Wrap Text
Unaudtied interim results and dividend announcment for the six months ended 30 June 2013
GRINDROD LIMITED
Registration number: 1966/009846/06
Incorporated in the Republic of South Africa
Share code: GND & GNDP
ISIN: ZAE000072328 & ZAE000071106
UNAUDTIED INTERIM RESULTS AND DIVIDEND ANNOUNCMENT FOR THE SIX MONTHS ENDED 30 JUNE 2013
FEATURES
- Headline earnings per share increased 29% to 76,2 cents (H1 2012: 58,9 cents)
- Earnings per share decreased 12% to 90,2 cents (H1 2012: 103,1 cents), largely due to the profit of R414,9 million
on sale of 35% of the Maputo coal terminal in the prior period
- Gross interim ordinary dividend per share increased 14% to 20,0 cents (H1 2012: 17,5 cents)
- Freight Services earnings from trading activities increased 75% to R299,9 million (H1 2012: R171,7 million)
- Financial Services earnings increased 120% to R47,8 million (H1 2012: R21,7 million)
CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2013
Unaudited Unaudited Audited 30 June 30 June 31 December
2013 2012# 2012*
R000 R000 R000
Revenue 6 980 782 18 785 950 27 262 223
Earnings before interest, taxation, depreciation and amortisation 535 360 546 705 929 904
Depreciation and amortisation (218 356) (196 714) (412 430)
Operating profit before interest and taxation 317 004 349 991 517 474
Non-trading items 83 964 239 318 199 689
Interest received 75 497 100 816 206 941
Interest paid (119 164) (119 425) (227 398)
Profit before share of joint venture and associate companies' profit 357 301 570 700 696 706
Share of joint venture companies' profit after taxation 294 423 189 263 340 029
Share of associate companies' profit after taxation 10 648 5 843 9 385
Profit before taxation 662 372 765 806 1 046 120
Taxation (76 184) (124 833) (140 828)
Profit for the period 586 188 640 973 905 292
Attributable to:
Ordinary shareholders 533 197 608 439 836 745
Preference shareholders 27 450 29 223 57 297
Owners of the parent 560 647 637 662 894 042
Non-controlling interests 25 541 3 311 11 250
586 188 640 973 905 292
Exchange rates (R/US$)
Opening exchange rate 8,48 8,11 8,11
Closing exchange rate 9,93 8,34 8,48
Average exchange rate 9,23 7,95 8,22
Unaudited Unaudited Audited
30 June 30 June 31 December
2013 2012# Change 2012*#
R000 R000 % R000
Reconciliation of headline earnings
Profit attributable to ordinary shareholders 533 197 608 439 (12) 836 745
Adjusted for: (82 703) (260 709) (231 117)
Impairment of goodwill - - 21 045
Impairment of other investments - 8 274 11 208
Impairment of ships, plant, intangibles and equipment - 116 686 178 648
Net profit on disposal of investments (83 006) (386 668) (410 245)
Net (profit)/loss on disposal of plant and equipment (952) 1 012 2 023
FCTR adjustment on disposal of investment (6) (13 853) (33 965)
Joint ventures:
Negative goodwill realised (5 920) - -
Net profit on disposal of plant and equipment (53) - -
Impairment of ships, plant and equipment - 13 840 20 305
Total taxation effects of adjustments 7 234 - (20 136)
Headline earnings 450 494 347 730 29 605 628
Ordinary share performance
Number of shares in issue less treasury shares (000's) 590 986 590 336 590 486
Weighted average number of shares (basic) (000's) 590 870 590 081 590 097
Diluted weighted average number of shares (000's) 593 519 590 465 592 728
Earnings per share (cents)
Basic 90,2 103,1 (12) 141,8
Diluted 89,8 103,0 141,2
Headline earnings per share (cents)
Basic 76,2 58,9 29 102,6
Diluted 75,9 58,9 102,2
Dividends per share (cents) 20,0 17,5 32,9
Interim 20,0 17,5 14 17,5
Final - - 15,4
Dividend cover (times) 4,5 5,9 4,4
* Restated due to the application of IAS 19 Employee Benefits, as amended.
