Revenue increased by 13,8% to R37,1 billion, underlined by: a 7,9% increase in general freight

volumes; a 6,5% increase in export coal

railed volumes; and a 11,4% increase in railed

automotive and container volumes.

EBITDA increased by 17,7% to R16,3 billion, significantly higher than SA’s GDP growth of 0,5%*.

Profit for the period increased to R3,4 billion (2016: R1,0 billion), more than 230% higher than the prior period.

Gearing at 44,0% and cash interest cover** (CIC) at 3,0 times, are significantly within loan covenant requirements.

Borrowings of R9,9 billion raised and R9,5 billion repaid during the period, reflecting the strength of Transnet’s financial position.

Cash generated from operations increased by 17,6% to R17,2 billion, reflecting our strong cash generating capability.

Operating expenses increased by 10,9% to R20,8 billion, mainly due to: the increase in variable costs in

line with higher volumes, with resultant increases in personnel, fuel and electricity costs.

Savings of R2,2 billion were achieved against planned costs.

* The above GDP is calculated on the latest BER estimates for comparative periods (Apr-Sept 2017 vs Apr-Sep 2016).** Excluding working capital changes.

Capital investment of R8,9 billion. Brings expenditure during the

MDS period to R153 billion. 541 locomotives accepted

into operations since the inception of the locomotive acquisition contracts in 2014.

2,8% of personnel costs invested intraining. Focus on: Artisans. Engineers. Engineering technicians.

Disabling Injury Frequency Rate (DIFR): 0,72. On track to record the seventh

consecutive year that the Company outperformed the target of 0,75 and the global benchmark of 1.

We regret to report the passing on of Mr Edgar Masilela, construction manager from Transnet Group Capital during the period.

The Company continues to proactively strive ‘towards zero harm’.

R104,3 million committed to sustainable community development programmes across South Africa. 132 033 patients treated on board

the Phelophepa trains. 334 734 individuals benefitting

from community outreach services.

B-BBEE spend: R15,8 billion (87,8% of total measured procurement spend(TMPS) per the DTI codes). Black-owned enterprises spend of

R6,4 billion (40,5% of TMPS). Black women-owned enterprises

spend of R2,5 billion (15,8% of TMPS).

Transnet was rated a Level 2 B-BBEE contributor in 2016.

VOLUMES

General freight (GFB) (mt) 82,6 88,0 90,6 84,0 88,1 43,1 46,5 7,9

Export coal (mt) 69,2 68,1 76,3 72,1 73,8 35,5 37,8 6,5

Export iron ore (mt) 55,9 54,3 59,7 58,1 57,2 28,8 29,3 1,7

Total rail 207,7 210,4 226,6 214,2 219,1 107,4 113,6 5,8

Containers (TPT) ('000 TEUs) 4 237 4 503 4 571 4 366 4 396 2 234 2 370 6,1

Petroleum (Mℓ) 15 882 16 583 17 186 17 426 16 978 8 575 8 324 (2,9)

FINANCIALS

Revenue (including claw back) 50 194 56 606 61 152 62 167 65 478 32 604 37 096 13,8

EBITDA (including claw back) 21 051 23 639 25 588 26 250 27 557 13 865 16 318 17,7

Capital investment 27 471 31 766 33 565 29 561 21 438 9 422 8 948 (5,0)

Total assets 203 896 240 073 328 439 356 393 351 635 351 727 362 363 3,0

Total borrowings 73 088 90 444 110 377 134 517 124 780 127 685 126 229 (1,1)

RATIOS/STATISTICS

EBITDA margin (%) 41,9 41,8 41,8 42,2 42,1 42,5 44,0

Gearing (%) 44,6 45,9 40,0 43,1 44,4 43,8 44,0

Cash interest cover (times)* 3,7 3,5 3,2 3,0 2,8 2,6 3,0

FFO/Debt (S&P) (%) 21,6 20,7 17,2 13,6 13,0 13,3 16,2

FFO/cash interest coverage (S&P) (times) 3,5 3,4 3,0 2,8 2,1 2,1 2,6

Return on total average assets 7,7 6,6 6,4 3,7 4,6 3,8 5,9

Net debt/EBITDA 3,3 3,5 3,7 4,1 4,2 4,0 3,7

Group operational efficiency (%) 3,3 13,8 16,6 15,9 14,9 13,7 3,6

Real GDP growth (%) 2,2 1,5 1,4 0,6 0,7 0,7 0,5

* Excluding working capital changes.

