Wrap Text
Unaudited interim results and dividend announcement for the 6 months ended 30 June 2017
Grindrod Limited
Registration number: 1966/009846/06
Incorporated in the Republic of South Africa
Share code: GND & GNDP
ISIN: ZAE000072328 and ZAE000071106
UNAUDITED INTERIM RESULTS AND
DIVIDEND ANNOUNCEMENT
for the six months ended 30 June 2017
KEY FINANCIAL INFORMATION
- Revenue R13 404.3 million inclusive of joint ventures (H1 2016: R11 071.2 million)
- EBITDA R640.4 million inclusive of joint ventures and excluding rail assembly businesses (H1 2016: R246.4 million)
- Headline earnings excluding rail assembly businesses R126.2 million (H1 2016 headline loss: R367.0 million)
- Headline earnings per share excluding rail assembly businesses 16.8 cents (H1 2016 headline loss: 48.9 cents)
- Rail assembly headline loss of R255 million (H1 2016: R14 million)
- Headline loss per share 17.2 cents (H1 2016: 50.8 cents)
- Loss per share 11.5 cents (H1 2016: 149.2 cents)
- Net asset value per share 1 909 cents (H1 2016: 2 228 cents)
- Low gearing of 5% (H1 2016: 4%)
- No interim ordinary dividend was declared (H1 2016: no interim ordinary dividend declared)
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
R000 R000 R000
Revenue 4 105 746 4 649 789 9 031 783
Earnings before interest, taxation, depreciation and amortisation 148 456* 197 161 469 323
Depreciation and amortisation (240 909) (332 193) (584 061)
Operating loss before interest and taxation (92 453) (135 032) (114 738)
Non-trading items 52 038 (760 112) (1 419 242)
Interest received 113 554 163 270 348 528
Interest paid (110 261) (123 161) (257 864)
Loss before share of joint venture and associate companies' profit (37 122) (855 035) (1 443 316)
Share of joint venture companies' profit/(loss) after taxation 49 851 (135 314) (224 874)
Share of associate companies' profit/(loss) after taxation 20 793 (7 165) 20 604
Profit/(loss) before taxation 33 522 (997 514) (1 647 586)
Taxation (82 339) (76 026) (191 919)
Net loss for the period (48 817) (1 073 540) (1 839 505)
Attributable to:
Ordinary shareholders (86 623) (1 120 044) (1 907 695)
Preference shareholders 33 907 33 501 67 970
Owners of the parent (52 716) (1 086 543) (1 839 725)
Non-controlling interests 3 899 13 003 220
(48 817) (1 073 540) (1 839 505)
Exchange rates (ZAR/USD)
Opening exchange rate 13.69 15.60 15.60
Closing exchange rate 13.06 14.73 13.69
Average exchange rate 13.32 15.38 14.73
* Included in earnings before interest, taxation, depreciation and amortisation is a loss of R206.7 million relating to rail
assembly businesses held for sale
EARNINGS PER SHARE INFORMATION
FOR THE SIX MONTHS ENDED 30 JUNE 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
R000 R000 R000
Reconciliation of headline loss
Loss attributable to ordinary shareholders (86 623) (1 120 044) (1 907 695)
Adjusted for: (42 314) 738 948 1 448 180
Impairment of goodwill - 350 146 445 982
Impairment of other investments 151 425 257 090 806 619
Impairment of ships, intangibles, vehicles and equipment - 131 959 271 483
Net loss on disposal of investments 34 069 18 945 18 799
Net loss/(profit) on disposal of plant and equipment 1 382 1 832 (3 380)
Foreign currency translation reserve release (238 915) - (120 261)
Joint ventures and associates:
Net profit on disposal of investments - - (216)
Net loss/(profit) on disposal of plant and equipment 68 287 (253)
Impairment of ships, intangibles, vehicles and equipment 7 281 9 340 49 649
Impairment/(reversal of impairment) of other investments 2 376 - (12 175)
Total non-controlling interest effects of adjustments - (2 962) (2 962)
