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GRINDROD LIMITED - Audited Results and Dividend Announcement for the year ended 31 December 2014

Release Date: 25/02/2015 08:00
Code(s): GNDP GND     PDF:  
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Audited Results and Dividend Announcement
for the year ended 31 December 2014

GRINDROD LIMITED
Registration number: 1966/009846/06
Incorporated in the Republic of South Africa
Share code: GND & GNDP
ISIN: ZAE000072328 and ZAE000071106

AUDITED RESULTS AND DIVIDEND ANNOUNCEMENT
for the year ended 31 December 2014

HIGHLIGHTS

The group continued to position itself for long-term growth through further investments and expanding its integrated source-to-destination logistics services, in both commodity spread and
geographic reach.

- Successful capital raise of R2.4 billion secures equity for growth plan
- Successful B-BBEE consortium transaction of R1.6 billion
- Revenue increased by 2% to R32 717 million inclusive of joint ventures (2013: R32 135 million)
- EBITDA increased by 4% to R1 825 million inclusive of joint ventures (2013: R1 761 million)
- Headline earnings up 4% to R729.4 million (2013: R701.8 million)
- Increase in weighted average number of issued shares 15% to 678.3 million (2013: 591.1 million)
- Headline earnings per share down 9% to 107.5 cents (2013: 118.7 cents)
- Earnings per share down 26% to 147.6 cents (2013: 199.1 cents)
- Net asset value per share up 16% to 2 227 cents (2013: 1 926 cents)
- Final ordinary dividend per share up 17% to 20.0 cents per share (2013: 17.1 cents)
- Net cash R0.5 billion (2013: net debt:equity of 21%)

SUMMARISED CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2014

                                                                                                                    Audited       Audited
                                                                                                                31 December   31 December
                                                                                                                       2014          2013
                                                                                                                       R000          R000

Revenue                                                                                                          13 912 482    15 662 026
Earnings before interest, taxation, depreciation and amortisation                                                 1 166 011       886 690
Depreciation and amortisation                                                                                      (547 143)     (463 112)
Operating profit before interest and taxation                                                                       618 868       423 578
Non-trading items                                                                                                   235 256       479 460
Interest received                                                                                                   234 687       129 961
Interest paid                                                                                                      (216 621)     (222 891)
Profit before share of joint venture and associate companies' profit                                                872 190       810 108
Share of joint venture companies' profit after taxation                                                             314 265       545 132
Share of associate companies' profit after taxation                                                                  83 145        23 350
Profit before taxation                                                                                            1 269 600     1 378 590
Taxation                                                                                                           (193 623)     (116 540)
Net profit for the year                                                                                           1 075 977     1 262 050
Attributable to:
 Ordinary shareholders                                                                                            1 001 191     1 177 172
 Preference shareholders                                                                                             59 094        55 354
Owners of the parent                                                                                              1 060 285     1 232 526
Non-controlling interests                                                                                            15 692        29 524
                                                                                                                  1 075 977     1 262 050
Exchange rates (R/US$)
 Opening exchange rate                                                                                                10.55          8.48
 Closing exchange rate                                                                                                11.57         10.55
 Average exchange rate                                                                                                10.88          9.67


                                                                                                                    Audited       Audited
                                                                                                                31 December   31 December
                                                                                                                       2014          2013
                                                                                                                       R000          R000
Reconciliation of headline earnings
Profit attributable to ordinary shareholders                                                                      1 001 191     1 177 172
Adjusted for:                                                                                                      (271 804)     (475 356)
 Impairment of goodwill                                                                                              20 000       186 447
 Impairment of other investments                                                                                     64 759        64 530
 Impairment of ships, intangibles, plant and equipment                                                              233 396        58 992
 Net profit on disposal of investments                                                                             (436 169)      (87 655)
 Net loss on disposal of plant and equipment                                                                          6 023           190
 Negative goodwill realised                                                                                         (23 521)       (3 937)
 Foreign currency translation reserve recycled on cessation of operations following restructure                     (99 744)     (698 028)
Joint Ventures:
 Negative goodwill realised                                                                                               -        (4 642)
 Net loss on disposal of plant and equipment                                                                            162             -
 Impairment of ships, plant and equipment                                                                             3 698             -
Total taxation effects of adjustments                                                                               (40 408)        8 747

