GRINDROD LIMITED - Unaudited Interim Results for the six months ended 30 June 2018

Release Date: 31/08/2018 07:20
Code(s): GND GNDP
 
Wrap Text
Unaudited Interim Results for the six months ended 30 June 2018

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

Grindrod Limited
Unaudited Interim Results
for the six months ended 30 June 2018

Key financial information

Performance from continuing operations - Freight Services and Financial Services
- Revenue inclusive of joint ventures up 5% to R11 051.7 million (H1 2017: R10 515.9 million)
- EBITDA inclusive of joint ventures up 21% to R531.2 million (H1 2017: R437.5 million)
- Headline earnings R284.8 million (H1 2017: R231.5 million), a 23% improvement on prior year
- Headline earnings per share 37.8 cents (H1 2017: 30.8 cents)
- Earnings per share 46.7 cents (H1 2017: 45.6 cents)

Performance from discontinued operations
- Includes release of foreign currency translation gain of R2.8 billion

Performance from total operations
- Earnings per share 317.3 cents (H1 2017 loss per share: 11.5 cents)
- Headline earnings per share 3.8 cents (H1 2017 headline loss per share: 17.2 cents)
- Net asset value per share 1 257 cents (H1 2017: 1 909 cents, inclusive of the Shipping business)
- Nil gearing (H1 2017: 5%)
- No interim ordinary dividend declared (H1 2017: no interim ordinary dividend declared)

Condensed consolidated income statement
for the six months ended 30 June 2018

                                                                      Unaudited      Unaudited      Audited
                                                                        30 June        30 June  31 December
                                                                           2018           2017         2017
                                                                           R000           R000         R000
                                                                                 Re-presented*
Continuing operations
Revenue                                                               1 549 842      1 481 643    3 059 422
Earnings before interest, taxation, depreciation and amortisation       249 600        274 765      621 981
Depreciation and amortisation                                           (87 569)       (95 412)    (195 844)
Operating profit before interest and taxation                           162 031        179 353      426 137
Non-trading items                                                        80 751        120 473      129 272
Interest received                                                       123 244        103 574      264 575
Interest paid                                                           (36 959)       (46 079)     (97 850)
Profit before share of joint venture and associate companies' profit    329 067        357 321      722 134
Share of joint venture companies' profit after taxation                 136 656         58 815      111 475
Share of associate companies' profit after taxation                      43 293         20 793       60 481
Profit before taxation                                                  509 016        436 929      894 090
Taxation                                                               (120 084)       (56 926)    (172 937)
Profit for the period from continuing operations                        388 932        380 003      721 153
Discontinued operations
Profit/(loss) after taxation from discontinued operations             2 036 402       (428 820)  (1 229 023)
Profit/(loss) for the period                                          2 425 334        (48 817)    (507 870)
Attributable to:
Ordinary shareholders                                                 2 387 767        (86 623)    (582 695)
From continuing operations                                              351 346        342 177      646 275
From discontinued operations                                          2 036 421       (428 800)  (1 228 970)
Preference shareholders                                                  32 680         33 907       67 645
Owners of the parent                                                  2 420 447        (52 716)    (515 050)
Non-controlling interests                                                 4 887          3 899        7 180
From continuing operations                                                4 906          3 919        7 233
From discontinued operations                                                (19)           (20)         (53)

                                                                      2 425 334        (48 817)    (507 870)

* Re-presented for discontinued operations as detailed in the basis of preparation

Earnings per share information
for the six months ended 30 June 2018


                                                                Unaudited      Unaudited      Audited
                                                                  30 June        30 June  30 December
                                                                     2018           2017         2017
                                                                     R000           R000         R000
                                                                           Re-presented*
Reconciliation of headline earnings from continuing operations
Profit attributable to ordinary shareholders                      351 346        342 177      646 275

Adjusted for:                                                     (66 556)      (110 690)     (75 474)
Impairment of investments                                               -        126 425      126 479
Impairment of ships, intangibles, vehicles and equipment                -              -        8 503
Net profit on disposal of investments                                   -              -       (1 226)
Net profit on disposal of plant and equipment                     (81 008)           (17)     (17 372)
Foreign currency translation reserve release                            -       (246 882)    (245 656)

Joint ventures and associates:
Net profit on disposal of investments                                 (80)             -            -
Net loss on disposal of plant and equipment                           197            127          121
(Reversal of impairment)/impairment of ships, intangibles,         (1 229)         7 281       16 735
vehicles and equipment
(Reversal of impairment)/impairment of investments                 (2 675)         2 376       31 748
Impairment of goodwill                                                134              -            -

Total taxation effects of adjustments                              18 105              -        5 194

Headline earnings from continuing operations                      284 790        231 487      570 801

Ordinary share performance
Number of shares in issue less treasury shares            (000s)  753 084        751 257      751 640
Weighted average number of shares (basic)                 (000s)  752 504        751 004      751 164
Diluted weighted average number of shares                 (000s)  758 205        756 391      755 810