Total taxation effects of adjustments - (27 689) (5 105)
Headline loss (128 937) (381 096) (459 515)
Ordinary share performance
Number of shares in issue less treasury shares (000s) 751 257 750 648 750 548
Weighted average number of shares (basic) (000s) 751 004 750 565 750 539
Diluted weighted average number of shares (000s) 756 391 753 691 753 712
Loss per share: (cents)
Basic (11.5) (149.2) (254.2)
Diluted* (11.5) (149.2) (254.2)
Headline loss per share: (cents)
Basic (17.2) (50.8) (61.2)
Diluted* (17.2) (50.8) (61.2)
Dividends per share: (cents) - - -
Interim - - -
Final - - -
Dividend cover (headline) (times) - - -
* Diluted loss per share and diluted headline loss per share were calculated on weighted average number of shares due to
the anti-dilutive effect of the long-term incentive scheme shares
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
R000 R000 R000
Loss for the period (48 817) (1 073 540) (1 839 505)
Other comprehensive (loss)/income:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations (402 012) (611 054) (1 387 904)
Net movement in cash flow hedges 253 41 170 54 636
Business combination 943 2 207 3 469
Items that will not be reclassified subsequently to profit or loss
Actuarial losses - - (2 184)
Fair value loss arising on available-for-sale instruments - - (2 420)
Total comprehensive loss for the period (449 633) (1 641 217) (3 173 908)
Total comprehensive (loss)/income attributable to:
Owners of the parent (452 535) (1 663 005) (3 182 753)
Non-controlling interest 2 902 21 788 8 845
(449 633) (1 641 217) (3 173 908)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
R000 R000 R000
Ships, property, terminals, machinery, vehicles and equipment 5 072 775 6 543 623 5 351 224
Intangible assets 1 032 254 1 156 512 1 060 807
Investments in joint ventures 3 650 865 4 365 163 3 947 765
Investments in associates 917 385 893 948 852 225
Deferred taxation 91 253 149 054 87 062
Financial Services investments and other investments 2 252 373 1 828 338 1 948 728
Total non-current assets 13 016 905 14 936 638 13 247 811
Loans and advances to bank customers 6 313 277 5 222 504 5 854 734
Liquid assets and short-term negotiable securities 1 937 342 1 664 651 1 801 065
Bank balances and cash 6 601 649 5 928 574 9 478 073
Other current assets 4 200 316 4 756 584 4 245 485
Non-current assets held for sale 1 140 866 1 407 141 1 549 072
Total assets 33 210 355 33 916 092 36 176 240
Shareholders' equity 15 036 526 17 405 936 15 752 437
Non-controlling interests 48 928 61 733 48 919
Total equity 15 085 454 17 467 669 15 801 356
Interest-bearing borrowings 1 727 396 1 978 308 1 423 339
Financial Services funding instruments 1 157 184 741 192 803 489
Deferred taxation 265 350 263 641 261 817
Other non-current liabilities 113 826 96 438 121 446
Non-current liabilities 3 263 756 3 079 579 2 610 091
Deposits from bank customers 11 239 939 9 352 593 13 610 140
Current interest-bearing borrowings 884 745 1 043 186 909 037
Financial Services funding instruments 257 971 222 968 191 187
Other current liabilities 1 771 667 2 043 552 1 831 320
Non-current liabilities associated with assets held for sale 706 823 706 545 1 223 109
Total equity and liabilities 33 210 355 33 916 092 36 176 240
Net worth per ordinary share - at book value (cents) 1 909 2 228 2 007
Net debt:equity ratio 0.05:1 0.04:1 0.02:1
Capital expenditure 181 331 515 799 676 627
30 June 30 June 30 June 30 June 31 December 31 December
2017 2017 2016 2016 2016 2016
R000 USD000 R000 USD000 R000 USD000
Capital commitments 192 406 23 358 458 250 1 700 154 315 17 582