Headline earnings                                                                                                   729 387       701 816
Ordinary share performance
Number of shares in issue less treasury shares        (000s)                                                        751 619       591 586
Weighted average number of shares (basic)             (000s)                                                        678 348       591 109
Diluted weighted average number of shares             (000s)                                                        681 330       593 665
Earnings per share:                                  (cents)
 Basic                                                                                                                147.6         199.1
 Diluted                                                                                                              146.9         198.3
Headline earnings per share:                         (cents)
 Basic                                                                                                                107.5         118.7
 Diluted                                                                                                              107.1         118.2
Dividends per share:                                 (cents)                                                           33.6          37.1
 Interim                                                                                                               13.6          20.0
 Final                                                                                                                 20.0          17.1
Dividend cover (headline)                            (times)                                                            3.2           3.2



SUMMARISED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2014
                                                                                                                    Audited       Audited
                                                                                                                31 December   31 December
                                                                                                                       2014          2013
                                                                                                                       R000          R000

Profit for the year                                                                                               1 075 977     1 262 050
Other comprehensive income:
Items that may be reclassified subsequently to profit and loss
Exchange differences on translating foreign operations
 Exchange differences arising during the year                                                                       844 873     1 618 579
Cash flow hedges                                                                                                    (77 368)       (1 038)
Business combination acquisition                                                                                     (1 455)       (9 148)
Fair value loss arising on available-for-sale instruments                                                                 -       (25 029)
Reclassification of available-for-sale financial instruments                                                              -        50 029

Items that will not be reclassified subsequently to profit and loss
Actuarial gains                                                                                                       1 147         8 579
Total comprehensive income for the year                                                                           1 843 174     2 904 022
Total comprehensive income attributable to:
 Owners of the parent                                                                                             1 827 181     2 865 201
 Non-controlling interest                                                                                            15 993        38 821
                                                                                                                  1 843 174     2 904 022

SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2014
                                                                                                                    Audited       Audited
                                                                                                                31 December   31 December
                                                                                                                       2014          2013
                                                                                                                       R000          R000

Ships, property, terminals, vehicles and equipment                                                                7 328 376     6 698 871
Intangible assets                                                                                                 1 552 439       559 763
Investments in joint ventures                                                                                     3 883 263     3 616 166
Investments in associates                                                                                           849 303       788 118
Deferred taxation                                                                                                   191 704        99 772
Other investments and derivative financial assets                                                                 1 175 380       493 161
Recoverables on cancelled ships                                                                                     300 723       236 440
Total non-current assets                                                                                         15 281 188    12 492 291
Loans and advances to bank customers                                                                              4 306 693     3 674 567
Liquid assets and short-term negotiable securities                                                                  990 024     1 044 432
Bank balances and cash                                                                                            7 404 912     6 076 314
Other current assets                                                                                              4 303 617     2 718 056
Non-current assets held for sale                                                                                    513 586     2 416 467
Total assets                                                                                                     32 800 020    28 422 127
Shareholders' equity                                                                                             17 432 296    12 036 428
Non-controlling interests                                                                                            48 185        96 239
Total equity                                                                                                     17 480 481    12 132 667
Interest-bearing borrowings                                                                                       2 263 292     1 973 390
Financial services funding instruments                                                                              362 717     1 082 986
Deferred taxation                                                                                                   131 643       144 426
Other non-current liabilities                                                                                       156 665       110 810
Non-current liabilities                                                                                           2 914 317     3 311 612
Deposits from bank customers                                                                                      7 809 523     8 014 890
Current interest-bearing borrowings                                                                               1 232 421     1 127 074
Financial services funding instruments                                                                              922 550       160 253
Other liabilities                                                                                                 2 322 993     1 460 392
Non-current liabilities associated with assets held for sale                                                        117 735     2 215 239
Total equity and liabilities                                                                                     32 800 020    28 422 127

Net worth per ordinary share - at book value (cents)                                                                  2 227         1 926
Net debt:equity ratio                                                                                              (0.03):1        0.21:1
Capital expenditure                                                                                               1 645 526     2 020 953

                                                                                Audited       Audited              Audited        Audited
                                                                            31 December   31 December          31 December    31 December
                                                                                   2014          2014                 2013           2013
                                                                                   R000        US$000                 R000         US$000