•

•

•

•

•

•

•

•

* Absolute variance.

^ Excluding working capital changes.

Transnet's performance was exceptional in the context of a depleted economy, with EBITDA growth of 17,7%, in spite of GDP growth tracking below expectations:

2012/131st year of MDS

2017/18Budget

Sept 2017latest BER estimate

2,8%

1,0%

0,5%

(2,9)

6,15,8

Prior period

Rail Ports Pipelines

Sept 2017 vs

prior period

Weighted group volume performance +6,3%

Revenue excluding claw back +12,5%

+17,7%

Depreciation (19,8%)

Capital investment (5,0%)

Cash interest cover (times)*^ +0,4

Gearing* +0,2%

Finance cost +5,7%

+13,8%Revenue including claw back

EBITDA excluding claw back +14,7%

EBITDA including claw back

32 422 36 475

2016

37 096

+13,8%

2017

182 621

32 604

Claw back

* Variance % prior year.

ℓ

2016

107,4

28,835,5

43,1 46,5

113,6

+5,8%

2017

29,3

37,8Export iron ore +1,7%*

Export coal +6,5%*

General freight +7,9%*

2 3702 234

+6,1%

20172016

8 3248 575

2016

-2,9%

201759% of Transnet’s revenue is guaranteed as a result of regulated entities and take or pay contracts.

TPT

TPL

5

TNPA 16

TE

11

TFR53

15

Exceptional in the context of a sluggish economy.

14,323,711,3

14,9

67,6

84,4

17,024,7

95,4

73,0

10,5

69,6

21,020,8 17,59,1

20,7

90,4

Cost-reduction initiatives implemented throughout the Company resulted in a R2,2 billion saving against planned costs. These initiatives included:• Reduction in professional and consulting fees; and • Limit on discretionary costs as it relates to travel, accommodation, printing,

stationery and telecommunications.

20 77818 739

2017

+10,9%

2016

60

19

4

6

11

Other operating expenses

Material and maintenance

Electricity costs

Personnel costs

Fuel costs

Net operating expenses increased by 10,9%, mainly due to:• the increase in variable costs in line with higher volumes, with resultant

increases in personnel, fuel and electricity costs.

These three cost categories represent 77% of net operating expenses.

20

-1

57

13

42,5 44,0

+1,5%

20172016

*

* Absolute variance.

13 683 15 697

16 318

+17,7%

2017

182 621

2016

13 865

Claw backTPL**

10TPT

12

TNPA**23

TE

-1

TFR56

** Regulated entities.

EBITDA at 17,7%, well in excess of SA’s GDP growth of 0,5%.

Regulated entities (33%) and take or pay contracts (40%) represent 73% of Group EBITDA.

Depreciation, derecognition and amortisation of assets decreased by 19,8%, mainly due to the annual useful life adjustments to rolling stock and the re-phasing of capital investments to align with lower market demand.

Finance costs increased by 5,7%, in line with expectations, due to the increased cost of borrowings.

Impairment of assets relates primarily to impairments of trade and other receivables, as well as index valuation impairments on port operating assets.

6 4288 015

-19,8%

20172016

590914

-35,4%

20172016

4 7074 452

+5,7%

20172016

1 835

6 337

8 948

+3,5%

Sept 2017

322 773

Impairment and other

(39)

Borrowing costs

Deprec.

(6 235)

Reval.AdditionsMarch 2017

311 927

5,9

+2,1%

20172016

3,8

*

PPE by 3,5% to R322,8 billion.Due to:• capital investment of R8,9 billion.

Expansion: R2,1 billion; and Sustaining: R6,8 billion.

