Slide 1: Unaudited Interim Results and Dividend Announcement
UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT for the six months ended 30 June 2013
Slide 2: Geographical Profile: Freight Services
GEOGRAPHICAL PROFILE: FREIGHT SERVICES GRINDROD LIMITED | UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT
Slide 3: Geographical Profile: Trading
GEOGRAPHICAL PROFILE: TRADING GRINDROD LIMITED | UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT
Slide 4: Geographical Profile: Shipping
GEOGRAPHICAL PROFILE: SHIPPING GRINDROD LIMITED | UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT
Slide 5: Operational Highlights
OPERATIONAL HIGHLIGHTS an integrated business iene aden
Slide 6: Financial Highlights
FINANCIAL HIGHLIGHTS Headline earnings per share Gross interim ordinary dividend per share ▲ 29% to 76,2 cents ▲ 14% to 20,0 cents (H1 2012: 58,9 cents) (H1 2012: 17,5 cents) Financial Services earnings Freight Services earnings from trading activities ▲ 120% to R47,8 million ▲ 75% to R299,9 million
Slide 7: Strategic Highlights
STRATEGIC HIGHLIGHTS ● Good progress on terminal and rail expansions ● Ship purchases and charters at market lows ● Empowered the South African Industrial commodity business ● Completed South African Social Security Agency (SASSA) debit card rollout GRINDROD LIMITED | UNAUDITED INTERIM RESULTS AND D
Slide 8: Business Environment
BUSINESS ENVIRONMENT ● Industrial commodity demand continues ● Agricultural commodity competition in the local market and pricing volatility ● Ship newbuilding prices rising ● Drybulk freight rates fall while tanker freight rates improve ● Africa infrastructure development continues ● Currency volat
Slide 9: Interim Results 2013
INTERIM RESULTS 2013 an integrated business iene aden
Slide 10: Management Income Statement – H1 2013
MANAGEMENT INCOME STATEMENT – H1 2013 H1 H1 Growth R million 2013 2012 % Comments Revenue 14 711 19 658 (25) Sale of 50% of Cockett Increased volumes in terminals offset by decline Trading profit 952 782 22 in the trading business Increased capital expenditure in ships and Depreciation and amortisat
Slide 11: Headline Earnings – H1 2013
HEADLINE EARNINGS – H1 2013 H1 H1 Growth R million 2013 2012 % 2012 Profit attributable to ordinary shareholders 533 608 (12) 837 Adjusted for: (83) (261) (231) Net profit on disposals (77) (400) (455) Impairment _ 139 224 Negative goodwill (6) _ _ Headline earnings 450 347 29 606 GRINDROD LIMITED |
Slide 12: Attributable Income by Division
ATTRIBUTABLE INCOME BY DIVISION H1 2013 H1 2012 800 800 96 (121) 31 608 600 600 580 22 47 3 533 106 R million R million 400 376 1 400 415 200 200 76 0 0 Freight Trading Shipping Financial Group Total Freight Trading Shipping Financial Group Total Services Services Services Services GRINDROD LIMITED
Slide 13: Balance Sheet
BALANCE SHEET 30 June Dec Growth R million 2013 2012 % Comments Ships 4 578 3 865 18 Increase due to additions and translation Terminal infrastructure, vehicles and equipment 1 254 1 052 19 Investments in joint ventures and associates 2 801 2 181 28 Increase due to profits and translation Other non-
Slide 14: Cash Flow
CASH FLOW (746) (1 413) 0 330 (269) ( 400) (57) R million (671) ( 800) (1 200) (1 600) December 2012 Cash generated Interest/ Other investing Investments and June June 2013 from operations dividends/taxation/ activities capital expenditure forex/other GRINDROD LIMITED | UNAUDITED INTERIM RESULTS AND
Slide 15: Capital Commitments and Expenditure
CAPITAL COMMITMENTS AND EXPENDITURE Capital expenditure Capital commitments Split as follows H1 H2 Approved Approved (R million) 2013 2013 2014 2015 2016+ Total not contracted and contracted Freight Services 431 786 83 20 7 896 397 499 Ports and Terminals 188 368 20 20 - 408 391 17 Rail 85 146 23 -
Slide 16: Markets
MARKETS an integrated business iene aden
Slide 17: Drybulk Seaborne Trade Growth
DRYBULK SEABORNE TRADE GROWTH 6 000 Global seaborne trade CAGR 5,2% exceeded 4bn tonnes in 2012 Seaborne trade will continue to grow by an average of 5,2% annually between 2012 and 4 000 2015 Million tonnes Contribution to growth by commodity 2 000 36% 36% 7% 21% 0 2009 2010 2011 2012 2013f 2014f 20
Slide 18: Shipping: Capesize Bulk Carriers
SHIPPING Capesize bulk carriers 300 No of Capesize ships mDwt 250 Fleet (1 July 2013) 1 538 287,4 Order book (1 July 2013) 240 46,6 200 Order book percentage of fleet 16% 16% Number of ships % of fleet over 25 years 1% 1% % non-delivery in 2011* 25% 28% 150 % non-delivery in 2012* 30% 30% % non-deli
Slide 19: Shipping: Handysize Bulk Carriers
