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Unaudited Financial Results For The Three Months And Six Months Ended June 30, 2023
GRINDROD SHIPPING HOLDINGS LTD.
ABBREVIATED NAME: GRINSHIP
Registered in Singapore with registration number 201731497H
JSE Share code: GSH
ISIN: SG9999019087
Primary listing on NASDAQ Global Select Market
Secondary listing on the JSE Main Board
Grindrod Shipping Holdings Ltd. Announces Unaudited Financial Results For The Three Months And Six Months Ended
June 30, 2023
On September 5, 2023, Grindrod Shipping Holdings Ltd. (NASDAQ: GRIN) (JSE: GSH) (“Grindrod Shipping” or "Company"
or “we” or “us” or “our”), a global provider of maritime transportation services predominantly in the drybulk sector, today
announced its earnings results for the three months and six months ended June 30, 2023.
Financial Highlights for the Three Months Ended June 30, 2023
- Revenues of $109.1 million
- Gross profit of $16.4 million
- Profit for the period and attributable to owners of the Company of $5.5 million, or $0.28 per ordinary share
- Adjusted net income of $5.5 million, or $0.28 per ordinary share(1)
- Adjusted EBITDA of $24.3 million(1)
- Handysize and supramax/ultramax TCE per day of $11,594 and $15,215, respectively(1)
Financial Highlights for the Six Months Ended June 30, 2023
- Revenues of $185.9 million
- Gross profit of $23.5 million
- Profit for the period and attributable to owners of the Company of $1.2 million, or $0.06 per ordinary share
- Adjusted net income of $1.2 million, or $0.06 per ordinary share(1)
- Adjusted EBITDA of $40.0 million(1)
- Handysize and supramax/ultramax TCE per day of $10,542 and $13,968, respectively(1)
- Period end cash and cash equivalents of $83.3 million and restricted cash of $7.0 million
(1)
Adjusted EBITDA, Adjusted net income/(loss) and TCE per day are non-GAAP financial measures. For the definitions of these
non-GAAP financial measures and the reconciliation of these measures to the most directly comparable financial measure
calculated and presented in accordance with GAAP, please refer to the definitions and reconciliations in “Non-GAAP Financial
Measures” at the end of this press release.
Operational & Corporate Highlights for the Three Months Ended June 30, 2023
- On May 4, 2023, we entered into a contract to charter-out the 2017-built supramax bulk carrier IVS Swinley Forest for
12 months.
- On May 25, 2023, we exercised the purchase option on the chartered-in 2016-built supramax bulk carrier, IVS Hayakita,
with delivery planned on or about September 28, 2023. The vessel will remain chartered-in at her original contract rate
until delivery to us.
- On June 9, 2023, the Company completed the previously disclosed sale of the 2014-built handysize bulk carrier, IVS
Kestrel for $17.3 million (before costs). Approximately $7.0 million debt was repaid on the Company’s $114.1 million
senior secured credit facility and the sale generated net proceeds to the Company of $10.3 million after the debt
repayment. Following delivery to the new owners, IVS Kestrel was chartered-in for 11 to 13 months and has two one-
year options to extend the charter.
- On June 27, 2023, we entered into a contract to sell the 2011-built handysize bulk carrier, IVS Orchard for a price of
$10.8 million (before costs). The vessel is unencumbered.
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Recent Developments
- On July 11, 2023, we exercised the option to extend the firm charter-in period of the 2016-built supramax bulk carrier IVS
Windsor for 12 months.
- On July 13, 2023, we announced an EGM to be held on August 10, 2023 to propose a capital reduction which would result
in a total cash distribution up to a maximum of $45.0 million.
- On July 17, 2023, we exercised the option to extend the firm charter-in period of the 2014-built supramax bulk carrier IVS
Naruo for 12 months.
- On July 18, 2023, we entered into a contract to purchase the 2024-built handysize bulk carrier newbuilding for a price of
$33.8 million (before costs) from Good Viscount (MI) Ltd (a wholly owned subsidiary of our parent company Taylor
Maritime Investments Limited (“TMI”). The acquisition, which is at an agreed price consistent with two independent
broker valuations obtained in connection with the transaction, was unanimously approved by the disinterested members of
the Board.
- On July 24, 2023, we entered into a contract to purchase the 2011-built handysize bulk carrier, Steady Sarah, for a price of
$15.0 million (before costs) from Billy (MI) Ltd (a wholly owned subsidiary of our parent company TMI). The acquisition,
which is at an agreed price consistent with three independent broker valuations obtained in connection with the transaction,
was unanimously approved by the disinterested members of the Board. We took delivery of the handysize bulk carrier on
July 28, 2023.