• R153 billion invested in the past five years.• R229,2 billion (including a R20 billion ‘war chest’ for revenue diversification

planned up to 2023/24).

541 electric and diesel locomotives accepted into operations, in terms of the contracts for 1 319 new locomotives signed in 2014.

Return on total average assets of 5,9% represents an absolute increase of 2,1% compared to the prior period, mainly due to a 69,1% increase in operating profits.

* Absolute variance.** Excluding capital work in progress and Regulator claw backs.

126 229124 780

Sept 2017

+1,2%

March 2017

44,0

-0,4%

44,4

March 2017 Sept 2017

*

3,0

2017

2,6

2016

The gearing ratio by 0,4%.

• Below the target range of 50,0%; and• Well below the triggers in loan covenants.

Gearing ratio not expected to exceed the target ratio over the medium-term.

Reflects available capacity to continue investment strategy, aligned to validated demand.

Transnet’s strong cash-generating capability resulted in CIC of 3,0 times which is significantly higher than the triggers in loan covenants.

Raised R9,9 billion without government guarantees and repaid borrowings of R9,5 billion.

* Absolute variance.**Excluding working capital changes.

Transnet borrows on the strength of its financial position and has maintained an investment grade credit rating, confirming its solid stand-alone credit profile (SACP).

The SACP of Transnet was affirmed at bbb by Standard & Poor’s (above the sovereign), reflecting the Company’s strong financial position.

Development finance institutions 1,5

Commercial paper and call loans 5,8

Domestic bond issue and other 1,2

Export credit agencies 1,4

Total 9,9

Baa3/Negative outlook BB+/Negative outlook

Baa3/Negative outlook BBB-/Negative outlook

Cash and cash equivalents at the beginning of the period 6 422 13 943 (53,9)

Cash flows from operating activities 8 246 11 547 (28,6)

Cash generated from operations 17 230 14 650 17,6

Changes in working capital (4 566) 738 <(100,0)

Other operating activities (4 418) (3 841) 15,0

Cash flows utilised in investing activities (10 522) (10 498) 0,2

Cash flows from/(utilised in) financing activities 493 (5 356) >100,0

Net decrease in cash and cash equivalents (1 783) (4 307) (58,6)

Total cash and cash equivalents at the end of the period 4 639 9 636 (51,9)

•

•

3%8%

12%

77%

Engineering and other

Pipelines

Ports

Rail

76%

24%Replacement R6,8 billion.

Expansion R2,1 billion.

The economic slowdown has resulted in Transnet optimising its expansionary capital investment for the period.

* CAGR to 2017.

* 8%

1%8%

4%

2%1%2%

72%Manganese

Break bulk

Piped products

Maritime containers

Iron ore

Bulk

Coal

General freight2%

Other

21,4

2016 2017

29,6

-6,0%

2015

33,6

2014

31,8

2013

27,5 8,9

-5,0%

Sept 2017Sept 2016

9,4

* Cumulative since inception of contracts.

Locomotives

233 class 44 diesel 45 162

359 class 22 electric 44 124

95 class 20E electric 95

60 class 43 diesel 60

100 class 21E electric 100

Total for the 1 319 locomotive contracts 541

232 class 45 diesel - 14 locomotives have been delivered and are undergoing acceptance testing.

240 class 23 electric - 8 locomotives have been delivered and are undergoing acceptance testing.

359 class 22 electric - 6 locomotives have been delivered and are undergoing acceptance testing.

233 class 44 diesel - 9 locomotives have been delivered and are undergoing acceptance testing.

Wagons

GFB and export coal 126 10 268

Rail refurbishment: infrastructure

Turnouts (units) 16

Universals (units) 38

Rails (kilometers) 191

Ballast (kilometers screened) 83 904 (m3)

Sleepers (units) 224 618

Pipeline infrastructure

Coastal terminal phase 1A 100%

Inland terminal phase 1A 96%

• The coastal terminal (excluding tanks), 24” main pipeline and 16” inland pipelines have been fully commissioned and are operational, having transported more than 18 billion litres of diesel from Durban to the inland region since commissioning.

