JSE-listed logistics company Grindrod, in a December 19 pre-closing trading update, said its focus going forward would be to drive growth in bulk handling, container handling, logistics capability and rail and transport, adding that demand for Grindrod's logistics service offering and its long-term business fundamentals remain strong.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) margin in its Port and Terminals segment remained healthy at 35% this year, down from 42% in 2023.

The Ebitda margin of the Logistics segment slowed to 22%, down from 30% in the prior year, owing to the challenging operating environment, a decrease in container volume throughput and an increase in low-margin transport brokering.

This impact has been partially mitigated by solid rail, ships agency and clearing and forwarding business performance, the company said.

The company's gross debt, as at November 30, was R3.1-billion, up from R2.9-billion in June, which is an increase of R200-million mainly as a result of investment in bulk infrastructure and rail.

At net debt of R400-million, down from R500-million in June, and with a net-debt to equity ratio of 4%, down from 5% in June, Grindrod's leverage remains low.

"The soft export drybulk commodity market that was 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, the company added.

From July 1 to November 30, the average price decline recorded on Grindrod's basket of export drybulk commodities was 28% compared with the same period the previous year. However, the 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, Grindrod said.

Further, in South Africa, the operating environment showed some improvement at the quayside both in Durban and Richards Bay with volume performance reflecting this.

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.

However, inbound rail logistics into the Navitrade terminal in Richards Bay remains an area of focus, the company noted.

Additionally, 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, Grindrod added.

MOZAMBIQUE
Meanwhile, in the fourth quarter of the year, protests in Maputo impacted on 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 October 21 and subsequently concentrated at the Komatipoort or Ressano Garcia border from October 24 resulted in intermittent border closures.

Consequently, 24 vessels were delayed and six cancelled owing to stock shortages at the quayside as at November 30.

"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," the company highlighted.

Further, the Port of Maputo's drybulk terminal, which handles mainly chrome, achieved 13.2-million tonnes for the 11-month period to November 30, which is 14% higher on the prior comparable 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," the company highlighted.

Grindrod's drybulk terminals in Mozambique handled 10.2-million tonnes, which is down 13% compared to the prior period and was impacted by protests and the subdued coal market.

Grindrod's 24.7% share of earnings from the Port of Maputo was R320.5-million, up 37% from R233.7-million in 2023, the company said.