23 March 2018
Grindrod restructure bears fruit and plans the spin-off of the Shipping business and listing on the NasdaqPublished by Grindrod Limited in General
Durban, 23 March 2018: Grindrod Limited released its results for the financial year ending 31 December 2017 and confirmed the business restructure is well progressed, this includes the planned spinoff of its Shipping division on the Nasdaq, the closure of the rail assembly business and sale of the rail construction business.
Mike Hankinson, Executive Chairman Grindrod said: “The change in the business cycle has impacted positively on the business and has provided the stimulus to implement the spin-off of the Shipping business with a planned listing amongst its peer group on the Nasdaq with an inward listing on the JSE.”
The Shipping business has remained sustainable during a prolonged period of adverse conditions which saw the failure of several of its peers. The net asset value of the Shipping business is $320 million, which approximates fair value.
Improved coal and magnetite markets, strong chrome demand, and the dredging of the Maputo Port channel, led to an increase in volumes handled throughout the business as well as improved terminal utilisation in 2017 (increase of 22% to 10.2 million tonnes). This, together with the restructure of businesses for efficiency, translated into improved headline earnings for Grindod’s continuing operations of R570.8 million, a 173% improvement on the prior year. The continuing businesses comprise of Maputo Port, Terminals, Logistics, Marine Fuels, Agricultural Logistics and Financial Services.
The Financial Services division reported solid results and businesses performed above expectations. The retail division within Grindrod Bank continues to distribute social-grant payments to ten million card holders. There will be change in respect of this contract and Grindrod is committed to provide the support required during this transition phase.
The decision to spinoff Shipping and exit the Rail assembly and construction businesses, resulted in the classification of their respective results as discontinued operations.
“We are confident that the restructured group is well positioned to benefit from increasing shipping rates, stronger demand for commodities and a more positive outlook for South Africa,” said Hankinson.
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