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June 11, 2010

Transnet Freight Rail revenues beat expectations

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SOUTH AFRICA'S largest railfreight operator Transnet Freight Rail (TFR) achieved a better-than-expected increase in revenues in the last financial year, despite a decline in export coal traffic and general freight. Revenues rose by 11.8% to Rand 20.6 billion ($US 2.7 billion) in the year ending March 31, buoyed by an increased share of the intermodal market and rising bulk volumes in the latter part of the year.

Export coal volumes decreased by 0.2% to 61.8 million tonnes, principally because of operational issues on the railway. However, export iron-ore volumes continued their strong upward trend, rising 21.5% to 44.7 million tonnes, a 41% increase over 2005 levels. General freight declined from 78.4 million tonnes to 72.1 million tonnes.

A cost cutting campaign bore fruit with net operating expenses rising only 3.2% to Rand 13.4 billion.

TFR hopes to strengthen its financial performance by concessioning under-utilised freight lines to other operators. Expressions of interest were invited recently for the operation of 7300km of branch lines, only 3928km of which are currently operational. TFR is also assessing the possibility of leasing locomotives and rolling stock to concessionaires.

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