Authorised by directors and contracted for 26 749 10 787 435 769 1 379 131 278 -
Due within one year 22 749 6 210 323 769 1 379 131 278 -
Due thereafter 4 000 4 577 112 000 - - -
Authorised by directors not yet contracted for 165 657 12 571 22 481 321 23 037 17 582
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
R000 R000 R000
Operating profit before working capital changes 229 778 271 966 425 960
Working capital changes (228 164) (55 222) 65 749
Cash generated from operations 1 614* 216 744 491 709
Net interest (paid)/received (9 675) 32 264 16 888
Net dividends received/(paid) 59 360 (12 721) 29 451
Taxation paid (45 835) (46 335) (110 343)
5 464 189 952 427 705
Net (advances to)/deposits from customers and other short-term negotiables (2 965 021) (1 532 717) 1 956 186
Deposits - Retail Banking (2 900 263) (1 320 057) 2 288 800
Other (64 758) (212 660) (332 614)
Net cash flows (utilised in)/generated from operating activities before ship sales and purchases (2 959 557) (1 342 765) 2 383 891
Proceeds on disposal of ships - - 180 843
Capital expenditure on ships (21 911) (402 200) (368 145)
Net cash flows (utilised in)/generated from operating activities (2 981 468) (1 744 965) 2 196 589
Acquisition of investments, subsidiaries, property, terminals, vehicles and equipment (326 943) (168 218) (339 257)
Net proceeds from disposal of property, terminals, vehicles, equipment and investments 15 356 200 229 266 482
Net receipt from finance lease receivables - - 11 160
Intangible assets acquired (435) (793) (25 253)
Proceeds from disposal of intangible assets 88 - 602
Funds advanced to joint ventures and associate companies (11 618) (614 194) (644 288)
Acquisition of preference share investment - - (5 367)
Acquisition of additional investments in subsidiaries, joint ventures and associates (53 849) (32 255) (44 240)
Net cash flows utilised in investing activities (377 401) (615 231) (780 161)
Acquisition of treasury shares (1 386) (7 471) (8 671)
Proceeds from disposal of treasury shares - 914 914
Long-term interest-bearing debt raised 1 166 179 512 934 821 780
Payment of capital portion of long-term interest-bearing debt (576 675) (430 953) (952 600)
Short-term interest-bearing debt (repaid)/raised - (72 370) (132 726)
Net cash flows generated from/(utilised in) financing activities 588 118 3 054 (271 303)
Net (decrease)/increase in cash and cash equivalents (2 770 751) (2 357 142) 1 145 125
Cash and cash equivalents at beginning of the period 9 294 457 8 340 917 8 340 917
Difference arising on translation (47 928) (89 923) (191 585)
Cash and cash equivalents at end of the period 6 475 778 5 893 852 9 294 457
* Included in cash generated from operations is cash utilised of R244.4 million relating to rail assembly businesses
held for sale
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
R000 R000 R000
Share capital and share premium 5 985 504 5 972 919 5 971 719
Balance at beginning of the period 5 971 719 5 970 727 5 970 727
Share options vested 15 171 6 892 6 892
Treasury shares acquired (1 386) (7 471) (8 671)
Treasury shares sold - 2 771 2 771
Preference share capital 2 2 2
Balance at beginning of the period 2 2 2
Equity compensation reserve 58 854 62 939 68 513
Balance at beginning of the period 68 513 63 643 63 643
Share-based payments 5 512 6 188 11 762
Share options vested (15 171) (6 892) (6 892)
Foreign currency translation reserve 3 906 383 5 443 264 4 546 313
Balance at beginning of the period 4 546 313 6 063 103 6 063 103
Foreign currency translation realised (238 915) - (120 261)
Foreign currency translation adjustments (401 015) (619 839) (1 396 529)
