Annual Financial Results 2005/2006 July 2006

Contents of presentation Strategy confirmation and structure Strategy implementation Salient features 2006 Financial results 2006 Post-balance sheet events Summary Conclusion and questions

Strategy confirmation and structure

Strategy confirmation and structure Focused freight transport company Delivering effective and competitive services Enabling economic growth TRANSNET COMPANY Structure Operational divisions (continued businesses) Non-core portfolio SAA Viamax V & A Waterfront Autopax Metrorail freightdynamics Equity Aviation VAE Perway Discontinued businesses Other to be sold Propnet – non-core portfolio Housing assets SA Express “C” class preference shares Spoornet RAIL Transwerk Petronet PIPELINE PORTS National Ports Authority SA Port Operations

Strategy: Four-point turnaround plan Lower cost of doing business Targeted sectors Redirect & re-engineer the business Re-engineer core business Corporate HO restructure Operational synergies Customer focus Infrastructure development Corporate governance and risk management Shareholders compact Memo and Articles of Association IFRS Legal review EWRMF 4-Point turnaround plan Human capital development Skills audit and matching Recruitment and retention Skills and training Performance management Career management Succession planning Balance sheet restructuring Pension fund deficit Transfer SAA to Government Disposal of non-core businesses Economic development

Strategy implementation: Progress made Human capital development Corporate governance and risk management Balance sheet restructuring Progress summary Major re-engineering program – “Vulindlela” underway Commenced with roll out of R64.5 billion investment plan Disposal of non-core assets Established governance structures and risk programmes implemented Comprehensive HR strategy Redirect and re-engineer the business

Strategy implementation (continued) Restructuring the balance sheet Exit of non-core assets PFMA approval obtained for the disposal of non-core assets Businesses sold Business Buyer Effective date Sale price SAA Government (DPE) 31 March 2006 subject to fulfillment of suspensive conditions R2 billion (no cash flow) Metrorail SARCC (Dept of Transport) 1 May 2006: Effective date 26 December 2005: Risk and rewards R1.00 Transtel: Full service network (Metro fibre and electronic assets) SNO 3 May 2006 R256 million Sale process started Viamax, freightdynamics, V & A Waterfront (26%), Equity Aviation (49%), VAE Perway (35%), non-core property, Transtel Future plan Sale of Housing Assets, SA Express, Autopax, “C” class preference shares

Strategy Implementation: Progress Redirecting the business Investment plan of R64.5 bn approved and roll-out commenced Rail R34.1 bn Ports R24.9 bn Pipeline R4.9 bn Other R0.6 bn Total R64.5 bn Vulindlela (re-engineering) programme implemented with focus: Addressing safety Efficiency improvements Costs reductions Service delivery Market-share increase Main focus is on Spoornet Port and Rail Master Plan for future growth completed Restructuring of corporate office completed

Strategy implementation (continued) Human capital strategy Completed redesign and staffing of corporate centre Introduced a talent management programme Began capacity-building exercise for operational requirements and skills demand study for medium term Introduced a new reward and performance management system and the roll-out has begun Introduced a leadership development programme Redefined partnership with labour for the transformation of Transnet

Strategy implementation Corporate Governance and risk management Shareholder compact completed and approved by Board awaiting approval from Shareholder Revised articles of association approved by Board awaiting Shareholder approval Litigation and material contracts due diligence completed Enterprise Wide Risk Management Framework completed Key risks identified and monitored for each operating division Internal audit (outsourced) now fully functional focusing on Control environment /compliance reviews Transaction audit (a comprehensive payroll audit completed) Assessment of major projects and special investigations Developed and completed a fraud prevention plan, core values, ethics statements and contracts for all employees

Capex spending five-year plan Planned spending over next five years (core businesses): R64.5 billion Petronet R4.9 billion Multi-product pipeline DJP (R4.2 billion) Gas line upgrading (R0.4 billion) Transwerk R2.6 billion Equipment SAPO R6.3 billion Mainly capacity increases Durban (R1.5 billion) Richards Bay (R1.0 billion) Ngqura (R1.2 billion) Cape Town (R0.9 billion) Saldanha (R0.6 billion) Spoornet R31.5 billion Coal line (R8 billion) Ore line (R2.7 billion) General freight (R10.8 billion) Maintenance capitalisation (R8.1 billion) NPA R18.6 billion Upgrade and expansion Durban (R8.7 billion) Cape Town (R3.9 billion) Ngqura (R2.5 billion) Richards Bay (R1.4 billion)

