JSE-listed Grindrod intends to unbundle and list its shipping business as a separate entity on the JSE, as it does not believe that the value of the shipping business is fairly reflected in the Grindrod share price.
“We have appointed professional advisers in and outside South Africa in the fields of shipping, legal and financial to work with us on the unbundling of the shipping business onto an international exchange that supports shipping groups with an inward listing in South Africa,” chairperson Mike Hankinson said during the company’s recent interim financial results presentation.
Hankinson noted that the process had progressed well and that the company was planning to complete the unbundling in the first half of 2018.
Focusing on the freight and financial services businesses, the stronger mineral commodity exports, improved shipping markets and the planned offshore listing of the shipping division, he added that Grindrod was looking forward to “an exciting second half of the year”.
Stronger commodities markets impacted positively on the company’s earnings before interest, taxes, depreciation and amortisation of R640.4-million, inclusive of joint ventures and excluding rail assembly businesses, compared with the R246.4-million of the prior year’s comparative period.
The closure of Grindrod’s rail assembly businesses held for sale resulted in losses and impairments of R255-million and, consequently, a headline loss of R128.9-million for the six-month period ending June 30, 2017.
This is, however, a 66% improvement compared with the prior year comparative period headline loss of R381-million.
Meanwhile, the ports and terminals division’s profitability has been strong.
“On the back of firm commodities markets, volumes handled in the dry-bulk terminals increased by 62%, compared with the prior year comparative period.”
The company added, however, that capacity in the Matola and Richards Bay dry-bulk terminals was fully contracted for the remainder of the year.
Following dredging of the Maputo Port Channel and the Terminal Da Carvão de Matola (TCM) berth pocket and TCM’s quay extension, fully laden Panamax vessels are now handled in the Port of Maputo and at TCM, significantly increasing the port’s capacity.
The logistics business showed a good turnaround and is looking forward to an improved outlook in South Africa.
Dry-bulk shipping rates have increased, owing to steadily increasing dry-bulk commodities demand, continued vessel scrapping and a slowdown in new build deliveries.