Basic earnings/(loss) per share:                         (cents)
From continuing operations                                           46.7           45.6         86.0
From discontinued operations                                        270.6          (57.1)      (163.6)
Total                                                               317.3          (11.5)       (77.6)
                                                         
Diluted earnings/(loss) per share:                       (cents)
From continuing operations                                           46.3           45.2         85.5
From discontinued operations**                                      268.6          (57.1)      (163.6)
Total                                                               314.9          (11.9)       (78.1)
  
Headline earnings per share from continuing operations:  (cents)
Basic                                                                37.8           30.8         76.0
Diluted                                                              37.6           30.6         75.5

*  Re-presented for discontinued operations as detailed in the basis of preparation
** In the prior year diluted loss per share from discontinued operations was 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 2018
                                                                    Unaudited  Unaudited      Audited
                                                                      30 June    30 June  31 December
                                                                         2018       2017         2017
                                                                         R000       R000         R000
Profit/(loss) for the period                                        2 425 334    (48 817)    (507 870)

Other comprehensive income/(loss):
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations                706 955   (402 012)    (799 595)
Net movement in cash flow hedges                                          186        253          760
Business combinations                                                  (2 006)       943        1 946

Items that will not be reclassified subsequently to profit or loss
Actuarial gains                                                             -          -        7 102
Fair value gain/(loss) arising on available-for-sale instruments          690          -       (1 901)
Total comprehensive income/(loss) for the year                      3 131 159   (449 633)  (1 299 558)
Total comprehensive income/(loss) attributable to:
Owners of the parent                                                3 124 847   (452 535)  (1 304 522)
Non-controlling interest                                                6 312      2 902        4 964
                                                                    3 131 159   (449 633)  (1 299 558)

Condensed consolidated statement of financial position
as at 30 June 2018

                                                                                                     Unaudited      Unaudited      Audited
                                                                                                       30 June        30 June  31 December
                                                                                                          2018           2017         2017
                                                                                                          R000           R000         R000
Ships, property, terminals, machinery, vehicles and equipment                                        1 564 701      5 072 775    1 478 003
Intangible assets                                                                                      706 145      1 032 254      710 909
Investments in joint ventures                                                                        2 798 479      3 650 865    2 453 230
Investments in associates                                                                              916 509        917 385      867 220
Deferred taxation                                                                                       54 865         91 253       59 313
Other investments and derivative financial assets                                                    2 582 640      2 252 373    2 389 218
Total non-current assets                                                                             8 623 339     13 016 905    7 957 893
Loans and advances to bank customers                                                                 7 524 148      6 313 277    7 149 198
Liquid assets and short-term negotiable securities                                                   2 209 999      1 937 342    1 763 875
Bank balances and cash                                                                              11 105 598      6 601 649    8 970 274
Other current assets                                                                                 2 301 559      4 200 316    2 466 331
Non-current assets held for sale                                                                       253 834      1 140 866    6 641 399
Total assets                                                                                        32 018 477     33 210 355   34 948 970

Shareholders' equity                                                                                10 157 816     15 036 526   14 152 823
Non-controlling interests                                                                               49 881         48 928       44 659
Total equity                                                                                        10 207 697     15 085 454   14 197 482
Interest-bearing borrowings                                                                            318 571      1 727 396      295 429
Financial Services funding instruments                                                               1 024 678      1 157 184      720 137
Deferred taxation                                                                                      243 548        265 350      244 655
Other non-current liabilities                                                                           52 691        113 826       66 199
Total non-current liabilities                                                                        1 639 488      3 263 756    1 326 420
Deposits from bank customers                                                                        17 183 473     11 239 939   14 640 363
Current interest-bearing borrowings                                                                    543 767        884 745      349 881
Financial Services funding instruments                                                                 550 844        257 971      738 953
Other liabilities                                                                                    1 455 462      1 771 667    1 300 360
Non-current liabilities associated with assets held for sale                                           437 746        706 823    2 395 511
Total equity and liabilities                                                                        32 018 477     33 210 355   34 948 970

Net worth per ordinary share - at book value (cents)*                                                    1 257          1 909        1 790
Net debt equity ratio                                                                                  (0.09:1)        0.05:1       0.00:1
Capital expenditure                                                                                    433 327        181 331      389 472

                                                                     30 June        30 June      30 June      30 June    31 December  31 December
                                                                        2018           2018         2017         2017           2017         2017
                                                                        R000         USD000         R000       USD000           R000       USD000
Capital commitments                                                  143 345          7 769      192 406       23 358         29 000       19 000
Authorised by directors and                                           30 685              -       26 749       10 787         29 000       19 000
contracted for
Due within one year                                                   30 685              -       22 749        6 210         29 000       19 000
Due thereafter                                                             -              -        4 000        4 577              -            -
Authorised by directors not yet                                      112 660          7 769      165 657       12 571              -            -
contracted for

