waterberg rail Stage 1 complete and in operation
Manganese rail Phase 1 complete and in operation
Port infrastructure
Reconstruction of Maydon Wharf berths Complete
Port of Ngqura new administration building Complete
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 17
+ Rail – Export coal
+ Rail – Export iron ore
+ Rail – General Freight Business
+ Ports containers
+ Pipelines
• The Sishen–Saldanha railway line, also known as the Iron
Export Line, is an 861 kilometres (535 miles) long heavy haul
railway line.
• It connects iron ore mines near Sishen in the Northern
Cape with the port at Saldanha Bay in the Western Cape. It
is used primarily to transport iron ore and does not carry
passenger traffic.
• Train lengths have been increased to 342 wagons,
employing Radio Distributed Power (RDP) technology. These
trains have 8 locomotives, a mix of electric and diesel-
electric, and 342 wagons with a total mass of 41 400 tonnes
and are 3,8 kilometres long.
• This is the longest production train in the world.
Volumes and operations
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 18
Volumes (mt)
Productivity and efficiency
Ra
il –
Ex
po
rt C
oa
l
Export coal volumes: • by 4,3% from the prior year.
• Improved performance in response to
strong customer demand. • This achievement includes a monthly
record throughput of 7,2mt in the month of September 2017.
Improvement initiatives include: • Continued high level engagement to
address network disruptions due to community unrest;
• Additional foot-patrols inspecting hotspot areas during severe weather conditions to avoid possible incidents;
• Customer engagement on stockpile levels to optimize wagon allocation; and
• Continuous improvement of operational efficiencies through lean six sigma programme deployment.
Cycle time (hours)
Volumes and operations
+4,3%
2018
77,0
2017
73,8
2016
72,1
2013
69,2
2015
76,3
2014
68,1
-1,7%
62,6
2018 2017
63,7
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 19
Volumes (mt)
Productivity and efficiency
Ra
il –
Ex
po
rt I
ron
Ore
Export iron ore volumes: • by 2,3% from the prior year. • Improved performance in response to
increased demand. This was partially offset by: • Adverse weather conditions; and • Derailments on the export iron ore line in
the fourth quarter. Improvement initiatives for the ensuing year include: • Customer liaison on product availability
and resource allocation; and • Cycle time improvements through lean six
sigma programme initiatives.
Cycle time (hours)
Volumes and operations Volumes and operations (Cont.)
2017
90,3
-3,9%
86,8
2018
+2,3%
2018
58,5
2017
57,2
2016
58,1
2015
59,7
2014
54,3
2013
55,9
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 20
Volumes (mt)
Productivity and efficiency
Ra
il –
Ge
ne
ral Fre
igh
t B
usin
ess (
GFB
)
GFB volume performance • by 3,1% from the prior year.
• Improved operational efficiency and
productivity led to increased volumes. • The container and automotive business
grew by 6,5%, suggesting continued success in market-share growth from the road-to-rail shift.
Improvement initiatives for the ensuing year include: • Continued implementation of
diversification & road to rail strategies; • Maximizing rail delivery on commodities
with high demand; and • Improving on wagon placement for
improved turnaround times.
Wagon turnaround time (days)
Volumes and operations (Cont.)
2017
88,1
2016
90,8
+3,1%
2018
88,0
2013
82,6 84,0
2015
90,6
2014
-5,6%
10,1
2018 2017
10,7
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 21
Ship turnaround time (hours)
Volumes (‘000 TEUs)
Productivity and efficiency
Po
rt C
on
tain
ers
The current year’s performance • by 6,1% from the prior year.
• Better performance mainly due to
improved customer demand.
• Port productivity at Port of Durban impacted significantly by severe storms and floods in October 2017 that damaged port infrastructure and equipment extensively.
Improvement initiatives include: • Intensive repairs and maintenance to
damaged infrastructure and port equipment in response to the unanticipated long recovery period from the October 2017 floods and storms;
• Maintenance of minimum work operations during adverse weather conditions, in line with standard operating procedures;
• Optimal utilization of 23 new straddle carriers; and
• Close liaison with shipping lines for improved cargo handling plans (parcel sizes and stowage).
