GRINDROD’S share price increased sharply after reporting continued strong growth in its import and export services, this despite thousands of trucks, many vessels and warehouses being forced to idle after a Transnet strike closed local ports.
Grindrod’s share price increased 6.53% to R9.30 yesterday afternoon. The group is invested in the Maputo Port Development Company (MPDC) with other partners – the MPDC holds the concession to operate, develop and maintain Mozambique’s biggest port.
The port provides the shortest route to sea from the Gauteng industrial hub and from Limpopo and Mpumalanga mining areas and has seen volume growth in recent years due to inefficiencies and delays at the Durban port, such as for example, the resumption this year of citrus exports through Maputo.
Grindrod said in a trading statement for the nine months to September 30 that strong mining minerals markets and a focus on customer solutions were the main drivers of volume growth in both the group’s Port and Terminals, and Logistics business segments.
In the Port and Terminals division, Maputo Port volumes were up 23% compared with the nine-month period a year before, capitalising on additional slab and berthing capacity.
Grindrod's dry bulk terminals volumes increased by 47%. Grindrod benefited in particular from further profit participation on 293 716 tons of coal cargo handled, driven by strong customer demand.
In the Logistics division, Grindrod's coastal shipping and container depot business performance benefited from healthy charter rates secured on the leasing and subleasing of vessels.
The clearing and forwarding business delivered solid results for the period supported by favourable freight rates.
The Northern Mozambique graphite operations embedded its alternative break bulk solution out of the port of Pemba, handling 60 684 tons for the period.
The locomotive deployment rate in Grindrod’s rail business improved to 63% compared to the prior period’s 32%.
Grindrod Bank reported healthy growth in its earnings, underpinned by the higher interest rate environment.
Feasibility studies were under way for the expansion of the Matola terminal from 7.3 million tons to 12 million tons per year.
“Grindrod continues to drive its strategy of delivering efficient and cost-effective logistics solutions to its existing and potential new customers. In support of these solutions, Grindrod will invest in the required infrastructure,” the group said.
BUSINESS REPORT