Tough commodity market hits Grindrod where it hurts
The commodity markets have not treated Grindrod favourably in the first five months of the year, says CEO Xolani Mbambo.
Speaking to investors on a conference call on Wednesday, he warned that the prices of commodities such as thermal coal, graphite and chrome had been trending downwards, which had created a “very, very challenging” situation for the JSE-listed logistics group.
Mbambo said the continued slow-down in global growth, trade tensions and policy uncertainty would persist in adding downward pressure on the mining commodity market outlook.
Some better news was that the situation in Mozambique had improved this year compared with the post-election riots witnessed in the fourth quarter of last year.
While the situation might have normalised, however, the challenge had been to stabilise operations on the Maputo corridor and to provide comfort to customers that the group could get their goods to the Mozambican port intact.
More good news was that the consolidation of the Matola terminal was already delivering value through the now full ownership of the asset.
The signing of the container facility operator agreement at the Port of Richards Bay also marked a strategic entry for the group into the quayside container terminal operations at this facility.
In the five months under review, Grindrod’s 24.7% share of earnings from the Port of Maputo was R165.9-million, compared with R178-million in the same period last year.
The earnings before interest, taxes, depreciation and amortisation (Ebitda) margin in the Port and Terminals business was 35% (2024: 33%).
The Logistics business’s Ebitda margin, excluding transport brokering, slowed to 25% (2024: 32%).
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