Volumes and operations (Cont.)
4 237 4 503 4 571 4 366 4 396
2017 2018
+6,1%
2014 2013 2015 2016
51 55 26 24
69
32 38
Cape Town Durban Pier 2 Ngqura Durban Pier 1
2017 2018
4 664
72
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 22
Productivity and efficiency
Po
rt C
on
tain
ers
Train turnaround time (hours)
Container moves per ship working hour
While train turnaround times at Durban Pier 1 and Pier 2 improved, performance at Cape Town and Ngqura declined marginally.
Container moves per ship working hour (SWH) negatively impacted by: • Shipping lines significantly changing their
vessel and parcel sizes, requiring adaptations in the allocation of available port resources; and
• Operations in the Port of Durban were impacted by a severe storm in October 2017, which saw a significant amount of equipment being damaged (e.g. cranes & RTGs), temporarily reducing the terminals’ operational capacity.
The terminals recovered from this incident and performance in the last quarter reflected significant improvement.
Volumes and operations (Cont.)
3,8
1,1
2,4
Durban Pier 1
2,9 3,5
Durban Pier 2
2,2
1,0
3,9
Ngqura Cape Town
53,0
Durban Pier 2
52,7 45,0
55,5
Durban Pier 1
45,5
Ngqura
49,5 63,0
Cape Town
44,8
2017 2018
2018 2017
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 23
DJP + NMPP capacity utilisation (Mℓ/Week)
Volumes (bℓ)
Productivity and efficiency
Pip
eli
ne
s
Operating cost per Mℓ.km (Nominal R/Mℓ.km)
Petroleum volume performance
• 3,7% below the prior year.
Low performance was mainly due to a customer shutdown and lower market demand.
Planned vs actual delivery time (% of deliverables within 2 hours of plan)
Ordered vs delivered volumes (% of deliveries within 5% of order)
Interventions
• Continue to maximise on available coastal volumes;
• Optimise TM2 utilization; and
• Perform an assessment of the demand intermodal study.
Volumes and operations (Cont.)
89 99 120 133 119
2014 2013 2017 2018 2016 2015
85,6 85,7
2016 2017 2018
86,0
2014
82,0
2015
84,0 99 98 96 93
2018 2017 2016 2015 2014
116,0
2017
115,0
2018 2016
110,0
2014
16,6
2015
17,2
2016
17,4
2017
17,0
2018 Actual
16,3
-3,7%
2013
15,9
100
135
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 24
Sustainable development outcomes + Safety
+ Human resources
+ Community development
+ Industrial capability building and
transformation
+ ED initiatives
+ Environmental stewardship
• Two unique trains that operate as mobile healthcare
hospitals, bringing much needed medical and educational
services to impoverished rural areas of South Africa.
• With over 40 permanent staff and numerous volunteers,
the train is more than a mobile hospital, it provides out-
reach and educational programmes and has thus far
reached 23,5 million people since it rolled out in 1994,
which makes it the world’s biggest mobile clinic.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 25
Employee fatalities (number)
The Company regrets to report five employee fatalities during the year (compared to fifteen in the prior year). The employee fatalities resulted from a combination of causes such as road vehicle accident and human behavior. Transnet’s leadership has heightened its oversight role of operational performance - and safety performance in particular – in more visible ways through site-visits, and by instituting an integrated systems management approach to ensure the various levels of safety performance are clearly understood and adhered to within the organisation. The Company continues to analyse and review its current safety approach and efficiency, while proactively striving ‘towards zero harm’.
Disabling injury frequency rate (DIFR)
DIFR performance of 0,73 (tolerance: 0,75)
• This is the seventh consecutive year of recording a DIFR ratio below 0,75 due to continued focus and investment in safety.
The Company continues to monitor and mitigate, as best as is possible, considering both operational and behavioural risks that are inherent in a Transnet work environment.
Safety – the seventh consecutive year recording a DIFR ratio below 0,75
0,69
2014
0,69 0,69
2017
0,73
2018 2016 2015
0,69
5
15
8
4
7
2014 2015 2016 2018 2017
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 26
Human resources – Employment, transformation, skills development
* Including contract
employees.
