Johannesburg - The port of Maputo in Mozambique has reduced its tariffs, which has made Grindrod’s car terminal more competitive when compared with South African ports.
Grindrod’s car terminal in Maputo is a competitor to Transnet’s car terminal facilities in Durban and Port Elizabeth.
Alan Olivier, the chief executive of Grindrod, said last week that Maputo port was a US dollar-based facility while South African ports were rand-based facilities, which made it quite expensive for vehicle original equipment manufacturers (OEMs).
“The [tariff] cost will reduce, which should allow more cost effective throughput (in) Maputo,” he said.
Volumes
Olivier said volumes through Grindrod’s car terminal in Maputo dropped by 42 percent in the six months to June compared with the prior corresponding period and 17 063 vehicles had been moved through the terminal year-to-date.
“It’s a very disappointing reduction in volumes. It’s [caused by] the state of the local market to a large extent,” he said.
Olivier added that one of the challenges Grindrod had in Maputo was that all the vehicles were transported in and out of Maputo by road and it did not have balanced trade going in and out of the port, which meant they ended up with “a dead leg” on the return leg and made the service expensive.
He said Grindrod was looking to secure new contracts for the car terminal and there was possibly scope to bring in the many second-hand cars that were imported into Africa.
“But then you have got to be prepared to run your trucks up into Africa with those cars. That is something we will have to look at quite carefully,” he said.
Olivier on Friday provided an update on the key capital projects being planned by Grindrod at a total cost of billions of rand to transform the group into a fully integrated freight and logistics service provider.
These projects are the expansion of the Richards Bay terminal, the planned development of the Ngqura liquid bulk terminal storage facility in Coega, the planned development of a crude oil facility in Saldanha, the dredging of Maputo port, the expansion of the Matola coal terminal, the north-west rail project in Zambia and the development of the north-south corridor.
Olivier said the rolling out of these projects was taking time because all of them required commitments from customers, approvals from regulators or the awarding of concessions by governments. The lower price commodity cycle was also not helping, he said.
“There’s an enormous amount of work going on in all these areas and generally we are making progress with all of the projects. It’s not negative but market conditions and all these factors mean these projects do not happen overnight,” he said.
Earnings
Grindrod on Friday reported a 56 percent decline in attributable earnings to R303.2m in the six months to June from R693.7m in the previous corresponding period.
Olivier said this was largely a consequence of the once-off profit recognised on the acquisition the minority interests in the broad-based black economic empowerment joint ventures in the prior period.
Headline earnings a share fell 16 percent to 43.6c from 52c. Revenue dropped by 38.5 percent to R5.06bn from R8.24bn. An unchanged interim dividend of 13.6c was declared.
Olivier said with its ungeared balance sheet, Grindrod was well positioned to develop key capital projects and further capitalise on opportunities.
Shares in Grindrod dropped 3.74 percent on Friday to close at R14.15.
BUSINESS REPORT