Grindrod Limited · JSE:GND
Grindrod — H1 2016 Earnings Presentation
40 slides from Grindrod's earnings presentation, August 2016
Slide 1: Unaudited Interim Results and Dividend Announcement
UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT for the six months ended 30 June 2016
Slide 2: Highlights
G HIGHLIGHTS
Slide 3: Financial Highlights
FINANCIAL HIGHLIGHTS an integrated business Headline loss per share Total assets 50.8 cents R33 916 million (Earnings per share H1 2015: 43.6 cents) (December 2015: R36 457 million) Net asset value Loss per share 2 228 cents 149.2 cents (H1 2015: 2 316 cents) (Earnings per share H1 2015: 40.3 cents)
Slide 4: Business Environment
BUSINESS ENVIRONMENT an integrated business ● China’s economic growth forecast at 6.8% to ease in 2017 ● US growth trimmed to 2.0% and to remain flat ● South Africa GDP forecast to decrease to 0.1% for 2016 and to remain weak ● Eurozone growth expected to decelerate to 1.4% for 2016 to remain flat i
Slide 5: Interim Results 2016
G INTERIM RESULTS 2016
Slide 6: Management Income Statement – H1 2016
MANAGEMENT INCOME STATEMENT – H1 2016 an integrated business H1 H1 R million 2016 2015 Comments Revenue 11 071 14 441 Lower volumes and rates Reduced volumes, rates and foreign exchange Trading profit 299 943 losses Depreciation and amortisation (464) (422) Ships delivered Non-trading items after ta
Slide 7: Headline Earnings by Division
HEADLINE EARNINGS BY DIVISION an integrated business H1 2016 H1 2015 250 600 100 (74) 450 (50) (368) 74 (45) (200) 328 R million R million 97 300 77 (16) (350) (381) 202 (500) 150 (650) (800) 0 Freight Shipping Financial Group Total Freight Shipping Financial Group Total Services Services Services S
Slide 8: Attributable Income by Division
ATTRIBUTABLE INCOME BY DIVISION an integrated business H1 2015 H1 2016 200 800 (732) (1 120) 0 600 (200) R million (400) R million 400 74 (46) (600) 303 (418) 97 (800) 200 178 (1 000) 77 (47) (1 200) 0 Freight Shipping Financial Group Total Freight Shipping Financial Group Total Services Services Se
Slide 9: Management Balance Sheet
MANAGEMENT BALANCE SHEET an integrated business 30 June 30 Dec Growth R million 2016 2015 % Comments Property, plant and equipment Freight Services 3 174 4 118 (23) Transfer to non-current assets held for sale and currency Shipping 7 701 7 943 (3) Ships delivered offset by lower exchange rate Financ
Slide 10: Net Debt Analysis
NET DEBT ANALYSIS an integrated business 400 217 (27) (516) 250 100 34 (733) ( 50) R million ( 200) (88) ( 350) (614) ( 500) ( 650) 261 ( 800) ( 950) Dec 2015 Cash Interest/ Capital Bank Loans to joint Proceeds on Jun 2016 generated from dividends/ expenditure investment ventures disposals, operatio
Slide 11: Capital Commitments and Expenditure
CAPITAL COMMITMENTS AND EXPENDITURE an integrated business Capital expenditure Capital commitments Split as follows Approved Approved R million H1 2016 H2 2016 2017 2018+ Total not contracted and contracted Freight Services 98 612 114 - 726 27 699 Port and Terminals 31 207 2 - 209 5 204 Rail 23 83 -
Slide 12: Markets
G MARKETS
Slide 13: Dry-Bulk Seaborne Trade
DRY-BULK SEABORNE TRADE an integrated business GLOBAL SEABORNE TRADE GROWTH 6 000 CAGR 2012-15 CAGR 2016f-18f 3.6% 1.5% Global seaborne trade expanded rapidly between 2012 and 2015, adding +155mt p.a +71mt p.a over 155 million tonnes of new cargo 5 000 every year on average. Over the next few years,
Slide 14: Shipping: Capesize Bulk Carriers
SHIPPING an integrated business CAPESIZE BULK CARRIERS (100 000+ dwt tonnes) 350 No of ships Mdwt 300 Fleet (1 Jul 2016) 1 625 309.5 Total order book (1 Jul 2016) 208 49.0 250 Order book % of fleet 13 16 Number of ships % of fleet over 25 years 1 1 200 Est. % non-delivery in 2016* 50 52 Fleet growth