# Restated due to compliance with the Headline Earnings Circular 2/2013.
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2013
Unaudited Unaudited Audited
30 June 30 June 31 December
2013 2012 2012*
R000 R000 R000
Profit for the period 586 188 640 973 905 292
Other comprehensive income
Exchange differences on translating foreign operations 1 200 000 162 936 263 750
Cash flow hedges (523) (3 375) (7 204)
Business combination release - - 5 998
Actuarial gains - - 16 521
Fair value loss arising on available-for-sale instruments (25 029) - (25 000)
Total comprehensive income for the period 1 760 636 800 534 1 159 357
Total comprehensive income attributable to:
Owners of the parent 1 727 324 790 744 1 145 519
Non-controlling interest 33 312 9 790 13 838
1 760 636 800 534 1 159 357
*Restated due to the application of IAS 19 Employee Benefits, as amended.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013
Unaudited Unaudited Audited
30 June 30 June 31 December
2013 2012 2012
R000 R000 R000
Ships, property, terminals, vehicles and equipment 6 382 383 5 396 345 5 443 757
Investment property 122 785 26 526 33 826
Intangible assets 815 872 651 922 679 643
Investments in associates 566 745 69 319 512 646
Investments in joint ventures 2 234 742 1 537 893 1 668 233
Deferred taxation 109 058 61 007 107 435
Other investments and derivative financial assets 314 894 367 566 325 888
Recoverables on cancelled ships 222 545 374 267 379 050
Total non-current assets 10 769 024 8 484 845 9 150 478
Loans and advances to bank customers 3 606 323 2 413 115 3 188 454
Liquid assets and short-term negotiable securities 432 505 200 971 626 378
Short-term loans 638 888 872 301 518 819
Bank balances and cash 3 146 578 3 810 059 4 226 367
Other current assets 4 576 329 4 065 097 4 089 390
Non-current assets held for sale 277 916 72 607 273 615
Total assets 23 447 563 19 918 995 22 073 501
Shareholders' equity 11 733 480 9 913 596 10 114 356
Non-controlling interests 123 984 99 668 126 533
Total equity 11 857 464 10 013 264 10 240 889
Interest-bearing borrowings 1 998 180 2 061 375 2 028 392
Financial services funding instruments 881 903 325 733 813 947
Deferred taxation 152 985 153 098 147 004
Other non-current liabilities 154 357 87 477 108 037
Total non-current liabilities 3 187 425 2 627 683 3 097 380
Deposits from bank customers 3 816 019 3 901 667 4 661 346
Current interest-bearing borrowings 2 521 976 1 834 915 1 987 398
Financial services funding instruments 241 979 - 193 519
Other liabilities 1 707 058 1 541 466 1 741 914
Non-current liabilities associated with
assets held for sale 115 642 - 151 055
Total equity and liabilities 23 447 563 19 918 995 22 073 501
Net worth per ordinary share - at book value (cents) 1 860 1 554 1 609
Net debt:equity ratio 0,12:1 0,05:1 0,07:1
Capital expenditure 671 442 322 018 1 209 563
Capital commitments 1 421 000 1 755 000 647 324
Authorised by directors and contracted for 1 014 000 1 574 000 185 857
Due within one year 535 000 1 469 000 185 857
Due thereafter 479 000 105 000 -
Authorised by directors, not yet contracted for 407 000 181 000 461 467
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2013
Unaudited Unaudited Audited
30 June 30 June 31 December
2013 2012 2012
R000 R000 R000
Operating profit before working capital changes 388 486 451 654 890 190
Working capital changes (58 809) 438 976 532 465
Cash generated from operations 329 677 890 630 1 422 655
Net interest (paid)/received (43 667) 25 108 (20 457)
Net dividends paid (120 053) (62 355) (215 472)
Taxation paid (77 084) (43 079) (101 985)
88 873 810 304 1 084 741
Net bank advances to customers and other short-term negotiables (1 069 323) 555 896 667 876
Net cash flows (utilised in)/generated from operating activities before ships sales and purchases (980 450) 1 366 200 1 752 617
Refund on ships under construction cancelled 205 718 16 290 16 846
Capital expenditure on ships (182 937) (148 686) (242 372)
Net cash flows (utilised in)/generated from operating activities (957 669) 1 233 804 1 527 091
Acquisition of property, terminals, vehicles and equipment (468 980) (167 298) (949 300)
Disposal/(acquisition) of other investments 9 521 (143 120) (95 046)
Proceeds from disposal of property, terminals, vehicles, equipment and investments 121 268 568 448 499 936
Intangible assets acquired (19 525) (6 035) (17 891)
Proceeds from disposal of intangible assets - 3 180 -
Loans advanced to/(from) joint venture and associate companies 47 733 - (73 186)
