Logistics group Grindrod expects to report an uptick in earnings for the first half despite a slip in exports after slimming down its core activities.
In the six months to end-June, the firm disposed of its 50% stake in marine fuel trading business Cockett, the last of its peripheral noncore assets, earning R900m in cash from the sale.
The group also consolidated its ownership of the Matola terminal by purchasing the remaining 35% interest in its share capital for R1.4bn.
In a trading statement on Wednesday, Grindrod said foreign currency translation reserves stemming from both these transactions had resulted in one-off net profits of R903m in the first half of this year.
After this cash injection, Grindrod now expects earnings for the six months to end-June to be between R1.44bn and R1.49bn, more than double those of the previous first half.
The stronger earnings come despite a weaker operational performance during the period under review — an encouraging indicator for the group’s inorganic growth strategy.
The company has been actively divesting of its noncore assets in recent years, including the disposal of Grindrod Bank in 2022 and the sale of North Coast property-backed loans to African Bank in March.
Its latest deals have helped shelter Grindrod’s balance sheet from a challenging operational environment in the first half of the year, in which trade wars, sluggish commodity prices and policy uncertainty saw the company record lower exports and narrower margins from last year.
In June, the group announced that interim terminal volumes had slipped to 6.7-million tonnes a year, compared with 6.9-million in the first half of 2024.
Exports from its dry-bulk terminal, operated by the port of Maputo, fell to 5.2-million tonnes a year in the five months to end-May, compared with 5.8-million before.
Despite the weaker sales volumes, Grindrod expects to report headline earnings per share between 85c and 92.5c, up 18%-28% year on year.
Headline earnings from core operations were expected to be “broadly in line” with those of the previous comparable period at around R562m.
Shares in the logistics provider rose 3.4% on the news, providing some temporary reprieve to an ongoing decline.
Grindrod has given up more than 20% in the past year as the company navigated Mozambican civil unrest and geopolitical uncertainty stemming from US tariffs.
Grindrod plans to publish its interim results on August 22.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.