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Transnet fails to stop the bleeding
The parastatal will report huge losses when it discloses results, writes DON ROBERTSON
In spite of efforts to restructure the PX parcel delivery operations, the division will show a massive loss of over R500-million for the year to March, while SA Airways is expected to announce a R350-million loss. Of the six major divisions within Transnet, only Portnet, Petronet and Spoornet will be able to show any profit improvement. In the 1995/96 financial year Transnet posted a taxed profit of R1.79-billion, but after its commitment to the pension fund, which had an actuarial deficit of R3.2-billion at year-end, and medical aid liabilities, a net loss of R253-million was shown. It is now believed that SAA will show a loss of R350-million in the year to March 1997 compared with a profit of R324-million in the previous financial year. SAA is expected to show further losses in the next year. The R350-million profit expected to be reported by Spoornet represents only R100-million in trading income - the rest is extraordinary items including the repayment of debts by countries such as Zimbabwe. In the 1995/96 financial year, Spoornet had a taxed profit of R98-million. The major drag on profits, however, is the PX mini-container and parcel division. The rationalisation of PX will take longer to achieve than expected. Joe Ndhlela, executive director of PX, is projecting a loss of at least R475-million for the year and says the company will not be profitable until 2000. He adds that provisions for the 2 000 staff members who took voluntary retrenchment during the year could extend this loss and some think it could be as high as R540-million. In the 1995/96 financial year, PX suffered a loss of R433-million. A loss of R295-million was forecast for the past year. It is now believed that a further loss of at least R290-million can be expected in the 1997/98 financial year. The reorganisation of PX involved the reduction in the number of handling centres from 96 to 33 and a cut in the network of area and local distribution centres from 96 to 44. In addition, the division was restructured to focus on niche markets which include a special fast and guaranteed parcels delivery service, a separate parcels section, a mini-container division and an export unit called PX Africa. As a result, 2 000 employees were asked to take voluntary retrenchment. It was hoped that PX would be able to increase its share of the parcel delivery market from the current 18% to 30% within 15 months. Ndhlela will not comment on how market share has increased save to say that strategies have been adopted to improve business and that a "massive recovery has taken place". In a further move to improve profitability, rates for parcel delivery were increased by 6% on average from April 1, says Ndhlela . Disgruntled customers, however, claim that tariffs have almost doubled in some cases. In last year's annual report, outgoing managing director Anton Moolman said steps would be taken to stem the losses at PX.
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