Grindrod tanks on trading statement

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Grindrod tanks on trading statement

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Published Date: 2019-08-19 | Source: Stephen Gunnion | Author: Stephen Gunnion

Grindrod tanks on trading statement

Impairments on discontinued operations will result in an interim loss but its continuing businesses have done well despite the weak economy.

Grindrod's shares sank as much as 26% on Friday after it warned that it would report an interim loss due to big impairments after it unbundled its shipping business and put other units up for sale.

In a trading statement, the freight and financial services group said it expected to report a loss of between R492 million and R532 million for the six months to end-June, down from last year's earnings of R2.42 billion. Total headline losses for the period are expected to clock in at between R101 million and R141 million from headline earnings of R347 million.

Following a strategic review, it said its Marine Fuels and Agriculture investments no longer formed part of its strategic focus and were held for sale. Due to impairments, it said the discontinued operations were expected to report a loss of as much as R659 million, compared to earnings of R2.84 billion in the comparative period. Its prior-year discontinued operations included the Shipping division. Last year's results included a foreign currency translation gain of R2.83 billion that arose on the listing of Grindrod Shipping in June last year, further distorting this year's numbers.

The group said its continuing businesses, Freight Services and Financial Services, demonstrated good performances in an environment of constrained economic growth. Earnings and headline earnings from continuing operations will more than double to between R127 million and R147 million.

Its shares retraced some of their losses to close 16% down at R4.90





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