Slide 1: Grindrod Limited Unaudited Interim Results and Dividend Announcement
FINANCIAL + FREIGHT + SHIPPING www.grindrod.com GRINDROD LIMITED UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT for the six months ended 30 June 2017 Wifi access | guest@sun Presentation and Announcement download | www.grindrod.com > Investor relations
Slide 2: Highlights: Strategic, Business Environment and Financial
FINANCIAL + FREIGHT + SHIPPING HIGHLIGHTS STRATEGIC,BUSINESS ENVIRONMENT, AND FINANCIAL MIKE HANKINSON
Slide 3: Video of first half 2017 highlights
FINANCIAL + FREIGHT + SHIPPING Click here to view video showing highlights and operational enhancements for the first half of 2017
Slide 4: Highlights: Strategic
FINANCIAL + FREIGHT + SHIPPING HIGHLIGHTS STRATEGIC • Over a century of entrepreneurial growth • Developed into three distinct businesses • Current detailed strategic review in process • Clear rationale for unbundling Shipping from Grindrod • Process, supported by professional advisors, is significa
Slide 5: Highlights: Business Environment
FINANCIAL + FREIGHT + SHIPPING HIGHLIGHTS BUSINESS ENVIRONMENT • China’s economic growth is projected at 6.6% for 2017 • US and Eurozone economic growth is projected to be moderate at 2.1% and 1.9% respectively in 2017 • South African economic growth is projected to be poor at 0.7% for 2017 • Commod
Slide 6: Highlights: Financial
FINANCIAL + FREIGHT + SHIPPING HIGHLIGHTS FINANCIAL • Revenue R13 404.3 million inclusive of joint ventures (H1 2016: R11 071.2 million) • EBITDA R640.4 million inclusive of joint ventures and excluding rail assembly businesses (H1 2016: R246.4 million) • Headline earnings excluding rail assembly bu
Slide 7: Interim Results 2017
FINANCIAL + FREIGHT + SHIPPING INTERIM RESULTS 2017 ANDREW WALLER
Slide 8: Management Income Statement – H1 2017
FINANCIAL + FREIGHT + SHIPPING INTERIM RESULTS 2017 MANAGEMENT INCOME STATEMENT – H1 2017 Excluding rail R million assembly Comments H1 2017 H1 2016 H1 2017 H1 2016 Revenue 13 404 11 071 13 118 10 361 Increase in dry-bulk rates and crude oil price Improvement in dry-bulk rates, freight volumes and T
Slide 9: Headline Earnings – H1 2017
FINANCIAL + FREIGHT + SHIPPING INTERIM RESULTS 2017 HEADLINE EARNINGS – H1 2017 R million H1 2017 H1 2016 Comments Loss attributable to ordinary shareholders (87) (1 120) Adjusted for: (42) 739 Rail concession buy-up (140) − Accounting impact of buy-up in rail concession Loss on disposal in rail con
Slide 10: Headline Loss by Division
FINANCIAL + FREIGHT + SHIPPING INTERIM RESULTS 2017 HEADLINE LOSS BY DIVISION H1 2017 H1 2016 (50) (50) 59 (74) (148) 80 (129) (200) (200) (120) R million R million (350) (350) 77 (16) (368) (500) (500) (650) (650) (800) (381) (800) Freight Shipping Financial Group Total Freight Shipping Financial G
Slide 11: Headline Earnings by Division Excluding Rail Assembly
FINANCIAL + FREIGHT + SHIPPING INTERIM RESULTS 2017 HEADLINE EARNINGS BY DIVISION EXCLUDING RAIL ASSEMBLY BUSINESS HELD FOR SALE H1 2017 H1 2016 59 126 107 50 100 80 (60) (100) R million R million (120) (250) (50) 77 (16) (367) (400) (368) (200) (550) Freight Shipping Financial Group Total Freight S
Slide 12: Management Balance Sheet