* June 2018 excludes the Shipping business

Condensed consolidated statement of cash flows
for the six months ended 30 June 2018

                                                                                                                Unaudited      Unaudited      Audited
                                                                                                                  30 June        30 June  31 December
                                                                                                                     2018           2017         2017
                                                                                                                     R000           R000         R000
                                                                                                                            Re-presented*
Operating profit from continuing operations                                                                       162 031        179 353      426 142
Operating loss from discontinued operations                                                                      (257 189)      (271 806)    (825 287)
Non-cash adjustments                                                                                              157 378        322 231      860 797
Operating profit before working capital changes                                                                    62 220        229 778      461 652
Working capital changes                                                                                          (166 704)      (228 164)      97 566
Cash (utilised in)/generated from operations**                                                                   (104 484)         1 614      559 218
Net interest received/(paid)                                                                                       20 478         (9 675)      38 335
Net dividends (paid)/received                                                                                     (29 350)        59 360       55 570
Taxation paid                                                                                                     (73 785)       (45 835)    (169 616)
                                                                                                                 (187 141)         5 464      483 507
Net deposits from/(advances to) customers and other short-term negotiables                                      1 716 281     (2 965 021)    (227 051)
Deposits - Retail Banking                                                                                       2 081 492     (2 900 263)     120 876
Other                                                                                                            (365 211)       (64 758)    (347 927)
Net cash flows generated from/(utilised in) operating activities before ships sales and purchases               1 529 140     (2 959 557)     256 456
Proceeds on disposal of ships                                                                                           -              -      238 097
Capital expenditure on ships                                                                                     (242 244)       (21 911)     (69 753)
Net cash flows generated from/(utilised in) operating activities                                                1 286 896     (2 981 468)     424 800
Acquisition of other investments, property, terminals, machinery, vehicles and equipment                         (208 481)      (326 943)    (368 457)
Net (outflow)/proceeds from disposal of property, terminals, machinery, vehicles, equipment and investments      (461 301)        15 356      169 900
Intangible assets acquired                                                                                            (44)          (435)      (4 110)
Proceeds from disposal of intangible assets                                                                           353             88        7 948
Funds advanced from/(to) joint ventures and associate companies                                                   261 707        (11 618)     (22 144)
Acquisition of additional investments in subsidiaries, joint ventures and associates                                 (406)       (53 849)     (82 448)
Net cash flows utilised in investing activities                                                                  (408 172)      (377 401)    (299 311)
Acquisition of treasury shares                                                                                          -         (1 386)      (1 386)
Long-term interest-bearing debt raised                                                                          1 353 906      1 166 179    1 277 549
Payment of capital portion of long-term interest-bearing debt                                                  (1 053 837)      (576 675)  (1 030 371)
Short-term interest-bearing debt raised                                                                                93              -            -
Net cash flows generated from financing activities                                                                300 162        588 118      245 792
Net increase/(decrease) in cash and cash equivalents                                                            1 178 886     (2 770 751)     371 281
Cash and cash equivalents at beginning of the period                                                            9 558 382      9 294 457    9 294 457
Difference arising on translation                                                                                 125 319        (47 928)    (107 356)
Cash and cash equivalents at end of the period                                                                 10 862 587      6 475 778    9 558 382

*  Re-presented for discontinued operations as detailed in the basis of preparation
** June 2017: Included in "Cash generated from operations" is cash utilised of R244.4 million relating to the Rail businesses held for sale