Capital commitments                                                              82 500        15 561              184 978         57 711
Authorised by directors and contracted for                                       81 290        15 561              116 640         25 427
 Due within one year                                                             79 974           517              116 140         23 590
 Due thereafter                                                                   1 316        15 044                  500          1 837
Authorised by directors not yet contracted for                                    1 210             -               68 338         32 284



SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2014
                                                                                                                    Audited       Audited
                                                                                                                31 December   31 December
                                                                                                                       2014          2013
                                                                                                                       R000          R000

Operating profit before working capital changes                                                                   1 222 860       734 765
Working capital changes                                                                                             262 905       (86 937)
Cash generated from operations                                                                                    1 485 765       647 828
Net interest paid                                                                                                   (34 563)      (92 930)
Net dividends paid                                                                                                 (170 107)     (173 870)
Taxation paid                                                                                                      (223 789)     (219 585)
                                                                                                                  1 057 306       161 443
Net bank advances to customers and other short-term negotiables                                                    (783 085)    2 465 696
 Deposits - Retail Banking                                                                                         (768 862)    2 196 780
 Other                                                                                                              (14 223)      268 916

Net cash flows generated from operating activities before ship sales and purchases                                  274 221     2 627 139
Refund on ships under construction cancelled                                                                              -       197 248
Proceeds on disposal of ships                                                                                       234 317       306 061
Cash payments on ship options exercised                                                                            (116 221)            -
Capital expenditure on ships                                                                                       (192 694)     (406 251)
Net cash flows generated from operating activities                                                                  199 623     2 724 197
Acquisition of investments, subsidiaries, property, terminals, vehicles and equipment                              (955 954)   (1 634 688)
Proceeds from disposal of property, terminals, vehicles, equipment and investments                                  383 273       160 889
Net payments made to acquire financial assets and finance lease receivables                                          (4 834)            -
Intangible assets acquired                                                                                          (58 248)      (63 162)
Proceeds from disposal of intangible assets                                                                               -           175
Loans advanced to joint ventures and associate companies                                                             28 773       100 074
Acquisition of preference share investment                                                                         (400 000)            -
Acquisition of additional investments in subsidiaries, joint ventures and associates                               (183 634)     (107 451)
Net cash flows utilised in investing activities                                                                  (1 190 624)   (1 544 163)
Net proceeds from issue of ordinary share capital                                                                 3 978 573        11 737
Acquisition of treasury shares                                                                                      (37 563)            -
Proceeds from disposal of treasury shares                                                                               144             -
Long-term interest-bearing debt raised                                                                              726 945       811 560
Payment of capital portion of long-term interest-bearing debt                                                    (1 080 843)     (720 807)
Short-term interest-bearing debt (repaid)/raised                                                                 (1 588 273)      571 560
Net cash flows generated from financing activities                                                                1 998 983       674 050
Net increase in cash and cash equivalents                                                                         1 007 982     1 854 084
Cash and cash equivalents at beginning of the year                                                                6 131 503     4 250 250
Difference arising on translation                                                                                    49 141        27 169
Cash and cash equivalents at end of the year                                                                      7 188 626     6 131 503

SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2014
                                                                                                                    Audited       Audited
                                                                                                                31 December   31 December
                                                                                                                       2014          2013
                                                                                                                       R000          R000

