The auditor-general has “commended” the financial viability of Transnet amid the many state-owned companies that are falling apart.
The office was presenting financial statements of leading SOEs before Scopa in parliament on Wednesday.
According to the AG's office, “Transnet’s ability to raise funds without government support and guarantees remains commendable and is a great strength.”
However, the AG cautioned, the liquidity and financial health of the public entity “require close monitoring and attention”.
Transnet had managed to make a profit amounting to R5bn, largely credited to the company’s fair-value adjustments on investment properties amounting to R98bn processed during the year under review.
The company was, however, not generating sufficient cash flows from operations to enable it to settle capital loans.
“Consequently, the company has to rely heavily on additional external loans to refinance significant portions of their maturing loans; this included refinancing of the US$1bn TNUSS22 bond that matured in July 2022,” reads a report tabled before Scopa.
“Transnet still has room to raise additional loans. Its funding structure consists of capital market bonds [domestic medium-term note (DMTN), global medium-term note (GMTN)] and external funding loans.
“Recent credit rating action by Moody’s has lifted the review downgrade and confirmed Transnet’s current ratings.”
This was attributed to the improved liquidity position of the entity.
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