Speaking at the results presentation in Sandton, chief executive Brian Molefe said the expenditure in the six months to September went to iron-ore expansion projects and locomotive acquisitions. These included the expansion of rail capacity on the line to 60 million tons per annum and port capacity to 58 million tons per annum over the quay wall.
Transnet also acquired 76 locomotives, 44 of which have already been delivered, which will facilitate the increase in iron-ore capacity to beyond 60 million tons per annum.
These developments form part of the company's five-year capital expenditure programme, which is currently estimated at R110 billion. Rail takes the lion's share of the allocation due to years of underinvestment, while the balance goes to ports and pipelines, respectively.
The parastatal hopes to borrow R33 billion in capital markets, while the rest will be funded through the company's cash resources.
Molefe pointed out that the state-owned entity concluded a loan agreement in the current financial year totalling US$810 million with the African Development Bank, and a syndication of international institutions.
Transnet posted a 20.3% rise in revenue to R22.4 billion in the six months to September from the previous comparable period, boosted by strong growth in export iron ore volumes and containers handled at their ports.
Earnings from operations before interest, taxation, depreciation and amortisation (EBITDA) rose 27% to R9.4 billion, while operating profit lifted 25.2% to R5.1 billion, from the previous comparable period. Cash generated from operations was up 25.6% to R10 billion.
"The gearing ratio is 42.6% compared to 41.1% as at March 31, but remains comfortably below our target range of 50%. This reflects the significant capacity available to fund future capital expenditure. We do not expect this ratio to exceed our target over the medium term," Molefe said.
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