JSE-listed Grindrod’s trading in the first quarter of this year was strong through most of its businesses, the company said in a pre-close business update on June 26.
It noted, however, that Covid-19-related lockdowns in Southern African countries impacted significantly on the ability of many of its businesses to generate revenue and cover their cost base during the second quarter.
Those businesses that were permitted to operate as essential services continued to do so in very complex circumstances. All the businesses curtailed and deferred costs.
All remaining businesses have since resumed operations.
Although Mozambique remains in a state of emergency until June 30, mineral cargo flows had resumed and the port and terminals were operating, albeit under strict conditions, said Grindrod.
In terms of ports and terminals, the Richards Bay facilities have seen cargo flows at reasonable levels throughout the period. Mineral rail cargo flow to Grindrod’s Matola and Maputo terminals is ramping up following the reopening of international borders.
In terms of containers, essential cargo volumes meant that for two months container flows were erratic. The intermodal and sea freight services were preforming contingency operations to ensure these products could move in very congested South African ports.
The rail business felt the impact of the lockdown through the closure of borders and force majeure called on some sites following the closure and scaling back of mines.
As logistics supply chains start the recover processes and the market demand returns, Grindrod said it has begun to see increased demand for its services.
Grindrod Bank continues to operate cautiously during this time, ensuring that its liquidity cover and capital adequacy ratios remain above minimum regulatory requirements. The process of disposal of assets held for sale continues, albeit at a slower pace than anticipated with potential buyers choosing to focus on their own portfolios.
In terms of liquidity, additional funding lines were secured to cater for any prolonged period of low or no revenues and cash.