We have reached the end of what has been a tough year with commodity markets being under pressure and impacting on many of our businesses. The dry bulk shipping market fell to its all-time low in February. Our port operations, terminals and rail businesses were specifically impacted by weak commodity markets with diminished demand for capacity at the ports and terminals and no new demand for locomotives. Container volumes through South Africa’s ports declined by 7% year on year, placing pressure on our logistics business.
However, as cycles go, our landscape will change and we are well positioned to benefit from an upswing in commodity markets and shipping rates.
Dry bulk shipping rates have gradually improved to a two-year high in November. We have seen substantially improved volumes through Maputo port, with October seeing the best volumes since November 2014. Our coal and magnetite terminal in Maputo is now fully contracted. The feeder container service (OACL),
ships agency and clearing and forwarding business continue to perform well despite declining volumes and Grindrod Bank continues to grow its assets under management and is performing very well.
While Grindrod remains financially strong with very little debt on the balance sheet, we remain cautious in the development of new projects. The Maputo Port Development Company channel dredge is
over 90% complete and due for completion in January 2017. This will increase draft
to over 14m and allow vessels of up to 120,000 DWT to call at Maputo Port. An IVS ship, Mineral Belgium, is currently loading 90 000 tonnes of chrome, a new record loading.
We are hopeful that our new oil tank terminal in Coega will commence construction during 2017.
We welcome Mrs Zola Malinga to the board as a non-executive director and look forward to her valuable contribution.
Wishing all our customers, business partners and employees a happy Christmas and a peaceful festive season.
Thank you for your continued support.