Other non-distributable statutory reserves (45 076) (82 925) (51 592)
Balance at beginning of the period (51 592) (126 302) (126 302)
Financial instrument hedge settlement 864 42 536 53 873
Foreign currency translation adjustments 1 040 3 234 6 006
Fair value adjustment on hedging reserve (708) 1 515 4 641
Deferred tax effect on cash flow hedge - (3 908) (6 415)
Net business combination 5 320 - 16 605
Accumulated profit 5 130 859 6 009 737 5 217 482
Balance at beginning of the period 5 217 482 7 174 992 7 174 992
Fair value gain arising on available-for-sale financial instruments - - (2 420)
Actuarial losses recognised - - (2 184)
Loss for the period (52 716) (1 086 543) (1 839 725)
Ordinary dividends paid - (45 211) (45 211)
Preference dividends paid (33 907) (33 501) (67 970)
Total interest of shareholders of the company 15 036 526 17 405 936 15 752 437
Equity attributable to non-controlling interests of the company 48 928 61 733 48 919
Balance at beginning of the period 48 919 (6 274) (6 274)
Foreign currency translation adjustments (997) 8 785 8 625
Non-controlling interest disposed 244 48 373 49 860
Profit for the period 3 899 13 003 220
Dividends paid (3 137) (2 154) (3 512)
Total equity attributable to shareholders of the company 15 085 454 17 467 669 15 801 356
SEGMENTAL ANALYSIS
FOR THE SIX MONTHS ENDED 30 JUNE 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
R000 R000 R000
Revenue
Freight Services** 1 650 766 2 266 251 3 846 303
Shipping 11 509 615 8 574 232 20 585 634
Financial Services 224 993 226 139 492 216
Group 18 945 4 546 6 389
13 404 319 11 071 168 24 930 542
Segmental adjustments* (9 298 573) (6 421 379) (15 898 759)
4 105 746 4 649 789 9 031 783
Earnings/(loss) before interest, taxation, depreciation and amortisation
Freight Services** 62 690 245 849 458 356
Shipping 196 264 (26 823) (82 999)
Financial Services 164 302 131 617 303 213
Group 10 412 (51 411) 11 851
433 668 299 232 690 421
Segmental adjustments* (285 212) (102 071) (221 098)
148 456 197 161 469 323
Operating (loss)/profit before interest and taxation
Freight Services** (76 726) 31 830 89 891
Shipping (8 817) (274 079) (559 619)
Financial Services 161 594 128 663 297 312
Group (2 288) (51 519) 11 675
73 763 (165 105) (160 741)
Segmental adjustments* (166 216) 30 073 46 003
(92 453) (135 032) (114 738)
Share of associate companies' profit after taxation
Freight Services** 20 591 (7 165) 20 604
Group 202 - -
20 793 (7 165) 20 604
(Loss)/profit attributable to ordinary shareholders
Freight Services** (81 932) (732 222) (1 239 856)
Shipping (124 039) (417 903) (928 411)
Financial Services 80 256 77 071 171 006
Group 39 092 (46 990) 89 566
(86 623) (1 120 044) (1 907 695)
* Joint venture earnings are reviewed together with subsidiaries by the key decision-makers. Segmental adjustments relate to
joint ventures and are necessary to reconcile to IFRS presentation.
** A further split of the rail assembly business is included in the Additional Information for Analysts slides. This document
can be found on www.grindrod.com.
RELATED PARTY TRANSACTIONS
AS AT 30 JUNE 2017
During each period the group, in the ordinary course of business, enters into various transactions with related parties.
Parties are considered to be related if one party has the ability to control or exercise significant influence over the other
party in making financial and operating decisions. These transactions occurred under terms that are no more, or less
favourable than those arranged with third parties.
Below is a list of significant related party transactions and balances for each period.
