Grindrod's share price surges after special dividend announcement and rail service access

Grindrod’s share price shot up 12.2% on Friday after shareholders cheered a special half-year dividend and news that the group is one of 11 companies that have met the requirements to operate rail services on parts of South Africa’s state-owned railway network.

Grindrod on Friday declared a special half-year dividend of 32.2 cents a share for the six months to June 30. This was in addition to the 23 cents a share ordinary interim dividend. The share price closed at R14.63 on Friday.

The payout was despite global commodity headwinds, with sluggish prices in iron ore, lithium, graphite, and coal, as well as slightly lower volumes. The confirmation of Grindrod’s third-party status was also received Friday morning from Transnet.

“This achievement marks a significant milestone in South Africa’s rail reform journey, creating opportunities for private sector participation to contribute positively to South Africa’s freight logistics system,” said Grindrod CEO Xolani Mbambo.

Mbambo announced his resignation in June, effective from December 31, 2025, when his notice period ends, and talent search specialists have been commissioned to find a successor.

Transnet announced Friday that 11 train operating companies had met the requirements after receiving applications from 25 companies for third-party access to the rail network. At stake are 41 routes across six strategic transport corridors. Further negotiations would take place.

Core headline earnings were flat at R562.4 million. The group was ungeared by the end of the period, with some R4 billion of credit facilities that were likely to be used up in the next two to three years on various expansion projects, said CFO Fatima Ally in an online presentation.

The group attributed the results to its focus on integrated, cost-effective logistics solutions and its strategy of investing in assets that enable cargo flow. Group earnings increased to R1.47bn from R566.4m at the same time last year.

Core headline earnings were underpinned by a strong second-quarter recovery at the Matola terminal last year and the Port of Maputo.

There was a strong recovery of the Maputo corridor; following disruptions late last year, the corridor rebounded to deliver faster turnaround times and record cargo volumes. The dry bulk terminal operated by the Port of Maputo achieved export volumes of 6.5 million tons, compared to 6.9 million tons at the same time last year.

Grindrod’s dry bulk terminal in Matola achieved its highest-ever monthly throughput of 1.1 million tons in May 2025, setting new efficiency benchmarks for vessel loading.

The closure of the marine fuels business and north coast property loans exposure was completed. The remaining 35% stake in Matola terminal was acquired; Grindrod now owns 100% of the asset, strengthening its integrated “pit-to-port-to-market” offering.

An agreement was signed with Transnet National Ports Authority, in partnership with Eyamakhosi Resources, to develop and operate a container handling facility at Richards Bay, furthering rail reform momentum.

An overhaul program of 13 locomotives repatriated from Sierra Leone is underway.

“Our disciplined execution of strategy continues to strengthen Grindrod’s position as a leading provider of integrated, cost-effective, and efficient logistics solutions across sub-Saharan Africa,” said Mbambo.

“By completing non-core operations divestitures, securing ownership of strategic assets, and advancing our rail participation, we are enabling sustainable cargo flows and long-term growth for shareholders, customers, and key stakeholders alike,” said Mbambo.

In the logistics segment, there was a resilient performance in ships agency, clearing, and forwarding businesses, low utilisation of rolling stock, softer margins in road transportation, and subdued container and graphite volumes.

Mbambo said they would focus on their strategy in the second half. Capital allocation would be disciplined, rail would continue to be unlocked as a key enabler, the buyout of Matola terminal would be bedded in, while growth projects would continue.

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