Grindrod Limited confident in financial performance over the coming months
Grindrod’s core businesses, comprising ports and terminals, logistics, banking and the group, reported strong profits of Rand 345 million and trading profit of Rand 779 million. Overall profit from core businesses reflects a significant improvement in business performance compared to the six-month period ended June 30, 2020, with operations recovering from COVID-19 lockdowns in 2020. Ports and terminals and logistics benefited from increased exports mining and other minerals. flow of goods, strong citrus season and alternatives to offshore shipping lines. Grindrod Bank has remained cautious on lending and has continued to maintain substantial capital and liquidity ratios.
Port and Terminals
The significant increase in volumes handled in the port of Maputo (9.4 million tonnes, up 7%) and the operations of the Grindrod terminal in Matola (3.1 million tonnes, up 18%) results strong demand for raw materials and contingencies to supplement rail volumes with road delivery. Investments in port infrastructure and process automation in the port, which will soon be completed, have contributed to efficiency and increased capacity utilization. The attempts to load larger vessels at the Port of Maputo and the Matola terminal in Grindrod have been successful, with the focus now on optimizing the use of berths.
The outlook for these activities remains positive, with management focusing on increasing the rail allocation to Richards Bay, unblocking bottlenecks at the Mozambique border, positioning operations to manage opportunities for sector participation. private sector and the development of current manganese solutions for our customers.
Container ships, container depots and transportation and multi-purpose terminal operations have improved their profitability through tailor-made customer solutions and thanks to an excellent citrus season, strong mineral exports and an increase in the business of transport. Our container ships and our network of logistics solutions have provided offshore shipping companies with alternative solutions to meet the challenges.
Grindrod has taken over the logistic exploitation of graphite in Nacala. Management will focus on optimizing the logistics solution as volume increases in the second half of the year in line with global demand. The resumption of graphite logistics operations in Nacala mitigated to some extent the impact of the suspension of the liquefied natural gas project in Cabo Delgado due to insurgent attacks.
Driven by high iron ore prices, five of the ten locomotives that had not been moved from Sierra Leone were redeployed when the Tonkolili mine resumed operations. Management will continue to seek to extract value from the rail operations through one or both divestitures and deployment of locomotives.
Grindrod Bank has focused on its client relationships and quality lending during the period, ensuring it maintains its strong liquidity and capital position. Profits are up from the previous period. The Bank’s core loan and deposit portfolios grew 9% and 23% to R 8.6 billion and R 10.5 billion, respectively, from December 2020. The Bank remains cautious in its operations. loan activities. The strategic focus on platform banking generated growth in the number of new accounts during the period. The Bank refinanced the loan notes that matured in June 2021. The bonds were oversubscribed and the price of the new 3-year notes was 50 basis points better than those that matured.
The Group continues to continue selling non-strategic assets.
“We remain committed to creating the most cost effective and efficient logistics solutions for the flow of goods to our customers, ensuring that African exports and imports reach their destinations. This aligns with our goal of making a positive difference in Africa’s trade with the world and touching the lives of the communities in which we operate, ”said Andrew Waller, CEO of Grindrod Limited.
Source: Grindrod Limited