Grindrod CEO Alan Olivier. Picture: FINANCIAL MAIL
Grindrod CEO Alan Olivier. Picture: FINANCIAL MAIL

ATTRIBUTABLE income at Grindrod shot up 61% to R853m in the 12 months ended December, signifying a strong resurgence in most operations, the company reported on Wednesday.

While revenue was down on a loss on the disposal of 50% of its marine fuels business, and because earnings from joint ventures were not reflected in the consolidated income statement, headline earnings per share leapt 22%, while cash generated from operations was R1.4bn.

The group said it had its eyes fixed firmly on growth in Africa.

The diversified freight, shipping, trading and financial services group said it focused on end-to-end commodity supply chain solutions in the period, moving liquid bulk, dry-bulk, containerised and vehicle commodities.

It also made a "concerted effort" during the year to manage risk and meet financial targets.

Strategic initiatives included delivering on an integrated freight and logistics service and investing in infrastructure assets and other opportunities with high barriers to entry. These included expanding the capacity of the Port of Maputo’s coal terminal and through increasing its locomotive manufacturing capacity. Grindrod also invested in rail technology and concessions businesses and partnered with Vitol — a global energy trading business — in coal and fuel-related activities.

In this regard, CEO Alan Olivier said on Wednesday the group had 30 locomotives on order, and had taken a 46.4% interest in New Limpopo Bridge Projects.

The latter had implications for private sector involvement in a unified railway system linking South Africa and Congo.

"It’s absolutely critical to the development of the Southern African region," Mr Olivier said.

Earnings rose year on year in the freight and financial services divisions. Trading activities were up 12% on a comparable basis.

Grindrod said shipping continued to suffer from weak shipping markets. But it also said its statement of financial position "remained sound" with total assets of R22bn, a net debt to equity ratio of 7% and a book net asset value per share of R16.09.

Warwick Lucas, senior investment analyst at broker Imara SP Reid, said it seemed Grindrod’s business was "bottoming out".

He said Mr Olivier’s presentation to the market had been "positive" but "very cautious".

The group had been sailing choppy waters, where there was a "massive" oversupply of shipping, he said. "But they are back in a viable market again," Mr Lucas said. Grindrod had been implementing a long-standing strategy to get its freight business to balance out shipping.