Slide 1: Grindrod Limited Audited results for the year ended 31 December 2017
FINANCIAL + FREIGHT + SHIPPING www.grindrod.com Grindrod Limited Audited results for the year ended 31 December 2017 Wifi access | guest@sun Presentation and Announcement download | www.grindrod.com > Investor relations
Slide 2: Highlights: Financial and Business Environment
FINANCIAL + FREIGHT + SHIPPING HIGHLIGHTS FINANCIAL AND BUSINESS ENVIRONMENT Mike Hankinson
Slide 3: Highlights: Strategic - Grindrod and Shipping
FINANCIAL + FREIGHT + SHIPPING HIGHLIGHTS STRATEGIC Grindrod • Over a century of entrepreneurial growth • Developed into three distinct businesses • Strategy execution in progress Shipping • All regulatory processes are well progressed • Proposed Nasdaq listing with inward listing on the JSE • Share
Slide 4: Highlights: Strategic - Freight and Financial Services
FINANCIAL + FREIGHT + SHIPPING HIGHLIGHTS STRATEGIC Freight Services • Restructure work is nearing completion and gaining traction • Reviewing opportunities to increase scale in line with strategy Financial Services • Continued organic growth across the portfolio • Opportunities to further scale the
Slide 5: Highlights: Business Environment
FINANCIAL + FREIGHT + SHIPPING HIGHLIGHTS BUSINESS ENVIRONMENT • Global output estimated to grow by 3.7% in 2017 • China’s economic growth is projected at 6.8% for 2017 • US and Eurozone economic growth is projected to be moderate at 2.3% in 2017 • South African economic growth is projected to be po
Slide 6: Financial Performance from Continuing Operations
FINANCIAL + FREIGHT + SHIPPING HIGHLIGHTS FINANCIAL PERFORMANCE FROM CONTINUING OPERATIONS – FREIGHT AND FINANCIAL SERVICES • Revenue inclusive of joint ventures up 14% to R21 275.9 million (2016: R18 660.1 million) • EBITDA inclusive of joint ventures up 45% to R953.6 million (2016: R658.9 million)
Slide 7: Financial Performance of Shipping - To Be Separately Listed
FINANCIAL + FREIGHT + SHIPPING HIGHLIGHTS FINANCIAL PERFORMANCE OF SHIPPING – TO BE SEPARATELY LISTED • Headline loss from shipping R202.6 million (headline loss 2016: R569.6 million) • Net asset value of shipping business to be separately listed $320 million, approximates fair value PERFORMANCE FRO
Slide 8: Results 2017
FINANCIAL + FREIGHT + SHIPPING RESULTS 2017 Andrew Waller
Slide 9: Management Income Statement - Continuing Operations
FINANCIAL + FREIGHT + SHIPPING RESULTS 2017 MANAGEMENT INCOME STATEMENT – CONTINUING OPERATIONS R million 2017 2016 Comments Increase in bunker fuels revenue due to Revenue 21 276 18 660 crude oil price Improved terminals utilisation, reduced Trading profit 954 659 losses in bunker fuels business an
Slide 10: Headline Profit by Segment - Continuing Operations
FINANCIAL + FREIGHT + SHIPPING RESULTS 2017 HEADLINE PROFIT BY SEGMENT - CONTINUING OPERATIONS 2017 2016 700 350 598 290 39 141 * 600 300 189 250 500 200 400 95 R million R million 57 171 150 82 300 94 100 194 200 50 100 - (174) - (50) Ports and Logistics Marine Financial Group Total Ports and Logis
Slide 11: Management Income Statement - Discontinued Operations
FINANCIAL + FREIGHT + SHIPPING RESULTS 2017 MANAGEMENT INCOME STATEMENT – DISCONTINUED OPERATIONS R million 2017 2016 Comments Improved shipping rates, offset by no Revenue 5 876 6 270 orders in the rail assembly business Trading results Shipping 223 (5) Improved rates Rail 59 (1) Rail adjustment *
Slide 12: Management Balance Sheet
FINANCIAL + FREIGHT + SHIPPING RESULTS 2017 MANAGEMENT BALANCE SHEET R million 2017 2016 Comments Property, plant and equipment 2 769 9 792 Port and Terminals 1 086 1 092 Logistics 817 769 Marine Fuels and Agri 46 69 Financial Services 195 200 Group 625 658 Discontinued operations - 7 004 Shipping b
Slide 13: Net Debt Analysis
FINANCIAL + FREIGHT + SHIPPING RESULTS 2017 NET DEBT ANALYSIS 400 689 300 200 100 (130) (76) 516 0 R million (7) (100) (200) (300) (389) (400) (373) (500) (223) (22) (600) Dec 2016 Cash NCA cash Interest/ Investments Financial Loans to joint Proceeds on Dec 2017 generated utilised in dividends/ and
Slide 14: Operational Overview: Freight Services
FINANCIAL + FREIGHT + SHIPPING OPERATIONAL OVERVIEW FREIGHT SERVICES Bongiwe Ntuli