Acquisition of joint ventures - (321 492) -
Net cash flows utilised in investing activities (309 983) (66 317) (635 487)
Repurchase of ordinary share capital 6 255 5 900 7 839
Proceeds from disposal of treasury shares - - 2 989
Long-term interest-bearing debt raised 365 784 542 448 1 432 603
Payment of capital portion of long-term
interest-bearing debt (541 325) (521 161) (834 015)
Short-term interest-bearing debt raised/(repaid) 226 350 (362 046) (126 514)
Net cash flows generated from/(utilised in) financing activities 57 064 (334 859) 482 902
Net (decrease)/increase in cash and cash equivalents (1 210 588) 832 628 1 374 506
Cash and cash equivalents at beginning of the period 4 250 250 2 901 050 2 901 050
Difference arising on translation 19 032 (15 731) (25 306)
Cash and cash equivalents at end of the period 3 058 694 3 717 947 4 250 250
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2013
Unaudited Unaudited Audited
30 June 30 June 31 December
2013 2012 2012*
R000 R000 R000
Share capital and share premium 2 031 510 2 020 387 2 025 255
Balance at beginning of the period 2 025 255 2 014 427 2 014 427
Share options exercised 6 255 5 960 7 839
Treasury shares sold - - 2 989
Preference share capital 2 2 2
Balance at beginning of the period 2 2 2
Equity compensation reserve 46 251 38 087 42 126
Balance at beginning of the period 42 126 37 947 37 947
Share-based payments 4 125 140 4 179
Foreign currency translation reserve 2 201 207 900 555 1 005 260
Balance at beginning of the period 1 005 260 744 098 744 098
Foreign currency translation adjustments 1 195 947 156 457 261 162
Other non-distributable reserves (67 235) (15 134) (37 965)
Balance at beginning of the period (37 965) (11 759) (11 759)
Fair value adjustment of available-for-sale financial instrument (25 029) - (25 000)
Foreign currency translation adjustments (3 718) - -
Cash flow hedge (523) (3 375) (7 204)
Business combination release - - 5 998
Movement in accumulated profit 7 521 745 6 969 699 7 079 678
Balance at beginning of the period 7 079 678 6 432 054 6 432 054
Business acquisitions/(disposals) - - (31 160)
Actuarial gains - - 16 521
Profit for the period 560 647 637 662 894 042
Ordinary dividends paid (91 130) (70 794) (174 482)
Preference dividends paid (27 450) (29 223) (57 297)
Total interest of shareholders of the company 11 733 480 9 913 596 10 114 356
Equity attributable to non-controlling interests of the company 123 984 99 668 126 533
Balance at beginning of the period 126 533 94 336 94 336
Foreign currency translation adjustments 7 771 6 479 2 588
Business acquisitions/(disposals) (34 000) - 23 397
Non-controlling interest disposed - - 2 849
Profit for the period 25 541 3 311 11 250
Dividends paid (1 861) (4 458) (7 887)
Total equity attributable to shareholders of the company 11 857 464 10 013 264 10 240 889
* Restated due to the application of IAS 19 Employee Benefits, as amended.
SEGMENTAL ANALYSIS FOR THE SIX MONTHS ENDED 30 JUNE 2013
Unaudited Unaudited Audited
30 June 30 June 31 December
2013 2012 2012*
R000 R000 R000
Revenue
Freight Services 2 375 855 1 853 166 3 929 411
Trading 10 263 220 15 496 462 27 074 222
Shipping 1 914 174 2 213 782 4 009 832
Financial Services 155 917 94 331 252 686
Group 1 358 322 911
4 710 524 19 658 063 35 267 062
Segmental adjustments# (7 729 742) (872 113) (8 004 839)
6 980 782 8 785 950 27 262 223
Earnings before interest, taxation, depreciation and amortisation
Freight Services 577 581 358 112 730 048
Trading 32 908 197 380 258 660
Shipping 287 239 158 289 311 759
Financial Services 80 093 43 998 127 702
Group (10 543) 6 101 (37 925)
967 278 763 880 1 390 244
Segmental adjustments# (431 918) (217 175) (460 340)
535 360 546 705 929 904
Operating profit/(loss) before interest and taxation
Freight Services 463 200 252 613 510 137
Trading 24 618 188 699 241 815
Shipping 137 228 46 951 68 523
Financial Services 79 054 43 432 126 380
Group (12 514) 4 596 (41 557)
691 586 536 291 905 298
Segmental adjustments# (374 582) (186 300) (387 824)
317 004 349 991 517 474
Share of associate companies' profit/(loss) after taxation
Freight Services 12 031 5 843 10 200
Trading (1 383) - (815)
10 648 5 843 9 385
Profit/(loss) attributable to ordinary shareholders
Freight Services 375 694 580 225 793 540
Trading 711 96 172 113 546
Shipping 106 166 (121 061) (167 284)
Financial Services 47 843 21 727 65 145
Group 2 783 31 376 31 798
533 197 608 439 836 745
* Restated due to the application of IAS 19 Employee Benefits, as amended.
