Transnet Online Integrated Report 2017
Market Demand Strategy (MDS) themes
  • Financial sustainability
  • Capacity creation and maintenance
  • Market segment competitiveness
  • Operational excellence
  • Human capital
  • Organisational readiness
  • Sound governance and ethics
  • Constructive stakeholder relations
  • Sustainable developmental outcomes
Sustainable Developmental Outcomes (SDOs)
  • Employment
  • Skills development
  • Industrial capability building
  • Investment leveraged
  • Regional integration
  • Transformation
  • Health and safety
  • Community development
  • Environmental stewardship
The Capitals
  • Financial Capital
  • Manufactured Capital
  • Intellectual Capital
  • Human Capital
  • Social and Relationship Capital

Operating Divisions’ Performance

Operating Divisions’ Review


Freight Rail

KPIs

  • Revenue (R million)
  • EBITDA (R million)
  • Operational expenditure (R million)
  • ROTA (%)
  • Capex
  • Volumes
  • % black employees
  • Training spend (% of personnel cost)
  • DIFR
  • % energy efficiency improvement on PY (electricity)
  • Regional Integration: Cross-border revenue (R million)
Key

Improvement on prior year performance

Decline on prior year performan

Equivalent performance to prior year

Target achieved

Target partially achieved

Target not achieved

Commentary


Opportunities in the short to medium term



Read more
Operating Divisions’ reports online
at www.transnet.net

  • 2016

    36 952
  • 2017

    39 114
  • 15 468
  • 17 263
  • 21 484
  • 21 851
  • 3,3
  • 5,80
  • 22 619
  • 15 746
  • 214,2 (mt)
  • 219,1 (mt)
  • 85
  • 87
  • 1,9
  • 1,9
  • 0,86
  • 0,78
  • (0,6%)
  • (4,5%)
  • 1 645
  • 1 860

Revenue for the year increased by 5,9% to R39,1 billion (2016: R37,0 billion).

Despite a challenging economic climate, Freight Rail’s volume performance increased by 2,3% to 219,1 mt (2016: 214,2 mt).

The volume increase was accompanied by a slight increase in the average Rand per ton of R174,95 (2016: R168,74).

Net operating expenses increased marginally.


Growing volumes through strategic interventions, including digital tools to aid in maximising on back-to-rail opportunities in various sectors.

Improve efficiency through continuous improvement initiatives, such as implementing Lean Six Sigma methodology and employing digital and technological innovations.

Create value through the refinement and implementation of operating models, consolidation hubs and value propositions that attract and retain customers

Engineering

KPIs

  • Revenue (R million)
  • EBITDA (R million)
  • Operational expenditure (R million)
  • ROTA (%)
  • Capex
  • Volumes
  • % black employees
  • Training spend (% of personnel cost)
  • DIFR
  • % energy efficiency improvement on PY (electricity)
  • Regional Integration: Cross-border revenue (R million)
Key

Improvement on prior year performance

Decline on prior year performan

Equivalent performance to prior year

Target achieved

Target partially achieved

Target not achieved

Commentary


Opportunities in the short to medium term



Read more
Operating Divisions’ reports online
at www.transnet.net

  • 2016

    10 734
  • 2017

    9 380
  • 389
  • (457)
  • 10 345
  • 9 700
  • 1.2
  • (7.0)
  • 1 002
  • 945
  • -
  • -
  • 79.70
  • 80.20
  • 2.35
  • (3.4)
  • 0,45
  • 0,61
  • 6.8%
  • 14%
  • 319
  • 227

Demand for new rolling stock from Rail reduced, resulting in a 17% revenue reduction from Freight Rail to R7,8 billion (2016: R9,4 billion).

Despite weak economic conditions, Engineering-related product demand resulted in a 19,6% increase in external revenue to R1,6 billion (2016: 1,4 billion)..

Operating expenses were reduced by 4,9% to R9,8 billion (2016: R10,3 billion). Other operating expenses, excluding labour costs, reduced by 17% to R4,8 billion (2016: R5,8 billion), despite the upward inflationary environment, indicating Engineering’s successful variable cost-containment initiatives.


Rolling stock overhauls and upgrades will continue to be strong in Africa, and this provides an opportunity to sell refurbished rolling stock.

New rail corridors being developed within sub-Saharan Africa allowing Engineering to exploit these markets with the supply of rolling stock.

