Grindrod Inks Writedown Charge, Cites Flagging Profit
South Africa's Grindrod flagged as much as 35 percent drop in annual profit on Thursday, after taking a $100 million writedown charge due to a slide in shipping rates and volumes.
Africa's biggest shipping group said headline earnings per share - a widely watched measure of profit in South Africa that strips out certain one-off items - is likely to drop by between 30 and 35 percent for the year ending in December.
"Persistent decline in the dry-bulk shipping rates has continued into 2016 and are now at unprecedented levels," the group said, adding that had forced it to take a impairment charge of $100 million on its shipping business.
The global shipping and freight industry is facing he longest downturn in three decades. Maritime consultancy Drewry forecasts the global container shipping industry will make a combined loss of $5 billion this year due to lacklustre freight rates and cargo volumes, ship lay-ups and higher operating costs.
The Baltic Exchange's main sea freight index, which tracks the cost of shipping dry commodities, is down more about 75 percent since August last year as global poor appetite for raw material takes its toll.
Reporting by Thekiso Anthony Lefifi