Upbeat Grindrod cruises in with remarkable improvement

Terry Hutson EIGHTEEN MONTHS after Grindrod managing director Ivan Clark told a journalist “..we will take the group by the scruff of the neck and shake it into reality,” he has delivered on his promise. Grindrod’s half-year results to June reflect a remarkable improvement in headline earnings of R49,9 million, representing a 127% increase per share over the same period last year. Clark said that he was upbeat about the group’s prospects. He said that at this stage there was no reason why earnings in the second half of the year should not exceed those of the first half, with further improvements on the good performance in 2000. Clark attributes the improvement to shedding the group of businesses and ships that do not make money, as well as a reduction in overhead infrastructure, and investment in certain types of business. Although the group had been through an intense programme of acquisitions and was bedding these down, he said they would look at opportunities as and when they arose. He added that while the new businesses had started to contribute to the group’s earnings, there remained substantial potential. A bulk carrier and three multi purpose vessels have been sold for R160 million, of which R80m in the current report has assisted in reducing the debt/equity ratio. Two container ships, which are being sold and chartered back at market rates, will generate a further R190 million, providing R270m in the second half of the year, which will further reduce gearing. This concludes Grindrod’s programme to sell ships. Together with joint venture partners Grindrod has placed orders in China for four handysized tankers in addition to long term charters for four similar tankers from Japan. Two of the Chinese-built vessels will be fully owned and all eight will enter service with Island View Shipping trading internationally. Unicorn Tankers has chartered three 45 000-ton product tankers, which will enter a pool arrangement aimed at ensuring their long-term employment.