Slide 15: Shipping: Handymax Bulk Carriers
SHIPPING an integrated business HANDYMAX BULK CARRIERS (40 – 62 999 dwt tonnes) 500 No of ships Mdwt 400 Fleet (1 Jul 2016) 3 380 184.0 Total order book (1 Jul 2016) 505 30.6 Order book % of fleet 15 17 Number of ships 300 % of fleet over 25 years 3 2 Est. % non-delivery in 2016* 58 58 Fleet growth
Slide 16: Shipping: Handysize Bulk Carriers
SHIPPING an integrated business HANDYSIZE BULK CARRIERS (10 – 39 999 dwt tonnes) 500 No of ships Mdwt 400 Fleet (1 Jul 2016) 3 291 93.0 Total order book (1 Jul 2016) 335 12.0 Order book % of fleet 10 13 Number of ships 300 % of fleet over 25 years 9 7 Est. % non-delivery in 2016* 50 49 Fleet growth
Slide 17: Product Tanker Demand
PRODUCT TANKER DEMAND an integrated business 16 14 12 10 8 % change 6 4 2 0 (2) (4) (6) (8) 2009 2010 2011 2012 2013 2014 2015 2016e 2017e MR demand MR fleet World liquid fuel consumption Source: Affinity (Shipping) Ltd, July 2016 GRINDROD LIMITED | UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCEMEN
Slide 18: Shipping: Medium-Range Products Tankers
SHIPPING an integrated business MEDIUM-RANGE PRODUCTS TANKERS (25 – 54 999 dwt tonnes) 250 No of ships Mdwt 200 Fleet (1 July 2016) 1 821 82.0 Total order book (1 July 2016) 165 7.8 Order book % of fleet 9 10 Number of ships 150 % of fleet over 25 years 3 3 Est. % non-delivery in 2016* 30 29 Fleet g
Slide 19: Shipping: Small Chemical and Products Tankers
SHIPPING an integrated business SMALL CHEMICAL AND PRODUCTS TANKERS (15 – 19 999 dwt tonnes) 90 No of ships Mdwt 75 Fleet (1 July 2016) 588 10.7 Total order book (1 July 2016) 64 1.2 60 Order book % of fleet 11 11 Number of ships % of fleet over 25 years 6 6 Est. % non-delivery in 2016* 38 34 45 Fle
Slide 20: Freight Services
OPERATIONAL OVERVIEW FREIGHT SERVICES
Slide 21: Operational Highlights – Port and Terminals
OPERATIONAL HIGHLIGHTS – PORT AND TERMINALS an integrated business ● Maputo Port dredge to 14.2m in execution phase – approximately 40% complete ● Matola terminal berth deepening and quay offset commenced ● Matola terminal magnetite contract extended and coal contracts concluded ● Maputo car termina
Slide 22: Operational Highlights – Rail
OPERATIONAL HIGHLIGHTS – RAIL an integrated business ● Rail Leasing businesses achieved good earnings ● Rail Operations businesses achieved good results ● Bollore’s locomotive delivery programme to complete in September 2016 ● Locomotive assembly and rail construction businesses reported low revenue
Slide 23: Operational Highlights – Logistics
OPERATIONAL HIGHLIGHTS – LOGISTICS an integrated business ● Carrier Logistics: › Auto business gained market share benefiting from the reset cost-base › Fuel business restructure complete and growing from the new base ● Integrated Logistics agency and clearing and forwarding businesses held up well
Slide 24: Strategy and Outlook
STRATEGY AND OUTLOOK an integrated business STRATEGY Terminals: drive dry-bulk capacity utilisation, deliver liquid-bulk terminal Rail: refocus on freight-cargo origination and services along key rail corridors Resolute focus on enhancing our Integrated Logistics services across the customer b
Slide 25: Shipping
OPERATIONAL OVERVIEW SHIPPING
Slide 26: Operational Highlights
OPERATIONAL HIGHLIGHTS an integrated business ● Rates in the tanker sector were high for the most part of H1 2016 but ended lower ● Rates in the dry-bulk sector recovered from their lowest levels but remain below profitable levels ● 13 handysize and 4 supramax third-party owned vessels now commercia
