Grindrod sees better times ahead

Johannesburg - Africa's biggest shipping group Grindrod posted a 63% drop in full-year profit hit by last year's collapse in world trade which it expects to improve in the year ahead.

Grindrod, whose vessels haul raw materials such as iron ore, cement and fertilizer, said on Thursday headline earnings per share fell to 190c from 511.7c, in line with its forecast range of a 55%-65% decline.

The 100-year old Durban-based company said the results were also affected by the stronger rand, lower profits from the sale of its ships and softer volumes.

Revenue fell 18% to R27.7bn and trading profit tumbled 53% to R1.4bn.

But the company said it expects the recovery in the global economy to help it deliver "acceptable" results this year, even with a large number of new drybulk ships due to be delivered to the market in the short term.

"In spite of the uncertainties, management expects to achieve continued acceptable returns on shareholder funds for 2010," the company said.

Grindrod, which derives about 80% of its profit from shipping, has suffered torrid times as poor global appetite for raw materials took its toll on freight volumes and rates.

The Baltic Exchange's main sea freight index, which tracks the cost of shipping dry commodities, is nearly 80% lower than a record 11 793 points hit last year.

- Reuters