Grindrod Shipping swings to loss as dry-bulk demand wanes

The shares of Grindrod Shipping were on track for their worst day in two weeks on Thursday after the maritime transportation services group reported an annual loss as dry-bulk demand declined.

The JSE and Nasdaq-listed group reported a loss of $9.6m for the year to end-December from a $103.4m profit the previous year. Its basic headline loss was $0.41c from Heps of $5.42 the previous year.

Grinship said a reduction in demand for dry-bulk vessels, weaker spot market rates, rising costs and impairment losses had contributed to the weak performance.

Grinship shares fell 8% to R161 on Thursday, the lowest since mid-February, but recovered to R163.01 by late afternoon, down 6.8%.

Based in Singapore, Grindrod owns and charters a fleet of dry-bulk vessels and is arguably one of the proxies of seaborne trade flows, which largely depend on the global economy.

Trading under its two main brands, Island View Shipping and Unicorn, the group is focused on shipping dry-bulk cargo such as minerals, coal, ores and agricultural products, as well as transporting liquid chemicals and clean petroleum products.

The 2022 merger of Taylor Maritime Investments (TMI) and Grindrod created a significant mid-sized dry-bulk player with a fleet of 57 ships.

After the conclusion of the deal, Taylor Maritime reconstituted the board of Grinrod Shipping, resulting in six new members being appointed to its enlarged board, which consists of 10 members including seven independent directors.

Privately owned TMI last year moved to install its founder Edward Buttery as the new CEO of Grinship, solidifying its takeover.

“Following TMI’s acquisition in December 2022, the priority for 2023 was deleveraging to strengthen the balance sheet while maintaining an attractive fleet of modern, efficient geared bulk carriers,” Buttery said in a statement on Thursday. “During this time, we have also been improving cost efficiencies across the fleet, the benefits of which should be evident by the end of this year.”

Grinship reported it had reduced interest-bearing debt by $56.9m during 2023, reducing yearly interest payments by $1.9m. It reported holding cash and cash equivalents of $55.2m and restricted cash of $8.7m.

Buttery said there “remains plenty to do in 2024”, highlighting that Grinship was well positioned to achieve its goals against a backdrop of a more favourable market outlook, despite current challenging market conditions.

Grindrod Shipping was hived off from logistics group Grindrod and listed on Nasdaq and the JSE in 2018. The group originated in SA, with roots dating back to 1910.

gumedemi@businesslive.co.za