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
R000 R000 R000
Goods and services sold to:
Vitol Shipping Singapore Pte Ltd 66 176 213 213 331 705
Goods and services purchased from:
Cockett Marine Oil Pte Ltd (338 288) (234 360) (584 201)
Amounts due from related party:
Terminal De Carvo da Matola Ltda 344 305 385 575 354 677
Cockett Marine Oil Pte Ltd 623 504 701 140 655 174
GPR Leasing Africa (Pty) Ltd 168 970 175 651 178 053
Newshelf 1279 (Pty) Ltd 492 855 446 824 492 855
IVS Bulk Pte Ltd 262 219 157 876 279 098
FAIR VALUE OF FINANCIAL INSTRUMENTS
AS AT 30 JUNE 2017
The table below 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).
Levels 2 and 3 fair values were determined by applying either a combination of, or one of, the following valuation
techniques: market-related interest rate yield curves to discount expected future cash flows; projected unit method; market
value; the net asset value of the underlying investments; and a price earnings multiple or a discounted projected
income/present value approach.
The fair value measurement for income approach valuation is based on significant inputs that are not observable in the
market. Key inputs used in the valuation include discount rates and future profit assumptions based on historical performance
but adjusted for expected growth. Management reassess the earnings or yield multiples at least annually based on their
assessment of the macro and micro economic environment.
Unaudited Unaudited Unaudited Unaudited
30 June 30 June 30 June 30 June
2017 2017 2017 2017
R000 R000 R000 R000
Level 1 Level 2 Level 3 Total
Financial assets
Derivative financial assets - 1 158 - 1 158
Financial assets designated at fair value through profit or loss - 638 541 1 337 171 1 975 712
Total - 639 699 1 337 171 1 976 870
Financial liabilities
Derivative financial instruments - (17 788) - (17 788)
Financial liabilities designated at fair value through profit or loss - (104 391) - (104 391)
Total - (122 179) - (122 179)
Unaudited Unaudited Unaudited Unaudited
30 June 30 June 30 June 30 June
2016 2016 2016 2016
R000 R000 R000 R000
Level 1 Level 2 Level 3 Total
Financial assets
Derivative financial assets - 2 975 - 2 975
Financial assets designated at fair value through profit or loss 41 303 602 705 994 392 1 638 400
Total 41 303 605 680 994 392 1 641 375
Financial liabilities
Derivative financial instruments - (43 711) - (43 711)
Financial liabilities designated at fair value through profit or loss - (87 522) - (87 522)
Total - (131 233) - (131 233)
Audited Audited Audited Audited
31 December 31 December 31 December 31 December
2016 2016 2016 2016
R000 R000 R000 R000
Level 1 Level 2 Level 3 Total
Financial assets
Derivative financial assets - 3 255 - 3 255
Financial assets designated at fair value through profit or loss - 753 752 1 084 948 1 838 700
Total - 757 007 1 084 948 1 841 955
Financial liabilities
Derivative financial instruments - (26 365) - (26 365)
Financial liabilities designated at fair value through profit or loss - (100 200) - (100 200)
Total - (126 565) - (126 565)
Fair value gains recognised in the statement of comprehensive income for Level 3 financial instruments were R41.4 million
(H1 2016: R35.7 million).
Reconciliation of Level 3 fair value measurements of financial assets
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
R000 R000 R000
Opening balance 1 084 948 888 133 888 133
Additions 227 007 70 597 158 499
Disposals (16 200) - (993)
Total gains recognised:
In other comprehensive income 674 35 662 (3 770)
Profit and loss 40 742 - 43 079
Closing balance 1 337 171 994 392 1 084 948
CONTINGENT ASSETS/LIABILITIES
AS AT 30 JUNE 2017
The company guaranteed loans and facilities of subsidiaries and joint ventures amounting to R5 463 039 000
(December 2016: R5 030 118 000) of which R2 281 692 000 (2016: R2 032 903 000) had been utilised at the end of the period.
