Yet another good year for Grindrod

Feb 27, 2005
Author: P&S

A continued strong world shipping market allied to the maintenance of low fixed costs across an enlarged fleet has contributed substantially to the Grindrod Group’s latest results, says CEO Ivan Clark.

Although Grindrod’s turnover in dollars increased by 230% for the year ending December 2004, this was devalued somewhat by the strong rand. In spite of this headline earnings per share rose 146% with earnings increasing by 132% to R557M, compared with R239.9M in 2003, making it a dividend of 125 cents per share possible compared with 42c the year previously.

“Our long-term planning and decision to expand the fleet at a time when markets were low has now paid off and is evident in the group’s ability to generate good cash from operations, despite a dramatic strengthening of the rand,” said Clark.

“The US dollar income generated by the division was 230% higher than the previous year, but because of the strong rand it resulted in lower rand earnings growth when translated and on revaluation of forex losses.

“We expect to have extensive cash flows at our disposal for several years to come and will look to invest these cash flows carefully to ensure that our two main business activities – shipping and freight and financial services – grow and provide good returns on the new capital invested.”

By the time the current programme is completed in 2007 Grindrod will have invested R2Bn in ships and a further R1Bn in landfreight operations. This includes the recent purchase of bulk terminals at the ports of Walvis Bay and Maputo.

Clark was confident that the group could continue to achieve further growth in income for 2005, saying that shipping markets were expected to remain buoyant throughout the year and that Grindrod has a high level of contracted income for this year.

During the past 12 months the group consolidated the ordinary and ‘N’ ordinary shares into a single class of share, took delivery of four handysize bulk carriers, a capesize bulk carrier, three 37,000-dwt products tankers and acquired several landfreight logistics businesses.



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