South African freight and shipping group Grindrod is upbeat about the group's outlook and is planning to grow its fleet by 38 percent in the next two to three years.

Chief Executive Alan Olivier said on Thursday that Grindrod's current core fleet of 37 ships is contracted to increase to 51 ships by the end of 2012.

He said at a presentation of the group's interim results that long-term shipping prices and charter rates indicated expectations of a firm shipping market in the medium term.

The group on Wednesday reported a 95 percent jump to 242.8 cents in headline earnings per share for interim period to June 2008 compared with 124.6 cents a year ago.

An interim ordinary dividend of 68 cents was declared – up 100 percent on the same period a year ago. A preference dividend of 589 cents per share was declared, up from 498 cents a year ago.

Revenue for the interim period rose 93 percent to R13.5-billion, and trading profit was up 92 percent to R1.4-billion.

"The results were achieved against the backdrop of a continued buoyant shipping market and substantial demand for commodities. The strong markets have enabled the group to secure substantial contracted profits at very favourable rates, and the strategies that have been put in place to acquire and charter in a modern shipping fleet at low costs over prior years continue to pay dividends," Olivier said.

In addition, Grindrod advised that it expects full year HEPS to rise between 80 percent and 100 percent on the 263.1 cents per share reported for the 12 months ended December 2007.

As at end June, 64 percent of Grindrod's owned and chartered fleet is contracted for the remainder of 2008, 51 percent for 2009 and 35 percent for 2010. The group will look to further expand this base for 2009 and beyond.

Olivier said shipping market fundamentals continue to be positive and consequently earnings are expected to remain at firm levels for the remainder of the 2008 financial year.

The group has significant contract cover and will look to further expand this base for 2009 and beyond.

The Trading, Freight Services and Financial Services divisions are well positioned for growth, he said, with capacity to invest in expansion, mainly in infrastructural development opportunities, and new projects coming on stream.

At 11.15am on the JSE, Grindrod's share price was up 37 cents, or 1.54 percent, at 24.47 rand. On Wednesday it closed 3.43 percent higher.

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