• Following the coastal terminal commissioning in August 2017, the pipeline is now operating as a multi-product pipeline, operating at full phase 1 flow rates. This ensures security of fuel supply for the South African economy over the medium to long-term period. The inland terminal is expected to be operational by end of November 2017.

Port equipment

Skid steer loader 2

Haulers 4

Trailers 7

Straddle carriers 6

Tugs 6

•

•

•

•

•

Export coal volumes:

• by 6,5% from the prior period.

Notwithstanding this increase, performance was below expectations mainly due to:• community unrest, adverse weather conditions and

stockpile challenges earlier in the period.

The outlook for customer product availability to Transnet is positive and the company is focused on maximising on available volumes in the remaining period. Accordingly, the latest estimates indicate that the annual performance will be better than the prior year.

Improvement initiatives include:• Continued engagement to address community

challenges; • Focused customer engagement on stockpile levels to

optimise wagon allocation and reduce customer cancellations; and

• Continued improvement of operational efficiencies through ongoing lean six sigma initiatives.

Cycle time (hours)

68,1

2013

69,2

+3,0%

2018 LE

76,0

2017

73,8

2016

72,1

2015

76,3

2014

+2,2%

64,6

Sept 2017Sept 2016

63,2

37,8

+6,5%

Sept 2017Sept 2016

35,5

Export iron ore volumes:

• by 1,7% from the prior period.Marginal increase as a result of decreased volumes mainly due to:• Business rescue processes in the Mining industry;• Adverse weather conditions; and• Product unavailability.

Latest estimates indicate annual performance will be better than the prior year and the product availability outlook is positive.

Improvement initiatives include:• Ramp up to 38 daily trains in response to

increased customer demand;• Continued improvement of operational

efficiencies through ongoing lean six sigma initiatives;

• Customers being placed under business rescue and accounts suspended due to economic downturn.

Cycle time (hours)

92,6

Sept 2016

-9,2%

Sept 2017

84,1

2017

55,9 57,2 60,0

+4,9%

2018 LE2016

58,1

2015

59,7

2014

54,3

2013

29,3

+1,7%

Sept 2017Sept 2016

28,8

GFB volume performance:

• by 7,9% from the prior period; and

Performance increase was mainly due to:• Focus on product availability and capacity

allocation;• The container and automotive business grew by

11,4% evidencing continued market share growth from the road-to-rail modal shift;

• A record quarter 2 performance on export manganese, mainly Natcor and Phalaborwa channels; and

• Increase in chrome volumes.

Annual performance is estimated at 91mt, below budget, due to major risks of customer cancellations, customer loading/offloading challenges, operational challenges and product unavailability.

Improvement initiatives include:• Continuously engage all relevant stakeholders to

improve order book and optimise product availability;

• Focus to improve efficiency and productivity;• Explore alternative opportunities to shift more

volumes from road to rail; and• Deployment of the new 23E locomotives planned

for November 2017.

Wagon turnaround time (days)

91,0

+3,3%

2018 LE2016

84,0

2015

90,6

2014

82,6 88,0

2013 2017

88,1

10,2

Sept 2017

-12,1%

11,6

Sept 2016

Sept 2017Sept 2016

+7,9%

46,543,1

The current year’s performance:

• by 6,1% from the prior period; and

Increase was mainly due to:• improved customer demand.

Latest estimates indicate annual performance will be better than the prior year.

4 4244 3964 3664 5714 5034 237

+0,6%

2015 2018 LE20172013 2014 2016

Improvement initiatives include:• Delivery of 23 replacement straddles by December

2017;• Optimal utilisation of available straddles through

use of prime route and straddle pooling;• Engagement with shipping lines to improve vessel

stowage; and• Maintenance of minimum work operations during

adverse weather conditions, in line with standard operating procedures.