Condensed consolidated statement of changes in equity
for the six months ended 30 June 2018
                                                                       Unaudited   Unaudited      Audited
                                                                         30 June     30 June  31 December
                                                                            2018        2017         2017
                                                                            R000        R000         R000
Share capital and share premium                                        4 430 048   5 985 504    5 992 754
Balance at beginning of the period                                     5 992 754   5 971 719    5 971 719
Share options vested                                                      21 656      15 171       22 421
Return of share capital                                               (1 584 362)          -            -
Treasury shares acquired                                                       -      (1 386)      (1 386)
Preference share capital                                                       2           2            2
Balance at beginning of the period                                             2           2            2
Equity compensation reserve                                               51 928      58 854       58 364
Balance at beginning of the period                                        58 364      68 513       68 513
Share-based payments                                                      16 968       5 512       12 272
Share options vested                                                     (21 656)    (15 171)     (22 421)
Balance disposed on Shipping exit                                         (1 748)          -            -
Foreign currency translation reserve                                   1 380 362   3 906 383    3 505 281
Balance at beginning of the period                                     3 505 281   4 546 313    4 546 313
Foreign currency translation realised                                 (2 830 449)   (238 915)    (243 653)
Foreign currency translation adjustments                                 705 530    (401 015)    (797 379)
Other non-distributable statutory reserves                               (42 664)    (45 076)     (43 566)
Balance at beginning of the period                                       (43 566)    (51 592)     (51 592)
Financial instrument hedge settlement                                        186         864        3 005
Foreign currency translation adjustments                                    (382)      1 040        2 035
Fair value adjustment on hedging reserve                                  14 068        (708)        (202)
Deferred tax effect on cash flow hedge                                         -           -       (2 132)
Net business combination acquisition                                           -       5 320        5 320
Balance disposed on Shipping exit                                        (12 970)          -            -
Accumulated profit                                                     4 338 140   5 130 859    4 639 988
Balance at beginning of the period                                     4 639 988   5 217 482    5 217 482
Transitional provision - implementation of IFRS 9 and IFRS 15            (33 217)          -            -
Fair value gain arising on available-for-sale financial instruments          690           -       (1 901)
Actuarial gains recognised                                                     -           -        7 102
Profit/(loss) for the period                                           2 420 447     (52 716)    (515 050)
Ordinary dividends paid*                                              (2 657 088)          -            -
Preference dividends paid                                                (32 680)    (33 907)     (67 645)
Total interest of shareholders of the company                         10 157 816  15 036 526   14 152 823
Equity attributable to non-controlling interests of the company           49 881      48 928       44 659
Balance at beginning of the period                                        44 659      48 919       48 919
Foreign currency translation adjustments                                   1 425        (997)      (2 216)
Non-controlling interest disposed                                              -         244          244
Profit for the period                                                      4 887       3 899        7 180
Dividends paid                                                            (1 090)     (3 137)      (9 468)
Total equity attributable to all shareholders of the company          10 207 697  15 085 454   14 197 482

* Ordinary dividends relate to the Shipping spin-off

Segmental analysis for continuing operations
for the six months ended 30 June 2018
                                                                            Unaudited      Unaudited       Audited
                                                                              30 June        30 June   31 December
                                                                                 2018           2017          2017
                                                                                 R000           R000          R000
                                                                                       Re-presented*
Revenue
Port and Terminals                                                            411 598        421 159       874 607
Logistics                                                                   1 246 062      1 139 247     2 336 408
Financial Services                                                            233 441        224 993       467 039
Marine Fuel and Agricultural Logistics                                      9 122 391      8 720 011    17 585 797
Group                                                                          38 188         10 490        12 045
                                                                           11 051 680     10 515 900    21 275 896
Segmental adjustments**                                                    (9 501 838)    (9 034 257)  (18 216 474)
                                                                            1 549 842      1 481 643     3 059 422
Earnings/(loss) before interest, taxation, depreciation and amortisation
Port and Terminals                                                            113 820        152 176       309 247
Logistics                                                                     250 077        120 620       339 738
Financial Services                                                            197 486        164 302       362 952
Marine Fuel and Agricultural Logistics                                         29 129         28 498        65 061
Group                                                                         (59 325)       (28 099)     (123 392)
                                                                              531 187        437 497       953 606
Segmental adjustments**                                                      (281 587)      (162 732)     (331 625)
                                                                              249 600        274 765       621 981
Operating profit/(loss) before interest and taxation
Port and Terminals                                                             61 630         99 192       204 313
Logistics                                                                     159 549         36 273       165 275
Financial Services                                                            194 821        161 594       357 707
Marine Fuel and Agricultural Logistics                                         24 434         23 903        50 740
Group                                                                         (59 326)       (25 526)     (124 525)
                                                                              381 108        295 436       653 510
Segmental adjustments**                                                      (219 077)      (116 083)     (227 373)
                                                                              162 031        179 353       426 137
Share of associate companies' profit/(loss) after taxation
Port and Terminals                                                             27 434         27 288        54 077
Logistics                                                                         294         (5 129)      (10 130)
Marine Fuel and Agricultural Logistics                                         39 456         20 395        55 093
                                                                               67 184         42 554        99 040
Segmental adjustments**                                                       (23 891)       (21 761)      (38 559)
                                                                               43 293         20 793        60 481
Profit/(loss) attributable to ordinary shareholders
Port and Terminals                                                             91 691        114 427       182 137
Logistics                                                                     133 414        173 546       221 809
Financial Services                                                            104 233         80 256       188 958
Marine Fuel and Agricultural Logistics                                         45 513         16 801        57 777
Group                                                                         (23 505)       (42 853)       23 032
                                                                              351 346        342 177       673 713
Segmental adjustments**                                                             -              -       (27 438)
                                                                              351 346        342 177       646 275

*  Re-presented for discontinued operations as detailed in the basis of preparation
** 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
   
