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Transnet Records Significant Loss Amid Operational Challenges in 2022/23 Financial Year

Published September 21, 2023
9 months ago

Amid significant rail constraints hampering the Transnet Freight Rail (TFR), South Africa's state-owned logistics company, Transnet, has reported a tremendous financial loss of R5.7 billion for its 2022/23 fiscal year. The company's performance is a stark contrast to its profitability the previous year, which saw gains of R5 billion.

The underperformance stemmed from a coolant issue in TFR, which typically contributes between 47% and 50% of Transnet's revenue. A lack of locomotives, underinvestment in maintenance, and vandalism, coupled with theft, have significantly impacted TFR's operations.

During the 2022/23 financial year, TFR's contribution to Transnet's revenue dropped to approximately 43%, highlighting the profound impact of the operational challenges. Transnet is now developing a comprehensive turnaround strategy that will focus on business improvements and operational efficiency.

Transnet's CFO, Nonkululeko Dlamini, during the earnings announcement, pointed out the large debt burden and significant interest owed as significant factors affecting the company's financial performance. Despite these factors, Transnet’s total revenue saw a slight increase in the 2022/23 fiscal year, reaching R68.9 billion, primarily due to improved port and pipeline performance.

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