Slide 15: Freight Services - Port and Terminals Operational Highlights (Maputo)
FINANCIAL + FREIGHT + SHIPPING FREIGHT SERVICES – PORT AND TERMINALS OPERATIONAL HIGHLIGHTS Maputo Port and Matola Terminal: • Maputo Port access channel dredge from 11 metres depth to 14.2 metres sailing draft enabled loading of vessels to full capacity • Volume loaded per vessel increased by 40% a
Slide 16: Freight Services - Port and Terminals Operational Highlights (Richards Bay, Liquid)
FINANCIAL + FREIGHT + SHIPPING FREIGHT SERVICES – PORT AND TERMINALS OPERATIONAL HIGHLIGHTS Richards Bay terminals: • The export coal volumes of 1.8 million tonnes was up 6% on prior year • Work with Transnet to optimise the corridor is progressing well Liquid terminals: • Durban tank conversion for
Slide 17: Freight Services - Logistics Operational Highlights
FINANCIAL + FREIGHT + SHIPPING FREIGHT SERVICES – LOGISTICS OPERATIONAL HIGHLIGHTS • Execution of the Syrah graphite logistics contract is underway with volumes handled already by our Agency business and the construction of the cross-docking facility in the existing Grindrod managed Nacala intermoda
Slide 18: Freight Services - Rail Operational Highlights
FINANCIAL + FREIGHT + SHIPPING FREIGHT SERVICES – RAIL OPERATIONAL HIGHLIGHTS Rail operations: • Increased volumes on the north-south corridor driven by demand from the central African copper belt • Zambian government’s special instrument expected to improve volumes further • High levels of utilisat
Slide 19: Freight Services Activity and Outlook
FINANCIAL + FREIGHT + SHIPPING FREIGHT SERVICES ACTIVITY AND OUTLOOK ACTIVITY OUTLOOK • Port to progress the execution of the Port masterplan • Maputo port volumes are firm and port attractiveness including the improvement in efficiencies for shipping improved following the investments and sustained
Slide 20: Operational Overview: Shipping
FINANCIAL + FREIGHT + SHIPPING OPERATIONAL OVERVIEW SHIPPING Martyn Wade
Slide 21: Shipping Activity
FINANCIAL + FREIGHT + SHIPPING SHIPPING ACTIVITY • Dry-bulk fleet back to profits in Q4, as rates lift from historic lows in 2016 • Tanker fleet earnings, as expected, lower than 2016. Earnings marginally below breakeven • Ship-operating businesses profits declining as dry-bulk rates lift • Fleet mo
Slide 22: Shipping Strategy
FINANCIAL + FREIGHT + SHIPPING SHIPPING STRATEGY • Spin off Shipping and proposed listing on the Nasdaq with inward listing on the JSE • Retain the sector and size focus in which IVS and Unicorn have expertise • Facilitate consolidation within these sectors • Consider equity raise for increased flee
Slide 23: Shipping Outlook
FINANCIAL + FREIGHT + SHIPPING SHIPPING OUTLOOK • Dry-bulk fleet now at a balanced position with further improvements expected • Tankers remain at current levels for the remainder of 2018 following the high first half 2017 deliveries • Ship-operating result expected to remain at profitable levels de
Slide 24: Operational Overview: Financial Services
FINANCIAL + FREIGHT + SHIPPING OPERATIONAL OVERVIEW FINANCIAL SERVICES David Polkinghorne
Slide 25: Financial Services Historical Performance
FINANCIAL + FREIGHT + SHIPPING FINANCIAL SERVICES HISTORICAL PERFORMANCE 250 Net Profit after tax Advances and Deposits 9 000 8 000 200 7 000 150 6 000 Millions Millions 5 000 100 4 000 3 000 50 2 000 1 000 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2006 2007 2008 2009 2010 2011
Slide 26: Financial Services Operational Highlights
FINANCIAL + FREIGHT + SHIPPING FINANCIAL SERVICES OPERATIONAL HIGHLIGHTS • Continued growth in the Bank • Private equity investment portfolio continues to grow • Retail SASSA grant payments continue to be efficiently managed • Core deposits grew 13.1% (R7.84 billion from December 2016: R6.94 billion
Slide 27: Financial Services Activity and Outlook
FINANCIAL + FREIGHT + SHIPPING FINANCIAL SERVICES ACTIVITY AND OUTLOOK ACTIVITY OUTLOOK • Drive focused business growth • Steady organic growth expected • Pursue growth in assets under management indirectly through CoreShares and Bridge Fund • Volatile stock market could impact asset Managers manage
Slide 28: Group Strategy and Outlook
FINANCIAL + FREIGHT + SHIPPING GROUP STRATEGY AND OUTLOOK Mike Hankinson
