GRINDROD’S operations are recovering from the effects of the pandemic, and a substantial improvement in headline earnings per share of between 108 percent and 96 percent is expected for the six months to June 30.
The group said in a trading statement yesterday that interim headline earnings were expected to be between 2.1 cents and -0.9c a share, compared with -25c per share in the same period last year.
Port and Terminals, and Logistics operations have benefited from a rise in cargo flows, high citrus and mining minerals exports, and by providing alternative solutions to the deep-sea shipping lines.
Grindrod Bank remained conservative in lending and maintained strong capital and liquidity ratios.
Overall, Port and Terminals reported earnings growth. Maputo Port volumes increased 7 percent to 9.4 million tons compared to the prior period.
The Matola terminal handled 3.1 million tons, up 18 percent. The introduction of road-hauled magnetite volumes contributed to the increase at lower margins.
The focus in the second half was to continue to collaborate with Transnet, to increase the rail allocation to the group’s Port and Terminal facilities, and to address lower margins at Matola.
The coastal shipping, container depots and transport, and multi-purpose terminal businesses achieved earnings growth on the back of high citrus and mining mineral exports.
Driven by strong iron ore prices, five of the 10 locomotives that were not relocated from Sierra Leone were redeployed as the Tonkolili Mine resumed activities.
Resumed production at the Balama graphite mine positively impacted the Northern Mozambique performance, with further volume ramp-up expected.
Grindrod’s activities at the liquefied natural gas project in the region had ceased because of insurgency and the indefinite suspension of the gas project at the beginning of April.
Measures taken by the group included suspending activities and reducing liability exposure to contractual obligations. These necessitated impairments and provisions of R75.7m.
Disposals of the Automotive and Fuel Carrier businesses were under way. This necessitated the impairment of goodwill and assets of R260.9m.
The bank’s lending and core deposit books increased by 9 percent and 23 percent to R8.6bn and R10.5bn respectively, from December last year.
A focus on platform banking had generated growth in the number of new accounts. The sale of non-core assets continued to be pursued. However, the market remained challenging.
Grindrod concluded disposals of private equity assets of which R163.7m was received by the end of the period. Results for the period included impairments and fair value losses of R301.7m. The carrying value of the private equity and property portfolio at June 30 was R983.3m.
The results would also include a mark-to-market gain of R186.2m on Grindrod Shipping shares because of the increase in its listed share price.
The group generated positive cash from operations. Net debt excluding Grindrod Bank and IFRS 16 liabilities was 25 percent at June 30.
BUSINESS REPORT