Grindrod Shipping in Fleet Buildup Mode Post Spin-Off
- Business & Finance
Fresh from spin-off from Grindrod Limited, Nasdaq-listed shipowner Grindrod Shipping Holdings is taking advantage of historically low asset prices to strengthen its fleet with quality vessels.
Since the beginning of the year, the company has contracted to buy two 61,000 dwt Ultramax eco newbuilding resales in Japan for USD 26.4 million each and has agreed to charter-in three Ultramax eco vessels, with deliveries scheduled between Q3 2019 and Q3 2020.
“Looking ahead, we intend to leverage further our access to Japanese shipbuilding and financial and trading relationships to continue to expand our drybulk fleet by focusing on Japanese built eco Ultramax and larger Handysize vessels, as we believe current asset prices continue to represent an attractive entry point to acquire quality vessels relative to historic averages,” Martyn Wade, the Chief Executive Officer of Grindrod Shipping, said in the company’s report on business results.
The shipping company, operating in dry bulk and product tanker sector, booked a loss of USD 13.5 million for the six months ended June 30, 2018, almost doubling the loss from last year of USD 7 million.
Revenues were also down for the period when compared year-on-year reaching USD 150.8 million against USD 194.1 million for the six months ended June 30, 2017.
“Dry bulk fundamentals are positive given the reduced supply outlook combined with steady demand especially for minor bulks, which are typically carried by Grindrod vessels. On the tanker side, the company is focused on the medium range product tanker space and intends to continue to focus on its relationships with major trading partners such as Vitol and Maersk. We believe our strong balance sheet, coupled with our competitive positioning in the industry, underpin our growth strategy and prospects,” Wade commented.
During the first half of the year, Grindrod completed a USD 100 million debt refinancing with a syndicate of banks. Net proceeds from the refinancing were used to retire USD 77.8 million of existing bank debt and added USD 20.5 million to the company’s liquidity.