Income statement - Discontinued operations
for the six months ended 30 June 2018

                                                               Unaudited      Unaudited      Audited
                                                                 30 June        30 June  31 December
                                                                    2018           2017         2017
                                                                    R000           R000         R000
                                                                          Re-presented*
Revenue                                                        1 954 635      2 624 103    5 432 486
Loss before interest, taxation, depreciation and amortisation   (257 189)      (126 310)    (606 721)
Shipping                                                        (161 487)        50 745       25 309
Rail                                                             (95 702)      (177 055)    (632 030)
Depreciation and amortisation                                          -       (145 496)    (218 564)
Shipping                                                               -       (134 444)    (204 450)
Rail                                                                   -        (11 052)     (14 114)
Operating loss before interest and taxation                     (257 189)      (271 806)    (825 285)
Non-trading items                                              2 304 691        (68 435)    (587 770)
Gain on re-measurement of fair value less costs to sell                -              -      483 180
Interest received                                                 25 529          9 980       71 646
Interest paid                                                    (46 475)       (64 182)    (117 382)
Profit/(loss) before share of joint venture companies' loss    2 026 556       (394 443)    (975 611)
Share of joint venture companies' profit/(loss) after taxation    30 338         (8 964)    (162 356)
Profit/(loss) before taxation                                  2 056 894       (403 407)  (1 137 967)
Taxation                                                         (20 492)       (25 413)     (91 056)
Profit/(loss) for the period                                   2 036 402       (428 820)  (1 229 023)
Attributable to:
Owners of the parent                                           2 036 421       (428 800)  (1 228 970)
Non-controlling interests                                            (19)           (20)         (53)
                                                               2 036 402       (428 820)  (1 229 023)

* Re-presented for discontinued operations as detailed in the basis of preparation

Related party transactions
for the six months ended 30 June 2018

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 year:
                                                                   Unaudited  Unaudited      Audited
                                    Nature of                        30 June    30 June  31 December
                                    relationship                        2018       2017         2017
                                                                        R000       R000         R000
Goods and services sold to
Vitol Shipping Singapore Pte Ltd    Joint venture                     54 073     66 176      111 163
Goods and services purchased from
Cockett Marine Oil Pte Ltd          Joint venture                   (268 797)  (338 288)    (702 945)
Amounts due from related party
Terminal De Carvo da Matola Ltda    Joint venture                     75 721    344 305      313 132
Cockett Marine Oil Pte Ltd          Joint venture                    438 830    623 504      420 203
GPR Leasing Africa                  Joint venture                    168 316    168 970      146 896
Newshelf 1279 (Pty) Ltd             Influence holder of the group    579 963    492 855      548 954
IVS Bulk Pte Ltd                    Joint venture                          -    262 219      283 632
Directors (directly or indirectly)  Directors and key officers       173 222    171 278      178 842

Foreign currency denominated items
as at 30 June 2018

Exchange rates (ZAR/USD)  Unaudited  Unaudited      Audited
                            30 June    30 June  31 December
                               2018       2017         2017
                               R000       R000         R000
Opening exchange rate         12.39      13.69        13.69
Closing exchange rate         13.73      13.06        12.39
Average exchange rate         12.31      13.32        13.36

Fair value of financial instruments
as at 30 June 2018

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).

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; and/or
- Projected unit method; and/or
- Market value; and/or
- The net asset value of the underlying investments; and/or
- 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 reassesses the earnings or yield
multiples at least annually based on their assessment of the macro- and micro-economic environments.

                                                                    Unaudited    Unaudited    Unaudited    Unaudited
                                                                      30 June      30 June      30 June      30 June
                                                                         2018         2018         2018         2018
                                                                         R000         R000         R000         R000
                                                                      Level 1      Level 2      Level 3        Total
Financial assets
Derivative financial assets                                                 -            -            -            -
Financial assets designated at fair value through profit or loss       34 378      881 098    1 541 799    2 457 276                                                                      
Total                                                                  34 378      881 098    1 541 799    2 457 276

Financial liabilities
Derivative financial instruments                                            -       (7 140)           -       (7 140)
Other liabilities*                                                          -      (91 816)           -      (91 816)
Total                                                                       -      (98 956)           -      (98 956)


                                                                    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)
Other liabilities*                                                          -     (104 391)           -     (104 391)
Total                                                                       -     (122 179)           -     (122 179)


                                                                      Audited      Audited      Audited      Audited
                                                                  31 December  31 December  31 December  31 December
                                                                         2017         2017         2017         2017
                                                                         R000         R000         R000         R000
                                                                      Level 1      Level 2      Level 3        Total
Financial assets
Derivative financial assets                                                 -        1 617            -        1 617
Financial assets designated at fair value through profit or loss            -      811 417    1 426 302    2 237 719                                                                           
Total                                                                       -      813 034    1 426 302    2 239 336

Financial liabilities
Derivative financial instruments                                            -      (20 744)           -      (20 744)
Other liabilities*                                                          -      (92 132)           -      (92 132)
Total                                                                       -     (112 876)           -     (112 876)

* Other liabilities include provisions for post-retirement medical aid and cash-settled share-based payment scheme

Fair value gains recognised in the condensed consolidated income statement and condensed consolidated statement of other
comprehensive income for Level 3 financial instruments were R97.7 million (June 2017: R41.4 million). 

