“Although the strike action had a negative impact on volumes for Transnet Freight Rail’s general freight business and at the Ports, overall general freight and maritime container volumes increased by 2.2 percent,” said the company.

EBITDA [earnings before interest, taxation, depreciation and amortisation] increased by 9.4 percent to R15.8 billion, which resulted in an EBITDA margin of 41.5 percent.

There had been improvements in the port and pipeline operations, including volume growth and productivity improvements, which contributed to improved profitability. There was, however, underperformance in rail operations on key elements of the Quantum Leap strategy, particularly volume growth, safety and operational efficiency.

Transnet said overall port efficiencies improved due to across-the-board increases in moves per gross crane hour (GCH), with the Durban Container Terminal (Pier1)  achieving  a 23.8  GCH  improvement.

“The terminal sustained a world class average of 29.5 GCH since December 2010 and is expected to maintain this throughout the year ahead.”

Meanwhile, the Durban Container Terminal (Pier 2) achieved an average GCH of 23 for the year due to aged assets. In order to correct this, Transnet is in the process of acquiring new cranes.

Transnet Pipelines continued to fulfil its strategic role in the economy by ensuring security of supply of petroleum products to the inland market.  This comes as it met the increased demand and logistical challenges as a result of the 2010 Soccer World Cup.

Cash generated from operations after changes in working capital increased by 13.5 percent  to R18.3 billion compared with R16.1 billion previously, while capital investment (excluding capitalised borrowing costs) rose to R21.5 billion from R18.4 billion previously.

Transnet’s rolling five-year plan has been revised up to R110.6 billion from the previous five years’ R93.4 billion. This is to meet the required volumes and to support the growth initiatives embarked on.

Of this R110.6 billion capital investment plan, approximately 58.3 percent will be spent on rail due to decades of underinvestment in the past. The remaining 28.2 percent and 13.5 percent will be spent on ports and pipelines respectively.

The New Multi-Product Pipeline (NMPP), which is under construction, will be replacing the existing Durban-Johannesburg pipeline (DJP) and is expected to increase capacity from 4.4 billion litres to 8.4 billion litres by December 2013.

This is the company’s single biggest capital expenditure item.

“The review by a sub-committee of the Executive Committee concluded that the final cost estimate is R23.4 billion and that construction would be completed by December 2013.”