Share capital and share premium                                                                                   5 982 924     2 036 992
Balance at beginning of the year                                                                                  2 036 992     2 025 255
Share options exercised                                                                                               4 778        11 737
Share issue                                                                                                       3 978 573             -
Treasury shares acquired                                                                                            (37 563)            -
Treasury shares sold                                                                                                    144             -
Preference share capital                                                                                                  2             2
Balance at beginning of the year                                                                                          2             2
Equity compensation reserve                                                                                          57 566        50 551
Balance at beginning of the year                                                                                     50 551        42 126
Share-based payments                                                                                                 11 793         8 425
Share options exercised                                                                                              (4 778)            -
Foreign currency translation reserve                                                                              2 661 342     1 916 514
Balance at beginning of the year                                                                                  1 916 514     1 005 260
Foreign currency translation realised                                                                               (99 744)     (698 028)
Foreign currency translation adjustments                                                                            844 572     1 609 282
Other non-distributable statutory reserves                                                                         (123 092)      (23 151)
Balance at beginning of the year                                                                                    (23 151)      (37 965)
Fair value adjustment of available-for-sale financial instrument                                                          -       (25 029)
Reclassification of available-for-sale investments                                                                        -        50 029
Foreign currency translation adjustments                                                                             (1 455)       (9 148)
Cash flow hedge                                                                                                     (76 975)       (1 038)
Deferred tax effect on cash flow hedge                                                                                 (393)            -
Net business combination acquisition                                                                                (21 118)            -
Movement in accumulated profit                                                                                    8 853 554     8 055 520
Balance at beginning of the year                                                                                  8 055 520     7 079 678
Actuarial gains recognised                                                                                            1 147         8 579
Profit for the year                                                                                               1 060 285     1 232 526
Ordinary dividends paid                                                                                            (204 304)     (209 909)
Preference dividends paid                                                                                           (59 094)      (55 354)
Total interest of shareholders of the company                                                                    17 432 296    12 036 428
Equity attributable to non-controlling interests of the company                                                      48 185        96 239
Balance at beginning of the year                                                                                     96 239       126 533
Foreign currency translation adjustments                                                                                301         9 297
Business acquisitions/(disposals)                                                                                    21 548       (54 502)
Non-controlling interest disposed                                                                                   (78 685)            -
Profit for the period                                                                                                15 692        29 524
Dividends paid                                                                                                       (6 910)      (14 613)
Total equity attributable to shareholders of the company                                                         17 480 481    12 132 667

SEGMENTAL ANALYSIS
for the year ended 31 December 2014
                                                                                                                    Audited       Audited
                                                                                                                31 December   31 December
                                                                                                                       2014^        2013^
                                                                                                                       R000          R000
Revenue
Freight Services                                                                                                  5 653 512     5 853 538
Shipping                                                                                                         22 106 063    18 472 198
Financial Services                                                                                                  376 912       370 790
Group                                                                                                             4 580 465     7 438 466
                                                                                                                 32 716 952    32 134 992
Segmental adjustments**                                                                                         (18 804 470)  (16 472 966)
                                                                                                                 13 912 482    15 662 026
Earnings before interest, taxation, depreciation and amortisation
Freight Services                                                                                                  1 053 611     1 175 217
Shipping                                                                                                            638 913       690 455
Financial Services                                                                                                  175 210       156 138
Group                                                                                                               (42 750)     (260 695)
                                                                                                                  1 824 984     1 761 115
Segmental adjustments**                                                                                            (658 973)     (874 425)
                                                                                                                  1 166 011       886 690
Operating profit/(loss) before interest and taxation
Freight Services                                                                                                    732 073       912 499
Shipping                                                                                                            227 421       346 219
Financial Services                                                                                                  171 401       154 456
Group                                                                                                               (58 597)     (270 383)
                                                                                                                  1 072 298     1 142 791
Segmental adjustments**                                                                                            (453 430)     (719 213)
                                                                                                                    618 868       423 578
Share of associate companies' profit/(loss) after taxation
Freight Services                                                                                                     79 538        30 625
Group                                                                                                                 3 607        (7 275)
                                                                                                                     83 145        23 350
Profit/(loss) attributable to ordinary shareholders
Freight Services                                                                                                    613 269       659 083
Shipping                                                                                                            223 765       852 384
Financial Services                                                                                                  111 979        92 254
Group                                                                                                                52 178      (426 549)
                                                                                                                  1 001 191     1 177 172
^  Trading businesses have now been included in the Freight Services and Shipping divisions.
** Joint venture earnings are reviewed together with subsidiaries by the key decision maker. Segmental adjustments relating to joint ventures are necessary to reconcile to IFRS presentation.

BUSINESS COMBINATIONS
for the year ended 31 December 2014

Acquisition of subsidiaries, joint ventures and associates

During the year, the group acquired the following interests:
Company acquired                                                                                                  Nature of    Percentage             Interest       Purchase
                                                                                                                   business      acquired             acquired  consideration
                                                                                                                                                          2014           R000

