Mozambican protests hit freight logistics group Grindrod’s fourth-quarter Port of Maputo volume, impeding the port’s performance and Grindrod’s dry bulk subconcessions.
The group said on Thursday that sporadic border closures, with protests at the Komatipoort/Ressano Garcia border, started on October 24. Grindrod suspended its port and terminal operations in Maputo and Matola briefly on November 7.
“Consequently, 24 vessels were delayed and six cancelled due to stock shortages at the quayside as at November 30,” Grindrod said in a statement. “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.”
Mozambique borders SA, Tanzania, Malawi, Zambia, Zimbabwe and Eswatini so instability there is a concern for the region and particularly SA, which uses the Maputo harbour for exports in the wake of crumbling infrastructure in its main port of Durban.
For the 11 months to the end of November, Grindrod's dry bulk terminals in Mozambique handled 10.2-million tonnes, which was 13% less than the prior period. Protests and the subdued coal market affected this figure.
Conversely, the Port of Maputo's dry bulk terminal, which primarily handles chromium, was able to withstand the effects of protests against the election result thanks to the high volume performance going into the second half, reporting it had handled 13.2-million tonnes, which was 14% more than in the previous period.
Grindrod — which holds a stake in the Maputo Port Development Company (MPDC), a public-private joint venture that operates the Maputo port — said the port reached a record 1.4-million tonnes in August, supported by high quayside stock holdings, operating efficiency, and a thriving chrome market.
Grindrod’s 24.7% share of earnings from the Port of Maputo rose 37% to R320.5m in the period, from R233.7m in 2023. The Port & Terminals segment’s earnings before interest, tax, depreciation, and amortisation (ebitda) margin held steady at 35%, though lower than the 42% recorded in 2023.
A drop in container volume throughput, a rise in low-margin transport brokering, and a difficult operating environment caused the logistics ebitda margin to fall to 22% from 30%. But that was somewhat offset by strong rail, ship agency, and clearing and forwarding business performance, said Grindrod.
Grindrod’s strategy to shift focus towards Maputo port amid Durban port woes brought it a spectacular run in Mozambique, reporting record high volumes in recent years, but the recent violence threw a spanner in the works.
In September, Grindrod announced plans to acquire the remaining 35% stake in Terminal de Carvão da Matola (TCM) from the Vitol Group for $77m (R1.36bn), to further solidify its presence at Mozambique’s Maputo port and its broader strategy to expand logistics and export capabilities across Southern Africa.
It is unclear how the instability will affect its plans, but the board chaired by Cheryl Carolus said it would continue to assess and monitor the situation in Mozambique.
The ports, terminals and logistics operator reported an improvement in the SA operating environment at the quayside in Durban and Richards Bay where it recorded volume upticks. Grindrod said it handled 5.1-million tonnes at its Richards Bay dry bulk and Durban multipurpose terminals, up 28% on the prior period.
“Richards Bay reported a remarkable volume ramp-up on its conveyor belt operation, after its successful recommissioning in January 2024, supported by Transnet Port Terminals' solid performance at the quayside,” the group said.
The conveyor belt infrastructure linking Grindrod’s Navitrade and Transnet’s Richards Bay export dry bulk port was destroyed in a fire in October 2021, halting coal exports from Grindrod’s facility.
The belt was recommissioned in January 2024 and recently reached 2-million tonnes of coal throughput.
With its strategy to provide a cost-effective and efficient integrated logistics solution for our customers' cargo flows, Grindrod said that the inbound rail logistics into the Navitrade terminal in Richards Bay would remain an area of focus alongside its other priorities for 2025.
“The focus going forward is to drive growth in bulk handling, container handling, logistics capability, and rail and transport,” the group said. “Demand for Grindrod's logistics service offering and its long-term business fundamentals remain strong.”
Ahead of the expected SA rail open access, the rail company said it was focused on refurbishing the 13 locomotives that were repatriated from Sierra Leone and other engagements. Despite the difficult operating climate, the performance of the shipping agency and clearing and forwarding companies remained strong.
Gross debt rose from R2.9bn to R3.1bn on November 30, due mainly to funds being allocated to rail and bulk infrastructure. Grindrod said its leverage was moderate at R0.4bn in net debt and a 4% net debt-to-equity ratio.
Grindrod’s share price was down 0.17% to R11.50 in Thursday morning trade, having slipped 18% in the past six months.
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