Slide 1: Unaudited Interim Results and Dividend Announcement
UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT for the six months ended 30 June 2014
Slide 2: Highlights
HIGHLIGHTS integrated logistics
Slide 3: Financial Highlights
FINANCIAL HIGHLIGHTS Attributable profit Total assets ▲ 30% to R693,7 million ▲ 31% to R30 414 million (H1 2013: R533,2 million) (H1 2013: R23 274 million) Earnings per share Headline earnings per share ▲ 25% to 112,5 cents ▲ 32% to 52,0 cents per share (H1 2013: 90,2 cents) (H1 2013: 76,2 cents) ●
Slide 4: Strategic Highlights
STRATEGIC HIGHLIGHTS ● Successful raise of R2,4 billion secures equity for growth plan ● R1,6 billion Consortium Placement providing 8,4% B-BBEE shareholding at group level ● Good contributions from Maputo businesses despite adverse market conditions ● Further orders placed in the shipping fleet wit
Slide 5: Business Environment
BUSINESS ENVIRONMENT ● Slowing but sustainable growth in China, estimated at approximately 7% ● US economic recovery remains robust ● Oversupply in coal and iron ore markets depressing prices ● Low shipping rates and delayed recovery in shipping markets ● Uncertainty in the trading patterns in the t
Slide 6: Interim Results 2014
INTERIM RESULTS 2014 integrated logistics
Slide 7: Management Income Statement – H1 2014
MANAGEMENT INCOME STATEMENT – H1 2014 H1 H1 Growth R million 2014 2013 % Comments Increase mainly from Shipping division due to forex and Revenue 13 390 11 495 16 ship sales Prior year included once-off profit on cancellation of Trading profit 866 943 (8) charters in Shipping division Depreciation a
Slide 8: Headline Earnings – H1 2014
HEADLINE EARNINGS – H1 2014 H1 H1 Growth R million 2014 2013 % Comments Profit attributable to ordinary shareholders 694 533 30 Adjusted for: (373) (83) 349 Foreign currency translation reserve recycled (6) – – upon cessation of operations following restructure Arising from change in control on the
Slide 9: Attributable Income by Division
ATTRIBUTABLE INCOME BY DIVISION H1 2014 H1 2013 800 800 42 (1) 694 157 600 600 130 10 (14) 533 496 R million R million 407 400 400 200 200 0 0 Freight Shipping Discon- Group Total Freight Shipping Discon- Group Total Services tinued Services tinued operations operations GRINDROD LIMITED | UNAUDITED
Slide 10: Management Balance Sheet
MANAGEMENT BALANCE SHEET 30 June 31 Dec Growth R million 2014 2013 % Comments Property, plant and equipment Freight Services 3 235 2 952 10 Additional assets from the acquisition of B-BBEE joint ventures Shipping 6 394 6 318 1 Prior year includes Financial Services which has been included in Group 3
Slide 11: Net Debt Analysis
NET DEBT ANALYSIS 500 (2 704) 302 92 0 3 088 ((500) (1 000) R million (1 500) (2 000) 551 (294) (851) (2 500) (3 000) (3 500) December Cash generated Interest/ Investments Net cash from Disposal of June 2013 from operations dividends/ and capital share issue assets 2014 taxation/ expenditure net for
Slide 12: Capital Commitments and Expenditure
CAPITAL COMMITMENTS AND EXPENDITURE Capital expenditure Capital commitments Split as follows H1 H2 Approved Approved R million 2014 2014 2015 2016 2017+ Total not contracted and contracted Freight Services 902 341 353 244 5 943 696 247 Ports and Terminals 58 169 283 – – 452 332 120 Rail 456 61 70 24
Slide 13: Markets
MARKETS integrated logistics
Slide 14: Dry-Bulk Seaborne Trade
DRY-BULK SEABORNE TRADE Global dry-bulk seaborne trade 6 000 CAGR 5,8% or 250mt per annum Global dry-bulk seaborne trade is expected to exceed 5 000 4,5 billion tonnes in 2014 Seaborne trade will continue 4 000 to grow by an average of 5,8% annually between 2013 Million tonnes and 2016 3 000 Contrib
Slide 15: Shipping: Capesize Bulk Carriers
SHIPPING Capesize bulk carriers 300 No of ships mDwt 250 Fleet (1 Jul 2014) 1 605 301,0 Order book (1 Jul 2014) 359 71,0 200 Order book percentage of fleet 22% 24% Number of ships % of fleet over 25 years 1% 1% % non-delivery in 2012* 30% 30% 150 % non-delivery in 2013* 43% 39% % non-delivery in H1
Slide 16: Shipping: Handysize Bulk Carriers