Sept 2016

+6,1%

Sept 2017

2 3702 234

2426

55513529

6857

Ngqura

+12%

+24%+12%

Durban Pier 1 Durban Pier 2 Cape Town

+46%

Sept 2016 Sept 2017

4,23,6

-29%-17%

Ngqura

+17%

-7%

Durban Pier 1

3,42,4

Cape Town

1,0

2,53,0

1,1

Durban Pier 2

Ngqura

52,0

-15%

Cape Town

+3%

Durban Pier 1

52,7

Durban Pier 2

-17%-5%

45,055,4 56,0

47,462,6

46,5

Sept 2016 Sept 2017

Sept 2016 Sept 2017

Train turnaround time performing well at most ports.

Container moves per ship working hour (SWH) negatively impacted by:• A busy reefer season;• Equipment breakdowns; and • Poor vessel stows received from certain

shipping lines with a ripple effect on ship turnaround time.

Petroleum volume performance:

• 2,9% below the prior period.

Decreased volumes are mainly due to:

• Reduced demand from customers; and

• Product supply interruptions.

129 123 133 1209989

Sept 201720172016201520142013

+5%

0%

2017

85,784,0

2014

81,0

Sept 2017

86,0

2016

85,6

2015

92969810099

Sept 2017

-4%

2017201620152014

113,0

Sept 20172017

116,0

2016

110,0

-3%

17,2

2016

17,0

2014

17,4

2015 2017

+0,3%

17,0

2018 LE

16,6

2013

15,9

• Lower demand had a marginal negative impact on pipeline capacity utilisation compared to the prior period.

• Delivery times to customers continued to improve while performance against customer orders was marginally below expectations.

Interventions

• NMPP Terminal 1 commissioned in July to positively impact flow rates;

• Maximise on available coastal volumes; and

• Improve ordered vs delivered volumes.

-2,9%

Sept 2017

8,328,58

Sept 2016

•

•

•

•

•

•

2014

0,69 0,69 0,69

2016 2017

0,72

Sept 20172015

0,69

1

15

8

4

7

2014 2015 2016 Sept 20172017

The Company regrets to report one employee fatality during the reporting period (compared to nine in the prior period). The employee fatality was as a result of a road vehicle accident.

Transnet’s leadership has heightened its oversight role of operational performance - and safety performance in particular – in more visible ways through site-visits, and by instituting an integrated systems management approach to ensure the various levels of safety performance are clearly understood and adhered to within the organisation.

The Company continues to analyse and review its current safety approaches and efficiency, while proactively striving ‘towards zero harm’.

DIFR performance of 0,72 (target: 0,75)

• On track to record the seventh consecutive year of recording a DIFR ratio below 0,75 due to continued focus on and investment in safety.

The Company continues to monitor and mitigate safety risks, as best as is possible, considering both operational and behavioural risks that are inherent in a Transnet work environment.

*Including contract employees.

Transnet has performed well in relation to its

employment equity targets.

Female representation is growing steadily despite

significant challenges in an operations-heavy

environment at semi and unskilled levels.

Invested 2,8% of the labour cost bill on skills

development initiatives (focusing on operational and

technical training).

Transnet achieved its targets for 2017 in the most

critical skills development areas that were the focus for

the period.

The Transnet Schools of Excellence continued to be

flagships of the Transnet Academy’s delivery.

2017 2017

Black 88,0 85,7

Females at GLT 50,0 42,0

Females at extended GLT 50,0 42,0

Females below extended GLT 29,7 28,1

PWD’s 3,1 2,3

Training spend % of personnel costsRand million

≥ 3,5 2,8372

Engineering trainees Number of learners ≥ 100 4

Technician trainees Number of learners ≥ 200 17

Artisan trainees Number of learners ≥ 200 187

Sector specific trainees Number of learners ≥ 955 888

Heritage preservation

Managing Transnet heritage assets for future generations.

The Heritage Policy and National Heritage Resources Act 25 of 1999 has been communicated to all Operating divisions in Transnet.

A list of heritage objects (locomotives and coaches) is now available on the Transnet Foundation website.

Employee volunteer programme (EVP) and

socio-economic infrastructure

development (SEID)

The ‘whole school development’

(WSD) programme is successfully

integrated with the education

portfolio.

The four community centres

reached 12 482 clients in the

period, resulting in community

members saving R366,993 in

transportation costs.

