1 FINANCIAL ANALYSIS OF TRANSNET FINANCIAL RESULTS 31 MARCH 2005 Presented by Nomzamo Radebe ASSETS & LIABILITY MANAGEMENT NATIONAL TREASURY

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 HIGHLIGHTS FINANCIAL RESULTS The highlights of the financial results for Transnet group are as follows: 2005 R’mil 2004 R’mil % Change Turnover Profit from operations before net finance costs and impairments Profit for year after taxation6 527(6 415)>100 Capital and Reserves Cash flow from operating activities before cash effects of derivate transaction Operating margin (%) Gearing67%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 –PIPELINESPetronet –AVIATIONSAA

6 ANALYSIS: INCOME STATEMENT (CONT) SEGMENT TURNOVER CONTRIBUTION IN 2004/2005

7 SEGMENT CONTRIBUTION TO OPERATING PROFIT ANALYSIS: INCOME STATEMENT (CONT)

8 SEGMENT CONTRIBUTION TO PROFIT/(LOSS) BEFORE TAX

9 ANALYSIS: INCOME STATEMENT (CONT) Improvement in operating margin in 2005 to 12.9% (2004: 0.44%) Formula:Operating 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 Issued Capital Revalua -tion reserve s Foreign currency translation reserves Actuarial gains and losses Other Accumu- lated profit/ (loss) Total (R’Mil) BALANCES AT 1 APRIL (301)(1 862) Total recognized income & expenditure -499(81) (10 595)(7 711) Transfer (to)/from accumulated loss --(5)--5- BALANCES AT 31 MARCH (85) (12 452)9 806 Total recognized income & expenditure (947)(53) BALANCES AT 31 MARCH (82)21 163(5 469)16 871

12 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 (2004:83%) Formula: Debt Debt+ equity Target benchmark for gearing ratio for Transnet is %

13 ANALYSIS: BALANCE SHEET Return on equity improved in 2005 to 38.7% (2004: negative 65.4%) Formula :Net income after tax Shareholder’s interest Slight improvement in solvency ratio in 2005 at 1.3 (2004:1.16) Formula: Total assets Total liabilities Liquidity ratio in 2005 is 0.7(2004:0.51), which is below the norm of 2 Acid test ratio in 2005 is 0.62 (2004:0.46), which is below norm of 1

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

15 SEGMENT CONTRIBUTION TO CAPEX SPEND ANALYSIS: CASHFLOW STATEMENT (cont)

16 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. FINAL COMMENTS

17 THANK YOU