Slide 29: Group Outlook
FINANCIAL + FREIGHT + SHIPPING GROUP OUTLOOK • Demand for commodities globally is a key driver of both the Freight and Shipping businesses • Improving dry-bulk shipping rates will have a material impact on the Shipping business’s profitability • Well positioned to take advantage of an improvement in
Slide 30: Annexures
FINANCIAL + FREIGHT + SHIPPING ANNEXURES
Slide 31: Non-Current Assets Held for Sale
FINANCIAL + FREIGHT + SHIPPING ANNEXURES NON-CURRENT ASSETS HELD FOR SALE 2017 2017 R million Shipping Rail 2017 2016 Analysis of 2017 balances Ships and leased Property, ships plant and equipment 5 307 935 6 242 257 locomotives Goodwill on coastal shipping Intangible assets 102 3 105 3 business Inv
Slide 32: Terminal Capacity - Utilisation as at December 2017
FINANCIAL + FREIGHT + SHIPPING ANNEXURES TERMINAL CAPACITY – UTILISATION AS AT 31 DECEMBER 2017 Annual H1 H2 Change Total Total Change capacity Terminals 2017 2017 % 2017 2016 % 2017 Dry bulk (tonnes) 5 002 074 5 213 846 4 10 215 920 8 346 607 22 15 150 000 Matola Coal Terminal1 2 654 584 2 548 635
Slide 33: Shipping: Capesize Bulk Carriers
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING No of ships Mdwt Fleet (1 Jan 2018) 1 692 323.7 CAPESIZE BULK CARRIERS (100 000+ dwt tonnes) Total order book (1 Jan 2018) 165 43.1 Order book % of fleet 10 13 % of fleet over 25 years 1 1 Fleet growth % 2016-2018* 4 5 350 300 250 Number of ships 200
Slide 34: Shipping: Handymax Bulk Carriers
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING No of ships Mdwt Fleet (1 Jan 2018) 3 553 196.0 HANDYMAX BULK CARRIERS (40 – 64 999 dwt tonnes) Total order book (1 Jan 2018) 178 10.8 Order book % of fleet 5 6 % of fleet over 25 years 2 2 Fleet growth % 2016-2018* 7 9 500 400 Number of ships 300 20
Slide 35: Shipping: Handysize Bulk Carriers
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING No of ships Mdwt Fleet (1 Jan 2018) 3 361 95.9 HANDYSIZE BULK CARRIERS (10 – 39 999 dwt tonnes) Total order book (1 Jan 2018) 174 5.9 Order book % of fleet 5 6 % of fleet over 25 years 7 6 Fleet growth % 2016-2018* 1 3 500 400 Number of ships 300 200
Slide 36: Shipping: Medium-Range Products Tankers
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING No of ships Mdwt Fleet (1 Jan 2018) 1 959 88.3 MEDIUM-RANGE PRODUCTS TANKERS (25 – 54 999 dwt tonnes) Total order book (1 Jan 2018) 156 7.5 Order book % of fleet 8 9 % of fleet over 25 years 3 3 Fleet growth % 2016-2018* 7 8 250 200 Number of ships 1
Slide 37: Shipping: Small Products and Chemical Tankers
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SHIPPING No of ships Mdwt Fleet (1 Jan 2018) 616 11.2 SMALL PRODUCTS AND CHEMICAL TANKERS (15 – 19 999 dwt tonnes) Total order book (1 Jan 2018) 66 1.2 Order book % of fleet 11 11 % of fleet over 25 years 6 6 90 Fleet growth % 2016-2018* 6 6 75 60 Number of s
Slide 38: 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 39: Dry-Bulk Seaborne Trade
FINANCIAL + FREIGHT + SHIPPING ANNEXURES DRY-BULK SEABORNE TRADE GLOBAL SEABORNE TRADE GROWTH CAGR 2012 to 2016 CAGR 2017 to 2019f 6 000 4.6% 1.4% + 121mt per annum + 69mt per annum 5 000 4 000 Million tonnes 3 000 Global seaborne trade expanded rapidly from 2012 to 2016, adding over 121 million ton
Slide 40: 2015-2017 Shipping and Commodity Price Performance
FINANCIAL + FREIGHT + SHIPPING ANNEXURES 2015-2017 SHIPPING AND COMMODITY PRICE PERFORMANCE 250 200 Index (Jan 15 = 100) 150 100 50 0 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17 Apr 17 Jul 17 Oct 17 Jan 18 Thermal Coal (FOB RBCT) Iron Ore (62% CIF China) Copper BDI Index Source: M
Slide 41: 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 Q3 Q4 2012 2013 2014 2015 2016 201
Slide 42: South African Coal Exports
FINANCIAL + FREIGHT + SHIPPING ANNEXURES SOUTH AFRICAN COAL EXPORTS South African Coal Exports mnt excluding India 10 9 8 7 6 5 4 3 South African Coal Exports to India 2 mnt 1 40 - 38 36 34 2016 2017 32 30 2016 2017 Source: Afriforesight Commodities, March 2018 GRINDROD LIMITED | AUDITED RESULTS AND
Slide 43: 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 44: Grindrod Limited
www.grindrod.com GRINDROD LIMITED FINANCIAL + FREIGHT + SHIPPING