Port Terminals

KPIs

  • Revenue (R million)
  • EBITDA (R million)
  • Operational expenditure (R million)
  • ROTA (%)
  • Capex
  • Volumes
  • % black employees
  • Training spend (% of personnel cost)
  • DIFR
  • % energy efficiency improvement on PY (electricity)
  • Regional Integration: Cross-border revenue (R million)
Key

Improvement on prior year performance

Decline on prior year performan

Equivalent performance to prior year

Target achieved

Target partially achieved

Target not achieved

Commentary


Opportunities in the short to medium term



Read more
Operating Divisions’ reports online
at www.transnet.net

  • 2016

    10 210
  • 2017

    11 150
  • 3 035
  • 3 794
  • 7 175
  • 7 249
  • 7,95
  • 13,60
  • 1 126
  • 1 208
  • 4 366 (000’ TEUs)
  • 4 396 (000’ TEUs)
  • 85
  • 85
  • 2,14
  • 1,50
  • 0,61
  • 0,71
  • 1,5%
  • 2%
  • 4,2
  • 8,2

Revenue increased by 9,2% to R11,2 billion (2016: R10,2 billion).

Net operating expenses increased by 2,5% to R7,4 billion (2016: R7,2 billion), resulting in total cost increases well below CPI.

Costs were tightly managed despite upward pressure from electricity tariffs and fixed operating structures.


Port Terminals is exploring opportunities to support Transnet’s regional integration strategy by applying strengths and capabilities to countries in Africa.

Port Terminals will continue to explore opportunities to offer tailor-made services to individual Original Equipment Manufacturers (OEMs).

National Ports Authority

KPIs

  • Revenue (R million)
  • EBITDA (R million)
  • Operational expenditure (R million)
  • ROTA (%)
  • Capex
  • Volumes
  • % black employees
  • Training spend (% of personnel cost)
  • DIFR
  • % energy efficiency improvement on PY (electricity)
  • Regional Integration: Cross-border revenue (R million)
Key

Improvement on prior year performance

Decline on prior year performan

Equivalent performance to prior year

Target achieved

Target partially achieved

Target not achieved

Commentary


Opportunities in the short to medium term



Read more
Operating Divisions’ reports online
at www.transnet.net

  • 2016

    11 144
  • 2017

    10 379
  • 7 284
  • 6 367
  • 3 860
  • 3 923
  • 7,61
  • 5,80
  • 2 938
  • 2 020
  • 4 439 (000’ TEUs)
  • 4 466 (000’ TEUs)
  • 83
  • 85,8
  • 8,14
  • 5,00
  • 0,71
  • 0,66
  • 9,9%
  • (4,0%)

Revenue decreased by 6,9% to R10,4 billion (2016: R11,1 billion), due to a negative clawback adjustment of R1,0 billion (2016: positive R136 million)..

The external revenue increase (excluding clawback) was limited to R180 million, due to a zero percent tariff increase on various commodities granted by the Ports Regulator.

Net operating expenses increased by 3,9% to R4,0 billion (2016: R3,9 billion), mainly due to increased personnel, energy and operating lease costs, offset by a reduction in legal fees.


The Port of Ngqura will add significant value to Transnet as a regional transshipment hub in sub-Saharan Africa.

Promotion of the South African port system globally to attract investment and stimulate industrial development zones.

Improving efficiencies and customer service through integrated technology and improving market collaboration

Pipelines

KPIs

  • Revenue (R million)
  • EBITDA (R million)
  • Operational expenditure (R million)
  • ROTA (%)
  • Capex
  • Volumes
  • % black employees
  • Training spend (% of personnel cost)
  • DIFR
  • % energy efficiency improvement on PY (electricity)
  • Regional Integration: Cross-border revenue (R million)
Key

Improvement on prior year performance

Decline on prior year performan

Equivalent performance to prior year

Target achieved

Target partially achieved

Target not achieved

Commentary


Opportunities in the short to medium term



Read more
Operating Divisions’ reports online
at www.transnet.net

  • 2016

    3 668
  • 2017

    4 355
  • 2 626
  • 3 377
  • 1 042
  • 962
  • 8,58
  • 11,50
  • 1 550
  • 1 706
  • 17 426 (Mℓ)
  • 16 978 (Mℓ)
  • 87
  • 88
  • 4,70
  • 3,30
  • 0,18
  • 0,37
  • (2,1%)
  • (1,0%)

Revenue increased by 18,7% to R4,4 billion (2016: R3,7 billion).

The revenue increase was due mainly to a 23% increase in allowable petroleum revenue granted by Nersa in its 2017 Tariff Determination, a favourable distribution pattern from the coast, and the unwinding of a clawback raised in the previous financial year.

Net operating expenses decreased by 6,1% to R978 million (2016: R1,0 billion), mainly due to reduced environmental rehabilitation costs.


Pipelines will look to capitalise on the opportunity to diversify into the liquefied natural gas (LNG) market in the near future.

We will focus on ensuring the success of the Africa Strategy – to grow the non-regulated business by sharing skills, knowledge, pipeline training and operational services to other African pipeline companies in the Southern Africa Development Community, including Kenya..