The company guaranteed charter-hire payments of subsidiaries amounting to R505 356 700 (2016: R665 767 000). The charter-hire
payments are due by the subsidiaries in varying amounts from 2017 to 2022.
The group placed R190 618 106 (2016: R190 618 106) on deposit as security with the funders of the BEE consortium and provided
a guarantee of R130 000 000 in their favour to secure the structure. Grindrod continues to have the ability, but no
obligation, to increase its funding within the structure should the current lenders wish to exit.
BUSINESS REVIEW
STRATEGIC POSITIONING
The Grindrod board has for many years reiterated the intention to separate the Shipping business from the balance of the
group as it does not believe that the value of the Shipping business is fairly reflected in the Grindrod share price. In
order to achieve such a separation, the board has resolved to investigate a separate listing, including all the relevant
regulatory requirements locally and offshore, of the Shipping business, on a recognised international stock exchange. The
board expects to make a final determination regarding a separate listing before the end of the year.
The Grindrod management will continue its strategic focus on the Freight and Financial Services businesses. The executive
chairman will remain in his role to oversee the above processes. There will be further communication and engagement with
shareholders once the board has reached its decision.
OVERVIEW
Grindrod experienced continued improved trading conditions in the first half of 2017 following the recovery in the second
half of the prior year. The headline profit of R126.2 million was recorded prior to the loss of R255.1 million arising from
the rail assembly businesses held for sale.
Maputo Port experienced strong volume improvement following the completion of the 75-km dredging project to make the port
accessible to fully laden panamax vessels, which was completed in January 2017. The project to deepen and offset the Grindrod
TCM berth to accommodate the larger vessels was completed successfully. Fully laden post-panamax vessels are being handled by
the Port of Maputo and TCM following the projects.
The increased volume is supported by improved commodity prices. This is reflected in Grindrod's dry-bulk terminal
utilisation, which is 65 per cent in the first half (H1 2016: 40 per cent). Capacity in the Matola and Richards Bay dry-bulk
terminals is fully contracted for the remainder of the year.
Progress with the development of a petroleum-products terminal in the Port of Ngqura (Coega) by OTGC is delayed following the
decision to revise the new tariffing structure by NERSA. The long-term concession agreement between Transnet National Ports
Authority and OTGC was signed in December 2016 and customer engagement continues.
The warehousing and transportation businesses of Intermodal and Carrier continue their turnaround and are well positioned for
any market improvements. The Ships Agency and Clearing and Forwarding businesses traded well during the period. These
businesses are all dependent on the South African economy improving.
The sale of the rail assembly businesses has been extremely difficult given the lack of demand for locomotives, continued
uncertainty in the mining sector, and low levels of economic activity in southern Africa. The sale of the rail construction
business was concluded during the first half of 2017 while the sale of the signaling business is progressing well.
The agricultural logistics businesses first half earnings improved significantly following the end of the drought. The full
impact of the higher maize volumes within the silos will support the businesses result into next year.
Grindrod dry-bulk fleet is operating above daily ship running costs with average indices for the first half of the year for
handysize USD6 937 and supramax USD8 436 (H1 2016 average indices: handysize USD4 107, supramax USD4 787, 2016 H2 average
indices: handysize USD6 324, supramax USD7 540). The rates reflect the increased dry-bulk commodity demand, continued vessel
scrapping and a slow-down in newbuilding deliveries.
Rates in the tanker market remained depressed in the first half of the year, with average medium-range product tanker rates
at USD11 556 (H1 2016: USD16 138; and H2 2016: USD11 102), reflecting the effects of the high product stock levels and the
newbuilding deliveries.
The coastal seafreight profitability has come under pressure as the significant volumes of sugar transported around the coast
have reduced significantly. The improvement in rates reflect increased dry-bulk commodity demand despite the level of ships
being scrapped declining sharply and a high volume of newbuilding deliveries. Cockett Marine Oil remained in a loss position,
although trading results are now much improved.
