Johannesburg - Africa's biggest shipping company, Grindrod [JSE:GND]
, posted a 42% decline in first-half profit, hit by weak freight rates and unfavourable swings in currencies.
The South African-based company, whose ships haul raw materials such as iron ore, cement and fertilizer, said headline earnings per share totalled 55.7c in the six months to end-June compared with 95.4c a year earlier.
Headline EPS is the main profit measure in South Africa that strips out certain one-off items.
Grindrod, which is diversifying away from shipping to road freight and logistics, has been under pressure since 2009 as the global economic slowdown eroded appetite for raw materials while a flood of new vessels hit freight rates.
The Durban-based company said revenue rose 19% to R17.78bn hit partly by the stronger rand. The stronger rand is a negative for Grindrod, as it eats into profit when overseas earnings are brought home.
Grindrod said it sees positive but volatile demand for commodities providing opportunities for freight and trading business, but an oversupply of ships, particularly in the dry bulk sector, will pressure earnings from shipping.
Group results would also remain sensitive to the dollar-rand exchange rate, it said.
Shares in Grindrod have fallen 25% so far this year, lagging behind a 6% decline on the All Share [JSE:J203] index.