Ship loader at Grindrod's Maputo Coal Terminal.Photo: Grindrod
EDWARD WEST
edward.west@inl.co.za
Protest disruptions in Mozambique had resulted in the delay of 24 vessels at the Port of Maputo, while six vessels had cancelled due to stock shortages at the quayside as at November 30, 2024, logistics group Grindrod said yesterday.
“With the end of the year approaching, all or a portion of delayed vessels, if not cancelled, can only be handled in the new year,” Grindrod directors said in a statement to a Johannesburg Stock Exchange platform yesterday. The group operates freight and logistics facilities at the port via a partnership with Mozambican port authorities.
During the fourth quarter of Grindrod’s financial year to December 31, the operational performance of the port and group dry bulk sub-concessions was impacted by the protests in Maputo.
The protests, which began on October 21, 2024, and concentrated at the Komatipoort/Ressano Garcia border from October 24, 2024, resulted in intermittent border closures.
Nevertheless, strong volume momentum into the second half managed to sustain the port against the impact of the protests.
In August, the port achieved a record 1.4 million tons, underpinned by the buoyant chrome market, high stock holding on the quayside, and operational efficiencies, Grindrod directors said.
The Port of Maputo's dry bulk terminal, which handles mainly chrome, achieved 13.2 million tons for the 11 months to November 30, 2024, a growth of 14% on the prior period.
Grindrod's dry bulk terminals in Mozambique handled 10.2 million tons, 13% down on the prior period, impacted by protests and the subdued coal market.
Meanwhile, in South Africa, Grindrod handled 5.1 million tons in its Richards Bay dry bulk and Durban multipurpose terminals, up 28% on the prior period, the group said.
Richards Bay saw a “remarkable” volume ramp-up on its conveyor belt operation, following its successful recommissioning in January 2024, supported by Transnet Port Terminals' solid performance at the quayside, directors said.
The group’s Rail business focused on the refurbishment of the 13 locomotives repatriated from Sierra Leone, and various engagements ahead of the anticipated South African rail open-access.
Ships agency and clearing and forwarding businesses' performance remained strong despite the challenging operating environment.
Grindrod's 24.7% share of earnings from the Port of Maputo was R320.5 million (2023: R233.7m), up 37% on the prior period.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) margin in the group’s Port and Terminals segment remained healthy at 35% (2023: 42%).
Grindrod directors said their infrastructure, inland and on quayside, logistics capability, and strong bond with communities and stakeholders meant they were in a good position to participate in the private sector access opportunities.
This strategy comes at a time when Transnet, the government’s transport and logistics operator, is making an increasing number of opportunities available for private sector participation, in an effort to improve the flagging efficiency of South Africa’s key state-owned transport and logistics infrastructure assets, such as the ports.
“The focus going forward is to drive growth in bulk handling, container handling, logistics capability, and rail and transport. Demand for Grindrod's logistics service offering and its long-term business fundamentals remain strong,” the directors said.
They said the soft export dry bulk commodity market experienced in the first half continued into the second half.
Subdued Chinese economic growth, downturn in the Chinese property market, and recent geopolitical developments had weighed on the market of Grindrod's portfolio of export dry-bulk commodities, they said.
From July 1, 2024, to November 30, 2024, the average price decline on Grindrod's basket of export dry-bulk commodities was 28%, compared to the same period the previous year.
However, the price performance for chrome, copper, and manganese grew 10%.
The impact of China’s stimulus policy announcements on iron ore and steel demand was disappointing as the initial stimulus was not targeted at the acceleration of the property and infrastructure sectors, directors said.
The Port of Maputo's dry bulk terminal, which handles mainly chrome, achieved 13.2 million tons for the 11 months to November 30, 2024, a growth of 14% on the prior period.
The Rail business focused on the refurbishment of the 13 locomotives repatriated from Sierra Leone, and various engagements ahead of the anticipated South African rail open-access.
Ships agency and clearing and forwarding businesses' performance remained strong despite the challenging operating environment.
Grindrod's 24.7% share of earnings from the Port of Maputo was R320.5 million (2023: R233.7m), up 37% on the prior period.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) margin in the Port and Terminals segment remained healthy at 35% (42%).
The Logistics segment EBITDA margin slowed to 22% (30%) due to the challenging operating environment, a decrease in container volume throughput, and an increase in low-margin transport brokering, partially mitigated by solid rail, ships agency, and clearing and forwarding business performance.
Group gross debt was R3.1 billion (R2.9bn) as at December 30. The net-debt to equity ratio of 4% (5%) remained low.