By the time you read this, our Interim results for the six months ended 30 June 2016, will have been announced and will be available on our website.
Our Financial Services division performed well, but as you are aware, the financial performance of the Freight and Shipping divisions have been heavily impacted by the poor dry-bulk shipping market and weak commodity markets.
Although dry-bulk shipping markets have recovered from the historic lows in the first quarter and rates are now well in excess of operating costs, and our tanker- and ship-operating businesses have performed well, this has been insufficient to recover the first quarter losses. Commodity markets have had a significant impact on volumes handled through our terminal facilities and have also impacted our Rail business. Commodity prices have improved of late and this together with a competitively priced logistics chain has resulted in increased contracted volumes for our terminal facilities for the second half of the year.
Grindrod’s strong balance sheet, and minimal debt, positions the group to weather the current market conditions. We do however, need to take cognisance of the company’s financial performance, and cut unnecessary costs, find new markets and be innovative. Our customers are facing enormous pressures in this market so let’s find innovative ways of supporting them.
Some of the most recent innovations include Grindrod Terminals’ new Agri-Terminal in Maputo, Bay Stevedores’ new venture into ‘grabs & hoppers’ in Richards Bay, Grindrod Intermodal’s rail siding in Denver, and further dredging in the port of Maputo to allow entry to vessels of up to 80 000 tons.
Management have received numerous messages applauding the Carrier division on excellent service. Well done to Fuelogic and Automotive for going the extra mile in supporting your customers.
Congratulations to the crew and ship management team of the Inyala, who have recently undergone a tanker risk assessment (a formal procedure introduced by the Oil Companies forum) in the port of Gibraltar. The ship passed the safety inspection with flying colours.
On a separate note, there have been changes to the board. Mrs Tantaswa Nyoka (previously Fubu) has resigned from the Grindrod Limited board and as a member of the Audit Committee due to her appointment to another financial institution. As part of the board succession plan, Mr Jannie Durand (CEO Remgro) has resigned from the board due to capacity constraints and his alternate, Mr Pieter Uys, is now a full member of the board. Mr Raymond Ndlovu has been appointed as an alternate director to Mr Uys and has been appointed as a member of the Audit and the Social and Ethics committees. Mr Cato Brahde, who resides in the Isle of Man, has resigned from the board due to other obligations and capacity constraints. Mr Gerhard Kotze has been appointed as an alternate to Mr Mkhuseli Faku.
Thank you to Mr Durand, Mr Brahde and Mrs Nyoka for their contributions to the board, and welcome to the newly appointed directors.
To all our customers, employees, suppliers, investors and other stakeholders, we thank you for your continued support.