Shipping and logistics group Grindrod's Port and Terminals segment headline earnings grew 35% after the port of Maputo achieved record volumes of 12.6 million tons, up 28% from the prior period. Photo: Supplied
Grindrod lifted its 2023 dividend by 84% to 72.4 cents following a record performance from the Maputo port operations, from sea freight trade and good deployment of its rail facilities.
Earnings before interest, tax, depreciation and amortisation increased 16% to R2.51 billion, while headline earnings increased 29% to R1.36bn, annual results for the year to December 31 showed yesterday.
Cratos Asset Management (@CratosAM) said on social media platform X: “Ports & Terminals, which was 56% of profit, grew revenue by 19% and profit 14%, while Logistics, which makes up 44% of its profit, saw revenue grow 14% and profit 2%.”
Market analyst Marco Olevano (@MarcoOlevano) said on X, “These results put Grindrod on a PE of around 8.4x with a dividend yield at current prices of 5.6%.. Not expensive by any means. Should have legs to push higher, ST target R14.00.”
Also on X, GenZInvestor (@GenZInvestor4) listed Grindrod on the top of his five most undervalued JSE stocks.
Grindrod’s share price traded 0.78% lower at R12.75 yesterday. The book net asset value per share increased to 1 368 cents (1 211 cents), meaning the share price is trading close to Grindrod management’s perceptions of book value.
The group’s Port and Terminals segment headline earnings grew 35% after the port of Maputo achieved record volumes of 12.6 million tons, up 28% from the prior period.
Volume growth was due to strong demand for chrome and ferrochrome volume exports and an eight percent increase in rail volumes transported.
The port successfully concluded its concession extension by a further 25 years to 2058 with the Conceding Authority.
Grindrod’s dry bulk terminals in Mozambique handled a record 12.9 million tons, up 14%. The first phase of the Matola dry bulk export terminal upgrade was progressing well.
The conveyor belt linking Grindrod’s Navitrade drybulk facility in Richards Bay was commissioned.
Grindrod's Logistics segment delivered strong results despite subdued charter markets in the sea freight business. Excluding the impact of this, and the sale of 51% of the container depot business, this segment grew its headline earnings by 12% on the prior year.
Headline earnings from ships agency and clearing and forwarding businesses grew 49% over the prior year.
Grindrod’s locomotive deployment rate closed strong at 70%. eSwatini multimodal corridor solution, in collaboration with eSwatini Rail, CFM and Grindrod, continued to perform well; volume grew 40% on this route.
The results included fair value losses of R255.7m on the private equity portfolio, including full impairment of the asset financing investment. In addition, net provisions and fair value losses of R77.9m relating to the KwaZulu-Natal North Coast property loans were recorded.
At a trading profit level, before adjustments, the Ports & Terminals segment contributed R1.34bn (R1.04bn), Logistics R1.17bn (R1.25bn), while the Group segment, which included funds from the sale of Grindrod Bank in 2022, generated R3.39bn (R109.31 loss) trading profit.
The trading profit from the marine fuel segment more than halved to R47m from R102m, while the trading loss from private equity and property was reported at R364.53m versus R359.73m the year before.
BUSINESS REPORT