Financial Services continued to grow profits and generate a good return on capital, with strong growth in its balance sheet
and third-party assets under management.
Despite ongoing engagement with the relevant parties on the SASSA grant payment contract, there is still no clarity on the
plans to transition the contract to a new service provider. We will continue to ensure we do all within our power to protect
the grant beneficiaries when the CPS contract expires in March 2018.
CAPITAL EXPENDITURE AND COMMITMENTS
Split as follows
Capital expenditure Capital commitments Approved not Approved and
R million H1 2017 H2 contracted contracted
2017 2018 2019+ Total
Freight Services 247 237 387 11 635 375 260
Port and Terminals 93 104 13 - 117 39 78
Rail 69 - - - - - -
Logistics 85 133 374 11 518 336 182
Shipping 105 2 4 - 6 - 6
Dry bulk 87 2 - - 2 - 2
Tankers 18 - 4 - 4 - 4
Financial Services 1 - - - - - -
Group 2 - - - - - -
355 239 391 11 641 375 266
Split as follows:
Subsidiaries 181 156 377 10 543 353 190
Joint venture 174 83 14 1 98 22 76
The above table represents board-approved capital commitments. These commitments exclude planned expenditure which is subject
to final board consideration.
Total capital and investment expenditure was R355 million (H1 2016: R812 million), of which 81 per cent was expansionary and
the balance maintenance or replacement capital expenditure. The capital expenditure mainly comprised the final payment on the
last dry-bulk ship ordered, trucks and the expenditure incurred on the Matola terminal berth deepening.
CASH FLOW AND BORROWINGS
The financial position reflects net debt of R727.1 million (December 2016: R372.6 million). The group generated operating
profit before working capital cash flows of R229.8 million (H1 2016: R272.0 million) during the period. Working capital
contributed to a net outflow of R228.2 million (H1 2016: R55.2 million net outflow).
STATEMENT OF FINANCIAL POSITION
With total assets of R33 210 million (December 2016: R36 176 million) and low gearing of 4.8 per cent, the group's financial
position remains strong. Book net asset value per share is 1 909 cents (December 2016: 2 007 cents).
Shareholders' equity decreased to R15 037 million (December 2016: R15 752 million) mainly as a result of the strengthening
South African rand and current year losses. The decrease of R401 million to the foreign currency translation reserve was due
to the strengthening of the Rand/US Dollar exchange rate from R13.69/USD to R13.06/USD.
Ordinary shares in issue remained unchanged at 762 553 314 shares.
The rail assembly businesses continue to be held for sale. The net carrying value of R434 million represents management's
best estimate of the proceeds to be received.
BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with the information required by IAS 34:
Interim Financial Reporting, SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Reporting Pronouncements as issued by the Financial Reporting Standards Council and comply with the Listings Requirements of
the JSE Limited and the Companies Act of South Africa, 2008.
These unaudited summarised consolidated interim financial statements have been prepared under the supervision of
AG Waller, CA(SA) were approved by the board of directors on 23 August 2017 and have not been audited by the group's external
auditors.
ACCOUNTING POLICIES
The accounting policies applied in the preparation of these unaudited condensed interim financial statements from which the
condensed consolidated financial statements were derived are in accordance with IFRS and are consistent with those of the
previous consolidated annual financial statements for the year ended 31 December 2016.
POST BALANCE SHEET EVENTS
There are no material post balance sheet events to report.
VOTE OF THANKS AND CHANGE IN DIRECTORATE
After 31 years at Grindrod and over 10 years as chief executive officer, Alan Olivier retired at the end of July 2017. The
board would like to thank Alan for his significant contribution to the business throughout his tenure and wish him well in
his retirement. The board has appointed the chairman, Mike Hankinson to perform an executive role to oversee the strategic
positioning process as mentioned above, and Nkululeko Sowazi as lead independent non-executive.