1 300 motorists and pedestrians

have been reached through rail

safety programmes.

1 926 learners benefited from

career guidance outreach

interventions.

Rural and farm schools sports development

Two multi-purpose sports

complexes completed in

Empangeni.

Sports apparel and equipment

donated to 100 schools.

100 000 learners participated in

sporting talent events.

The first-term grade 12 pass

percentage was 100%.

HealthcareAccess to primary health

care services for rural communities.

Transnet-Phelophepa I&II.

132 033 patients assisted on-

board.

334 734 individuals assisted

through outreach services.

1 095 youth participants for the period.

EducationLooks after orphaned and

vulnerable youth in communities where

Transnet has large projects or operations.

39 youth participants benefited

from life-skills camps.

The education managers maintain regular contact with students and ICAS is on standby to provide counselling when needed.

* TMPS – Total measurable procurement spend.

** B-BBEE spend down due to certain large suppliers being impacted by the introduction of the new codes.

+8%

Total contract value

135,509125,331

20172016

+7%

Committed SD obligation

62,77658,508

+44%

Actual SD obligation delivered

39,710

27,551

66 99

4128

169

+7%

+13%

0%

0%

20172016

Black woman owned

Black owned

Qualifying small enterprises

Emerging enterprises

88103101105

948880756559

Sept 2017

20102009 20152014201320122011 20172016

+5%

**

Moving Ideas competition

• The first selection out of 48 learners was done at the end of August 2017, where a final selection of 20 was agreed upon between Transnet and SABS.

• On 3 October 2017, the 20 finalists presented their ideas, out of which the final 3 were selected.

• The fund is a collaboration

between Transnet, Anglo

American and Small

Enterprise Finance Agency

to provide financial and non-

financial support to Transnet

black-owned suppliers.

• R150 million allocated to

financial assistance and R15

million for non-financial

assistance.

• R49 million worth of loans

have been approved, out of

which R47 million has been

disbursed.

• The enterprise development hub aims to ensure that Transnet creates an enabling environment for SMMEs to access products and services that are offered by both provincial and national economic development institutions.

• There are four ED Hubs in operation with over 18 million walk-ins.

• Property has been identified in Limpopo and another ED Hub is planned for 1 December 2017 in Empangeni.

• The programme provides operational support to qualifying black-owned SMMEs that are Transnet suppliers, with the aim of waste reduction, improving utilisation of resources, efficiency and quality.

• The programme has benefited 76 companies and has 39 companies going through the operational efficiency support programme.

• A non-financial support service aimed at incubating 100% black-owned SMMEs, which can meet Transnet’s supply chain needs.

• Two incubation centres are currently running in Richards Bay, and Port Elizabeth.

• An intensive mentorship drive was initiated during the period and an improvement in business maturity and literacy rate has been noted.

Transnet MatlafatšoCentre

R19 million spend since inception in 2014 to date.

• Through a partnership between Transnet, SABS, JASA and Wits Transnet Centre for Systems Engineering the initiative aims to stimulate entry by black entrepreneurs, particularly black youth, into the high tech sectors by providing innovation and R&D facilities.

• 110 EMEs and start ups assisted, 9 individuals assisted and 83 beneficiaries in ideation.

Black Umbrella’sR31 million spend since

inception in 2013 to date. The project has been

completed in the current year.

Productivity SAR18 million spend since

inception in 2014 to date. To be completed in 2019.

Enterprise development hubsR27 million spend since

inception in 2014 to date. R12 million expected

spend until 2019.

Godisa fundThe fund was capitalised

at R165 million for 10 years with an equal

contribution of R55 million from each partner.

• A partnership with Seed Academy for an ICT incubation programme for black owned SMMEs in the ICT sector.

• 10 SMMEs have been recruited into the programme.

• The recruitment process is set to continue for 15 additional SMMEs.

• Provides funding for BO, BWO, BYO, BDO SMMEs in the Cape Region.

• Also provides guarantees for large contracts and provide accessible funding to SMMEs.