RRL Grindrod Locomotives Proprietary Limited                                                                           Rail            49              30 June        264 110
RRL Grindrod Proprietary Limited                                                                                       Rail            50              30 June         37 500
Unicorn Calulo Shipping Services Proprietary Limited                                                      Shipping Services            50              30 June         26 800
Unicorn Calulo Bunker Services Proprietary Limited                                                          Bunker Services            25              30 June        127 400
Sturrock Grindrod Maritime Holdings Proprietary Limited                                                      Ships Agencies            50              30 June        190 400
Grindrod South Africa Proprietary Limited                                                                  Freight Services            25              30 June         30 022
Grindrod Rail Construction Proprietary Limited                                                                         Rail            25              30 June          9 000
Grindrod Corridor Management Proprietary Limited                                                                  Terminals            30              30 June          7 900
Grindrod Locomotives Technology Proprietary Limited                                                                    Rail           100            1 October         15 000
North West Rail Limited                                                                                                Rail          89.5            1 October          6 669
Total purchase consideration                                                                                                                                          714 801

Disposal of subsidiaries, joint ventures and associates
During the year, the group disposed of the following interests:
Company disposed                                                                                                  Nature of    Percentage             Interest       Disposal
                                                                                                                   business      disposed             disposed  consideration
                                                                                                                                                          2014           R000

Russelstone Protein Proprietary Limited                                                                             Trading            30          31 December       (17 419)
Oiltanking Grindrod Calulo Holdings Proprietary Limited                                                         Liquid-bulk           7.5              30 June        (5 022)
                                                                                                                storage and
                                                                                                                    trading
Total disposal consideration                                                                                                                                         (22 441)

Reasons for acquisitions

The primary reasons for acquisitions were to enable Grindrod to create greater alignment between subsidiary companies and the group, eliminate any conflicts of interest which might exist,
enable more efficient management of the businesses, appropriately capitalise the businesses and leverage the group's statement of financial position in raising debt facilities.

Impact of the acquisitions on the results of the group

From the dates of their acquisition, the acquired businesses contributed additional profit of R26.2 million.

Net assets acquired in the subsidiaries' transactions and the goodwill/intangible assets arising, are as follows:

Net assets acquired                                                                                Acquirees' carrying
                                                                                                         amount before
                                                                                                        combination at
                                                                                                            fair value
                                                                                                                  R000

Property, plant and equipment                                                                                  487 498
Intangibles                                                                                                    132 998
Interest in associate companies                                                                                   (213)
Taxation                                                                                                       (21 671)
Working capital                                                                                                 83 824
Cash and bank                                                                                                  230 982
Non-controlling interest                                                                                        47 249
Business combination reserve                                                                                    13 186
Long-term liabilities                                                                                         (333 053)
Post-retirement medical aid                                                                                     (1 979)
Short-term borrowings                                                                                         (122 595)
Bank overdraft                                                                                                  (1 082)
Deferred taxation                                                                                               19 891
Total                                                                                                          535 035
Earnout                                                                                                        (71 300)
Less: disposal of investment in joint ventures                                                                (219 621)
Less: profit on sale on disposal of investment in joint ventures                                              (421 278)
Goodwill and intangible assets arising on acquisition                                                          891 965
Total purchase consideration                                                                                   714 801
Cash acquired                                                                                                 (229 900)
Net assets acquired                                                                                            484 901
Interest in associate and joint venture companies disposed                                                     (14 885)
Add: profit on sale on disposal of associates                                                                   (7 556)
Net assets disposed                                                                                            (22 441)
Net assets acquired and disposed                                                                               462 460

The goodwill arising on the acquisition of these businesses is attributable to the anticipated profitability of these businesses.

LEASES AND SHIP CHARTERS
for the year ended 31 December 2014
                                                                                                  Audited       Audited
                                                                                              31 December   31 December
                                                                                                     2014          2013
                                                                                                     R000          R000
Operating leases and ship charters
 Income                                                                                         1 134 933       486 911
 Expenditure                                                                                    4 522 157     3 788 193
Finance lease liabilities                                                                          41 969        54 478

FAIR VALUE OF FINANCIAL INSTRUMENTS
for the year ended 31 December 2014

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which
the fair value is observable:

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

                                                                                                                    Audited       Audited              Audited        Audited
                                                                                                                31 December   31 December          31 December    31 December
                                                                                                                       2014          2014                 2014           2014
                                                                                                                       R000          R000                 R000           R000

                                                                                                                    Level 1       Level 2              Level 3          Total
Financial assets
Financial assets designated at fair value through profit or loss                                                     23 762       252 999              435 392        712 153
Total                                                                                                                23 762       252 999              435 392        712 153
Financial liabilities
Derivative financial instruments                                                                                          -       (88 540)                   -        (88 540)
Total                                                                                                                     -       (88 540)                   -        (88 540)