Invested 2,9% of the labour cost bill on skills
development initiatives (focusing on operational and
technical training).
Transnet achieved its targets for 2018 in most critical
skills development areas, that were the focus for the
year.
Schools of Excellence in Transnet continued to be
a great flagship of the Transnet Academy’s
delivery.
55 666
Transnet employees*
A representative workforce.
Designated categories Target % Actual %
2018 2018
Black 88,0 86,1
Females at GLT 50,0 36,4
Females at extended GLT 50,0 39,7
Females below extended GLT 29,7 28,4
People with disability (PWD)’s 3,1 2,4
Skills development, capacity building and job creation
Key performance indicator
Unit of measure
Annual target
Actual 2018
Training spend % of personnel costs Rand million
≥ 3,5 2,9 741
Engineering trainees Number of learners ≥ 100 100
Technician trainees Number of learners ≥ 200 201
Artisan trainees Number of learners ≥ 200 202
Sector specific trainees Number of learners ≥ 955 1 516
Transnet has performed well in relation to its employment
equity targets. For black employees, Transnet had set a
stretch target after having achieved the National
Economically Active Population target.
With the formation of the Transnet PWD forum, various
initiatives related to PWDs have received traction.
Female representation is growing steadily despite
significant challenges in an operations-heavy environment
at semi and unskilled levels but the recruitment and
retention of women is receiving significant attention.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 27
Community development – Transnet Foundation invested R219 million in corporate social investment.
Heritage preservation
Managing Transnet heritage assets for future generations.
Four locomotives were relocated to Bloemfontein for restoration.
The museums in George and Kimberley continue to demonstrate the role played by rail in the historic development of the South African economy.
Employee volunteer programme (EVP) and socio-economic
infrastructure development (SEID)
Employees volunteered at the
De Aar Youth Precinct to work with
local youth.
Idondotha Community Centre is
60% complete.
ESD centre at Empageni is
complete and the community
centres at Khuma, Thokoza,
Ireagh and Springs provided
social services to 45 989 clients.
152 poor households were
recipients of food-garden produce.
4 148 motorists and
pedestrians have been reached
through rail safety programmes.
Sports
SAFA/Transnet Football School of Excellence
Will soon be converted to a
fully-fledged Transnet Soccer
Academy.
The current rural and farm
sports programme reached
50 000 learners through
programmes promoting chess,
athletics, soccer, netball and
basketball.
Healthcare
Access to primary health care services for rural
communities. Transnet-Phelophepa I&II.
157 418 patients assisted
on-board.
435 332 individuals assisted
through outreach services.
7 647 girls and 2 385 boys through packaged health services.
Mass cancer and diabetes campaigns were intensified.
Education
Looks after orphaned and vulnerable youth in communities where
Transnet has large projects or operations.
Completed the King Zwelithini primary school library.
A national programme is underway to audit teachers’ skills to support the 2019 teacher development programme.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 28
Broad-based black economic empowerment (B-BBEE) and local supplier
industry development
Transnet is currently
rated as a Level 2 B-BBEE
contributor
Supplier development (SD) programme (R million)
% B-BBEE spend of TMPS* B-BBEE categories spend % of TMPS *
Industrial capability building and transformation
* TMPS – Total measurable procurement spend. ** B-BBEE spend down due to certain large suppliers being impacted by the introduction of the new codes. ^Absolute variance.
+2%
Total contract value
137,619 134,365
2018
2017
+1%
Committed SD obligation
63,403 62,564
+32%
Actual SD obligation delivered
42,479
32,246
87103101105
948880756559
2018 2017
+4%
2013 2014 2015 2016 2012 2011 2010 2009
**
Emerging enterprises
8 9
+1%^
+18%^
Qualifying small enterprises
0%^
+8%^
8
Black owned
8 13
Black woman owned
42
34 31
2018
2017
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 29
ED initiatives
Junior Achievement South Africa (JASA)
Be Bold Entrepreneurial Youth Programme
South African Bureau of Standards (SABS)
GODISA Fund
R4,5 million spend since inception
R1,5 million spend in the current year. Completed in 2018
R30 million spend since inception in 2014 to date.
