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PRASA GROUP FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2013

PRASA GROUP FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2013. Key Highlights. Conclusion of the procurement process in relation to the Rolling Stock Fleet Renewal Program and announcement of the successful bidder (ALSTOM-led GIBELA consortium).

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PRASA GROUP FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2013

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  1. PRASAGROUP FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2013

  2. Key Highlights • Conclusion of the procurement process in relation to the Rolling Stock Fleet Renewal Program and announcement of the successful bidder (ALSTOM-led GIBELA consortium). • Commenced with the implementation of the 5-year Signalling Upgrade Program in Gauteng, KwaZulu-Natal and the Western Cape • A total of 579 coaches delivered as part of the Accelerated Rolling Stock Program. • As part of the Balance Sheet restructuring process, investment property was revalued according to IAS 40 (from R924m to R2.5bn. • Capital expenditure improved by 82% from R3.5bn last year to R6.3bn.

  3. Key Highlights • Established the SIP7 Project Office as part of the Government’s infrastructure program under the Strategic Integrated Projects. • Metrorail fare revenue increased by 22% from last year, generating R1.8bn for the year and was 2% below budget for the year • Unlocking the value of assets through Balance Sheet Restructuring initiatives (New Real Estate Strategy Approved). • Reduced operational losses through various cost containment/management interventions • Despite a demand for a double-digit wage increase, PRASA settled at 8%

  4. Key Highlights • Awarding of over 500 bursaries as part of skills development contribution and Learnerships • Increase in the value of assets (excluding investment property) grew by 25% from R19.4 billion to R24 billion • Improvement on the company’s solvency with debt or solvency ratio at 0.17 despite operational challenges and unfunded mandate within Rail. • Fare revenue excluding Government subsidy and other revenue growth by 16.3% (Metrorail fare revenue) • Total Revenue (excluding government subsidy) and grew by 16.3% to R549 million compared to the previous year.

  5. Key Highlights • Group posted a current year shortfall of R157m, which is a loss increase of R128m on the prior year loss of R29m, mainly due to increased operational costs. • Passenger number for MLPS declined further due to the rationalization of its services. MLPS posted R795m loss excluding subsidy. • CRES’ ability to lease property has been affected by the current economic environment, characterised by poor property rental demand and generally lower rentals has severely affected the income generation capacity of the property portfolio division, with income being 46% below budget.

  6. Key Highlights • Autopax failed to secure the required bus operating licences which would have allowed it to generate sufficient revenue. • Despite the increase in Capital subsidy this has not been accompanied by growth in Operational Subsidy thus placing strain on cash flows to manage the capital enhancements. Operational subsidy increased by 5.6%. • Rates & taxes including energy increased by 18% on the prior year.

  7. ANALYSIS OF TOTAL ASSETS

  8. FIXED ASSET BASE

  9. ANALYSIS OF TOTAL LIABILITIES

  10. ANALYSIS OF TOTAL LIABILITIES

  11. KEY FINANCIAL POSITION RATIOS

  12. ABRIDGED GROUP INCOME STATEMENT

  13. QUALITY OF EARNINGS

  14. GROUP SUBSIDY AND FARE REVENUE

  15. % COST DISTRIBUTION

  16. OPERATIONAL EFFICIENCY RATIOS

  17. FRUITLESS & WASTEFUL EXPENDITURE

  18. IRREGULAR EXPENDITURE : FY 2013

  19. SUMMARY OF KEY CHALLENGES • TRANSPORT AND RAIL POLICY • Policy certainty is vital • Rail as backbone of transport • Conflict between rail and transport policy • Devolution of rail functions • Long distance rail • Access to the rail network • High speed rail (Future)

  20. SUMMARY OF KEY CHALLENGES • FUNDING FOR NEW ROLLING STOCK • Request for Review of Affordability Level (R40bn to R51bn) • Hedging – National Treasury • Turbulent Situation in Terms of Exchange Rate • (Rand – Dollar) • (Rand – Euro) • (Commodity Risks – Steel, Copper etc) • Mitigate Against the Risk

  21. SUMMARY OF KEY CHALLENGES • FUNDING FOR RAIL • Lack of funding is destroying long-distance Rail (Metrorail) • Mainline Pax Services (MLPS – otherwise known as ShosholozaMeyl, is costing PRASA R870m a year • Reduced Funding for Metrorail is equally destructive, affecting key operations • Increase in energy costs as well as negative rates and taxes impact on cash position of PRASA, suppliers and small business • Conditions on Capex Retrogressive

  22. SUMMARY OF KEY CHALLENGES • UNLOCKING THE VALUE OF PRASA ASSESTS • Section 54 (a) Application to the Shareholder • Support for PRASA Real Estate Strategy • Disposal of certain assets (eg Residential Property) • Private Sector Investment in New Developments • Conditions on Capex Retrogressive

  23. SUMMARY OF KEY CHALLENGES • THE ROLE OF PRASA IN THE SADC REGION • Opportunities for Integration in the SADC region • Legal Framework not prohibitive, however, no mandate • Opportunities to run train and bus between South Africa, Mozambique, Zimbabwe, Malawi, Lesotho and Zambia • Infrastructure Investment in SADC region

  24. THANK YOU

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