Grindrod has released a trading update that includes information on the floods in KZN. I’m not surprised to see this, as the market was talking about every business with possible exposure and Grindrod certainly featured on that list.

Like all great company updates, it starts with the good news.

In the first quarter of 2022, Ports and Terminals achieved strong volume growth. Ports volumes were up 11% and Terminals drybulk volumes were up 48% vs. the prior period.

Grindrod also highlights the Coastal Shipping and Clearing and Forwarding business in the Logistics segment, which delivered earnings growth of 39% over the prior period. This business benefits from a recovery in sea-borne trade to pre-pandemic levels.

Grindrod Bank’s earnings were up 9% on the prior period despite continuing with a cautious approach, indicated by the large liquidity surplus.

We now get to the bad news.

The container depots, terminals and warehouse facilities in Central Durban were impacted, with five sites presently suspended and likely to remain that way for several weeks. It’s not every day that you’ll see a sentence like “activity to recover customer containers and restore facilities has commenced” – this was a serious natural disaster.

Unrelated to the flood damage, the Matola Terminal has suffered force majeure after a ship collision damaged the infrastructure. Ship-loading operations are expected to commence this month.

The announcement follows the standard approach of a you-know-what sandwich, starting and ending with positive news and putting all the ugly bits in the middle. The good stuff starts again with an update related to the disposal of the fuel carrier fleet in Botswana at carrying value. This means that Grindrod has fully exited the fuel and automotive road transportation business, in line with the group strategy of focusing on core assets.

Finally, the remaining two tranches of preference share debt of R150 million in the Private Equity and Property business has been settled.