Good progress had been made towards completing the feasibility study to expand the Maputo coal terminal capacity by 20 million tons, Grindrod reported yesterday.

The capacity of the terminal was increased by 2 million tons to a total 6 million tons a year in the second quarter of last year and the project to further expand the terminal is expected to cost between $600 million (R5 billion) and $800m.

Alan Olivier, Grindrod’s chief executive, said yesterday that the board of the listed shipping and logistics group had approved plans to increase the capacity of the terminal by a further 1.3 million tons. The project commenced in April and was scheduled for commissioning next year.

“This will increase the terminal’s throughput capacity to 7.3 million tons a year, which is fully supported by current rail capacity,” he said.

Olivier added that the feasibility for phase four of the terminal project to expand its capacity to 20 million tons of coal and 10 million tons of magnetite was due to be completed in the final quarter of this year.

He said the group had executed a number of transactions and made substantial progress on projects aimed at realising its strategy of becoming an integrated freight and logistics service provider while retaining its position in shipping.

Included among these transactions was the sale by Grindrod in January of a 35 percent interest in the company that owns the Maputo coal terminal concession to Vitol, one of the largest energy trading businesses, for $67.7m.

Olivier said the introduction of Vitol as a partner in the terminal would support the completion of the expansion project.

Vitol and Grindrod also entered into a partnership agreement to combine the sub-Saharan Africa coal trading businesses of both companies.

Grindrod was awarded the concession to operate the Maputo coal terminal until 2033, with an option to extend the concession for a further 10 years.

To date $70m has been invested in the refurbishment and building of infrastructure expanding the capacity of the terminal to 6 million tons a year, which is ideally situated for the export of coal to international markets.

Yesterday Grindrod reported a 25 percent growth in headline earnings a share to 69.4c in the six months to June from 55.7c in the previous corresponding period.

Revenue rose by 9 percent to R18.8bn from R17.3bn. Operating profit before interest and taxation increased by 2 percent to R350m.

The interim ordinary dividend of 17.5c a share in the previous corresponding period was maintained.

Cash generated from operations increased by 669 percent to R890.6m.

The freight services division contributed earnings of R580.2m, of which R414.9m related to the profit on the disposal of 35 percent in the Maputo coal terminal.

Earnings by the trading division grew 32 percent to R96.2m.

Olivier said that the marine fuels business performed exceptionally well, while the joint venture with Vitol would achieve further growth in volume in these fuels.

Earnings by the shipping division before impairments dropped to R9.4m, which was attributed to reduced rates across all sectors.

The financial services division increased earnings by 3 percent to R21.7m, driven by good earnings from the banking division.

Olivier said the group anticipated an increase in full year earnings for the year to December.

Grindrod shares surged 6.62 percent to close at R14.50, the highest price on the day, after opening at the session low of R13.81 yesterday in Johannesburg trade. The industrial transport index added 2.09 percent.

 

 

Source: http://www.iol.co.za