Grindrod Limited has warned its shareholders that it will be posting a headline loss for the year ended 31 December 2016.
The profit warning issued by the company’s said the loss is expected to be between ZAR455 million and ZAR465 million.
Grindrod Limited attributed the loss to its first half headline loss of ZAR381 million the result reflects a gradual improvement in volumes and rates in the second half of the year. The prior year reflected positive headline earnings of R 559 million.
The improvement in the drybulk shipping rates from their lows in the first half and the continued good performance in the ship operating, coastal tanker and bunker barge businesses has positively impacted results. Rates in the tanker market have declined during the year, reflecting the effects of the high product stock levels and new building deliveries.
Freight services performance reflects improved trading conditions during the second half, following an improvement in commodity pricing and consequently improved terminals and port volumes. The Rail assembly business held for sale reported continued trading losses due to the lack of an order
Impairments in the second half of R 444 million have been made in the rail division and ZAR183 million on the decision to sell three of the groups older ships. The impact was partially mitigated by the foreign currency profit release of R 120 million on disposal of the coal trading business.
As a consequence of the above, Grindrod expects the loss for the year ended 31 December 2016 to be between R 1 695 million and R 1 720 million. Shareholders are advised that the headline loss for the year is expected to be between 62.0 and 60.5 cents per share (31 December 2015: Headline earnings of 74.4 cents per share) and a loss per share of between 226 and 229 cents per share.