Record volumes in Mozambique ports boost Grindrod profits

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Freight, logistics and financial services company Gridrod Limited [JSE:GND] reported a 12% revenue increase to R3.9 billion for the year ended 31 December 2019 after its sea freight and logistics segments surpassed targeted growth.

The company published its results on Wednesday and reported that its main port in Maputo achieved record volumes of over 21 million tonnes, an 8% increase from 2018 - largely helped by increases in chrome, magnetite and container throughput.

The company’s Matola Port, an open storage dry bulk handling terminal for coal and magnetite situated in Mozambique, also saw achieved record capacity utilisation of 81%. The port secured a five-year magnetite-handling contract, giving its long-term capacity utilisation security. Matola also achieved record volumes of 5.9 million tonnes. 

Grindrod said it aims to further solidify its presence in the Mozambique. The company officially launched a new 60 000m² cross-dock facility in Nacala, on the northern coast of Mozambique, on in June 2019. The facility is expected to transport 30 000 tonnes of bagged graphite containers each month when it reaches full production.

"The newly established and operational facility in Nacala and development in Palma continue to embed Grindrod's presence in Northern Mozambique and strengthen our ambition to be a key logistics corridor player in the liquefied natural gas project development in the region," the company said in Wednesday's in a statement.

Grindrod's bank segment also grew its deposit book after putting more focus on growing lending to SMEs and property sector.

"The Bank targets growth in the SME and property markets, developing service solutions for the fintech market and attracting suitable strategic partners," said the group.

Last year, Grindrod announced the discontinuation of its marine fuels business and agricultural investments, enduring a trading loss of R241 million. The investment was sold to NWK, a Southern African agricultural businesses, for R204 million in September 2019.

The company's trading profit increased 18% to R1 billion and its headline earnings rose 9% to R525 million. Grindrod declared a final gross dividend of 14.2 cents. Its share price closed 3% higher at R4.48.

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