Transnet core businesses five-year gross capital investment budget Financial years Financial years

ACHIEVING PERFORMANCE OBJECTIVES Salient features: 2006 Results 2006: Continuing operations 2006 R million % change Turnover * 26 346 +7 Operating profit 8 478 +57 Operating margin 32% +47 Capital and reserves 27 706 +31 Cash generated from operations 11 233 +28 Gearing 47% -24 ** ACHIEVING PERFORMANCE OBJECTIVES * Excludes notional revenue on embedded derivatives ** Excludes R1.7bn decrease in SAA’s operational cash flow

Financial Results 2006

Financial results 2006 Consolidated income statement for the year ended 31 March 2006 % change 2006 R million 2005 Revenue 7 26 346 24 706 Notional revenue on embedded derivatives 14 554 Net operating expenses (10) (17 882) (19 846) Profit from operations 57 8 478 5 414 Impairment of assets and fair value adjustments 318 4 023 Profit from operations before net finance costs 8 796 9 437 Net finance costs (2 395) (2 107) Taxation 25 (1 978) (1 582) Income from associates 33 62 Profit for the year from continuing operations 4 456 5 810 Profit from discontinued operations 115 754 Net profit for the year 4 571 6 564 Operating margin (before impairment and fair value adjustments) 32.2% 21.4%

Transnet operating profit margin (after impairment before fair value adjustment) HIGHEST MARGIN IN LAST SEVEN YEARS Transnet Group (Including discontinued operations) Average previous 6 years = 5,8%

Spoornet performance 2006 versus 2005 Financial Operating profit Turnover increased by 4% to R14.4 billion Capex spending R3 809 million in 2005/2006 and R31.5 billion over the next five years Total volumes transported increased by 0.5% to 182mt Iron-ore line volumes achieved: 29.6mt (increase of 5% over 2004/2005) Coal line volumes transported was 68.7mt (increase of 2.7% over 2004/2005) General freight volumes decreased by 2.7% to 83.8mt over the year 1014 681* 32% Operational *Includes a net amount of R681m for capitalisation of maintenance under IFRS

NPA performance 2006 versus 2005 Financial Turnover increased by 11% to R5.5 billion Capex spending R783 million in 2005/2006 and R18.6 billion over the next five years Bulk volumes grew by 6% due to increased demand for coal, iron ore (China) and other commodities Full container imports grew 9% while exports did not reflect growth due to currency strength, competition and quality issues All ports were accredited as being ISPS code compliant Operating profit 19% Operational

SAPO performance 2006 versus 2005 Financial Turnover increased by 9% to R3.6 billion Capex spending R776 million in 2005/2006 and R6.3 billion over the next five years Container volumes increased by 7% and is expected to further increase by 8% in 2005/2006 Breakbulk volumes dropped 5% due to competition and the trend towards containerisation Volumes in automotive sector reflected exceptional growth of 43% compared to 2004/2005 A record 28.8mt was exported through the Saldanha iron-ore terminal Operating profit 4% Operational

Petronet performance 2006 versus 2005 Financial Turnover increased by 4% to R1.1 billion Capex spending R224 million in 2005/2006 and R4.9 billion over the next five years Petronet successfully complied with the “clean fuels” requirements in January 2006 ‘De-bottlenecking’ project became operational in October 2005 resulting in an 18% improvement on existing constraints Existing refined products pipeline (DJP) is running at close to capacity while the crude line feeding Natref is operating at 75% Operating profit 31% Operational

Transwerk performance 2006 versus 2005 Financial Turnover increased by 28% to R3.8 billion Capex spending R189 million in 2005/2006 and R2.6 billion over the next five years Output achieved during the year which entails refurbishing, upgrading, building and modifying: 7 213 wagons 316 locomotives 550 coaches 2 113 traction motors 62 830 wheel pairs Operating profit 46% Operational

SAA: Financial performance 2006 versus previous two years: three-year view Turnover Operating profit Includes extra release from Air Traffic Liability of R600m 12,5%