FINANCIAL + FREIGHT + SHIPPING INTERIM RESULTS 2017 MANAGEMENT BALANCE SHEET 30 June 31 Dec R million 2017 2016 Comments Property, plant and equipment 9 146 9 533 Freight Services 2 735 2 709 Berth deepening offset by depreciation Shipping 6 157 6 557 Lower exchange rate and depreciation Financial S
Slide 13: Net Debt Analysis
FINANCIAL + FREIGHT + SHIPPING INTERIM RESULTS 2017 NET DEBT ANALYSIS 50 (100) 246 (250) 4 (400) (244) (373) R million (550) (181) (700) 54 (727) (222) (12) (850) (1,000) (1,150) Dec 2016 Cash NCA cash Interest/ Investments Financial Loans to joint Proceeds on June 2017 generated utilised in dividen
Slide 14: Operational Overview: Shipping
FINANCIAL + FREIGHT + SHIPPING OPERATIONAL OVERVIEW SHIPPING MARTYN WADE
Slide 15: Shipping Strategy
FINANCIAL + FREIGHT + SHIPPING SHIPPING STRATEGY • Unbundle from the Freight and Financial Services businesses and list on a recognised exchange • Retain the sector and size focus in which IVS and Unicorn have expertise • Facilitate consolidation within these sectors • Consider equity raise for incr
Slide 16: Shipping Historical Information
FINANCIAL + FREIGHT + SHIPPING SHIPPING HISTORICAL INFORMATION 6 000 GLOBAL SEABORNE TRADE GROWTH 5 000 Million tonnes 4 000 3 000 2 000 1 000 0 2012 2013 2014 2015 2016f 2017f 2018f Other dry bulks Grains Coal Iron ore 12000 300 10000 250 8000 200 6000 150 Capesize Fleet Index points 4000 100 2000
Slide 17: Shipping Operational Highlights
FINANCIAL + FREIGHT + SHIPPING SHIPPING OPERATIONAL HIGHLIGHTS • Rates in the dry-bulk sector remain much improved, above opex breakeven, but still below profitable levels • Rates in the tanker sector remained weak • As the dry-bulk sector improved, the Ship-operating businesses lost margin • Fleet
Slide 18: Shipping Outlook
FINANCIAL + FREIGHT + SHIPPING SHIPPING OUTLOOK • Dry-bulk fleet continues to move toward a balanced position leading to improvement in rates • Tankers remain under pressure following the high first half 2017 deliveries • Ship-operating result expected to remain at profitable levels despite margin p
Slide 19: Operational Overview: Freight Services
FINANCIAL + FREIGHT + SHIPPING OPERATIONAL OVERVIEW FREIGHT SERVICES BONGIWE NTULI
Slide 20: Freight Services – Port and Terminals Operational Highlights
FINANCIAL + FREIGHT + SHIPPING FREIGHT SERVICES – PORT AND TERMINALS OPERATIONAL HIGHLIGHTS • Maputo Port and terminals: − Maputo Port channel dredge from 11 metres depth to 14.2 metres sailing draft − Matola Terminal berth deepening and quay offset complete, record 91 000 tonnes loaded in August −
Slide 21: Freight Services – Port and Terminals Operational Highlights
FINANCIAL + FREIGHT + SHIPPING FREIGHT SERVICES – PORT AND TERMINALS OPERATIONAL HIGHLIGHTS • Richards Bay terminals: − Coal contracted capacity to 2.9 million tonnes (47% increase on 2016) − Working with Transnet to optimise the rail resources and berth capacity • Liquid terminals: − Durban tank co
Slide 22: Freight Services – Logistics Operational Highlights
FINANCIAL + FREIGHT + SHIPPING FREIGHT SERVICES – LOGISTICS OPERATIONAL HIGHLIGHTS • Nacala intermodal facility under Grindrod management. Additional throughput as the Syrah graphite logistics commences • Ships Agency and Clearing and Forwarding businesses held up well despite the lower volumes • Ca
Slide 23: Freight Services – Rail Operational Highlights
