Grindrod reports profit fall amid lower volumes, up to R200m Mozambique unrest hit

Karl Gernetzky
  • 3 Days Ago
Freight and logistics group Grindrod warned shareholders to expect a between 25% and 28% fall in its core headline earnings per share for its year to end December, when exports from its terminals softened 4.6% to 16.5 million tonnes.



The group said in an update on Tuesday its overall performance was impacted by lower commodity prices, except for chrome, temporary disruptions at the Lebombo/Ressano Garcia border amid unrest in Mozambique, and low container handling throughput. The impact of the border disruptions was 4.4 million tonnes on volume and between R180 million and R200 million on headline earnings, the group said, having earned R1.4 billion in this profit measure in 2023, which excludes items like its property and marine fuel interests.



Valued at almost R10 billion on the JSE, Grindrod operates in more than 20 countries, and has about a one quarter stake in the Maputo Port Development Company (MPDC), the main concessionaire for the Port of Maputo.



The group also offers landside services through its warehousing, distribution, container depots and transport capabilities, with container depots in Johannesburg, Cape Town, Gqeberha and Durban and has offices in all the major transit corridors in southern Africa, with interests including road and rail.



Its non-core business relates to marine fuels, and it has a private equity portfolio which consists of private and property equity investments and loans provided to KwaZulu-Natal North Coast property companies.



Headline earnings per share are expected to fall by between 67% and 71%, the group said in its update, hit by fair value and expected credit losses of R522.9 million, which resulted from the disposal loans for R500 million. It also was hit by an R165.5 million additional provision related to non-core loans that were sold as part of the Grindrod Bank deal - which refers to accounting for guarantees provided on loans in the event of default.





Shares of the group were down marginally on Tuesday morning after the announcement and have still gained almost 10% in the past year.



The group said it remained "uniquely poised to take advantage of the opportunities" in the logistics space as South Africa progresses on its logistics network reform agenda and has identified a growth pipeline that includes several logistics infrastructure-led investment opportunities valued at R8 billion across the core portfolio.



"The group is participating in the open access slots process across the rail network in South Africa," it said.

erning in the corridors it tenders for, evaluating the opportunities against a set of criteria including efficiencies, customer commitments, understanding of the corridor and the impact on the overall returns across the logistics value chain."

-FIN24