PROSPECTS
The stronger volumes have continued for several quarters and commodity pricing remains at profitable levels. The recovery of
the South African market is now needed to improve the returns of the South Africa-based logistics businesses.
The group remains cash-generative with a strong balance sheet and well positioned to execute its strategic plan. Shareholder
engagement on a proposal for unbundling will take place in due course.
For and on behalf of the board
NL Sowazi MJ Hankinson
Lead independent non-executive director Executive chairman
23 August 2017 23 August 2017
DECLARATION OF INTERIM DIVIDEND
ORDINARY DIVIDEND
Notice is hereby given that no interim dividend has been declared out of income reserves for the six-month period ended
30 June 2017 (H1 2016: no interim dividend declared).
At 23 August 2017, there were 762 553 314 ordinary shares in issue.
PREFERENCE DIVIDEND
Notice is hereby given that a gross interim dividend of 458.0 cents per cumulative, non-redeemable, non-participating and
non-convertible preference share (H1 2016: 453.0 cents) has been declared out of income reserves for the six-month period
ended 30 June 2017, payable to preference shareholders in accordance with the timetable below.
At 23 August 2017, there are 7 400 000 cumulative, non-redeemable, non-participating and non-convertible preference shares in
issue. The interim net preference dividend is 366.40000 cents per share for preference shareholders who are not exempt from
dividends tax.
With respect to the preference dividend, in terms of the dividends tax effective since 22 February 2017, the following
additional information is disclosed:
The local dividends tax rate is 20 per cent; and
Grindrod Limited's tax reference number is 9435/490/71/0.
PREFERENCE DIVIDEND TIMETABLE
Declaration and finalisation date Wednesday, 23 August 2017
Last day to trade cum-dividend Tuesday, 12 September 2017
Shares commence trading ex-dividend Wednesday, 13 September 2017
Record date Friday, 15 September 2017
Dividend payment Monday, 18 September 2017
No dematerialisation or rematerialisation of shares will be allowed for the period Wednesday, 13 September 2017 to Friday,
15 September 2017, both days inclusive.
The dividend is declared in the currency of the Republic of South Africa.
By order of the board
Mrs CI Lewis
Group company secretary
23 August 2017
CORPORATE INFORMATION
DIRECTORS
MJ Hankinson (Executive chairman), H Adams*, MR Faku*, WD Geach*, GG Gelink*, G Kotze (Alternate)*, Z Malinga*, RSM Ndlovu
(Alternate)*, B Ntuli, DA Polkinghorne, NL Sowazi (Lead independent non-executive), PJ Uys*, MR Wade (British), AG Waller
(Group financial director), SDM Zungu*
* Non-executive
REGISTERED OFFICE
Quadrant House,
115 Margaret Mncadi Avenue, Durban, 4001
PO Box 1, Durban, 4000, South Africa
TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg, 2196
PO Box 61051, Marshalltown, 2107, South Africa
As of 1 September 2017
Link Market Services South Africa Proprietary Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2017
PO Box 4844, Johannesburg, 2000
Telephone: +27 11 713 0800
Facsimile: 086 674 4381
Email: info@linkmarketservices.co.za
AUDITORS
Deloitte & Touche
Designated Audit Partner: Kim Peddie CA(SA)
SPONSOR
Grindrod Bank Limited
Fourth Floor, Grindrod Tower,
8A Protea Place, Sandton, 2196
PO Box 78011, Sandton, 2146, South Africa
Registration number: 1966/009846/06 Incorporated in the Republic of South Africa
Share code: GND & GNDP
ISIN: ZAE000072328 and ZAE000071106
Statements contained in this announcement regarding the prospects of the group, have not been reviewed or audited by the
group's external auditors.
For more information and additional analyst information, please refer to www.grindrod.com
Date: 23/08/2017 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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