Grindrod benefits from Maputo

• Logistics provider ups dividend 84% in vote of confidence after it sends record volumes through Mozambique

Ports and logistics provider Grindrod experienced record volumes through the Maputo port where it runs three terminals, as mining houses bypassed the Durban and Richards Bay ports, according to an analyst.

Its port and terminal headline earnings grew 35% in 2023 from the previous period, Grindrod said as it released results to endDecember on Thursday.

Headline earnings increased 29% to R1.35bn.

The record volumes at Maputo would remain high as mining and bulk goods as clients bypass the traditional ports of Richards Bay and Durban, Smalltalkdaily analyst Anthony Clark said. Transnet needed to up its game and improve SA ports, he said.

SA ports have been beset by delays and broken equipment used to load and offload ships.

Grindrod helps run the Maputo port. The concession by the government was granted to Maputo Port Development Company, in which Grindrod holds a 24.7% share. Grindrod is a sub-concessionaire in the dry bulk and car terminals in

Maputo Port, and the coal terminal in Matola.

The firm helps export and import motor vehicles and coal, and heavy minerals such as chrome and bulk cargo.

In February, the government of Mozambique extended its concession to help run the port until 2058. Grindrod said this “reflects positively on the sustainability of the operations and our investment in the port”.

It said in a media statement for the 2023 year: “The port of Maputo achieved record volumes of 12.6-million tonnes, growth of 28% on the prior period. Grindrod’s dry bulk terminals in Mozambique handled 12.9-million tonnes, an increase of 14% on the prior period, with

Matola coal terminal achieving record performance of 8.9-million tonnes.”

It upped the overall 2023 dividend payout by 84% to 72.4c, a sign of confidence in the future of the business, said Clark.

While ports had been the crown jewel for Grindrod in the past three years, he said the next boost would come from its rail operations if it got involved in public-private partnerships (PPPs) with Transnet in SA.

“Grindrod has cleaned up its business and has sufficient headroom and cash to benefit and participate in PPPs.”

Transnet has said it “aims to unlock efficiencies through leveraging private sector expertise”.

Grindrod also owns 54 locomotives within its rail business.

The year-end results were slightly better than its guidance, Clark said, but that the stock increased after a trading update in late February meant it did not react to the results.

“The stock has run in the past two weeks ,meaning the market had anticipated these results.”

The share was 0.78% down at R12.75. Clark, who promoted the stock in November 2020, when it was not even R4, believes it will hit R14.

The company’s noncore operations struggled with fair value losses of R77.9m relating to the KwaZulu-Natal north coast property loans.

Property in KwaZulu-Natal is in low demand as struggling sugar producer Tongaat tries to flog some of its portfolio.

ITS PORT AND TERMINAL HEADLINE EARNINGS GREW 35% IN 2023 FROM THE PREVIOUS PERIOD, GRINDROD SAID AS IT RELEASED RESULTS 24.7% stake in the Maputo Port Development Company held by Grindrod

29% jump in full-year headline earnings to R1.35bn