- On August 4, 2023, we delivered the 2011-built handysize bulk carrier, IVS Orchard, to her new owners.
- On August 10, 2023, a special resolution was passed at an EGM for a capital reduction which would result in a total cash
distribution up to a maximum of $45.0 million. The Company does not intend to declare any further dividends for 2023 in
light of the cash distribution.
- On August 24, 2023, we entered into an en-bloc deal to sell the 2015-built ultramax bulk carrier, IVS Bosch Hoek and the
2016-built ultramax bulk carrier, IVS Hayakita, for $46.5 million (before costs) with delivery to the new owner planned on
or about September 30, 2023. We can provide no assurances that the deliveries will take place by that time or at all.
- As of August 29, 2023, we have contracted the following TCE per day for the third quarter of 2023 (1):
- Handysize: approximately 1,353 operating days(2) at an average TCE per day of approximately $9,965
- Supramax/ultramax: approximately 1,327 operating days(2) at an average TCE per day of approximately
$12,810
(1)
TCE per day is a non-GAAP financial measure. For the definition of this non-GAAP financial measure and the reconciliation of
this measure to the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer
to the definitions and reconciliations in “Non-GAAP Financial Measures” at the end of this press release.
(2)
Operating days: the number of available days in the relevant period a vessel is controlled by us after subtracting the aggregate
number of days that the vessel is off-hire due to a reason other than scheduled drydocking and special surveys, including unforeseen
circumstances. We use operating days to measure the aggregate number of days in a relevant period during which vessels are
actually available to generate revenue.
CEO Commentary
Edward Buttery, the Chief Executive Officer, commented:
“In addition to continuing to reduce debt through select asset sales, significant steps were taken to enhance the profile of the Grindrod
fleet during the period as we strike a balance between deleveraging while maintaining a core, modern fleet of predominantly
Japanese geared bulk carriers. Furthermore, those asset sales have resulted in surplus cash for distribution to shareholders. Despite
recent weaker charter market conditions, asset values are still above historical averages suggesting a positive outlook remains for
the geared dry bulk segment given the limited supply of ships over the medium to long-term after a long period of low fleet growth.
In the near-term, re-stocking in China should result in improved rates towards the end of the year followed by what we expect will
be a structural recovery, albeit a gentle one, in the Chinese economy in 2024. We continue to focus on the path to realising synergies
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from the combined management of Grindrod and TMI fleets ensuring we’re in a strong position to capitalise on the improved
earnings environment when it arrives.”
Headline earnings and Headline earnings per share
The Johannesburg Stock Exchange, or JSE, requires that we calculate and publicly disclose Headline earnings per share and diluted
Headline earnings per share. Headline earnings per share is calculated using net income which has been determined based on IFRS.
Accordingly, this may differ to the Headline earnings per share calculation of other companies listed on the JSE because such
companies may report their financial results under a different financial reporting framework such as U.S. GAAP.
Headline earnings for the period represents profit for the period attributable to owners of the Company adjusted for the re-
measurements that are more closely aligned to the operating or trading results as set forth below, and Headline earnings per share
represents this figure divided by the weighted average number of ordinary shares outstanding for the period.
The table below presents a reconciliation between Profit for the period attributable to owners of the Company to Headline earnings
for the three month periods ended June 30, 2023 and 2022 and six months ended June 30, 2023 and 2022.
Three months ended Six months ended
June 30, June 30,
(In thousands of U.S. dollars, except per share data) 2023 2022 2023 2022
Profit for the period $ 5,541 $ 56,764 $ 1,247 $ 85,795
Reversal of Impairment loss recognized on ships - (4,073) - (4,073)
Headline earnings 5,541 52,691 1,247 81,722
Weighted average number of shares on which the profit per
share and headline earnings per share has been calculated 19,472,008 18,958,025 19,472,008 18,819,474
Effect of dilutive potential ordinary shares - 460,637 - 460,637
Weighted average number of ordinary shares for the purpose
of calculating diluted profit per share and diluted headline
earnings per share 19,472,008 19,418,662 19,472,008 19,280,111
Basic profit per share $ 0.28 $ 2.99 $ 0.06 $ 4.56
Diluted profit per share 0.28 2.92 $ 0.06 $ 4.45
Basic headline earnings per share $ 0.28 $ 2.78 $ 0.06 $ 4.34
Diluted headline earnings per share 0.28 2.71 $ 0.06 $ 4.24
Short-form announcement
The full announcement includes the contents of the Report on Form 6-K as filed with the SEC on September 5, 2023, being (1)
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2023
and 2022; and (2) the unaudited interim condensed consolidated financial statements and related notes of Grindrod Shipping
Holdings Ltd. for the six months ended June 30, 2023.
