South Africa\u2019s state-owned rail and ports operator said its full-year loss widened as theft and vandalism resulted in muted growth in shipments and as it provided for lawsuits.\u00a0<\/p>\n\n\n\n
Transnet SOC Ltd. posted a\u00a0loss\u00a0of R7.3 billion rand ($408 million) for the year through March 2024, compared with a restated R5.1 billion loss in 2023.<\/p>\n\n\n\n
Its freight-rail business \u2014 the largest operating unit accounting for 44% of revenue \u2014 delivered 151.7 million tons of cargo during the period, up 1.5% from the prior year. Pipeline volumes fell 2%, while port-container movements improved 2.9%, it said.\u00a0<\/p>\n\n\n\n
\u201cCollisions, derailments, community unrest on the coal line and equipment availability on the ore line\u201d affected volumes, the company said in a statement Monday. <\/p>\n\n\n\n
\u201cHigh levels of cable theft as well as infrastructure vandalism\u201d also affected the rail business, it said.\u00a0<\/p>\n\n\n\n
A court in June ordered that Transnet pay Sasol Ltd. R6.2 billion in damages and interest and TotalEnergies SE almost R3 billion, saying that the state-owned company overcharged the firms in an alleged breach of a 1991 oil pipeline contract.\u00a0<\/p>\n\n\n\n
Transnet said it has provided R9.3 billion in its accounts for the claim, interest and legal fees, and appealed the decision on July 8.<\/p>\n\n\n\n
Transnet is almost a year into a turnaround strategy that it announced in October 2023 to overhaul its rail and port services and tackle the impacts of years of mismanagement, theft and vandalism. <\/p>\n\n\n\n
The challenges, including underinvestment in infrastructure and equipment, and external shocks including floods and extreme weather events have added to operational problems.\u00a0<\/p>\n\n\n\n
The company\u2019s management said the plan is starting to bear fruit, with further improvements in rail volumes expected in the current financial year. <\/p>\n\n\n\n
Transnet, with a total debt of R226.5 billion, has repeatedly said its turnaround and growth plan needs significant capital to implement. That led to South Africa\u2019s National Treasury providing the entity with a R47 billion support package.<\/p>\n\n\n\n
The Auditor General of South Africa, who verified Transnet\u2019s accounts, said, \u201cMaterial uncertainty exists that may cast significant doubt on the entity\u2019s ability to continue as a going concern.\u201d<\/p>\n\n\n\n
Last week, the New Development Bank\u2014a lender formed by the BRICS group of economies\u2014granted Transnet a R5 billion loan. The funds will be used to modernize and improve South Africa\u2019s freight-rail network.<\/p>\n\n\n\n
The African Development Bank in July approved a loan of R1 billion for the first phase of the company\u2019s five-year capital investment plan that requires R152.8 billion.<\/p>\n\n\n\n