Reconciliation of Level 3 fair value measurements of financial assets

                                                                     Unaudited  Unaudited      Audited
                                                                       30 June    30 June  31 December
                                                                          2018       2017         2017
                                                                          R000       R000         R000
Opening balance                                                      1 426 302  1 084 948    1 084 948
Additions                                                               19 909    227 007      236 750
Disposals                                                               (2 061)   (16 200)     (21 018)
Total gains recognised in
- Condensed consolidated statement of other comprehensive income        45 587        674       (1 221)
- Condensed consolidated income statement                               52 062     40 742      126 843
Closing balance                                                      1 541 799  1 337 171    1 426 302

Contingent assets/liabilities
as at 30 June 2018

The company guaranteed loans and facilities of subsidiaries and joint ventures amounting to R4 285.6 million (December 2017: R4 739.8 million) of which R1 340.1
million (December 2017: R1 731.7 million) had been utilised at the end of the period.

Grindrod placed R190.6 million (December 2017: R190.6 million) on deposit as security with the funders of the BEE consortium and provided a guarantee of R130.0
million (December 2017: R130.0 million) 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.

Within discontinued operations, in the prior year the company guaranteed loans and facilities of subsidiaries and joint ventures amounting to R404.7 million of which
R404.4 million had been utilised at the end of the period. In the current year, no guarantees or facilities were made or utilised.

Included in the prior year discontinued operations, were charter-hire payments of subsidiaries guaranteed by the company amounting to R403.5 million. The charter-hire
payments were due by the subsidiaries in varying amounts from 2018 to 2022. In the current year, there are no guarantees of charter-hire payments.

Due to the significant restructuring, sale and disposal processes over the last few years, there are potential legal and compliance risks, which may result in
potential exposures.

Business review

Grindrod successfully implemented its strategy to spin-off and separately list the Shipping business on the NASDAQ as primary listing and secondary listing on the JSE
during the first half of 2018.

The conclusion of the spin-off of the Shipping division has cleared the path for a renewed strategic focus of the remaining businesses, namely Freight Services and
Financial Services.

Continuing operations

Headline earnings from continuing businesses, comprising Port and Terminals, Logistics, Marine Fuel and Agricultural Logistics and Financial Services, improved in the
first half of this year from R231.5 million in 2017 to R284.8 million, an increase of 23 percent.

Maputo Port and Terminals
Maputo Port continued to benefit from the 75-km access channel dredge successfully completed in 2017, and a continued buoyant chrome and ferrochrome market. Port
volumes grew 15 percent on prior year to 9.7 million tonnes. This positive performance is expected to continue into the second half of the year. Current expansionary
projects include the rehabilitation of berths, construction of additional chrome and ferrochrome slab, and procurement of additional equipment as approved by the
board in the first half of the year. These projects are part of the approved Port Master Plan which will position the port to improve further its service levels with
shipping lines and volume growth in the medium term.

At the Matola Terminal, a 36 percent improvement in coal volumes was reported in the first half which offset the reduced magnetite volumes caused by operational
issues at a key customer site. Total utilisation across all drybulk terminals showed a decrease of 6 percent to 4.8 million tonnes (2017: 5.1 million tonnes) for the
half year. The lower iron ore prices and stronger US Dollar against the Rand undermined earnings performance compared to 2017.

The Oiltanking Grindrod Calulo joint venture for the construction and development of the Ngqura Liquid Bulk Terminal in respect of a BOOT agreement with Transnet is
progressing well, with interest from existing and potentially new customers being finalised and with the conclusion of the financial elements planned for quarter 3 of
2018.

Logistics
Logistics operations achieved earnings of R155.4 million, a decrease of 11 percent as growth continued to be constrained by challenging market conditions.

The road transportation, containerised cargo and warehousing businesses demonstrated a significant turnaround compared to the losses reported in the prior period.
Various commercial initiatives are underway to increase the market share and improve asset utilisations. These initiatives are expected to limit the impact of
challenging market conditions and improve the businesses to a preferred transporter status.

The construction and operation of the cross-docking facility in Nacala in conjunction with the long-term pit-to-port logistics contract for Syrah Resources commenced
operations as planned and volume is ramping up. YTD volume of 6 922 tonnes has been handled with 121 000 tonnes expected during the second half. Thereafter volumes
are expected to ramp up to a steady 360 000 tonnes. The contract runs for an initial period of five years ending on 31 May 2023 with an option for a further five-year
period.

The Ships Agency and Clearing and Forwarding businesses generated positive earnings albeit lower than prior year due to the subdued trading environment in South
Africa.

The OACL coastal shipping service showed a significant volume improvement as the business benefitted from the extension of its landside cargo storage and handling
activities.

Continuing Rail operations, comprising management and operational services for customers on the North-South Corridor, showed a volume uplift of 14 percent on prior
year due to increased domestic volumes in Zimbabwe, and transit cargo. Results include the income of USD15.8 million which related to part settlement in respect of a
past take-or-pay agreement.