SHIPPING Handysize bulk carriers 800 No of Handysize ships mDwt Fleet (1 July 2013) 3 020 85,2 600 Order book (1 July 2013) 375 12,1 Order book percentage of fleet 12% 14% Number of ships % of fleet over 25 years 22% 21% % non-delivery in 2011* 42% 42% 400 % non-delivery in 2012* 24% 25% % non-deliv
Slide 20: Shipping: Medium-Range Products Tankers
SHIPPING Medium-range products tankers 180 No of Medium-range ships mDwt 150 Fleet (1 July 2013) 1 642 71,9 Order book (1 July 2013) 211 10,3 120 Order book percentage of fleet 13% 14% Number of ships % of fleet over 25 years 5% 4% % non-delivery in 2011* 58% 59% 90 % non-delivery in 2012* 50% 50% %
Slide 21: Shipping: Small Chemical and Products Tankers
SHIPPING Small chemical and products tankers 90 No of Small chemical and products ships mDwt 75 Fleet (1 July 2013) 597 10,8 Order book (1 July 2013) 25 0,5 60 Order book percentage of fleet 4% 4% Number of ships % of fleet over 25 years 10% 10% % non-delivery in 2011* 57% 57% 45 % non-delivery in 2
Slide 22: Freight Services
DIVISIONAL OVERVIEW FREIGHT SERVICES
Slide 23: Freight Services
FREIGHT SERVICES ● Earnings from trading activities increased by 75% to R299,9 million (H1 2012: R171,7 million) ● Ports, Terminals and Rail earnings from trading activities up 81% to R250,5 million (H1 2012: R138,8 million) ● Logistics earnings from trading activities up 50% to R49,4 million (H1 20
Slide 24: Operational Highlights – Ports, Terminals and Rail
OPERATIONAL HIGHLIGHTS – PORTS, TERMINALS AND RAIL ● Maputo coal terminal Phase 3,5 expansion project commissioned in July 2013 increasing capacity by additional 1,3 million tonnes ● Maputo drybulk terminals impacted by a 60-day closure on the Ressano Garcia line, resulting in 1,2 million tonnes los
Slide 25: Operational Highlights – Logistics
OPERATIONAL HIGHLIGHTS – LOGISTICS ● Mineral volumes handled at Intermodal increased by 30% to 434 867 tonnes ● Strong operating margins from the Clearing and Forwarding business, with volumes substantially up on prior year ● Petrologistics performance in Botswana exceeded expectations ● Restructuri
Slide 26: Strategy and Outlook
STRATEGY AND OUTLOOK STRATEGY ● Driving product mix in the Maputo terminals in favour of magnetite, supported by iron ore market fundamentals ● Execution of the Maputo port master plan, and expansion of capacity at Maputo terminal and Richards Bay drybulk terminal, in conjunction with RBT Resources,
Slide 27: Strategy and Outlook: Outlook
STRATEGY AND OUTLOOK OUTLOOK ● Port and Terminals volumes are expected to increase, sustained by continued seaborne demand ● Rail business to benefit from initiatives targeted at the strong growth within the sector showing exciting growth opportunities ● Robust demand in Botswana, Mozambique and Nam
Slide 28: Trading
DIVISIONAL OVERVIEW TRADING
Slide 29: Trading
TRADING ● H1 2013 revenue and earnings generated R10,3 billion and R0,7 million respectively (H1 2012: R15,5 billion and R96,2 million respectively) ● Good results from the Marine Fuels, Industrial commodity and Coal trading businesses ● Poor result from the Agricultural businesses Change from H1 20
Slide 30: Operational Highlights
OPERATIONAL HIGHLIGHTS ● Volume growth in the Marine Fuels business ● Additional barge and physical storage added to the Thames Marine Fuels business ● Sold 75% of the Industrial commodities business to a black-owned company represented by Mr Moyikwa Sisulu ● Acquisition of agriprocessing assets in
Slide 31: Strategy and Outlook
STRATEGY AND OUTLOOK STRATEGY ● Focus on utilisation of group assets, services and resources providing an integrated service offering ● Investment in strategic assets in the supply chain OUTLOOK ● The Marine Fuels business is expected to perform reasonably well as it grows its business in difficult
Slide 32: Shipping
DIVISIONAL OVERVIEW SHIPPING
Slide 33: Shipping
SHIPPING ● Profit of R106,2 million is a significant improvement on the R121,1 million loss in the first half of 2012 ● Average earnings per day outperformed average spot market rates for the period across all sectors Change from H1 2012 Shipping R million % Revenue 1 914 (14) EBITDA 287 82 Operatin
Slide 34: Operational Highlights
OPERATIONAL HIGHLIGHTS ● Commenced commercial and technical management of handysize bulk carriers fleet ● Exit from panamax drybulk sector ● Settlement negotiated for cancellation of long-term chartered chemical tankers ● Drybulk and Tanker operations performed well ● Orders placed for the acquisiti
Slide 35: Strategy and Outlook