Financial results 2006 Consolidated balance sheet at 31 March 2006 R million 2005 ASSETS Non-current assets 49 131 59 442 PPE and other 47 112 56 725 Long-term loans and advances 2 019 2 717 Current assets 28 202 17 609 Inventories, receivable assets and cash 7 588 13 700 Derivative financial assets 3 874 3 909 Assets classified as held-for-sale 16 740 – TOTAL ASSETS 77 333 77 051

Financial results 2006 (continued) Consolidated balance sheet (continued) at 31 March 2006 R million 2005 EQUITY AND LIABILITIES Capital and reserves 27 706 21 106 Non-current liabilities 22 996 30 717 Borrowings and provisions 17 724 23 421 Post-retirement benefit obligations 4 348 7 238 Deferred taxation 924 58 26 631 25 228 Payables and other 13 699 Liabilities classified as held-for-sale 12 932 – TOTAL EQUITY AND LIABILITIES 77 333 77 051 RATIOS Gearing 47% 62% Return on total assets 11% 7%

IFRS: Impact on 2004/2005 Financial statement prepared under IFRS with effect from 1 April 2004 for the year ended 31 March 2005 R million BALANCE SHEET PPE deemed cost (land and buildings, other) 4 183 Other (65) INCOME STATEMENT Operating costs (mainly depreciation) (98)

IFRS 5: (Non-current assets held-for-sale and discontinued operations) The following businesses met criteria at 31 March 2006 SAA – V & A Waterfront Autopax – Equity Aviation Viamax – VAE Perway freightdynamics Metrorail treated as discontinued – 26 December 2005 Net income for the above shown as “discontinued” Gross assets and liabilities shown separately as “held-for-sale”

Post-retirement benefit obligations Consolidated balance sheet Post-retirement benefit obligations 2006 R billion 2005 R billion Transnet Pension Fund (fully funded) – Transnet Second Defined Benefit Fund (a) 1.6 4.3 Post-retirement Medical Benefits (b) SATS pensioners Transnet employees 0.8 Other 0.3 0.5 Total 7.2 Unfunded liabilities Restructuring and funding plan in progress Funding monthly including Transnet subsidy

Financial results 2006 (continued) Abridged consolidated cash flow statement for the year ended 31 March 2006 Deviation % 2006 R million 2005 Cash flow from operating activities 5 865 546 Cash generated from operations *28 11 233 10 089 Other (5 368) (9 543) Cash flows from investing activities (2 479) (5 001) Capex – expand (1 745) (3 678) Capex – maintain (4 856) (1 963) Other investment activities 4 122 640 Cash flow from financing activities (4 001) 2 437 Decrease in bank and cash (615) (2 018) * Effective 28% increase after adjustment for the decrease in SAA operational cash flow of R1,7 billion

Funding requirements: Next three years Cash flow Budget 2006/07 R billion Total R billion 2007/08 R billion 2008/09 R billion Total capex (12.9) (16.3) (19.7) (48.9) Cash available from operations 10.0 *8.9 11.9 30.8 Cash shortfall (2.9) (7.4) (7.8) (18.1) Loan redemptions (0.9) (1.1) (8.6) (10.6) Gross funding requirement (3.8) (8.5) (16.4) (28.7) Projections: Excluding non-core Note: Excludes proceeds from sale of non-core portfolio * Reduction because of discontinued businesses

Post-balance sheet events SAA – sale agreement signed Metrorail sale agreement signed Sale process launched for V & A, Viamax and freightdynamics Second Network Operator (SNO) – Telecommunications assets sold

Summary Sound financial performance for the year R64.5 billion investment program underway Vulindlela project implemented that will deliver significant improvement in efficiencies, cost reductions, safety and customer service Disposal of non-core entities has begun and will be complete by December 2006

WE THEREFORE MOVE INTO THE FUTURE WITH CONFIDENCE Conclusion Progress to date is pleasing but still significant challenges ahead The sustainability of the turnaround achieved to date and future improvements can only be achieved through relentlessly driving the implementation of the strategies Our optimism for the future is based on the commitment of management and staff to focus on priorities and work as a team to deliver WE THEREFORE MOVE INTO THE FUTURE WITH CONFIDENCE

Thank you