Thursday, May 26, 2022
Grindrod Shipping (GRIN)
Grindrod reports impressive growth, largely as expected
Grindrod Shipping operates a fleet of owned and long-term and short-term chartered-in drybulk vessels predominantly in the handysize and supramax/ultramax segments. The drybulk business, which operates under the brand “Island View Shipping” (“IVS”), includes a Core Fleet of 31 vessels consisting of 15 handysize drybulk carriers and 16 supramax/ultramax drybulk carriers. The Company also owns one medium range product tanker on bareboat charter. The Company is based in Singapore, with offices in London, Durban, Tokyo, Cape Town and Rotterdam. Grindrod Shipping is listed on NASDAQ under the ticker “GRIN” and on the JSE under the ticker “GSH”.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
2022-1Q Results demonstrate leverage to shipping rates. Grindrod reported revenues of $110.3 million, up 61% over the same period last year on healthy Handysize and Supramax/Ultramax TCE rates. Operating costs rose only modestly leading the company to report gross profits of $40.7 million versus $12.6 million and adjusted EBITDA of $50.2 million versus $21.2 million. Adjusted net income for the quarter was $29.8 million ($1.60 per share) versus $2.4 million ($0.11 per share). Results were generally in line with expectations.
Speaking of vessel acquisitions. One of Grindrod’s strengths is its ability to exercise options to purchase chartered-in vessels at what has become very attractive pricing. It exercised the right to purchase the IVS Pinehurst for $18 million earlier this month. All told, the company can exercise options to acquire four more vessels over the next three years. …
This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.