                                                                                                                    Audited       Audited              Audited        Audited
                                                                                                                31 December   31 December          31 December    31 December
                                                                                                                       2013          2013                 2013           2013
                                                                                                                       R000          R000                 R000           R000

                                                                                                                    Level 1       Level 2              Level 3          Total
Financial assets
Derivative financial assets                                                                                          35 613         6 583                    -         42 196
Other financial assets held-for-trading                                                                                   -        23 769                    -         23 769
Financial assets designated at fair value through profit or loss                                                     25 532       175 604              342 501        543 637
Total                                                                                                                61 145       205 956              342 501        609 602
Financial liabilities
Derivative financial instruments                                                                                     (9 199)      (10 484)                   -        (19 683)
Other financial liabilities held-for-trading                                                                              -       (45 193)                   -        (45 193)
Total                                                                                                                (9 199)      (55 677)                   -        (64 876)

Fair value gains recognised in the statement of comprehensive income for Level 3 financial instruments were R61.3 million (2013: R13.3 million).

Reconciliation of Level 3 fair value measurements of financial assets
                                                                                                                    Audited       Audited
                                                                                                                31 December   31 December
                                                                                                                       2014          2013
                                                                                                                       R000          R000

Opening balance                                                                                                     342 501       180 405
Additions                                                                                                            51 402       186 520
Disposals                                                                                                           (19 803)      (12 740)
Total movement recognised
- in other comprehensive income                                                                                           -        25 000
Reclassified to profit or loss                                                                                            -       (50 029)
Profit and loss                                                                                                      61 292        13 345
Closing balance                                                                                                     435 392       342 501


CONTINGENT ASSETS/LIABILITIES
for the year ended 31 December 2014

The company guaranteed loans and facilities of subsidiaries and joint ventures amounting to R6 263 550 000 (2013: R7 941 355 000) of which R2 231 427 000 (2013: R4 629 690 000) had been
utilised at year-end.

The company guaranteed charter-hire payments of subsidiaries amounting to R1 137 690 000 (2013: R1 194 376 000). The charter-hire payments are due by the subsidiaries in varying amounts
from 2015 to 2022.

PREPARER OF SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2014

These summarised consolidated financial statements have been prepared under the supervision of AG Waller, CA(SA).

AG Waller
Group Financial Director
24 February 2015

BUSINESS REVIEW

Overview

In 2014 Grindrod continued to make progress in optimising operational assets in line with its vision to create sustainable returns and long-term value for its stakeholders. The Maputo
businesses continued to reflect good contributions despite adverse market conditions. Performance of the Shipping division was impacted by continued weakness in global shipping markets.
Financial Services continued to grow and improve performance.

The Atlas operation was discontinued, wound down and sold according to plan. In order to optimise synergies, the remaining Trading operations, coal, agricultural and mineral logistics and
marine-fuels businesses, have been incorporated in the Freight Services and Shipping divisions.

Financial Services is accounted for as a continued operation and has received further capital following the withdrawal of the Bidvest offer.

The group continues to focus on the further development and execution of various infrastructure projects, with specific focus on terminals and rail.

Grindrod successfully raised equity capital of R2.4 billion (the Bookbuild Placement). Business alignment and efficiency improvements were achieved through the acquisition of the interests
held by the group's long-term B-BBEE partners, Calulo Investments and Solethu Investments, in certain operating subsidiaries and joint ventures (the Acquisition). In conjunction with this, a
consortium including Calulo Investments, Solethu Investments, Safika Holdings, Adopt-a-School Foundation and Brimstone Investment Corporation invested R1.6 billion in Grindrod at a holding
level, providing for 8.4 per cent B-BBEE ownership (the Consortium Placement).

Attributable earnings decreased by 15 per cent to R1 001.2 million (2013: R1 177.2 million). Non-trading items include the required raising of R430.6 million in earnings as a consequence of
the change in control through the Acquisition. In addition, impairment charges of R105.8 million were made against the carrying value of the transport fleet, R89.8 million on the carrying value
of vessels and R80.0 million on the carrying value of mineral logistic investments. Earnings from non-trading items in the prior year of R475.3 million, included the realisation of a material
foreign currency translation reserve.