FINANCIAL + FREIGHT + SHIPPING FREIGHT SERVICES – RAIL OPERATIONAL HIGHLIGHTS • Rail operations: − Increased volumes on the north-south corridor − Increased ownership of the rail operating concession • Rail assembly assets held for sale: − Disposal of locomotive assembly business has been difficult
Slide 24: Freight Services Strategy and Outlook
FINANCIAL + FREIGHT + SHIPPING FREIGHT SERVICES STRATEGY AND OUTLOOK STRATEGY OUTLOOK • Ports increase volume in line with capacity • Maputo port volumes are firm following the investments and sustained commodity markets • Maputo terminals capitalise on the increased depths of the channel and berth
Slide 25: Operational Overview: Financial Services
FINANCIAL + FREIGHT + SHIPPING OPERATIONAL OVERVIEW FINANCIAL SERVICES DAVID POLKINGHORNE
Slide 26: Financial Services Historical Performance
FINANCIAL + FREIGHT + SHIPPING FINANCIAL SERVICES HISTORICAL PERFORMANCE 200 Net Profit after tax Advances and Deposits 8,000 180 7,000 160 6,000 140 120 5,000 Millions Millions 100 4,000 80 3,000 60 2,000 40 1,000 20 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0 2006 2007 2008 2009 201
Slide 27: Financial Services Operational Highlights
FINANCIAL + FREIGHT + SHIPPING FINANCIAL SERVICES OPERATIONAL HIGHLIGHTS • Above-target earnings in the Bank • Private equity investment continues to increase • Retail SASSA − Grant payments continue to be efficiently managed • Core deposits grew 7.6% (R7.47 billion from December 2016: R6.94 billion
Slide 28: Financial Services Strategy and Outlook
FINANCIAL + FREIGHT + SHIPPING FINANCIAL SERVICES STRATEGY AND OUTLOOK STRATEGY OUTLOOK • Drive focused business growth • Steady organic growth expected • Pursue growth in assets under management • Volatile stock market could impact asset indirectly through CoreShares and Bridge Fund management retu
Slide 29: Group Strategy and Outlook
FINANCIAL + FREIGHT + SHIPPING GROUP STRATEGY AND OUTLOOK MIKE HANKINSON
Slide 30: Group Strategy and Outlook
FINANCIAL + FREIGHT + SHIPPING GROUP STRATEGY AND OUTLOOK STRATEGY OUTLOOK • Enable a more accurate valuation of the group • More accurate valuation by the market of the through the unbundling and listing of Shipping on an businesses appropriate exchange • Demand for commodities globally is a key dr
Slide 31: Annexures
FINANCIAL + FREIGHT + SHIPPING ANNEXURES
Slide 32: Terminal Capacity – Utilisation as at 30 June 2017
FINANCIAL + FREIGHT + SHIPPING ANNEXURES TERMINAL CAPACITY – UTILISATION AS AT 30 JUNE 2017 Annual H1 H1 Change Total Total capacity Terminals 2017 2016 % 2016 2015 2017 Dry bulk (tonnes) 5 002 074 3 091 470 62 8 346 607 7 349 946 17 200 000 Matola Coal Terminal1 2 654 584 1 091 143 143 3 785 918 3
Slide 33: Shipping: Capesize Bulk Carriers
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING No of ships Mdwt Fleet (1 Jul 2017) 1 683 321.6 CAPESIZE BULK CARRIERS (100 000+ dwt tonnes) Total order book (1 Jul 2017) 122 31.6 Order book % of fleet 7 10 % of fleet over 25 years 1 1 Fleet growth % 2015-2017* 3 4 350 300 250 Number of ships 200
Slide 34: Shipping: Handymax Bulk Carriers
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING No of ships Mdwt Fleet (1 Jul 2017) 3 520 193.7 HANDYMAX BULK CARRIERS (40 – 64 999 dwt tonnes) Total order book (1 Jul 2017) 196 11.9 Order book % of fleet 6 6 % of fleet over 25 years 3 2 Fleet growth % 2015-2017* 13 16 500 400 Number of ships 300
