Wrap Text
2018 second half and full year financial results
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
2018 SECOND HALF AND FULL YEAR FINANCIAL RESULTS
Grindrod Shipping Holdings Ltd.(“Grindrod Shipping” or "Company" or “we” or “us”), presents its
unaudited second half and full year 2018 earnings results for the period ended December 31, 2018.
Financial Highlights for the second half of the year ended December 31, 2018(1)
- Revenues of $168.2 million.
- Gross profit of $8.7 million.
- Adjusted EBITDA of $1.6 million(2).
- Loss for the period of ($7.2 million) or ($0.38) per ordinary share.
- Handysize and supramax/ultramax TCE per day of $9,066 and $12,795, respectively,
outperformed the Baltic Handysize TC Index (“BHSI”) and Baltic Supramax-58 TC Index (“BSI-
58”) benchmarks by approximately 8.8% and 13.6% respectively(2).
- Handysize and supramax/ultramax fleet utilization of 99.5% and 99.7% respectively.
- Medium Range (“MR”) product tanker TCE per day of $10,950 outperformed Clarksons’
Average MR Clean Earnings per day assessment of $8,573 by approximately 27.7%, and small
tanker TCE per day of $11,453(2).
- MR product tanker and small tanker fleet utilization of 98.1% and 99.8%, respectively.
- Period end cash and cash equivalents of $47.3 million.
Financial Highlights for the full year ended December 31, 2018(1)
- Revenues of $319.0 million.
- Gross profit of $11.1 million.
- Adjusted EBITDA of ($0.1 million)(2).
- Loss for the period of ($20.6 million) or ($1.08) per ordinary share.
- Handysize and supramax/ultramax TCE per day of $9,032 and $11,878 outperformed the BHSI
and BSI-58 TC benchmarks by approximately 9.3% and 8.8%(2), respectively.
- Handysize and supramax/ultramax fleet utilization of 98.9% and 99.5% respectively.
- MR product tanker TCE per day of $11,258 outperformed Clarksons’ Average MR Clean
Earnings per day assessment of $8,750 by approximately 28.7%, and small tanker TCE per day
of $11,392(2).
- MR product tanker and small tanker fleet utilization of 97.8% and 99.1%, respectively.
(1)
The proportionate share of our joint ventures is not reflected in our condensed consolidated and
combined statement of profit and loss, but is reflected in our segment results.
(2)
Adjusted EBITDA and TCE per day are non-GAAP financial measures. For the definitions of these
non-GAAP financial measures and the reconciliation of these measure to the most directly comparable
financial measure calculated and presented in accordance with GAAP, please refer to the definitions
and reconciliations at the end of this press release.
Operational Highlights for the second half of the year ended December 31, 2018
- We entered into agreements to charter-in three Japanese newbuilding ultramax “eco” drybulk
vessels upon delivery. IVS Phoenix is expected to be delivered in Q2 2019 and chartered-in for
a minimum of three years with extension options. IVS Pebble Beach and IVS Atsugi are
expected to be delivered in Q3 2020 and chartered-in for a minimum of two years with extension
options and include purchase options in favor of the Company.
- We sold IVS Kanda, a non-“eco” handysize drybulk vessel, aged 14 years, in line with our
strategy to maintain a young fleet, for gross proceeds of $8.7 million.
- In August 2018, upon the completion of a 10 year charter, we redelivered the handysize drybulk
vessel IVS Shikra.
- We sold Berg, a 10 year old Chinese-built small tanker that we owned in a joint venture with
Engen Petroleum to a third party, for gross proceeds of $7.6 million.
- We redelivered Coral Stars, a 14 year old chartered-in medium range tanker on expiry of the
charter in December 2018.
Latest Developments
- We extended the termination date of the IVS Bulk joint venture from December 31, 2018 to April
30, 2019, and are continuing to discuss alternatives to termination with our joint venture
partners.
- We have commenced the wind up of the Leopard Tankers joint venture with Vitol, our joint
venture partner, whereby we acquired and Vitol acquired or will acquire two medium range “eco”
tankers from the joint venture. Accordingly we acquired Leopard Moon and Leopard Sun for a
total purchase price of $54.0 million. Proceeds from the sale by Leopard Tankers of its vessels
have been or will be applied to fully repay the joint venture’s $138.5 million credit facility, of
which $70.2 million remained outstanding as of December 31, 2018, and our guaranty
thereunder will be released upon full repayment. The financial results of Leopard Moon and
Leopard Sun will be consolidated into our financial statements following delivery of these
vessels to us.
