Earnings up 94% for Grindrod

2008-08-20 00:00

The JSE-listed, KZN-based shipping and freight logistics group, Grindrod, yesterday released its unaudited interim results for the six months ended June 30, 2008, which revealed that earnings grew 94% on the corresponding period of the prior year to R1,104 billion.

Headline earnings per share increased by 95% to 242,8 cents per share and the board declared an interim ordinary dividend per share of 68 cents (H1 2007: 34 cents).

“These results were achieved against the backdrop of a continued buoyant shipping market and substantial demand for commodities. Drybulk markets continue to be firm and the tanker market has performed well,” the group said in a statement.

“Shipping continued to be the major profit contributor at 90% of total earnings, 107% up on the corresponding period. Freight Services experienced good growth in earnings of 65%. Trading did not perform as expected, but is positioned for a strong second half.

“Financial Services’ results were impacted by the reduced shareholding, declining equity markets and the slowdown in local economic activity.”

The board declared a preference share dividend of 589 cents per share (H1 2007: 498 cents).

The higher funding, combined with higher interest rates, increased the net interest paid by 42% to R83 million, and the group’s debt-to-equity ratio decreased from 23% to 14%.

“The ratio remains well within the group’s optimal gearing benchmark of 100%. The strong balance sheet, conservative gearing and high cash generation provides the platform for the group to continue to seek investment opportunities.”

Grindrod said earnings are expected to remain at firm levels for the rest of the 2008 financial year as the shipping market fundamentals remain positive.

“The group has significant contract cover and will look to further expand this base for 2009 and beyond.”

It expects further performance improvement in the trading, freight services and financial services divisions.

These divisions are currently being expanded through investment, mainly in infrastructural development opportunities.

The group expects headline earnings per share for the 2008 financial year to be 80% to 100% higher than the 263,1 cents achieved in 2007.

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