Logistics and cargo handling group Grindrod says feasibility studies are under way for the expansion of its Matola terminal in Mozambique after upgrades at its Maputo port paid off in double-digit revenue growth.
The Durban-based group also welcomed Remgro’s unbundling of its stake in Grindrod, a move that could see liquidity in the stock increase.
Grindrod on Thursday reported a strong performance for the nine months to the end of September, bolstered by volume growth due to strong mining minerals markets, in both the port and terminals and logistics business segments. The news sent the JSE-listed industrial group’s share price soaring 6.19% to R9.27.
In a trading statement, the logistics specialist said volume handled at its dry-bulk terminals were 47% higher than in the previous matching period, driven by strong customer demand which saw it handle an additional 293,716 tonnes of coal cargo.
Grindrod said the additional slab and the extended berthing capacity of its Maputo port were starting to pay off as volume rose 23% over the prior period’s.
The port — which handles a variety of cargo including minerals, grains, sugar, vehicles, bulk liquid containers and general cargo — is strategically positioned as a gateway to the sub-Saharan region and the closest port to the Gauteng industrial hub as well as the Limpopo and Mpumalanga mining regions.
The berthing area was recently rehabilitated, expanded and dredged to as deep as 16 metres, enabling the port to receive and load more bigger vessels.
Grindrod said it wants to make similar changes to the Matola terminal, which handles mainly magnetite and coal. It said repairs to the damaged berth infrastructure at the Matola terminal were complete and feasibility studies are under way for expansion.
The group said that this will increase capacity from 7.3-million tonnes a year to 12-million.
Incoming group CEO Xolani Mbambo, who now heads the freight division, has previously outlined plans to further expand capacity to handle coal in Richards Bay as the group continues its bid for a strong operational turnaround and the imminent sale of Grindrod Bank.
In its logistics segment, Grindrod said healthy charter rates secured on the leasing and subleasing of vessels benefited its coastal shipping and container depot business performance.
It reported its rail business deployed 63% of its locomotives, compared with 32% in the prior period. This is in line with group strategy to expand its locomotive leasing and rail operations in SA and the rest of Africa, after its success in Sierra Leone.
The group told shareholders that the disposal of Grindrod Bank to African Bank was complete with all conditions precedent fulfilled last week, meaning the disposal will be effective from November 1.
The recent unbundling of Rupert family controlled investment company Remgro’s 25% stake in Grindrod was in line with its strategy to move most of its portfolio to unlisted assets. The group is also planning to sell its stake in the local unit of energy giant TotalEnergies.
Grindrod thanked Remgro for years of support, reaffirming its commitment to continue to execute the strategy to unlock shareholder value.