- In January and February 2019, we drew down $14.9 million on each vessel, on a new $29.9
million credit facility with NIBC Bank N.V. bearing interest at LIBOR plus a margin of 3.20% per
annum to finance in part the acquisition of the two vessels from Leopard Tankers.
- In February 2019, we agreed to sell to a third party the one remaining vessel in our joint venture
with Engen, the nine year old, non-“eco” medium range tanker Lavela at a gross price of $14.8
million, with delivery to the new owners expected to occur in March 2019. The joint venture will
be terminated following the delivery of Lavela.
CEO Commentary
Martyn Wade, the Chief Executive Officer of Grindrod Shipping, commented:
“Our results in the second half of 2018 showed a marked improvement reflecting the stronger dry bulk
markets but also our continued ability to outperform the relevant industry benchmarks in our dry bulk
fleet. Specifically, for the second half of 2018, our TCE per day in the handysize segment was $9,066
compared to the BHSI of $8,329 (adjusted for 5.0% commissions), an outperformance of approximately
8.8%, whereas in the ultramax/supramax segment our TCE per day was $12,795 compared to the BSI-
58 of $11,267 (adjusted for 5.0% commissions), an outperformance of approximately 13.6%. We should
note that in the first half of 2018 we had outperformed the BHSI and BSI-58, by approximately 9.7%
and 5.1% respectively. On the tanker side, the markets remained weak for most of the second half of
2018 with a resurgence as of November 2018 which carried into 2019 but has recently declined from
the highs in late 2018. Still, we achieved an MR tanker TCE per day of $10,950 during the second half
of 2018 compared to $8,573 for the Clarksons MR Clean Average Earnings assessment, an
outperformance of approximately 27.7%.
The dry bulk market in 2019 to date shows signs of weakness reflecting trade wars, the Chinese New
Year’s seasonal impact, a slowdown in Chinese imports and other external market disruptions. Yet we
believe that the long term fundamentals appear positive reflecting the reduced supply outlook combined
with steady demand especially for minor bulks, which are typically carried by Grindrod Shipping’s
vessels. We also expect the product tanker market to improve given the increase in refining capacity
and dislocation between refiners and end users combined with the low orderbook for MR tankers.
Furthermore, the implementation of the IMO 2020 regulations may have a positive impact on the overall
market further limiting supply as the result of higher scrapping rates, increased off hires and slow
steaming.
In this environment, we expect to continue to leverage our competitive advantages which include the
modernity and high quality of our Japanese built fleet, our ability to maximize revenue through the use
of in-house commercial pools and cargoes, and our close commercial relationships with global and
regional industry players. We believe that the current market weakness may present attractive growth
opportunities and we believe that Grindrod Shipping is well positioned to take advantage of these
opportunities. Our company continues to operate a diversified fleet of dry bulk and product tanker
vessels which affords management the opportunity to pursue potential consolidation and growth
opportunities in both sectors.”
Results for the Six Months Ended December 31, 2018 and 2017
In comparison to the results for the second half of 2017, the results for the second half of 2018 were
impacted by the sale of two non-core businesses on January 1, 2018. In the drybulk business, our
handysize and supramax/ultramax operating days declined to 6,279 days for the six months ended
December 31, 2018 from 7,676 days for the six months ended December 31, 2017, primarily as a result
of a reduction of short-term chartered-in days. A significant portion of both our drybulk and tankers fleet
continued to be exposed to the spot markets in the second half of 2018. Handysize and
supramax/ultramax drybulk spot markets were generally stronger in the second half of 2018 than they
were in the second half of 2017. On the other hand, while there was an improvement in the MR tanker
market from November 2018, the second half of 2018 in this sector was generally weaker than the
second half of 2017.
Revenues were $168.2 million for the six months ended December 31, 2018 and $215.5 million for the
six months ended December 31, 2017. Vessel revenues were $156.4 million for the six months ended
December 31, 2018 and $194.4 million for the six months ended December 31, 2017.
In the drybulk business, handysize total revenues and supramax/ultramax total revenues were
$72.9 million and $73.6 million, respectively, for the six months ended December 31, 2018 and $72.3
million and $78.7, respectively, for the six months ended December 31, 2017. Handysize vessel
revenues and supramax/ultramax vessel revenues were $63.4 million and $73.0 million, respectively,
for the six months ended December 31, 2018 and $64.5 million, and $78.2 million, respectively, for the
six months ended December 31, 2017.
