Weak Freight Rates push Grindrod to H1 loss

Africa's biggest shipping group Grindrod reported a first-half loss on Thursday, pressured by low global growth and declining dry bulk shipping rates but it expects demand for commodities to pick up this year.

Africa's biggest shipping group, which is present in 37 countries worldwide, reported a headline loss per share of 50.8 cents for the six months to June 30 versus a profit of 43.6 cents a year earlier.

Headline earnings per share, the main profit gauge in South Africa, strips out certain one-off items.

The global shipping and freight industry is struggling through its longest downturn in three decades. In February maritime consultancy, Drewry, forecast that the global shipping container industry would loose $5 billion this year due to lacklustre freight rates and high operating costs.

"We are cautious. Very cautious," Grindrod Chief Executive Alan Olivier said. "I don't expect commodity prices to ramp up at all. But I do expect to see some improvement in demand ... Cautiously optimist but it is going to be a gradual process."

In a statement, Grindrod said the "recovery of the market continues to be weak despite increased Chinese iron ore imports and higher coal prices".

Olivier told Reuters the company was focussing on delivering its capital projects, including dredging the access channel to the port of Maputo in Mozambique by the end of the year.

Its shares were down 7.3 percent at 11.12 rand by 1120 GMT.

 

Reporting by Zimasa Mpemnyama