Top executives at Singapore-based Grindrod Shipping have expressed continued frustration at the company’s low share price.
The Nasdaq-listed bulker and tanker owner currently trades at significantly less than half of its net asset value (NAV).
“Well, it is frustrating, there’s no doubt and we do seem to suffer a bigger discount to some of our peers,” chief financial officer Stephen Griffiths said in a recent conference call with investors.
“Obviously, I think there is an element of that is scale which we accept. I think we need to be bigger and I suppose it's a matter of getting our story out there.
“It is quite strange for the market – obviously we are all caught up in the trade war and the negative press – but the shipping markets are up 50% if not more in the last couple of months, yet the share prices have gone down.
“I think I can understand why investors are very wary, but at the moment the earnings are looking a lot better and it’s positive.”
Our core focus since listing has been to simplify the Grindrod story with investors...to better reflect the company’s financial performance
Grindrod Shipping CEO Martyn Wade
Griffiths said the company has the option to buy back shares and said it was “something that we have in our armory and we will be looking at quite closely”.
Chief executive Martyn Wade is hopeful that Grindrod’s efforts to clean up the structure of the company will eventually pay dividends.
“Our core focus since listing has been to simplify the Grindrod story with investors by reducing the number of off balance sheet joint ventures to better reflect the company’s financial performance,” he told investors.
“To that end, we have wrapped up the Leopard Tankers and Petrochemical Shipping joint ventures while agreeing in principle to acquire control of IVS Bulk, which would allow us to consolidate the financials of the business going forward.
“It also should lead to a capital structure and operations that are easier for investors to track and understand.”
Wade said Grindrod was also “still looking to sell, or will be selling, a couple of our older ships”.
“Obviously the market hasn't been receptive to that, but with the move in the indices which recently moved up even further we are starting to see interest in older second hand ships,” he said.
Wade also reiterated Grindrod’s stance against the use of scrubbers on its vessels, opting instead to use compliant fuels.
“We believe that there are potential negative environmental aspects that are emerging with increased scrutiny on the scrubber technology,” he said.
“We are also not convinced that the economic return on the scrubber installation cost will be sufficiently attractive in the vessel categories in which we operate due to the high quality and fuel efficient characteristics of our vessels and their trading patterns.
“We also have concerns regarding high sulphur fuel availability in many of the smaller ports in which we trade.”
