Grindrod, the JSE-listed freight logistics company, reduced its interim dividend by a third to 23 cents per share after core headline earnings fell a percent to R562 million in the six months to June 30.
Nevertheless, said chief executive Xolani Mbambo, the group did well to sustain the performance of its core businesses given the myriad of challenges they faced, which included poor market conditions, lower commodity prices, high interest rates, supply chain disruptions and geopolitical tensions.
Cash generated from operations was up 13% to R425m. The growth in volumes handled at the Port of Maputo’s dry-bulk terminals increased by 3% to 8.4 million tons. Richards Bay volumes rebounded to 1.6 million tons, a 20% growth on the prior period.
The continuing negative impact of logistics constraints on the container handling depot throughout, and transport, resulted in the overall logistics segment’s earnings growing by only 3%.
Logistics operations were impacted by lower container volume throughput. The ship agency operations and clearing and forwarding businesses grew headline earrings 38%.
A structural reorganisation of the rail business was completed. The repatriation of 13 locomotives from Sierra Leone was underway. A bid had been made to operate the Richards Bay container handling facility.
“Rail is critical in Grindrod’s integrated logistics solutions due to its efficiency and cost-effectiveness, particularly for dry-bulk and container flows. The strategy that emphasises partnerships with rail authorities and operators, aims to expand rail growth opportunities within the SADC and East Africa regions,” said Mbambo.
He said the return of thirteen locomotives from Sierra Leone last week would bolster the sustainability of cargo flows on trade corridors, further enhancing operational capabilities.
“Looking ahead, Grindrod remains committed to focusing on operational efficiencies, technology, and growth strategies. Capital expenditures will be directed towards supporting the rail expansion and the upgrading of the terminals in Maputo, demonstrating the company's dedication to sustainable growth,” he said.
In the six month period, the Port of Maputo had grown its own handled volumes by 18% to 6.9 million tons, underpinned by strong demand for chrome.
“By prioritising its technology enabled visualisation projects and automation of its cargo handling processes, the port continued to deliver on its strategic objectives and will continue to build momentum on customer initiatives,” he said.
In terms of trading profit during the six month period, the Ports & Terminals segment trading profit fell to R482m from R576.27m. The Logistics segment trading profit increased to R535.69m from R407.14m, while the group’s contribution to trading profit fell to R25.51m from R47.03m.
In terms of trading profit from the non-core segments, the contribution from Fuels fell to R16.78m from R27.66m, while the contribution from Private Equity and Property segment increased its trading loss to R898.9m from a R76.8m loss the same time past year.
BUSINESS REPORT