Pretoria - Listed integrated logistics service supplier Grindrod has reported an increased loss for the year to December and acquired a 75 percent interest in Nacala Intermodal Terminal Investments in Mozambique for R46.7 million.
Alan Olivier, the chief executive of Grindrod, said yesterday that the acquisition was made to obtain a majority share in the existing container depot outside the Port of Nacala in Mozambique, which would serve as an anchor point for the integrated logistics supply chain in the Nacala corridor.
The interest in the business was acquired in October and it contributed R300 000 in the two remaining months of the group’s financial year. Grindrod reported further impairments of R644 million across its rail business.
The company last year raised an impairment of R675.3 million in the rail business due to the continued depressed state of the market.
Olivier said no further material rail contracts had been won since the beginning of 2015. “The rail manufacturing businesses continued to experience constraints with the cancellation of planned capital investments in mining projects in Africa. Given the subsequent anticipated inability to secure the desired, sustainable return in these businesses, the Grindrod strategy was reviewed and a decision was taken to withdraw from the rail manufacturing businesses,” he said.
RRL Grindrod Locomotives is 51 percent owned by Grindrod. Empowerment group Solethu Investments owns 26 percent, with the balance of the shareholding held by its three founding partners.
Grindrod reported a widening in the group’s attributable loss to R1.91 billion in the year to December from R1.43 billion in the previous year.
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This translated into a headline loss a share of 61.2 cents, compared to headline earnings a share of 74.4c in the previous year.
Revenue declined 11 percent to R9 billion from R10.19 billion.
The group reported an operating loss of R114.7 million compared to its operating profit of R423.4 million in the previous year. A dividend was not declared.
Grindrod in the six months to June raised a R50 million impairment in the shipping business from the sale of a ship.
Olivier said Grindrod continued to position itself for a turn in the commodity cycle by focusing on integrated source-to-destination logistics services and progressing capital projects and aligned investments.
Disposals totalling R225.5 million in the year included the sale of Grindrod Asset Management, CoreShare Holdings, Vanguard Rigging and Vitol Coal South Africa.
Olivier said Grindrod Asset Management was rebranded Bridge Fund Managers and sold to Infinitus in which the group had an interest via its subsidiary GFS Holdings. He said the disposal of the coal trading, machine handling and rigging businesses was to rationalise operations to assist in the delivery of the group’s long term goals.
Total capital expenditure at end-December was at R1.12 billion.
Shares in Grindrod rose 2.16 percent on the JSE to close at R14.20.