# Joint venture earnings are reviewed together with subsidiaries by the key decision-maker. Segmental adjustments relate to joint ventures necessary to reconcile to
IFRS presentation.
BUSINESS REVIEW
Overview
The first half of 2013 recorded solid performances across Grindrod. The management and staff continually adapt to the dynamic business environment, delivering sustainable
profit and long-term growth for Grindrod shareholders.
Within the Freight Services division, Ports, Terminals and Rail reported exceptional growth in profits and expanded operational capacity. Logistics businesses were well
ahead of the prior year and continue to reposition the Automotive and Petrochemical transport businesses.
In Trading, Marine Fuels reported increased volumes and profit. The Industrial commodities business remained profitable despite the reduced commodity volumes. Agricultural
commodity volumes were deliberately restrained to counter the effect of the inverted market.
Shipping reported a profit with improved earnings from tankers and the Unical tanker operating business. The drybulk market remains poor.
Financial Services continued its good earnings growth.
Revenues are not comparable due to the sale of 50% of Cockett in June 2012.
The group's attributable earnings were R533,2 million (H1 2012: R608,4 million). This represents a 12% decrease in earnings which includes the non-trading profit of
R75,8 million on the Grindrod Tank Terminals business and in the prior year a profit of R414,9 million on the sale of 35% of the Maputo coal terminal.
Headline earnings of R450,5 million were up by 29% (H1 2012: R347,7 million). Headline earnings per share increased by 29% to 76,2 cents (H1 2012: 58,9 cents per share).
Prior year headline earnings were restated to exclude the compensation for impairment of Ocean Africa Container Lines (Pty) Ltd in compliance with the new Headline
Earnings Circular 2/2013.
An interim ordinary dividend of 20,0 cents per share (H1 2012: 17,5 cents per share) has been declared.
Statement of financial position
As at 30 June 2013, the total number of ordinary shares in issue is 600 165 314. The 9 179 348 ordinary shares repurchased in prior years continue to be held in
treasury. Of these, 2 302 884 shares have been allocated to the group forfeitable share plan, as approved by shareholders at the Annual General Meeting on 29 May 2013.
Equity increased by R1,8 billion largely from an increase in foreign currency translation of R1,2 billion and the attributable earnings of R560,7 million.
The group's balance sheet remains sound with total assets of R23,4 billion (December 2012: R22,1 billion). The net debt:equity ratio has increased to 12% as at 30 June 2013
(December 2012: 7%) following investments and capital expenditure.
Capital expenditure and commitments
Total capital expenditure for the six months to 30 June 2013 was R1,0 billion. Subsidiary capital expenditure and investment for the six months to 30 June 2013 amounted
to R671,4 million (H1 2012: R322,0 million), of which 80% was expansionary and the balance maintenance or replacement capital expenditure. The capital expenditure mainly
comprised payments on two product tankers, four drybulk ships, the Maputo coal terminal Phase 3,5 expansion project, locomotives, car terminal expansion and fleet investment.
Future capital continues to be committed to the expansion of terminal capacity, rail infrastructure, locomotives and ships. The commitments exclude the planned expansion of
the terminal capacity in Maputo and Richards Bay as well as the development of a bulk liquid storage facility at Coega, each of which is subject to final board consideration.
Capital expenditure Capital commitments Split as follows
Approved Approved
H1 H2 not and
(R million) 2013 2013 2014 2015 2016+ Total contracted 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 - - 169 - 169
Logistics 158 272 40 - 7 319 6 313
Trading 38 64 1 1 2 68 42 26
Shipping 422 258 202 312 - 772 - 772
Financial Services 105 28 - - - 28 - 28
Group 37 3 - - - 3 3 -
1 033 1 139 286 333 9 1 767 442 1 325
Split as follows:
Subsidiary 671 802 284 333 2 1 421 407 1 014
Joint venture 362 337 2 - 7 346 35 311
Cash flow and borrowings
Operating profit before working capital adjustments was R388,5 million (H1 2012: R451,7 million). The group's working capital position reflects a net outflow for the
period of R58,8 million.
The group has adequate funding for all capital commitments through its cash resources and bank facilities.
Basis of preparation
The condensed consolidated financial information has been prepared and presented in accordance with the framework concepts and the measurement and recognition requirements
of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, the Listings Requirements of the JSE Limited, the information as required by IAS 34 Interim Financial
Reporting and the requirements of the South African Companies Act 71 of 2008.
