GRINDROD LIMITED
DATE: 14 January 2026 TO: Investment Committee / Retail Desk FROM: Senior Equity Analyst SUBJECT: Investment Analysis â GRINDROD LIMITED (JSE: GND)
Step 1: Data Gathering & Source Verification
Reporting Periods Used:
- Latest Trading Update: Pre-Close Statement and Update on Performance (Released 10 December 2025).
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Latest Interim Results: Unaudited Interim Results for the six months ended 30 June 2025 (Released 22 August 2025).
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Latest Annual Financial Statements: Integrated Annual Report for the year ended 31 December 2024 (Released March 2025).
- Source Link (PDF)
Recent SENS Activity (L12M):
- 10 Dec 2025: Pre-Close Statement (Operational update ahead of FY25 results).
- 17 Oct 2025: Appointment of new CEO.
- 09 Sep 2025: Finalisation of Special Dividend.
- 22 Aug 2025: Interim Results (Declared Ordinary + Special Dividend).
- 19 May 2025: Acquisition of remaining 35% interest in TCM (Matola Terminal) finalized.
Step 2: Metric Extraction
| Metric | Value | Notes |
| --- | --- | --- |
| Market Cap | ~R12.3 Billion | Mid-cap infrastructure player. |
| Share Price | R17.61 | Closing price as of 13 January 2026. |
| Dividend Yield (L12M) | ~5.3% | Based on a total payout of 93.3 cents.
⢠Interim 2025: 23.0c (Ordinary) + 32.3c (Special).
⢠Final 2024: 38.0c (Paid April 2025).
Note: The yield includes a special dividend from non-core disposals; the "core" yield is lower (~3.5%). |
| Liquidity Check | Pass | Average daily value traded >R6 million. Good liquidity for retail and mid-sized institutional flows. |
| P/E Ratio | ~9.0x (Core) | Attractive. While the statutory earnings are distorted by large one-off forex gains (R902m released in H1 2025), the Core Headline Earnings puts the stock on a single-digit multiple. |
| Net Asset Value (NAV) | R19.50+ | Trades at a discount to its tangible NAV, especially when considering the replacement value of the port infrastructure. |
Step 3: Operational & Strategic Analysis
1. Business Overview Grindrod is an African logistics powerhouse focused on Freight Services. Its core asset is its exposure to the Port of Maputo (Mozambique) and the Matola Terminal (TCM).
- Port & Terminals: Expands capacity for handling bulk commodities (Chrome, Ferrochrome, Coal) and Containers. They recently acquired 100% of the Matola Coal Terminal (TCM).
- Logistics: Provides rail, road, and sea freight solutions, integrating the supply chain from mine to port.
2. Performance Trend (H1 2025 & Dec 2025 Update)
- Trend: Volumes Up, Prices Down.
- Record Volumes: Despite a challenging macro environment, the Port of Maputo and Matola Terminal hit record volumes (TCM reached 9.1 million tonnes in 11 months vs 8.1mt for full year 2024). This confirms the structural shift of miners exporting via Mozambique instead of South Africa.
- Commodity Headwind: The Dec 2025 update flagged that average dry-bulk commodity prices (coal, lithium) fell 12%. While Grindrod is a volume business, lower commodity prices risk making some junior miners unprofitable, which could eventually hurt volumes.
- Strategic Win: The acquisition of the remaining 35% of TCM (Matola) allows Grindrod to capture 100% of the cash flows from this high-performing asset.
3. Sector Context (Macro Factor) The "Maputo Corridor" vs. Transnet. Grindrod is the primary beneficiary of Transnet's rail and port failures in South Africa. As the Richards Bay Coal Terminal (RBCT) struggles with rail capacity, miners have permanently diverted flow to the Maputo Corridor. This structural displacement is resilient even if Transnet improves marginally.
Step 4: The Verdict
Bull Case: The "Maputo Monopoly" Grindrod owns the gateway to the world for South African chrome and ferrochrome. The acquisition of 100% of the Matola terminal is a game-changer for cash flow. With volumes hitting records (despite a commodity slump), the company has proven it is an essential utility, not just a cyclical play. Trading at ~9x Core Earnings with a healthy dividend history, it is cheaper than most infrastructure peers.
Bear Case: Commodity Price Risk The company handles "dirty" bulk commodities (Coal) and cyclical metals (Chrome). If global prices for these crash further (e.g., Coal drops below cost of production), miners will stop shipping, and Grindrod's volume-based revenue model will suffer immediately.
Fair Value Estimate R22.00 â R24.00 Based on a 12x multiple on Core Headline Earnings, reflecting the premium quality of the Maputo infrastructure asset.
Final Rating: BUY
- Why? Grindrod offers a unique mix of Growth (Maputo expansion) and Value (Low P/E). The market is still pricing it as a cyclical logistics stock rather than a strategic infrastructure monopoly. The special dividend in 2025 demonstrates management's commitment to returning capital to shareholders.