Why Grindrod is selling its marine fuels and agriculture businesses
The company's share price tumbles 16.10% — its biggest one-day fall since October 16 2008
JSE-listed freight and financial services company Grindrod says it has put its marine fuels and agricultural investments up for sale following a strategic review in the first half of 2019 to provide a clear direction for the company.
The company, due to release results for the six months ended June 30 on August 23, said it was decided to sell the marine fuels and agricultural business as they are not part of the group’s “strategic focus”.
The sale follows the unbundling and separate listing on Nasdaq of Grindrod Shipping in June 2018. According to Grindrod, the move enabled shareholders to better evaluate Grindrod’s freight and financial services businesses.
Grindrod said it expected interim headline earnings and earnings from continuing operations to more than double, from R62.7m to R127m-R147m.
It said headline earnings per share from continuing operations were expected to be about 21.6c-18.7c versus the 8.3c of the matching period last year.
Grindrod said that as a result of impairments, the discontinued businesses — marine fuels and agricultural investments — were expected to report a loss of up to R659m, compared with earnings of R2.8bn in the corresponding period last year.
The company's share price was down 16.10% at R4.90 at close of trade on Friday, its biggest one-day fall since October 16 2008.