Marine Fuel and Agricultural Logistics
The Agricultural Logistics businesses reported record carry-over grain stock levels which materialised after the largest national crop in the history of South Africa,
followed on the back of the 2016/2017 drought and the lowest rainfall in the recorded history of over 111 years. These improvements resulted in increased profits. The
Marine Fuel business benefitted from increased oil prices and higher tonnages.

Financial Services
Financial Services reported consistent results for the six months, and divisions mostly performed in line with expectations. The business continued to grow despite
muted economic growth and the uncertainty created by the transition to a new social grant payment system.

The statement of financial position showed growth in both Advances (5.2 percent) and Core Deposits (5.9 percent), demonstrating stability in the traditional banking
businesses.

The investment banking portfolio generally reflected the economic environment, the exception being a particularly strong performance in the UK property portfolio
where earnings were positively impacted by value uplifts in the underlying properties and by a weaker Rand exchange rate compared to the prior period.

The Retail division within Grindrod Bank focused on ensuring continuity in the on-time distribution of social grant payments. The transition from the previous SASSA
accounts to a new "open choice" dispensation commenced in earnest in April 2018 and is expected to be complete by September 2018. This process has not been without
its challenges however, we are looking forward to a more secure business once the changeover is complete.

The Financial Services division remains focused on its existing core business units while at the same time positioning itself to expand its service offering and
optimise value by targeting strategic growth initiatives. This includes investigating ways in which further value can be created by introducing an appropriate BEE
shareholding in order to propel Financial Services to the next level of growth.

Discontinued operations
The discontinued businesses comprise the Shipping division and the Rail leasing businesses.

Shipping
Results include the release of a R2.8 billion foreign-currency translation gain following the spin-off of the Shipping business. The business benefitted from its
exposure to the drybulk spot market which improved on the prior year comparative period, while tanker market rates were under pressure; reporting in the first half a
headline loss of R115.8 million, 15 percent lower than the comparative period loss of R135.9 million, excluding listing transaction costs.

Capital expenditure during the period, included progress payments on the resale contracts for two new Supramax drybulk vessels under construction in Japan and the
buy-up to outright ownership of two vessels on the mutual termination of a drybulk joint venture.

With its reputation and modern eco fleet the business is poised to grow.

Rail leasing
The held-for-sale Rail leasing business comprises of the locomotives and wagon leasing joint venture, Grindrod Pembani Remgro (GPR), held 55 percent by Grindrod
and 45 percent by PRIF, and the wholly owned Locomotives Leasing business operating in Sierra Leone.

GPR achieved 80 percent redeployment rate on its leased 27 locomotives and 100 wagons compared to 76 percent in 2017. Deteriorating conditions at the Tonkolili mine
in Sierra Leone with the mine being placed under care and maintenance pending a revised feasibility study, resulted in the board concluding that an impairment of
R637.5 million be recorded with respect to the locomotive business providing services to the Tonkolili mine.

Capital expenditure and commitments

                           Capital expenditure               Capital commitments                            Split as follows
                                                                                                   Approved                 Approved
                                                                                                        not                      and
R million                              H1 2018           H2 2018  2019  2020  2021               contracted               contracted
Continuing operations                      204               272     -     -     -                      230                       42
Port and Terminals                          28                21     -     -     -                        4                       17
Logistics                                  173               248     -     -     -                      226                       22
Financial Services                           1                 -     -     -     -                        -                        -
Group                                        2                 3     -     -     -                        -                        3
                                                                                                         
Discontinued operations                    272                 -     -     -     -                        -                        -
Rail leasing                                 6                 -     -     -     -                        -                        -
Dry-bulk                                   242                 -     -     -     -                        -                        -
Tankers                                     24                 -     -     -     -                        -                        -
                                                                                                                                 
                                           476               272     -     -     -                      230                       42
Split as follows:
Subsidiaries                               434               256     -     -     -                      225                       31
Joint ventures                              42                16     -     -     -                        5                       11

Total capital and investment expenditure was R476 million (H1 2017: R355 million), of which 71 percent was expansionary and the balance maintenance or replacement
capital expenditure. The capital expenditure mainly comprised expenditure on the Nacala project and payments on two Supramax ships on order.

Cash flow and borrowings
The financial position reflects net cash of R891.2 million (December 2017: R6.7 million). The group generated operating profit before working capital cash flows of
R62.2 million (December 2017: R461.7 million) during the period. Working capital contributed to a net outflow of R166.7 million (December 2017: R97.6 million net
inflow).

Statement of financial position
With total assets of R32 018.5 million (December 2017: R34 949.0 million) and no gearing, the group's financial position remains strong. Book net asset value per
share is 1 257 cents (December 2017: 1 790 cents, inclusive of the Shipping business).