SHIPPING Handysize bulk carriers 800 No of ships mDwt Fleet (1 Jul 2014) 3 102 88,1 600 Order book (1 Jul 2014) 479 16,8 Order book percentage of fleet 15% 19% Number of ships % of fleet over 25 years 16% 15% % non-delivery in 2012* 19% 21% 400 % non-delivery in 2013* 34% 32% % non-delivery in H1 20
Slide 17: Shipping: Medium-Range Products Tankers
SHIPPING Medium-range products tankers 180 No of ships mDwt 150 Fleet (1 Jul 2014) 1 673 73,9 Order book (1 Jul 2014) 308 14,8 120 Order book percentage of fleet 18% 20% Number of ships % of fleet over 25 years 4% 3% % non-delivery in 2012* 50% 50% 90 % non-delivery in 2013* 36% 34% % non-delivery i
Slide 18: Shipping: Small Chemical and Products Tankers
SHIPPING Small chemical and products tankers 90 No of ships mDwt 75 Fleet (1 Jul 2014) 587 10,6 Order book (1 Jul 2014) 60 1,1 60 Order book percentage of fleet 10% 11% Number of ships % of fleet over 25 years 8% 7% % non-delivery in 2012* 57% 56% 45 % non-delivery in 2013* 59% 57% % non-delivery in
Slide 19: Freight Services
OPERATIONAL OVERVIEW FREIGHT SERVICES
Slide 20: Freight Services
FREIGHT SERVICES ● Earnings from trading activities decreased by 21% to R261,1 million (H1 2013 restated: R331,3 million) ● Ports, Terminals, Rail and Seafreight earnings from trading activities down 18% to R222,8 million before profit on the Acquisition (H1 2013 restated: R270,2 million) ● Logistic
Slide 21: Operational Highlights – Ports, Terminals and Rail
OPERATIONAL HIGHLIGHTS – PORTS, TERMINALS AND RAIL ● Maputo port volumes up 19% to 9,0 million tonnes (H1 2013: 7,5 million tonnes) ● Matola terminal throughput increased by 19% to 1,7 million tonnes (H1 2013: 1,5 million tonnes) with increased magnetite volumes ● Richards Bay terminal throughput de
Slide 22: Operational Highlights – Logistics
OPERATIONAL HIGHLIGHTS – LOGISTICS ● Improved performance in automotive with focused cost saving and efficiency measures ● Restructuring of fuel carrier business progressing ● Successful completion of intermodal depot in Maputo, in partnership with Dubai Ports World ● Progress with intermodal depot
Slide 23: Strategy and Outlook
STRATEGY AND OUTLOOK STRATEGY ● Terminal expansion: dry-bulk and liquid-bulk ● Expansion in rail businesses ● Diversification in the African continent ● Commodity diversification to promote terminal sustainability OUTLOOK ● Magnetite and coal volumes should increase on increased railings despite wea
Slide 24: Shipping
OPERATIONAL OVERVIEW SHIPPING
Slide 25: Shipping
SHIPPING ● Earnings of R157,3 million (H1 2013 restated: R130,2 million) ● Earnings include R115,8 million on the Acquisition and R23,2 million negative goodwill ● Prior year includes R134,3 million profit on cancelled charters ● Adjusted earnings R18,3 million (2013: loss R4,1 million) Change from
Slide 26: Operational Highlights
OPERATIONAL HIGHLIGHTS ● Improved rates in dry-bulk sector with liquid-bulk rates under pressure ● Rates in dry-bulk and liquid-bulk sectors remain below profitable levels ● Solid performance in ship operating businesses ● Tighter market rates in marine fuels business due to product oversupply, incr
Slide 27: Strategy and Outlook
STRATEGY AND OUTLOOK STRATEGY ● Careful management of owned fleet to maximise commercial opportunities ● Expand fleet under commercial management OUTLOOK ● Owned and long-term chartered fleet has a reasonable level of cover ● Improvement in dry-bulk rates in the medium term, supported by expected gr
Slide 28: Financial Services
OPERATIONAL OVERVIEW FINANCIAL SERVICES
Slide 29: Financial Services (Discontinued Operation)
FINANCIAL SERVICES (DISCONTINUED OPERATION) ● Attributable profit increased by 99% to R94,9 million (H1 2013: R47,8 million) ● Assets under management up 6% to R13,0 billion (December 2013: R12,3 billion) ● Total funding (excluding SASSA deposits) at R5,2 billion (December 2013: R4,9 billion) ● Bank
Slide 30: Operational Highlights
OPERATIONAL HIGHLIGHTS ● Growth across all businesses ● Good valuation growth in property portfolio ● Optimisation improved earnings on 9,8 million SASSA-card business ● Engagement with SASSA, PASA and Net1 to promote positive outcome for the future ● Positive results from investment philosophy that
Slide 31: Strategy and Outlook