Slide 35: Shipping: Handysize Bulk Carriers
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING No of ships Mdwt Fleet (1 Jul 2017) 3 344 95.3 HANDYSIZE BULK CARRIERS (10 – 39 999 dwt tonnes) Total order book (1 Jul 2017) 188 6.6 Order book % of fleet 6 7 % of fleet over 25 years 8 6 Fleet growth % 2015-2017* 1 4 500 400 Number of ships 300 200
Slide 36: Product Tanker Demand
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING PRODUCT TANKER DEMAND 16 14 12 10 8 % change 6 4 2 0 (2) (4) (6) (8) 2009 2010 2011 2012 2013 2014 2015 2016 2017e 2018e MR demand MR fleet World liquid fuel consumption e = estimate Source: Affinity (Shipping) Limited, June 2017 GRINDROD LIMITED | U
Slide 37: Shipping: Medium-Range Products Tankers
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING No of ships Mdwt Fleet (1 Jul 2017) 1 940 87.5 MEDIUM-RANGE PRODUCTS TANKERS (25 – 54 999 dwt tonnes) Total order book (1 Jul 2017) 136 6.5 Order book % of fleet 7 7 % of fleet over 25 years 4 3 Fleet growth % 2015-2017* 12 14 250 200 Number of ships
Slide 38: Shipping: Small Products and Chemical Tankers
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING No of ships Mdwt Fleet (1 Jul 2017) 616 11.2 SMALL PRODUCTS AND CHEMICAL TANKERS (15 – 19 999 dwt tonnes) Total order book (1 Jul 2017) 70 1.3 Order book % of fleet 11 11 % of fleet over 25 years 6 6 90 Fleet growth % 2015-2017* 8 8 75 60 Number of s
Slide 39: Scrapping
FINANCIAL + FREIGHT + SHIPPING ANNEXURES 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
Slide 40: Dry-Bulk Seaborne Trade
FINANCIAL + FREIGHT + SHIPPING ANNEXURES DRY-BULK SEABORNE TRADE GLOBAL SEABORNE TRADE GROWTH CAGR 2012 to 2015 CAGR 2016 to 2018f 6 000 3.6% 2.1% + 155mt per annum + 104mt per annum 5 000 4 000 Million tonnes 3 000 Global seaborne trade expanded rapidly from 2012 to 2015, adding over 155 million to
Slide 41: 2015-2017 Shipping and Commodity Price Performance
FINANCIAL + FREIGHT + SHIPPING ANNEXURES 2015-2017 SHIPPING AND COMMODITY PRICE PERFORMANCE 180 160 140 120 Index (Jan 2015 = 100) 100 80 60 40 20 0 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 Iron ore (62% CIF China) Thermal coal (FOB RBCT) Copper BDI Source: Macquarie Securities Group, Macqua
Slide 42: Dry-Bulk Daily Spot Rates (Baltic Indices)
FINANCIAL + FREIGHT + SHIPPING ANNEXURES DRY-BULK DAILY SPOT RATES (BALTIC INDICES) 50 000 2 000 1 800 40 000 1 600 1 400 Index points US$ per day 30 000 1 200 1 000 20 000 800 600 10 000 400 200 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 2017 Balt
Slide 43: South African Coal Exports
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SOUTH AFRICAN COAL EXPORTS Major SA coal destinations (excluding India) 5 4 Million tonnes 3 2 1 0 SA coal exports to India H1 2016 H1 2017 25 Million tonnes 20 15 10 5 0 H1 2016 H1 2017 Source: Afriforesight Commodities, 27 July 2017 GRINDROD LIMITED | UNAUD
Slide 44: Disclaimer
FINANCIAL + FREIGHT + SHIPPING 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 herein is believed to be correct but the accuracy thereof is not guarantee
Slide 45: Grindrod Limited
www.grindrod.com GRINDROD LIMITED FINANCIAL + FREIGHT + SHIPPING