Headline earnings increased by four per cent to R729.4 million (2013: R701.8 million), with headline earnings per share decreasing by nine per cent to 107.5 cents (2013: 118.7 cents).
Earnings per share is calculated on a weighted average of 678.3 million shares, up from 591.1 million in 2013 primarily as a result of the Acquisition and Consortium Placement.
Ordinary dividends for the year totalled 33.6 cents per share (2013: 37.1 cents per share). A final dividend of 20.0 cents per share (2013: 17.1 cents per share) has been declared.

Capital expenditure and commitments
                                                                    Capital expenditure                    Capital commitments                     Split as follows
R million                                                                          2014          2015                 2016          2017+  Total  Approved  Approved
                                                                                                                                                   not con-  and con-
                                                                                                                                                   tracted   tracted

Freight Services                                                                  1 354            90                   22              7    119         1       118
 Port and Terminals                                                                 120            53                   18              6     77         1        76
 Rail                                                                               648             1                    1              1      3         -         3
 Carrier Logistics                                                                   97             3                    3              -      6         -         6
 Integrated Logistics                                                               489            33                    -              -     33         -        33
Shipping                                                                            981           430                  285            121    836         -       836
 Dry-bulk                                                                           795           430                  269            121    820         -       820
 Tankers                                                                            186             -                   16              -     16         -        16
Financial Services                                                                   15             -                    -              -      -         -         -
Group                                                                                98             -                    -              -      -         -         -
                                                                                  2 448           520                  307            128    955         1       954
Split as follows:
 Subsidiaries                                                                     1 646            87                   35            124    246         1       245
 Joint ventures                                                                     802           433                  272              4    709         -       709

The above represents board approved capital commitments. These commitments exclude planned expenditure which is subject to final board consideration.


Capital continues to be committed to the strategic investment areas of port, terminal and rail infrastructure as well as the dry-bulk shipping fleet.

Total capital and investment expenditure was R2.4 billion (2013: R2.9 billion), of which 73 per cent was expansionary and the balance maintenance or replacement capital expenditure. The
capital expenditure mainly comprised payments on the acquisition of 12 dry-bulk ships in the tripartite joint venture, the Acquisition, increased investment into the rail concession business,
locomotives and expansion in the intermodal business.

Future capital continues to be committed to the expansion of terminal capacity, rail infrastructure, locomotives and ships.

Cash flow and borrowings

The financial position reflects net cash of R0.5 billion (2013 net debt: R2.6 billion), following the large contribution from the inflow of equity funds raised over the period. Operating
profit before working capital adjustments was R1 222.9 million (2013: R734.8 million). Working capital contributed to a net inflow of R262.9 million (2013: R86.9 million outflow).

Statement of financial position

With total assets of R32.8 billion (December 2013: R28.4 billion) and no net debt (net debt:equity December 2013: 21 per cent), the group's financial position is strong. Book net asset value
per share is R22.27 (December 2013: R19.26).

Shareholders' equity increased to 762 053 314 shares in issue (December 2013: 600 765 314). The increase is attributable to the successful completion of the Bookbuild Placement of 96 000 000
shares in May 2014, the issue of 1 288 000 shares as part of the Acquisition and the Consortium Placement of 64 000 000 shares in July 2014.

BASIS OF PREPARATION

The summarised consolidated financial statements are prepared in accordance with the requirements of the Listings Requirements of the JSE Limited for summarised financial statements and the
requirements of the South African Companies Act, 71 of 2008 applicable for summarised financial statements. The Listings Requirements of the JSE Limited for the preliminary reports require
them to be prepared 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, and also, as a minimum,
to contain the information required by IAS 34 Interim Financial Reporting.

The accounting for the acquisitions and disposals made by the group has been determined as at 31 December 2014. 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 estimate of the likely values.

Following the board's decision to retain the Financial Services business, the business has been re-instated as a segment in continuing operations. The repositioning of the commodity
businesses within logistics and the closure and sale of the wholly owned agri-commodity desks has been accounted for in continuing operations.  Despite the significant re-organisation the
commodity logistics businesses are continuing operations. In the Interim Results at June 2014 these items had been disclosed as discontinued items. There is no impact on comparative
information, as these businesses were disclosed as continuing operations for the year ended 31 December 2013.

The audited summarised consolidated financial statements have been prepared under the supervision of the group financial director, AG Waller, CA(SA).

The summarised consolidated financial statements were approved by the board of directors on 24 February 2015.