Slide 27: Strategy and Outlook
STRATEGY AND OUTLOOK an integrated business STRATEGY ● Strategic size and sector focus and balance between owned and operated fleet ensuring relative strength in the shipping market ● Careful management of owned fleet to maximise market ● Further expand fleet under commercial management OUTLOOK ● Dr
Slide 28: Financial Services
OPERATIONAL OVERVIEW FINANCIAL SERVICES
Slide 29: Operational Highlights
OPERATIONAL HIGHLIGHTS an integrated business ● Above target earnings in both the Bank and Asset Management ● Private Equity investment continues to increase and valuations rise ● Retail SASSA › Grant payments continue to be efficiently managed › Over 1 000 ATMs deployed › Contractual 3rd party serv
Slide 30: Strategy and Outlook
STRATEGY AND OUTLOOK an integrated business STRATEGY ● Drive focused business growth ● Pursue growth in assets under management ● Secure appropriate investment banking opportunities ● Focus on well-secured loans with low-risk of default ● Expand Retail offering ● Expand the UK Property portfolio OUT
Slide 31: Capital Projects Update
G CAPITAL PROJECTS UPDATE
Slide 32: Capital Projects Update
CAPITAL PROJECTS UPDATE an integrated business ● Richards Bay terminal expansion proceeding in phases linked to contracting of cargo volumes, tippler upgrade complete ● Ngqura liquid-bulk terminal – BOOT agreement ready for signature & revised NERSA tariff methodology published ● Maputo Port dredgin
Slide 33: Group Strategy and Outlook
G GROUP STRATEGY AND OUTLOOK
Slide 34: Group Strategy and Outlook
GROUP STRATEGY AND OUTLOOK an integrated business STRATEGY ● To purposefully grow the business organically, by acquisitions and seeking synergies within the group, with specific focus on Africa, to become a fully integrated freight and logistics service provider › To provide logistic services that e
Slide 35: Annexures
G ANNEXURES
Slide 36: Terminal Capacity – Utilisation as at June 2016
TERMINAL CAPACITY – UTILISATION AS AT 30 JUNE 2016 an integrated business Utilisation Annual Change capacity Terminals H1 2016 H1 2015 % 2016 Dry bulk (tonnes) 3 091 470 3 781 418 (18) 15 150 000 Matola coal terminal1 1 091 143 1 904 854 (43) 7 300 000 Richards Bay1 1 773 349 1 319 333 34 6 100 000
Slide 37: Scrapping
SCRAPPING an integrated business Handy* Handy* Handysize Handymax Panamax Capesize products chemical All other Total dwt 000 bulker bulker bulker bulker tanker tanker Total types scrapping 2010 2 700 400 700 2 700 3 200 1 400 11 100 16 900 28 000 2011 5 300 2 200 5 200 10 500 1 400 700 25 300 17 400
Slide 38: 2014/16 Shipping and Commodity Price Performance
2014/16 SHIPPING AND COMMODITY PRICE PERFORMANCE an integrated business Fall in prices for the period Jul 2014 – Jul 2016 % 120 BDI Index (10) Decrease Iron ore (42) Decrease Thermal coal (20) Decrease 100 Copper (25) Decrease 80 Index 60 40 20 0 2014 2015 2016 Iron ore (62% Fe) Thermal coal (Newcas
Slide 39: Dry-Bulk Daily Spot Rates (Baltic Indices)
DRY-BULK DAILY SPOT RATES (BALTIC INDICES) an integrated business 50 000 2 500 40 000 2 000 Index points US$ per day 30 000 1 500 20 000 1 000 10 000 500 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 2015 2016 Baltic capesize Index ave TC Baltic panamax In
Slide 40: Disclaimer
DISCLAIMER an integrated business Statements contained throughout this presentation regarding the prospects of the group have not been reviewed or reported on by the group's external auditors. The information supplied herewith is believed to be correct but the accuracy thereof is not guaranteed and