STRATEGY AND OUTLOOK STRATEGY ● Carefully timed expansion through purchase or long-term charter of eco fuel efficient vessels ● Expand fleet under commercial management OUTLOOK ● Owned and long-term chartered fleet has a reasonable level of cover ● Newbuilding prices and rates show signs of increasi
Slide 36: Financial Services
DIVISIONAL OVERVIEW FINANCIAL SERVICES
Slide 37: Financial Services
FINANCIAL SERVICES ● Earnings increased 120% to R47,8 million (H1 2012: R21,7 million) ● Assets under management up 12% to R12,3 billion (December 2012: R11,0 billion) ● Total funding (excluding SASSA deposits) at R4,1 billion (December 2012: R3,6 billion) ● Bank advances grew 13,1% to R3,6 billion
Slide 38: Operational Highlights
OPERATIONAL HIGHLIGHTS ● Rollout of South African Social Security Agency (SASSA) bank debit cards which commenced in April 2012 with 9,7 million cards in issue as at June 2013 ● Expansion of Private Equity initiatives into UK Property Private Equity Fund ● Launch of Exchange Traded Fund product rang
Slide 39: Strategy and Outlook
STRATEGY AND OUTLOOK STRATEGY ● Continue with focused expansion ● Develop business around the retail card offering ● Pursue growth in assets under management on the back of good investment performance ● Focus on well secured loans with low risk of default and maintaining a good interest margin OUTLO
Slide 40: Transformation
TRANSFORMATION an integrated business iene aden
Slide 41: Transformation
TRANSFORMATION ● Grindrod South Africa has a level 2 B-BBEE certification › Mkhuseli Faku through the Calulo Group is invested in the South African Terminal, Logistics and Shipping businesses › Ted Zulu through Solethu is invested in the Rail businesses ● Adopt-a-School Foundation is an equity owner
Slide 42: Group Strategy and Outlook
GROUP STRATEGY AND OUTLOOK an integrated business iene aden
Slide 43: Group Strategy and Outlook
GROUP STRATEGY AND OUTLOOK STRATEGY ● To deliver on the integrated freight, trading and shipping strategy and invest in infrastructure opportunities with high barriers to entry OUTLOOK ● Well positioned to take advantage of an improvement in the global economy ● Well developed pipeline of strategic
Slide 44: Annexures
ANNEXURES an integrated business iene aden
Slide 45: Terminal Capacity
TERMINAL CAPACITY Utilisation Annual Annual plus Annual % capacity capacity under capacity Terminals H1 2013 H1 2012 change 2013 construction 2012 Drybulk (tonnes) 5 188 829 5 490 011 (5) 15 850 000 18 100 000 15 350 000 Maputo coal terminal 1 452 092 2 115 347 (31) 6 000 000 7 300 000 6 000 000 Ric
Slide 46: Auto Industry Sector – South Africa
AUTO INDUSTRY SECTOR – SOUTH AFRICA 800 000 600 000 Vehicle units 400 000 200 000 0 2006 2007 2008 2009 2010 2011 2012 2013f 2014f 2015f 2016f South Africa: Vehicle imports, units South Africa: Vehicle exports, units (includes M&HCV's) South Africa: Vehicle production South Africa: Domestic sales f
Slide 47: Drybulk Daily Spot Rates (Baltic Indices)
DRYBULK DAILY SPOT RATES (BALTIC INDICES) 50 000 3 500 3 000 40 000 2 500 Index points 30 000 2 000 US$ per day 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* 2010 2011 2012 2013 Baltic Capesize Index ave TC Baltic Panamax Index ave TC Baltic Supramax Index ave TC Ba
Slide 48: Handysize Bulk Carrier and Products Tanker Time Charter Rates
HANDYSIZE BULK CARRIER AND PRODUCTS TANKER TIME CHARTER RATES 50 000 40 000 30 000 US$ per day 20 000 10 000 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2006 2007 2008 2009 2010 2011 2012 2013 One year time charter rate 47k-48k modern products tanke
Slide 49: Seaborne Bulk Trade
SEABORNE BULK TRADE Source: Braemar Seascope, 19 July 2013 GRINDROD LIMITED | UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT
Slide 50: Seaborne Iron Ore Imports (Long-Term Outlook)
SEABORNE IRON ORE IMPORTS (LONG-TERM OUTLOOK) 1 800 1 500 1 200 Million tonnes 900 600 300 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 China Rest of world Source: Braemar Seascope, 17 July 2013 GRINDROD LIMITED | UNAUDITED INTERIM RESULT
Slide 51: 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 2 600 3 200 1 300 10 900 17 100 28 000 2011 5 300 2 200 5 200 10 500 1 400 800 25 400 17 200 42 600 2012 8 100 4 6
Slide 52: Research Disclaimer
RESEARCH DISCLAIMER The information supplied herewith is believed to be correct but the accuracy thereof is not guaranteed and the company and its employees and information sources cannot accept liability for loss suffered in consequence of reliance on the information provided. Provision of this dat