This short-form announcement is the responsibility of the directors of Grindrod Shipping Holdings Ltd. This short-form
announcement is only a summary of the information in the full announcement and does not contain full or complete details. Any
investment decision by investors and/or shareholders should be based on consideration of, inter alia, the full announcement.
The full announcement has been released on SENS on September 6, 2023 and is available for viewing on the Company’s website
(www.grinshipping.com) and at https://senspdf.jse.co.za/documents/2023/jse/isse/GSHE/GRINHY2023.pdf.
The full announcement is available for inspection at the offices of the Company (1 Temasek Avenue, #10-02 Millenia Tower,
Singapore 039192) and the offices of the Sponsor, Grindrod Bank Limited (Grindrod Tower, 8A Protea Place, Sandton, 2196), at
no charge during normal office hours on business days following its release on September 6, 2023.
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Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act 1995
with respect to Grindrod Shipping’s financial condition, results of operations, cash flows, business strategies, operating efficiencies,
competitive position, growth opportunities, plans and objectives of management, and other matters. These forward-looking
statements, including, among others, those relating to our future business prospects, revenues and income, are necessarily estimates
and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the
forward-looking statements. Accordingly, these forward-looking statements should be considered in light of various important
factors, including those set forth below. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,”
“estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. These
forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by
Grindrod Shipping at the time these statements were made. Although Grindrod Shipping believes that the expectations reflected in
such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.
These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently
subject to significant uncertainties and contingencies, many of which are beyond the control of Grindrod Shipping. Actual results
may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual
results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation,
Grindrod Shipping’s future operating or financial results; the strength of world economies, including, in particular, in China and the
rest of the Asia-Pacific region; the effects of the COVID-19 pandemic on our operations and the demand and trading patterns for
the drybulk market, and the duration of these effects; cyclicality of the drybulk market, including general drybulk shipping market
conditions and trends, including fluctuations in charter hire rates and vessel values; changes in supply and demand in the drybulk
shipping industry, including the market for Grindrod Shipping’s vessels; changes in the value of Grindrod Shipping’s vessels;
changes in Grindrod Shipping’s business strategy and expected capital spending or operating expenses, including drydocking,
surveys, upgrades and insurance costs; competition within the drybulk industry; seasonal fluctuations within the drybulk industry;
Grindrod Shipping’s ability to employ its vessels in the spot market and its ability to enter into time charters after its current charters
expire; general economic conditions and conditions in the oil and coal industries; Grindrod Shipping’s ability to satisfy the technical,
health, safety and compliance standards of its customers; the failure of counterparties to our contracts to fully perform their
obligations with Grindrod Shipping; Grindrod Shipping’s ability to execute its growth strategy; international political and economic
conditions including additional tariffs imposed by China and the United States; potential disruption of shipping routes due to
weather, accidents, political events, natural disasters or other catastrophic events; vessel breakdowns; corruption, piracy, military
conflicts, political instability and terrorism in locations where we may operate, including the recent conflicts between Russia and
Ukraine and tensions between China and Taiwan; fluctuations in interest rates and foreign exchange; changes in the costs associated
with owning and operating Grindrod Shipping’s vessels; changes in, and Grindrod Shipping’s compliance with, governmental, tax,
environmental, health and safety regulations including the International Maritime Organization, or IMO 2020, regulations limiting
sulfur content in fuels; potential liability from pending or future litigation; Grindrod Shipping’s ability to procure or have access to
financing, its liquidity and the adequacy of cash flows for its operation; the continued borrowing availability under Grindrod
Shipping’s debt agreements and compliance with the covenants contained therein; Grindrod Shipping’s ability to fund future capital
expenditures and investments in the construction, acquisition and refurbishment of its vessels; Grindrod Shipping’s dependence on
key personnel; Grindrod Shipping’s expectations regarding the availability of vessel acquisitions and its ability to buy and sell
vessels and to charter-in vessels as planned or at prices we deem satisfactory; adequacy of Grindrod Shipping’s insurance coverage;
effects of new technological innovation and advances in vessel design; and the other factors set out in “Item 3. Key Information-
Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2022 filed with the Securities and Exchange
Commission on March 23, 2023. Grindrod Shipping undertakes no obligation to update publicly or release any revisions to these
forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of
unanticipated events except as required by law.
Company Contact: Investor Relations:
Edward Buttery Email: ir@grindrodshipping.com
CEO
Grindrod Shipping Holdings Ltd.
1 Temasek Avenue, #10-02 Millenia Tower,
Singapore, 039192
Email: ir@grindrodshipping.com
Website: www.grinshipping.com
By Order of the Board
6 September 2023
Sponsor: Grindrod Bank Limited
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Date: 06-09-2023 08:30:00
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