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Africa’s top 500 companies: the high flyers and long haulers

By Mark Anderson
Posted on Thursday, 1 March 2018 20:18

With a few glaring exceptions, Africa’s largest port and air transport companies continued to perform well in 2016. The major players in transport have benefited from a renewed push to improve intra-African trade corridors and remove barriers to trade. But African airlines are also being forced to compete with foreign carriers for routes to the continent.

The sector’s 24 biggest companies by revenue contributed $27.7bn of earnings to this year’s ranking, making the sector the eighth-largest on the continent. That is a slight rise from our previous ranking, which showed the biggest transport companies earning $27.4bn.

The continent’s port and cargo companies have been doing well. Although the Suez Canal Authority, a port operator, slipped four places in this year’s ranking after the Egyptian economy performed badly during the reporting period, the SCA remained the biggest transport company on the continent by revenue, earning $5.2bn in 2016.

East Africa entries

South Africa’s state-owned logistics company Transnet, which operates rail, ports and pipelines, managed to navigate difficult economic conditions and gained four places this year. Transnet is now closing in on the SCA to take the top spot in the transport rankings. South African cargo services company Super Group earned $1.9bn in 2016 off the back of strong results outside its home market. In August, the company signed a contract with Kenya’s government to ship vehicles, its first entry into East Africa.

A tale of two airlines has recently emerged. The skyward success of Ethiopian Airlines continues, as Africa’s most profitable airline expands to new routes in each corner of the world, including São Paulo, Los Angeles and Tokyo. Royal Air Maroc, Africa’s second-biggest airline by revenue, has new routes to East Africa.

Kenya Airways climbed eight spots in this year’s ranking. Its turnaround strategy has been taken over by recently appointed chief executive officer Sebastian Mikosz.

South African sea cargo firm Trencor climbed 43 places. But in April 2017, the company said that its results would be hit by the global shipping container industry’s poor performance. The company has also been hurt by the bankruptcy of Chinese logistics firm Hanjin Shipping, one of its main clients.

Profile: Sebastian Mikosz, Chief executive officer, Kenya Airways

When Sebastian Mikosz left Poland’s state-owned carrier LOT Polish Airlines and took up the role of chief executive officer of Kenya Airways in June 2017, he faced the daunting task of restructuring more than $2bn of debt. Mikosz, who gained notoriety by saving LOT from the brink of bankruptcy, has turned to Kenya’s government for help. In November, the airline announced a debt-for-equity swap with the government and 11 local banks. Under the new ownership structure, the government raised its stake from 29.8% to 48.9%. As a result, nearly $400m of debt was converted into equity. “Kenya Airways is a strategic national asset and plays an important role in the economy,” Henry Rotich, Kenya’s finance minister, said at the time.

Experts agree that Kenya Airways has turned a corner by stabilising its balance sheet, but now the focus must shift to success at the operational level.

In his first six months, Mikosz slashed staff numbers by nearly a third and launched new routes to popular destinations. He has hired five senior executives from his former company as consultants on a three-month basis with the goal of cutting costs and raising revenue.

This article first appeared in the February 2018 print edition of The Africa Report magazine

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