Grindrod achieved a commendable performance in its core businesses for the year ended 31 December 2021 underpinned by record mineral volumes handled at its Port and Terminals operations and strong performance from the coastal shipping and container depot business. Grindrod Bank performed well as it continued its focus on quality lending and maintaining healthy capital and liquidity ratios.
Overall, Port and Terminals reported robust earnings growth of 70% in 2020, comfortably surpassing its pre- COVID-19 performance level. The coastal shipping and container depot business achieved earnings growth of 33%, with the remaining businesses delivering consistent performance for the period. The impact of cessation of Grindrod’s activities, relating to the liquified natural gas project in Northern Mozambique, due to the insurgency in the Cabo Delgado province was mitigated by the resumption of the graphite logistics business in Nacala. Current period results include impairments and provisioning of R78.2 million.
Grindrod Bank’s earnings improved 157% from the prior period despite remaining cautious in its lending activities and retaining surplus liquidity in excess of R5.0 billion as at 31 December 2021. During the period Grindrod Bank concluded an agreement with Shoprite Checkers as a key new platform partner and recommenced the project to raise further capital to enable growth and enhance returns
The disposal of the car carrier business is complete and the disposal of the fuel carrier businesses has progressed. This process necessitated the impairment of goodwill and assets of R266.6 million in the current period.
Grindrod successfully sold its Grindrod Shipping shares, generating proceeds of R338.1 million. A fair value gain of R238.2 million has been recorded in the current period.
Commentary – Non-Core Businesses
The Private Equity portfolio now consists of only two significant investments. The disposal of the offshore real estate investment was concluded during November 2021 for GBP17.4 million in addition to a number of smaller investments. The strategy is to exit the remaining two investments at the right valuations.
Progress has been made by the various owners of the KwaZulu-Natal north coast properties. Management continues to work with the principals to manage this exposure and settle the loans.