The full consolidated annual financial statements from which these summarised consolidated financial statements were derived are electronically available on the group's website
www.grindrod.co.za.

Accounting policies

The accounting policies applied in the preparation of the full consolidated annual financial statements from which the summarised consolidated financial statements were derived are in terms
of IFRS and are consistent with those of the previous full consolidated annual financial statements.

Audit opinion

These summarised consolidated financial statements for the year ended 31 December 2014 have been audited by Deloitte & Touche, who expressed an unmodified opinion thereon. The auditor also
expressed an unmodified opinion on the full consolidated financial statements for the year ended 31 December 2014, from which these summarised consolidated financial statements were
derived. A copy of the auditor's report on the summarised consolidated financial statements and of the auditor's report on the full consolidated financial statements are available for
inspection at the company's registered office, together with the financial statements identified in the respective auditor's reports.

Deloitte & Touche has not audited future financial performance and expectations expressed by management included in the commentary in the accompanying preliminary report and accordingly do
not express an opinion thereon. The auditor's report does not necessarily report on all of the information contained in this preliminary report. Shareholders are therefore advised that in
order to obtain a full understanding of the nature of the auditor's engagement, they should obtain a copy of the auditor's report together with the accompanying financial information from the
issuer's registered office.

Post balance sheet events

There are no material post balance sheet events to report.

Prospects

Grindrod is well positioned to further capitalise on opportunities using its extensive experience in the logistics value chain, respected brand and shareholder support. Current depressed
commodity prices and shipping rates will continue to put pressure on earnings in the near term.

For and on behalf of the board

MJ Hankinson                                     AK Olivier
Chairman                                         Chief Executive Officer
24 February 2015                                 24 February 2015

DECLARATION OF FINAL DIVIDEND

Preference dividend

Notice is hereby given that a gross final dividend of 409.0 cents per cumulative, non-redeemable, non participating and non-convertible preference share (2013: 377.0 cents) has been declared
out of income reserves for the year ended 31 December 2014, payable to preference shareholders in accordance with the timetable below.

At 31 December 2014, there were 7 400 000 cumulative, non-redeemable, non-participating and non-convertible preference shares in issue. The final net preference dividend is 347.65000 cents
per share for preference shareholders who are not exempt from dividends tax.

Ordinary dividend

Notice is hereby given that a gross final dividend of 20.0 cents per ordinary share (2013: 17.1 cents) has been declared out of income reserves for the year ended 31 December 2014, payable to
ordinary shareholders in accordance with the timetable below.

At 31 December 2014, there were 762 053 314 ordinary shares in issue. The final net ordinary dividend is 17.00000 cents per share for ordinary shareholders who are not exempt from dividends
tax.

With respect to the preference and ordinary dividends, in terms of the dividends tax effective since  1 April 2012, the following additional information is disclosed:

- The local dividends tax rate is 15 per cent;
- No STC credits will be utilised for the final ordinary or preference dividend; and
- Grindrod Limited's tax reference number is 9435/490/71/0.

Timetable

Declaration and finalisation date                                                               Wednesday, 25 February 2015
Last day to trade cum-dividend                                                                        Friday, 13 March 2015
Shares commence trading ex-dividend                                                                   Monday, 16 March 2015
Record date                                                                                           Friday, 20 March 2015
Dividend payment date                                                                                 Monday, 23 March 2015

No dematerialisation or rematerialisation of shares will be allowed for the period Monday, 16 March 2015, to Friday, 20 March 2015, 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
24 February 2015

CORPORATE INFORMATION

Directors

MJ Hankinson (Chairman)**, AK Olivier (Chief Executive Officer), H Adams**, AC Brahde** (Norwegian), JJ Durand*, MR Faku**, T Fubu**, WD Geach**, GG Gelink**, DA Polkinghorne, NL Sowazi**,
PJ Uys (Alternate)*, MR Wade (British), AG Waller (Group Financial Director), 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 Proprietary Limited
70 Marshall Street
Johannesburg
2001
PO Box 61051, Marshalltown 2107

Auditors

Deloitte & Touche
Designated Audit Partner: Craig Sagar CA(SA)

Sponsor

Grindrod Bank Limited
Fourth Floor
Grindrod Tower
8A Protea Place Sandton
2196
PO Box 78011, Sandton 2146

For more information, please refer to www.grindrod.co.za


Date: 25/02/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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