Freight and logistics service provider Grindrod was disposing of its financial services arm, Grindrod Financial Holdings, also known as Grindrod Bank, because it was no longer “part of its core strategy”, said CEO Alan Olivier on Thursday.

Speaking at the company’s financial results presentation in Johannesburg, he said the JSE-listed group was working to build a port and rail infrastructure business, with a specific focus on Africa.

Grindrod had entered into a memorandum of understanding in which Bidvest would acquire Grindrod Bank.

The departure of Grindrod Bank would leave the JSE-listed group with a portfolio of freight and shipping businesses, in its effort to become “an integrated freight and logistics service provider”.

The Freight Services division reported a tough six months to June 30, with revenue down 7% compared with the same period last year.

Volumes at the Maputo port were up 19%, to 9-million tons, while the Matola terminal reported an increase of 19%, to 1.7-million tons, on the back of increased magnetite volumes.

However, volumes at the Richards Bay terminal dropped by 17%, to 1.6-million tons, as the coal market cooled further and supply chain price pressures increased.

The Maputo car terminal also saw a 21% drop in volume, with 29 276 vehicles moved as new vehicle sales declined in South Africa.

Industrial action in various sectors, including the mining market, coupled with the weak rand, also curbed general imports into and exports from South Africa, noted Olivier.

Grindrod Freight Services also experienced a slowdown in the locomotive market.

The company manufactured and leased locomotives.

Olivier said the locomotive, track and signalling manufacturing business suffered from project cancellations. However, the group was hopeful of a turnaround, as there “was a lot of interest in what we are building. Things can change with a few orders”.

Grindrod focused on robust, low-cost locomotives for the African market. Capacity was 100 units a year, but the group preferred to do 30 to 40 units a year.

It was already doing “a little bit of business with Transnet”, and would “like to do a little bit of business with the Passenger Rail Agency of South Africa”, said Oivier.

He was positive that large resource projects in Zambia and the Democratic Republic of the Congo, for example, could bring about further rail infrastructure and rolling stock opportunities for the Grindrod group.

July already hinted at a better second half for the Freight Services division, volume-wise, said Olivier, with South African imports and exports improving.

Grindrod reached record volumes at its Richards Bay, Maputo and Matola facilities in July, and this had been “continuing into August”.

In the shipping business, Grindrod experienced low shipping rates, with delayed recovery in the shipping markets in the period under review.

The group wanted to expand the fleet under its commercial management, while also “carefully managing” the fleet it owned, to maximize commercial opportunities.

Grindrod reported a 16% increase in group revenue on its management income statement for the six months ended June 30, to R13.39-billion, compared with the same period last year.

This could be attributed, to some degree, to the weaker rand during the period, said Olivier.

Trading profit was down 8%, to R866-million.

Profit attributable to ordinary shareholders was R694-million, of which freight services delivered R496-million, and shipping R157-million.