• The agreement has been approved by Transnet Legal.

• Innovation and Entrepreneurship Programme for University Students providing mentorship and training in the development of innovative products and services which can translate to operational businesses.

• The 17 rural universities have been identified and associations have been set up.

• Application for communication with societies is running.

• Through a partnership between Transnet and Furntech, this is a Centre of Excellence for the furniture industry, offering business incubation and/or skills development.

• This initiative is focused specifically on black people living with disabilities.

• 25 beneficiaries have been trained and the second phase has commenced.

• Ten candidates from the Moving Ideas competition have progressed into the Business Support programme.

• The top 10 SMMEs to be on the programme.

• A partnership between Transnet and CVC Africa, a 100% black owned company that specialises in the development of SMMEs and start-up ventures, established two business incubation centres owned by military veterans.

• Training has commenced and the premises identified.

CVC military veterans

programmeR23 million spend since

inception.

Young Movers and JASA Academy

programmeR4,5 million spend since

inception

Furniture manufacturing

incubation R18 million spend since

inception in 2014 to date. To be completed in 2018.

Transnet BE BOLD programme

R1,4 million spend in the current year.

To be completed in 2018.

Phuhliso fund R50 million expected

spend until completion.

Seed academy ICTR0,5 million spend since

inception.

Revenue and volumes

ENERGY CONSUMPTION & EFFICIENCY CARBON EMISSIONS

Freight commodities market share gains from road hauliers

resulted in carbon emissions savings to the South African

transport sector of 357 077 tC02e.

97 878MWh electricity regenerated by the new 15E , 19E,

20E, 21E and 22E locomotives.

tC02e - tons of carbon dioxide equivalentGWh - Gigawatt hours

GJ - GigajouleGtk - gross ton km

2017

1 372

2016

1 330

+3,1%

103,4

2016

98,1

+5,4%

2017

18,7

2016 2017

+1,4%

18,4

+0,4%

65,7

2017

66,0

2016

10,64

-2,0%

20172016

10,43 1,62

+3,9%

2017

1,69

2016

+7,5%

204,9

2017

220,4

2016

1%5%5%6%4%10%7%49%13%

Break-bulk R1,9 billionPiped products R10,3 billionBulk other R9,9 billionManganese R12,5 billionIron ore R8,9 billionMaritime containers R21,5 billionCoal R14,3 billionGeneral freight R102,4 billionAutomotive and other R27,5 billion

Seven-year capital investmentby commodity (%)*

*Excludes R20 billion allocated to mergers and acquisitions.

Short- to medium-term outlook

Transnet’s results for the six-month period are exceptional in the context of a sluggish economy, with EBITDA growth of 17,7% underpinning this

achievement.

The Company has demonstrated sound resolve in the continued implementation of the MDS, by enforcing strong financial controls.

Focus on: cost-containment initiatives, operational efficiency improvements, securing diversified revenue and capital optimisation by value

engineering investments.

Aim to achieve capital spend of R229,2 billion (including R20 billion allocated to mergers and acquisitions) over the MDS period – investing between

R340 billion and R380 billion over the next 10 years, aligned to validated demand, to expand capacity across all commodities and sectors.

Transnet has maintained a strong financial position and cash-generating capability, as evidenced by gearing of 44,0% and cash interest cover of

3,0 times, thus enabling the Company to continue to borrow on its owns strength, without government guarantees. Funding raised in the current

period confirms Transnet’s attractiveness as a low credit risk investment.

Long-term outlook

Management has adopted the Transnet 4.0 vision to accelerate MDS growth in the 4th Industrial Revolution.

The future is digital and the Company will use the latest technology intelligently, to implement real-time customer solutions and new product

offerings.

Establish infrastructure networks for the transmission of natural gas.

Accelerate growth in property, spatial development and maritime connectivity.

Fundamentally reinventing Transnet’s existing business model and operational philosophy:

Extend Transnet’s footprint in Africa, the Middle East and South Asia;

Become a fully integrated logistics service provider, with end-to-end solutions; and

Establish an advanced manufacturing capability as an OEM for Africa.