Grindrod’s intermodal terminal in Denver, Johannesburg. Photo Supplied
Grindrod’s annual earnings improve, despite global and local challenges, and after its coastal shipping and container-depot businesses recovered following the devastating floods in KwaZulu-Natal.
Xolani Mbambo, CEO of Grindrod, said volatile economics prevailed last year. They witnessed a fall in shipping rates, along with China’s strict Covid regime. Rising debt-levels in counties was also at play, such as Mozambique and raising liquidity crunches, all of which they were monitoring.
The ongoing power crisis, floods, problems in the coal chain were among the issues they had to navigate in South Africa, he said.
Despite this, the group still managed in its results for the year ended December 31, 2022 the group reported a profit of R601.1 million for the reported period against R175.6m in the prior period.
Headline earnings increased by 39% to R859.7m, with revenue from core operations at R7.4 billion, up 58% from the prior year.
Grindrod said coastal shipping and container-depot businesses saw earnings’ growth of 134%, underpinned by strong container handling performance and higher shipping rates on the subleasing of the chartered vessels, capitalising on favourable market conditions.
"Earnings include losses of R76.6m related to flood damage. Insurance proceeds (pre-tax) of R146.9m were recorded,” the group said.
Grindrod declared a final gross dividend of 22.20 cents per share out of income reserves, up 10% from 20.10c the prior year.
“Grindrod delivered good results in its core business for the year ended December 31, 2022. Volume growth due to strong mining minerals markets and strategic focus on customer solutions drove this performance in its port and terminals, and logistics business segments,” it said.
Terminal volumes were up 23% to a record 16.0 million tonnes, while port volumes increased by 29% to a record 9.8 million tonnes.
Record volumes of 9.8 million tonnes were handled by the port of Maputo in 2022. Grindrod’s drybulk terminals handled a record 16.0 million tonnes, a 23% growth from the prior period.
This growth reflected the efficient usage of the rehabilitated berths commissioned in May 2022, and the implementation of 24-hour operations at the Lebombo/Ressano Garcia border in April, 2022. The port benefited from automated solutions implemented during the year, it said.
“Results were further improved by profit participation on 0.5 million tonnes of coal cargo handled, driven by strong customer demand,” the group said.
Grindrod said the group results included an impairment of R222.5m on the loan previously advanced to set up its Richards Bay black empowerment structure.
Grindrod successfully concluded the sale of Grindrod Bank on November 1, 2022 for gross proceeds of R1.6bn resulting in a loss on disposal of R291.7m.
“This was in line with the continued execution of the non-core exit strategy,” it said.
BUSINESS REPORT