Durban, 23 August 2017: Grindrod released its interim results for the period ending 30 June 2017.
Stronger commodity markets impacted positively on the EBITDA (earnings before interest, tax, depreciation and amortization) of R640.4 million inclusive of joint ventures, and excluding rail assembly businesses, compared to the R246.4 million of the prior year comparative period. The closure of the Rail assembly businesses held for sale resulted in losses and impairments of R255 million and consequently a headline loss of R128.9 million for the 6 month period ending 30 June 2017. This is a 66% improvement compared to the prior year comparative period headline loss of R381 million.
Ports & Terminals profitability has been strong. On the back of firm commodity markets, volumes handled in the dry-bulk terminals increased by 62 % compared to the prior year comparative period. Capacity in the Matola and Richards Bay dry-bulk terminals is fully contracted for the remainder of the year.
Following dredging of the Maputo Port Channel and dredging of Terminal Da Carvão de Matola (TCM) berth pocket and TCM’s quay extension, fully laden Panamax vessels are now handled in the Port of Maputo and at TCM, significantly increasing the Port’s capacity.
The Logistics business showed a good turnaround and is looking forward to an improved outlook in South Africa.
Dry-bulk shipping rates have increased due to steadily increasing dry-bulk commodity demand, continued vessel scrapping and a slow-down in newbuilding deliveries. This has resulted in the Shipping Division recovering to above a cash breakeven level. This is despite the tanker market remaining depressed.
Financial Services continues to grow profits and generate a good return on capital. There is ongoing engagement with the relevant parties on the SASSA grant payment contract and Grindrod is working with all parties to help find a solution for the Bank and South Africa in general.
The Grindrod Board has for many years reiterated the intention to separate the Shipping business from the balance of the group as it does not believe that the value of the Shipping business is fairly reflected in the Grindrod share price.
Said Mike Hankinson, Executive Chairman Grindrod: “We have appointed professional advisors in and outside of South Africa in the fields of shipping, legal and financial to work with us on the unbundling of the Shipping business onto an international exchange that supports shipping groups with an inward listing into South Africa. The process is well progressed and we are planning to complete the process in the first half of 2018.”
With the focus on the Freight and Financial Services businesses, the stronger mineral commodity exports, improved shipping markets and the planned offshore listing of the Shipping Division, Grindrod is looking forward to an exciting second half of the year.