The group has complied with IAS 19 Employee Benefits (as amended 2011) and Headline Earnings Circular 2/2013 (as revised in 2013). The net impact on earnings of the application
of IAS 19 Employee Benefits is nil for the six months ended 30 June 2012 and R16,5 million for the 12 months ended 31 December 2012. In terms of the new Headline Earnings
Circular 2/2013, headline earnings have been restated (30 June 2012: R61,9 million and 31 December 2012: R97,4 million) to exclude compensation for impairment in Ocean Africa
Container Lines (Pty) Ltd.
The accounting for the acquisitions and disposals made by the group has been provisionally determined as at 30 June 2013. The group disposed of net assets of R19,7 million during
the period. At the date of finalisation of these results, the necessary market values and other calculations had not been finalised and they have therefore been provisionally
determined based on the directors' best estimates of the likely values.
The unaudited interim results have been prepared under the supervision of the Group Financial Director, AG Waller, CA(SA).
Statements contained throughout this announcement regarding the prospects of the group have not been reviewed or reported on by the group's external auditors.
These condensed consolidated unaudited interim results were approved by the board of directors on 30 August 2013.
Change in directorate
As a result of his relocation to Shanghai, Mr PJ Liddiard (as alternate to Mr JJ Durand) resigned from the board on 29 August 2013. The board of directors expresses its
appreciation for his contribution and wishes him well with his future endeavours. Mr PJ Uys was appointed to the board as alternate to Mr JJ Durand with effect from
30 August 2013. Mr Uys joined Remgro in 2013 from Vodacom Group (Pty) Ltd where he was Group Chief Executive Officer. Mr Uys acts as director for a number of companies
and brings a wealth of experience and expertise to the board.
Prospects
Grindrod is well positioned for growth.
For and on behalf of the board
IAJ Clark AK Olivier
Chairman Chief Executive Officer
DECLARATION OF INTERIM DIVIDENDS
Preference dividend
Notice is hereby given that an interim gross dividend of 371,0 cents per cumulative, non-redeemable, non-participating and non-convertible preference share (H1 2012: 395,0 cents)
has been declared for the six-month period ended 30 June 2013, payable to preference shareholders in accordance with the timetable below.
In terms of the dividend tax effective 1 April 2013, the following additional information is disclosed:
- The local dividend tax rate is 15%;
- No STC credits will be utilised for the interim preference dividend;
- 7 400 000 cumulative, non-redeemable, non-participating and non-convertible preference shares are in issue;
- The net preference dividend is 315,350 cents per share for preference shareholders who are not exempt from dividends tax; and
- Grindrod Limited's tax reference number is 9435/490/71/0.
Ordinary dividend
Notice is hereby given that an interim gross dividend of 20,0 cents per share (H1 2012: 17,5 cents) has been declared for the six-month period ended 30 June 2013, payable to
ordinary shareholders in accordance with the timetable below.
In terms of the dividend tax effective 1 April 2013, the following additional information is disclosed:
- The local dividend tax rate is 15%;
- No STC credits will be utilised for the interim ordinary dividend;
- 600 165 314 ordinary shares are in issue;
- The net ordinary dividend is 17,000 cents per share for ordinary shareholders who are not exempt from dividends tax; and
- Grindrod Limited's tax reference number is 9435/490/71/0.
Timetable
Last day to trade cum dividend Thursday, 19 September 2013
Shares commence trading ex dividend Friday, 20 September 2013
Record date Friday, 27 September 2013
Dividend payment date Monday, 30 September 2013
No dematerialisation or rematerialisation of shares will be allowed for the period Friday, 20 September 2013, to Friday, 27 September 2013, both days inclusive.
The dividends are declared in the currency of the Republic of South Africa.
By order of the board
Mrs CI Lewis
Group Company Secretary
30 August 2013
CORPORATE INFORMATION
Directors
IAJ Clark (Chairman)*, AK Olivier (Chief Executive Officer), H Adams#, AC Brahde# (Norwegian), JJ Durand*, MR Faku*, WD Geach#, GG Gelink#, IM Groves#, MJ Hankinson#,
DA Polkinghorne, DA Rennie, PJ Uys (Alternate)*, MR Wade (British), AG Waller, SDM Zungu# (*Non-executive, #Independent non-executive)
Registered office
Quadrant House
115 Margaret Mncadi Avenue
Durban
4001
PO Box 1, Durban, 4000
Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg
2001
PO Box 61051, Marshalltown, 2107
Sponsor
Grindrod Bank Limited
First Floor, Building 3
North Wing, Commerce Square
39 Rivonia Road
Sandhurst
Sandton
2146
PO Box 78011, Sandton 2146
For more information, please refer to www.grindrod.co.za
Date: 02/09/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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