Acting chief executive Chris Wells says Transnet is committed to continuing its R80.5 billion capital investment programme, despite the economic crisis and lower net profits. He confirms the group’s capacity to raise the funds needed for its infrastructure development. It is about to launch a global medium-term note programme, providing access to US and European debt capital markets as soon as conditions become favourable.

Transnet will not need any funding from the state, compared with fellow parastatals SAA and armaments manufacturer Denel, which still need to be recapitalised, parliament’s public enterprises committee has been told. Transnet acting CEO Chris Wells said its results would show the “continued success of initiatives to improve 
operational efficiencies and cut costs”. The restructuring of the balance sheet and cost-effective debt structures have kept gearing within acceptable limits. Referring to the global economic crisis, Wells said the company is “well equipped” to weather the storm. He is confident that staff will not have to be retrenched, though this does depend on how the recession progresses. “Transnet’s short-term focus will shift towards sustaining the business, on protecting volumes and preserving cash,” Wells was quoted saying. “The timing of the implementation of the growth strategy will be delayed as a result of revisions to volume forecasts.”

Transnet expects its volumes in the current year to come under pressure, falling 4.7% on average compared with those of 2008-09, particularly in the areas of general freight, containers and export growth. It forecasts revenue growth of 8.8% in 2009-10, earnings growth of 9.6% and cash from operations at R10.6 billion. It plans to keep cost increases to 8.4%.

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