Fund capitalised at R165 million for 10 years with an equal contribution of
R55 million from each partner.
A School programme that provides entrepreneurship skills to high school
students with five academies in Eastern Cape, Northern Cape, Free State and
North West.
The Programme develops youth in terms of entrepreneurship and innovation for
the transport and logistics industry.
An incubation programme designed to assist black-owned SMMEs with design,
research and development skills.
A partnership with SEFA and Anglo to provide financial assistance to existing
suppliers.
Ten candidates from the Moving Ideas competition have progressed into the Business Support programme.
The top 10 SMMEs to be on the programme.
The 17 rural universities have been identified and associations have been set up.
Application for communication with societies is running.
110 EMEs and start ups assisted, nine individuals assisted and 83 beneficiaries in ideation.
R150 million allocated to financial
assistance and R15 million for non-
financial assistance.
R49 million worth of loans have been
approved, out of which R47 million has
been disbursed.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 30
ED initiatives (Cont.)
GIBS Programme
Shanduka Black Umbrellas
Matlafatso Centre – Wits Furntech
R19 million spend since inception in 2014 to date.
R31 million spend since inception in 2013 to date. The project has been
completed in the current year.
R18 million spend since inception in 2014 to date.
To be completed in 2018.
R3,5 million spend since inception in 2014 to date.
An incubation for the Systems Engineering and Research Centre.
A business incubation and mentorship programme aimed at
assisting black-owned SMMEs with business skills in Port Elizabeth and
Richards Bay.
Financial and non-financial assistance for black disabled youth
to manufacture furniture in Limpopo.
A mini MBA to equip black-owned SMMEs with
entrepreneurial skills.
110 EMEs and start ups assisted, 9 individuals assisted and 83 beneficiaries in ideation.
Two incubation centres are currently running in Richards Bay, and Port Elizabeth.
An intensive mentorship drive was initiated during the period and an improvement in business maturity and literacy rate has been noted.
This initiative is focused specifically on black people living with disabilities.
25 beneficiaries have been trained and the second phase has commenced.
Aims to empower new and existing growth-oriented entrepreneurs.
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 31
Energy consumption and efficiency Carbon emissions
Environmental stewardship Energy efficiency and carbon emissions reduction
Total electricity consumption (GW/h)
Total fuel consumption (million litres)
Carbon emissions intensity (kgCO2e/ ton)
Carbon emissions (mtCO2e)
Total energy efficiency (ton/GJ)
Traction electricity efficiency (gtk/kWh)
3 208 3 296
+2,7%
2018 2017
+2,9%
2018
239,0 246,0
2017
2018
65,4 64,5
2017 2017
18,9
2018
19,0
+0,9%
2017 2018
10,34 10,09
-2,4%
2017 2018
3,95 4,00
+1,3%
Freight commodities market share gains from road hauliers
resulted in carbon emissions savings to the South
African transport sector of 859 228 tC02e.
262 016MWh electricity regenerated by the new 15E,
19E, 20E and 21E locomotives.
tC02e - tons of carbon dioxide equivalent. GWh - Gigawatt hours.
GJ – Gigajoule. Gtk - gross ton km.
Traction fuel efficiency (gtk/kWh)
207,9 213,4
+2,6%
2018 2017
-1,5%
TRANSNET AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018 32
Conclusion
Transnet continues to improve performance year on year in an economy showing signs of recovery, confirmed by an
18,0% increase in EBITDA, its key profitability measure.
Improvements in operational efficiency and productivity, together with management‘s continued efforts to contain
costs and optimise capital investment, has resulted in Transnet achieving impressive results.
The Company is striving to be a digital organisation with a strong focus on maximising the use of technology to drive
efficiency, effectiveness and innovation.
Transnet will continue to create value for customers by strengthening infrastructure reliability in existing markets.
Transnet is also seeking new growth paths to compensate for lower growth expectations in its traditional markets.
Thank you