Durban, 23 August 2019: Grindrod Limited (Grindrod), the JSE listed freight and financial services company, released its interim results for the six months ended 30 June 2019, earlier today.
Grindrod’s Freight Services business is focused on ‘unlocking sub-Saharan African trade corridors. This requires the alignment of its businesses along key corridors, to connect and extend supply chains, effectively providing a corridor solution for cargo flow. The marine fuel business and agricultural investments do not fit into these ‘corridor solutions’, and the decision was made to exit these businesses.
The core bank has been further capitalized with R100 million following good growth in deposits and advances and is focusing on property lending and the SME market. The private equity businesses have been split out and are now being driven as a separate focused business.
Overall, the continuing operations performed well. Port and Terminals, Logistics and Bank - generated first half trading profit of R678 million up 22 percent on the prior year of R556 million. Headline earnings grew by 118 percent to R136.7 million compared to R62.6 million in 2018.
Discontinued operations – Marine Fuel and Agricultural investments – reported a trading loss of R241 million (2018: R371 million trading profit). This includes an impairment provision in the Marine Fuels UAE business. The Agricultural investments made good trading profits; however, the discontinued businesses are now held for sale and an impairment provision has been raised against the investment carrying values of the businesses to reflect management’s estimate of the recoverable value.
Port, Terminals and Logistics
Scaling these businesses by investing in infrastructure and acquiring assets, included:The acquisition of mobile cranes in Maputo Port to improve efficiency; Slab and quay development in Maputo Port to add further capacity; Facilities in Richards Bay and Durban upgraded to facilitate new cargo and customers; Twenty-four locomotives extracted from the Tonkolili mine (the mine closed in 2017) in Sierra Leone for deployment in sub-Saharan Africa on leasing contracts; Oiltanking Grindrod Calulo commenced the construction and development of the Ngqura Liquid Bulk Terminal.
Diversifying our customer base and commodities, included:Key contract extensions with shipping lines and key contract logistics customers; New customer contracts developed with shipping lines, cement, coal, hematite and vehicle customers; Additional Mozambique voyages and improved volumes in cement, steel and mill shipments despite the impact of cyclone Idai in Beira; Oil and gas focus in Northern Mozambique; Building solutions for the movement of copper, sulphur and fuel on the DRC and Zambia corridors.
Said Andrew Waller, CEO Grindrod Limited: “In most businesses we saw improvement in results off a very clear focus on customer solutions and servicing the supply chain. Strong iron ore prices in the first half sustained chrome volumes and our Nacala operational ramp up also contributed to the improvements."
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