STRATEGY AND OUTLOOK STRATEGY ● Continue with focused expansion ● Develop business around the retail card offering ● Pursue growth in assets under management ● Focus on well-secured loans with low risk of default OUTLOOK ● Steady earnings expected for the balance of the year ● Disposal to continue i
Slide 32: Group Strategy and Outlook
GROUP STRATEGY AND OUTLOOK integrated logistics
Slide 33: Group Strategy and Outlook
GROUP STRATEGY AND OUTLOOK STRATEGY ● To purposefully grow the business organically, by acquisitions and seeking synergies within the group, with specific focus on Africa, to become a respected fully integrated freight and logistics service provider OUTLOOK ● Well positioned to take advantage of an
Slide 34: Annexures
ANNEXURES integrated logistics
Slide 35: Terminal Capacity
TERMINAL CAPACITY Utilisation Annual Annual plus Change capacity capacity under Terminals H1 2014 H1 2013 % 2013 construction Dry-bulk (tonnes) 5 933 194 5 188 829 14 18 650 000 19 150 000 Matola coal terminal1 1 724 307 1 452 0923 19 7 300 000 7 300 000 Richards Bay 1 558 730 1 881 624 (17) 6 100 0
Slide 36: South African Port Volumes – End June 2014
SOUTH AFRICAN PORT VOLUMES – END JUNE 2014 YTD actual YTD actual Variance TEUs 2014 2013 Volume % Deep sea landed full 638 069 712 637 (74 568) (10,46) Deep sea landed empty 159 654 137 459 22 195 16,15 Deep sea shipped full 516 008 521 753 (5 745) (1,10) Deep sea shipped empty 286 769 311 182 (24 4
Slide 37: Auto Industry Sector – South Africa
AUTO INDUSTRY SECTOR – SOUTH AFRICA 800 000 600 000 Vehicle units 400 000 200 000 0 2010 2011 2012 2013 2014f 2015f 2016f South Africa: Vehicle imports, units South Africa: Vehicle exports, units (includes M&HCVs) South Africa: Vehicle production South Africa: Domestic sales f = BMI forecast Source:
Slide 38: SA Motor Industry Sales
SA MOTOR INDUSTRY SALES Domestic sales Export sales 2014 2013 YOY% 2014 2013 YOY% January 53 025 55 859 (5) 13 960 14 541 (4) February 51 814 53 893 (4) 21 819 26 535 (18) March 55 503 55 782 (1) 24 665 19 338 28 April 46 073 51 846 (11) 16 810 22 907 (27) May 49 465 55 252 (10) 15 613 26 325 (41) J
Slide 39: Dry-Bulk Daily Spot Rates (Baltic Indices)
DRY-BULK DAILY SPOT RATES (BALTIC INDICES) 50 000 3 500 3 000 40 000 2 500 US$ per day Index points 30 000 2 000 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* 2010 2011 2012 2013 2014 Baltic capesize Index ave TC Baltic panamax Index ave TC Baltic supram
Slide 40: Dry-Bulk Trade Growth
DRY-BULK TRADE GROWTH 7 6 5 Billion tonnes 4 3 2 1 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f 2016f 2017f 2018f 2019f 2020f Iron ore Coal Agribulk Bauxite/Alumina Minor ores Steel industry minor bulks Phosrock/Fertilisers Forest products Other minor bulks Sou
Slide 41: Handysize Bulk Carrier and Products Tanker Time Charter Rates
HANDYSIZE BULK CARRIER AND PRODUCTS TANKER TIME CHARTER RATES 50 000 40 000 US$ per day 30 000 20 000 10 000 0 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3* 2006 2007 2008 2009 2010 2011 2012 2013 2014 BHSI: time charter average 1 year time
Slide 42: Southern African Coal Exports
SOUTHERN AFRICAN COAL EXPORTS 80 70 60 50 Million tons 40 30 20 10 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e European Union China India World total Southern Africa: Botswana, Lesotho, Namibia, South Africa, Swaziland Source: Maersk Broker, July 2014 GRINDROD LIMITED | UNAUDITED INTERIM RE
Slide 43: Global Seaborne Iron Ore Trade
GLOBAL SEABORNE IRON ORE TRADE 1.8 1.6 1.4 1.2 Billion tonnes 1.0 0.8 0.6 0.4 0.2 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f 2016f 2017f 2018f 2019f 2020f Source: Braemar Seascope, July 2014 GRINDROD LIMITED | UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCE
Slide 44: Global Iron Ore Exporters
GLOBAL IRON ORE EXPORTERS 1.8 Largest exporters of iron ore are Australia and Brazil 1.5 In 2014 the top nine exporters are forecast to account for 84% of the global supply 1.2 Billion tonnes 0.9 0.6 0.3 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f 2016f 2017
Slide 45: Scrapping
SCRAPPING 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 42 700 2012 8 300 4 70
Slide 46: Disclaimer
DISCLAIMER 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 the company and its emp
Slide 47: Grindrod Limited
GRINDROD LIMITED integrated logistics