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Grindrod Limited
(Incorporated in the Republic of South Africa)
(Registration number 1966/009846/06)
Share code: GND & GNDP
ISIN: ZAE000072328 & ZAE000071106
("Grindrod" or "the Company")
PRE-CLOSE TRADING UPDATE
STRATEGY AND OUTLOOK
Grindrod's strategy is to provide a cost-effective and efficient integrated logistics solution for our customers'
cargo flows. With our strategic infrastructure assets, both inland and on quayside, our unparalleled logistics
capability, and strong bond with our communities and key stakeholders in the supply value chain, we are well
positioned to unlock value accretive opportunities in the logistics value chain and meaningfully participate in
the private sector access opportunities. 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.
MARKET ENVIRONMENT
The soft export drybulk commodity market experienced in the first half of this year continued into the second
half. Throughout 2024, subdued Chinese economic growth, persistent downturn in the Chinese property
market and more recent geopolitical developments have weighed on the market of Grindrod's portfolio of
export drybulk commodities. For the period 1 July 2024 to 30 November 2024, the average price decline
recorded on Grindrod's basket of export drybulk commodities was 28% compared to the same period the
previous year, but price performance for chrome, copper and manganese was resilient and grew 10%.
Following stimulus policy announcements by China, the impact on iron ore and steel demand was
disappointing as the initial stimulus was not targeted at the acceleration of the property and infrastructure
sectors.
OPERATING ENVIRONMENT
In the fourth quarter of this year, the protests in Maputo impacted volume flows into the Port of Maputo precinct
affecting operational performance of the port and Grindrod's drybulk sub-concessions. The protests which
began on 21 October 2024 and subsequently concentrated at the Komatipoort / Ressano Garcia border from
24 October 2024 resulted in intermittent border closures. Consequently, 24 vessels were delayed and six
cancelled due to stock shortages at the quayside as at 30 November 2024. 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. In South
Africa, the operating environment showed some improvement at the quayside both in Durban and Richards
Bay with volume performance reflecting this. However, inbound rail logistics into the Navitrade terminal in
Richards Bay remains an area of focus.
OPERATIONAL PERFORMANCE REVIEW
The Port of Maputo's drybulk terminal which handles mainly chrome achieved 13.2 million tonnes for the 11-
month period ended 30 November 2024 ("the period"), a growth of 14% on the prior period. The strong volume
performance momentum into the second half sustained the port against the impact of the protests. In August,
the port achieved a record 1.4 million tonnes underpinned by the buoyant chrome market, high stock holding
on the quayside and operational efficiencies. Grindrod's drybulk terminals in Mozambique handled 10.2 million
tonnes, 13% down on the prior period, impacted by protests and the subdued coal market. In South Africa,
Grindrod handled 5.1 million tonnes in its Richards Bay drybulk and Durban multipurpose terminals, up 28%
on the prior period. Richards Bay reported 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. 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.
FINANCIAL PERFORMANCE REVIEW
Grindrod's 24.7% share of earnings from the Port of Maputo was R320.5 million (2023: R233.7 million) up 37%
on the prior period. The earnings before interest, tax, depreciation and amortisation ("EBITDA") margin in the
Port and Terminals segment remained healthy at 35% (2023: 42%). The Logistics EBITDA margin slowed to
22% (2023: 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.
BALANCE SHEET
Gross debt as at 30 November 2024 was R3.1 billion (2024 June: R2.9 billion) an increase of R0.2 billion
deployed mainly on bulk infrastructure and rail. At net debt of R0.4 billion (2024 June: R0.5 billion) and net-
debt/equity ratio of 4% (2024 June: 5%), Grindrod's leverage remains low.
The information in this trading update has not been reviewed, audited or reported on by Grindrod's auditors.
Further details will be provided in the final year end results for the period ending 31 December 2024, which is
expected to be announced on SENS on or about 6 March 2025.
19 December 2024
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 19-12-2024 09:01:00
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