Transnet shows first annual loss in years

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Picture: Getty Images
Picture: Getty Images
  • Transnet's annual financial statements for the year ended in March 2021 reflected a R8.4 billion loss.
  • Transnet leadership said the loss was attributed to the impact of the Covid-19 pandemic and national lockdown of early 2020.
  • Transnet has been calling for transaction items in its financial statements that would otherwise reflect as irregular expenditure, and which occurred under previous leadership, to be ringfenced.

The first year of the pandemic proved to be a tough one for state-owned logistics firm Transnet, as it swung to an annual loss for the first time in years.

The R8.4 billion loss for the year ended March 2021 – compared with a profit of R3.9 billion in 2020 – was attributed to factors including legacy governance challenges and the Covid-19 pandemic which brought most economic activities to a complete halt in early 2020.

Transnet released its annual financial statements on Friday afternoon, after a delay of several hours. Its annual general meeting had run over time by some three hours.

Transnet group CEO Portia Derby and CFO Nonkululeko Dlamini attributed the delay to ongoing discussions with National Treasury and the office of the Auditor General about its qualified audit, as well as findings of irregular expenditure at the entity.

Dlamini said Transnet had seen a considerable reduction in revenue, with ebitda dipping almost 43% to R19.5 billion.

"We did see a significant reduction in our revenue line. It was the [Covid-19] year and it was expected that we got this kind of performance," said Dlamini.

Dlamini further said Transnet was identifying irregular expenditure from up to five years back and compliance with National Treasury regulations. She said this was behind the delay in the release of the annual financial statements.

Derby said at the lowest point of the lockdown, mining was operating at 50% of capacity, and the broader economy had suffered considerably as well.

"Unfortunately, Transnet's revenue has been directly related to the world economy and these sectors. There was a downgrade of the sovereign in November and Moody's downgraded the sovereign to junk status and this impacted us as Transnet," said Derby. 

Derby said Transnet was still focused on fighting irregular expenditure and build a procurement policy that would allow Transnet to be more agile.

Transnet has been calling for transaction items in its financial statements that occurred under previous leadership, and which would otherwise reflect as irregular expenditure in subsequent financial statements and audits, to be ringfenced.

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