Grindrod resumes dividends after returning profit
The company says it made a net profit after tax, including income from its now-separated shipping business and its for-sale rail-leasing division, from a loss previously
Freight and financial services group Grindrod has resumed dividend payments to shareholders after returning to profit in the year ended December.
The share was 6% higher at R8.89 early on Wednesday morning.
The company said on Wednesday it made a net profit after tax, including income from its now-separated shipping business and its for-sale rail-leasing division, of R2.9bn in 2018, from a loss of R508m previously.
In June 2018, Grindrod unbundled its shipping division onto both the Nasdaq exchange in the US and the JSE. From that transaction, it received a foreign currency translation gain of R2.8bn.
On the other hand, the group’s discontinued rail-leasing unit recorded an impairment of R568m against its operations in Sierra Leone, after a mine that that business was servicing was placed under care and maintenance.
Excluding those two discontinued operations, Grindrod said its net profit for the year rose 21% to R875m as revenues, including from joint ventures, grew 16% to R24.7bn.
“The continuing businesses of freight and financial services ended the year on a positive note,” Grindrod said.
The Maputo Port achieved record volumes of 19.6-million tons, a 7% increase on 2017, while the Matola Terminal’s volumes recovered in the second half, the group said.
The company resumed dividends to investors, saying it would pay a final dividend of 14.6c a share. It also bought back 1.1% of its issued shares at an average price of R6.65.
“Grindrod continues to implement the strategies of the freight services and financial services divisions,” it said.
“Significant initiatives to improve capacity and drive more efficient utilisation of resources are positioning the remaining businesses to increase market share and to capitalise on any global market improvements.”