Investors were given two plum opportunities in the past 12 months to buy into ports, rail and logistics business Grindrod. Both have delivered solid returns for those who understand the asset class and the inherent potential in Grindrod’s transformative story.
In mid-2025, having patiently built up a stake of 20.2% in Grindrod, the Public Investment Corporation (PIC) inexplicably started to sell — hard.
The market was perplexed, as Grindrod’s underlying prospects were sound, with the unfolding of Transnet’s private sector participation (PSP) initiative in ports and rail. By August 2025, the PIC had sold down its stake to 15%. This was the first opportunity.
The Grindrod share fell from R14 to R11 in a couple of months, and savvy investors snapped up stock. Then a bullish first-half trading statement in August resulted in the stock surging to R16.40.
The share kept trading higher as PSP prospects, the conclusion of asset sales and improving earnings and special dividends powered it to a record high of R19.20 by mid-February.
Conflict in the Middle East erupted in late February when the US and Israel attacked Iran. Markets wobbled and a global sell-off ensued, with the JSE all share index falling 5% and the mid-cap index 12%. Grindrod fell 14% from its record high as panicked investors sold the stock down to R16. This was the second opportunity.
Last week Grindrod issued sparkling results under new CEO Kwazi Mabaso. A Grindrod insider who ran bulk terminals, he succeeded well-regarded Xolani Mbambo, who left for the CFO role at Kumba Iron Ore in December 2025. Thus, management continuity was secured and the transition was seamless.
In year-end results to December 2025, Grindrod reported headline earnings per share of 179.8c (up 285%), with a final dividend up 48% to 25.2c per share and a special dividend of 43c per share. The stock rallied 9%.
With a market value of R12.2bn, Grindrod’s metrics and prospects speak for themselves. Yet the two selloff periods show that the wider market has failed to fully grasp its potential. Buying the dips has been a good move for investors.
Over the past seven years, Grindrod has been reinvented as it stripped out and sold often puzzling noncore assets — such as property, private equity interests and stakes in agricultural co-ops — to return to its ports, rail and logistics core. This started during the tenure of then CEO Andrew Waller in 2018 and continued under Mbambo.
Accumulated debt has been expunged and cash built up with a focus on areas of material competence. In the recent results, management states that the sale of Grindrod Bank and KwaZulu-Natal marine fuel trading business Cockett resulted in group cash growing to R3.9bn, leaving the group effectively ungeared. This means Grindrod will have the firepower to move quickly when proposals for rail public-private sector participation (PSP) unfold in the next two years.
The stock is up 40% over one year, 90% over three years and 253% over five years. Speaking to Mabaso and CFO Fathima Ally, it is clear that future prospects should keep Grindrod shareholders content. Core revenue for the year was up 1% to R7.5bn, with the benefit of acquiring the remaining 35% stake in the Maputo Matola terminal and record volumes in the Mozambique ports pushing profits.
Grindrod’s ports and terminals businesses had a stellar year, with headline earnings up 36% to R1.1bn. Surging quantities of chrome aided earnings, with total ports and terminal volumes up 6% to 15.2Mt and Matola volumes rising 22% to 9.9Mt.
The logistics unit was the softer portion, with earnings down 21% to R212m, weighed by lower volumes of some commodities from clients and a weaker shipping agency contribution. Logistics was also hindered by a concerted decision to withdraw locomotive assets from service and refurbish 13 trains in preparation for the rail PSP’s rollout. Grindrod is acquiring wagons, and is the only operator with rolling stock ready to proceed when the Transnet Rail Infrastructure Manager (Trim) initiative — which will allow private companies to use Transnet rail infrastructure — comes into effect.
These results are a snapshot in time. Mabaso says the acquisition of the outstanding 35% of the Matola terminal for $77m was transformative. The seller was longtime Matola partner and international commodities house Vitol, which had acquired the stake from Grindrod in 2012 for $68m. Grindrod plans phased expansion of the key terminal to add further capacity, alongside dredging and deepening the docking berth by 2027.
With two periods of selloffs, the wider market has failed to fully grasp Grindrod’s potential
Mabaso points out that this will enable larger 170,000t ships to load and dock at Matola, allowing volumes to move from 9.9Mt to 12Mt initially to an eventual 15Mt-17Mt. What’s more, Matola’s landing and loading costs will drop. Efficiencies will also improve, allowing faster and cheaper turnaround times for ships in an industry where every day saved runs into thousands of dollars.
The chief commodity volume is magnetite, one of the main iron ores. Matola has the infrastructure to rail products directly from point of origin to port. Thus Matola, the Grindrod rail strategy and Trim will power results from this asset.
The Port of Maputo plans further capacity expansion, driven by record volumes of chrome. Grindrod’s 24.7% stake in the concession has been extended to 2058, securing this valuable asset, which is a linchpin to the Trim initiative.
Another opportunity is the PSP initiative unfolding at Richards Bay Dry Bulk Terminal. Transnet aims to increase volume at the asset, which is a critical export gateway for South Africa’s bulk commodities, particularly chrome and magnetite. Through the PSP process, Transnet seeks to leverage private sector expertise and capital to improve operational efficiency and reliability.
Grindrod has been operating successfully at the terminal for several years. Its Navitrade subsidiary handled 2.3Mt last year and the current run rate is 2.7Mt-2.9Mt, according to management. Mabaso says rail deliveries to the terminal have increased and Grindrod, with Transnet, is pitching to be its main partner. The terminal has direct rail access to port and handles 17Mt a year mainly in chrome, magnetite and coal products. But a PSP could mean an uplift to 27Mt.
Transnet’s formal process to request private sector participants at the Richards Bay terminal is in an early stage and closes later this year. Grindrod has ringfenced R1.2bn for the prospect, and Transnet should announce the eventual partner in 2027.
Logistics, a laggard in recent years, will recover in 2026, Mabaso believes, with more to come in 2027 as the refurbished locomotives are allocated to new routes. A more reliable contract with commodities such as graphite will also assist.
In short, it’s full steam ahead for Grindrod. Having offered investors two bites at the cherry in the past year, it could present them with another opportunity should any further black swan events occur.
*The writer holds shares in Grindrod
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