Shareholders' equity decreased to R10 207.7 million (December 2017: R14 197.5 million) mainly as a result of a R1 584.4 million return of share capital and an
ordinary dividend of R2 657.1 million, all related to the spin-off of the Shipping division. The increase of R705.5 million to the foreign currency translation
reserve was due to the weakening of the ZAR/USD exchange rate from R12.39/USD in December 2017 to R13.73/USD in June 2018.

Ordinary shares in issue remained unchanged at 762 553 314 shares.

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. As a result of the spin-off and separate listing of the group's
Shipping business, the group's prior year condensed consolidated income statement and condensed segmental analysis have been re-presented to take account of the
effects of the application of the IFRS 5: Non-current Assets Held for Sale and Discontinued Operations. The group's condensed consolidated statement of other
comprehensive income, condensed consolidated statement of financial position and condensed consolidated statement of changes in equity are not required to be re-
presented.

The group adopted IFRS 15: Revenue from Contracts with Customers and IFRS 9: Financial Instruments with a date of initial application of 1 January 2018. As a result,
the group has changed its accounting policy for revenue recognition and financial instruments.

The group has elected not to restate comparative information and has recorded the cumulative effect of initially applying the new standards as an adjustment to the
opening balance of equity at the date of initial application. Therefore the comparative information has not been restated and is reported under the previous
standards.

The unaudited condensed consolidated financial statements have been prepared under the supervision of AG Waller CA(SA) and were approved by the board of directors on
22 August 2018.

Accounting policies
The accounting policies applied in the preparation of the full consolidated financial statements from which the unaudited condensed consolidated financial statements
were derived are in terms of IFRS and are consistent with those of the previous full consolidated financial statements except for the adoption of the new IFRS 15:
Revenue from Contracts with Customers and IFRS 9: Financial Instruments.

Post balance sheet events
There are no material post balance sheet events to report.

Directorate and vote of thanks
Bongiwe Ntuli, the chief executive officer of Freight Services has decided to embark on a new opportunity effective from 31 December 2018. Grindrod thanks Bongiwe for
her dedication, contribution and commitment to the company.

Gerhard Kotze, alternative to Mkhuseli Faku has resigned from the board on 31 August 2018 and Hassen Adams and Walter Geach retire with effect from 30 November 2018.
The board expresses its appreciation for their contribution and wishes them well with their future endeavours.

Andrew Waller is appointed as chief executive officer and Xolani Mbambo as financial director of Grindrod Limited with effect from 1 September 2018. The board
congratulates them on their new appointments and looks forward to their continued commitment.

Prospects
With the separate listing of the Shipping division complete, Grindrod is well positioned to drive the strategies of the Freight Services and Financial Services divisions.
Significant initiatives to improve capacity and drive more efficient utilisation of resources will position the remaining businesses to increase market share and to 
capitalise on any global market improvements.

NL Sowazi                                      MJ Hankinson
Lead independent non-executive director        Executive chairman
22 August 2018                                 22 August 2018

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 2018 (H1 2017: no interim dividend
declared).

At the date of this announcement, there were 762 553 314 ordinary shares.

Preference dividend
Notice is hereby given that a gross interim dividend of 442.0 cents per cumulative, non-redeemable, non-participating and non-convertible preference share (H1 2017:
458.0 cents) has been declared out of income reserves for the six-month period ended 30 June 2018, payable to preference shareholders in accordance with the timetable
below.

At the date of this announcement, there were 7 400 000 cumulative, non-redeemable, non-participating and non-convertible preference shares in issue. The interim net
preference dividend is 353.6 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 percent; and
- Grindrod Limited's tax reference number is 9435/490/71/0.

Preference dividend timetable
Declaration and finalisation date                     Friday, 31 August 2018
Last day to trade cum-dividend                        Tuesday, 18 September 2018
Shares commence trading ex-dividend                   Wednesday, 19 September 2018
Record date                                           Friday, 21 September 2018
Dividend payment                                      Tuesday, 25 September 2018

No dematerialisation or rematerialisation of shares will be allowed for the period Wednesday, 19 September 2018 to
Friday, 21 September 2018, 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
22 August 2018

Corporate information

Directors
MJ Hankinson (executive chairman), H Adams*, MR Faku*, WD Geach*, GG Gelink*, Z Malinga*, RSM Ndlovu (alternate)*, B Ntuli, DA Polkinghorne, NL Sowazi (lead
independent non-executive director), PJ Uys*, AG Waller (group financial director), SDM Zungu*
* Non-executive

Registered office
Grindrod Mews
106 Margaret Mncadi Avenue, Durban, 4001
PO Box 1, Durban, 4000, South Africa

Transfer secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2017
PO Box 4844, Johannesburg, 2000, South Africa
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
4th Floor, Grindrod Tower
8A Protea Place, Sandton, 2196
PO Box 78011, Sandton, 2146, South Africa

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 of announcement: 31 August 2018


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