Orientation Programme

1
FINANCIAL ANALYSIS OF TRANSNET FINANCIAL
RESULTS 31 MARCH 2005
Presented by Nomzamo Radebe ASSETS LIABILITY
MANAGEMENT NATIONAL TREASURY 07-09-2005
2
BACKGROUND

• Appointment of a new Group Chief Executive
  Board of Directors in 2004
• Announced the implementation of a 4-point
  turnaround strategy set to improve financial
  performance and will be implemented over 5 years
• Released and announced Annual Financial results
  for year ending 31/03/05 on 4 July 2005
• The 4-point turnaround strategy adopted by
  Transnet has returned it to profitability during
  year ending 31 March 2005 after having a R6.3bil
  loss in 2004

3
HIGHLIGHTSFINANCIAL RESULTS

• The highlights of the financial results for
  Transnet group are as follows

2005 Rmil 2004 Rmil Change
Turnover 46 259 43 637 6.0
Profit from operations before net finance costs and impairments 5 971 4 408 35.5
Profit for year after taxation 6 527 (6 415) gt100
Capital and Reserves 16 959 9 917 71.0
Cash flow from operating activities before cash effects of derivate transaction 7 536 4 952 52.2
Operating margin () 12.9 0.44 28
Gearing 67 83 16
4
CONSOLIDATED INCOME STATEMENT(for year-end 31
March 2005)
 
5
ANALYSIS INCOME STATEMENT

• Turnover increased by 6 from R43 637mil(2004)
  to R46 259mil(2005).
• This is due to good performance of core business
  units namely
• RAIL Spoornet
• Transwerk
• PORTS National Ports Authority
• South African Ports Operation
• PIPELINES Petronet
• AVIATION SAA

6
ANALYSIS INCOME STATEMENT (CONT)

• SEGMENT TURNOVER CONTRIBUTION IN 2004/2005

7
ANALYSIS INCOME STATEMENT (CONT)

• SEGMENT CONTRIBUTION TO OPERATING PROFIT

8
ANALYSIS INCOME STATEMENT (CONT)

• SEGMENT CONTRIBUTION TO PROFIT/(LOSS) BEFORE TAX

9
ANALYSIS INCOME STATEMENT (CONT)

• Improvement in operating margin in 2005 to 12.9
  (2004 0.44)
• FormulaOperating profit
• Turnover
• Improvement in Net profit margin in 2005 to 14.7
  (2004 negative 14.5)
• Formula Net profit
• Turnover

10
CONSOLIDATED BALANCE SHEET(As at 31 March 2005)
11
STATEMENT OF CHANGES IN EQUITY(for the year
ended 31 March 2005)
 
ATTRIBUTABLE TO EQUITY HOLDER ATTRIBUTABLE TO EQUITY HOLDER ATTRIBUTABLE TO EQUITY HOLDER ATTRIBUTABLE TO EQUITY HOLDER ATTRIBUTABLE TO EQUITY HOLDER ATTRIBUTABLE TO EQUITY HOLDER ATTRIBUTABLE TO EQUITY HOLDER ATTRIBUTABLE TO EQUITY HOLDER
Issued Capital Revalua-tion reserves Foreign currency translation reserves Actuarial gains and losses Other Accumu-lated profit/ (loss) Total
(RMil) (RMil) (RMil) (RMil) (RMil) (RMil) (RMil)
BALANCES AT 1 APRIL 2003 14 710 4 969 1 - (301) (1 862) 17 517
Total recognized income expenditure - 499 (81) 949 1 517 (10 595) (7 711)
Transfer (to)/from accumulated loss - - (5) - - 5 -
BALANCES AT 31 MARCH 2004 14 710 5 468 (85) 949 1 216 (12 452) 9 806
Total recognized income expenditure - 1 079 3 (947) (53) 6 983 7 065
BALANCES AT 31 MARCH 2005 14 710 6 547 (82) 2 1 163 (5 469) 16 871
 
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ANALYSIS BALANCE SHEET

• Return on average total assets managed has
  improved from to 9.3 in 2005 (2004-9). This
  indicates an improved efficiency in asset
  utilisation
• Formula Net income/(loss) for the year
• Average assets
• Capital and reserves increased by 71
• Gearing ratio improved to 67 in 2005 (200483)
• Formula Debt
• Debt equity
• Target benchmark for gearing ratio for Transnet
  is 50-55

13
ANALYSIS BALANCE SHEET

• Return on equity improved in 2005 to 38.7 (2004
  negative 65.4)
• Formula Net income after tax
• Shareholders interest
• Slight improvement in solvency ratio in 2005 at
  1.3 (20041.16)
• Formula Total assets
• Total liabilities
• Liquidity ratio in 2005 is 0.7(20040.51), which
  is below the norm of 2
• Acid test ratio in 2005 is 0.62 (20040.46),
  which is below norm of 1

14
ABRIDGED CONSOLIDATED CASHFLOW STATEMENT(For the
year ending 31 March 2005)
15
ANALYSIS CASHFLOW STATEMENT (cont)

• SEGMENT CONTRIBUTION TO CAPEX SPEND

16
FINAL COMMENTS

• The positive financial results indicate the
  positive effects of the 4 point turn-around
  strategy.
• The success of this strategy will be measured by
  the sustainability of improved financial results
  over a long term.
• Pleasing results , but major challenges going
  forward.
• Capex programme of R40.8 billion to be rolled out
  and funded over the next five years.

17

• THANK YOU