Transnet reduces losses and aims to reduce labor costs
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Despite some of its operations being halted earlier this year due to civil unrest and a cyber-attack, Transnet reduced its net loss to R78 million in the six months to end-September, down from R3.3 billion the previous year, according to newly audited results. Its revenue increased by nearly 11% to R35.4 billion, owing primarily to increased petroleum and container volumes as demand recovered from peak pandemic lockdowns in 2020.
Transnet stated that initiatives to “restructure the company and contain labor costs,” which account for a sizable portion of net operating expenses, are nearing completion. This includes a voluntary severance package offered in October, which was approved. Transnet estimates that fixed labor costs accounted for 67 percent of total costs. While Transnet has not confirmed how many employees will be affected, the United National Transport Union reported in September that nearly 3 000 employees were granted voluntary severance packages as part of the process.
“It is expected that the labour cost will eventually decrease to a more sustainable level in line with the reduction in labour relating to redundancies, without compromising operational efficiency within the company and focusing effort in line with the group’s operating segment strategy,” Transnet said in its results.
“The aforementioned approach by Transnet, is expected to contribute to the overall efficiency and growth of the South African logistics environment to which the company is a key player and ultimately will have a positive impact on the economic growth of the country.”