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| Review of operations – Bidfreight continued |
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| SACD Freight |
SACD Freight, South Africa’s leading container depot operator, continues to derive benefit from the global growth in container traffic. Both turnover and trading profit increased.
Secunda operations continue to grow while potential operations in Coega hold the prospect of significant future expansion. Growth in cross-border traffic into Africa is another positive factor.
Bidfreight Intermodal continued to grow and made a significant contribution to profit.
Sustained volume growth is putting pressure on the capacity of current facilities. An expansion programme is in place to address this challenge. |
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| South African Bulk Terminals |
South African Bulk Terminals, the country’s largest bulk grain handler, was impacted by the total absence of maize volumes until the last two months and low wheat volumes. However, our competitive advantage has been sharpened by consistent reductions in berth-times following the deployment of new technology, notably Africa’s fastest, largest and most efficient grain ship unloader. Cost efficiencies were achieved.
Volumes picked up considerably toward year end and higher volumes are anticipated. Six new silos were constructed last year. Work has begun on another six. Opportunities for expansion in Cape Town and southern Africa are being investigated. |
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| Naval |
| Our Mozambican stevedoring operations performed above expectation for the second successive year. Volumes were underpinned by higher ferro-chrome and coal exports. Growth in import and export activity is expected to continue at Maputo, Beira and Nacala. As Mozambique’s national prospects improve, competitive activity is expected to sharpen from other port operators. |
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| INTERNATIONAL CLEARING AND FORWARDING |
Safcor Panalpina, the international freight management specialist, achieved record throughput. Tender successes augmented volumes, but compounded margin-squeeze. The weakening of the rand increased levels of disbursement and therefore our revenue. Increasing interest rates also had a positive effect on our earnings from cash holdings.
Expanded facilities at ORTA made a significant contribution, though investment here has increased costs. Working capital was adversely affected by a change in credit terms for a major client and margins came under pressure from competitive activity and the rand’s weakening trend.
Phase two of the ORTA expansion programme, creating an airfreight cross-dock and adding to warehouse space, will become operational in August 2007. This will further accelerate throughput, enable further efficiency gains and entrench our marketplace position as the southern African benchmark for high-tech, high-value clearing and forwarding. Investment in IT systems is continuous.
The staff complement has grown from 1 190 to 1 239 and further job growth is anticipated.
Sebenza, our associated company, performed well and exceeded budgeted trading levels. The operations continue to deliver excellent service to the government, parastatals and certain blue-chip customers. |
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| MARINE SERVICES |
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South Africa’s market leader in ships agency services performed very well, driven by growth in volumes handled by liner principals and car-carrier activities. Increased vehicle inspection fees, increased owner supervisory appointments and earnings from the Agulhas casualty in East London augmented revenue.
Efforts are under way to further increase our Africa representation. |
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| MANICA AFRICA |
| African operations performed well, with the exception of Manica Malawi where remedial action has been taken and a rapid return to profitability is anticipated. Zimbabwe creates special challenges in view of the onset of hyperinflation. However, the business continues to turn in a satisfactory performance. The Zambian and Namibian business units performed particularly well while profit from Botswana operations was above budget. For the second successive year, Manica Africa’s result was pleasing and new investment will be committed to help local management maintain momentum. |
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