In the tankers business, our medium range tankers and small tankers total revenues were $19.0 million
and $12.2 million, respectively, for the six months ended December 31, 2018 and $29.7 million and
$10.9 million, respectively, for the six months ended December 31, 2017. Medium range tankers and
small tankers vessel revenues were $19.0 million and $8.4 million, respectively, for the six months
ended December 31, 2018 and $18.8 million and $10.9 million, respectively for the six months ended
December 31, 2017.
Handysize TCE per day was $9,066 per day for the six months ended December 31, 2018 and $8,422
per day for the six months ended December 31, 2017. Supramax/ultramax TCE per day was $12,795
per day for the six months ended December 31, 2018 and $10,639 per day for the six months ended
December 31, 2017.
Medium range tankers TCE per day was $10,950 per day for the six months ended December 31, 2018
and $10,592 per day for the six months ended December 31, 2017. Small tankers TCE per day was
$11,453 per day for the six months ended December 31, 2018 and $13,458 per day for the six months
ended December 31, 2017.
Cost of sales was $159.5 million for the six months ended December 31, 2018 and $203.1 million for
the six months ended December 31, 2017. In the drybulk business, handysize segment and
supramax/ultramax segment cost of sales was $67.0 million and $71.9 million, respectively, for the six
months ended December 31, 2018 and $68.3 million and $79.2 million, respectively, for the six months
ended December 31, 2017.
Handysize voyage expenses and supramax/ultramax voyage expenses were $32.9 million and
$35.7 million, respectively, for the six months ended December 31, 2018 and $31.8 million, and $37.9
million, respectively, for the six months ended December 31, 2017. Handysize vessel operating costs
and supramax/ultramax vessel operating costs were $13.5 million and $1.7 million for the six months
ended December 31, 2018, respectively, and $13.5 million and $1.7 million, respectively for the six
months ended December 31, 2017. Handysize vessel operating costs per day were $5,167 per day for
the six months ended December 31, 2018 and $5,124 per day for the six months ended December 31,
2017. Supramax/ultramax vessel operating costs per day were $4,667 per day for the six months ended
December 31, 2018 and $4,592 per day for the six months ended December 31, 2017.
The average daily charter-in costs for our long-term supramax/ultramax fleet was $12,668 per day
during the second six months of 2018. During this period, out of 2,913 operating days in the
supramax/ultramax segment, 50.3% were fulfilled with owned/long-term chartered-in vessels and the
remaining 49.7% with short-term chartered-in vessels. As noted above, the IVS Shikra was redelivered
in August 2018 (which was our only long-term chartered-in Handysize vessel).
In the tankers business, medium range tankers and small tankers cost of sales were $20.1 million and
$10.3 million, respectively, for the six months ended December 31, 2018 and $33.0 million and $8.1
million, respectively, for the six months ended December 31, 2017. Medium range tankers voyage
expenses and small tankers voyage expenses were $4.2 million and $1.3 million, respectively, for the
six months ended December 31, 2018 and $3.4 million and $2.2 million, respectively, for the six months
ended December 31, 2017. Medium range tankers vessel operating costs and small tankers vessel
operating costs were $5.4 million and $4.1 million, respectively, for the six months ended December
31, 2018 and $6.4 million and $4.7 million, respectively, for the six months ended December 31, 2017.
Medium range tankers vessel operating costs per day were $6,502 per day for the six months ended
December 31, 2018 and $6,806 per day for the six months ended December 31, 2017. Small tankers
vessel operating costs per day were $6,390 per day for the six months ended December 31, 2018 and
$7,286 per day for the six months ended December 31, 2017.
The average daily charter-in costs for our long-term medium range tanker fleet was $14,972 per day
during the second six months of 2018 and during this period all of the operating days in the medium
range segment, were fulfilled with owned/long-term chartered-in vessels. The Company did not have
any long-term or short-term chartered-in small tanker vessels during this period.
Gross profit was $8.7 million for the six months ended December 31, 2018 and $12.4 million for the six
months ended December 31, 2017.
Other operating income was $3.4 million for the six months ended December 31, 2018 and $2.8 million
for the six months ended December 31, 2017 primarily due to the increase in foreign exchange gains
for the six months ended December 31, 2018.
Administrative expenses were $14.3 million for the six months ended December 31, 2018 and
$19.3 million for the six months ended December 31, 2017. The higher level of administrative expenses
in the period ended December 31, 2017 was primarily due to $2.4 million of costs in the six months
ended December 31, 2017 relating to our spin-off from Grindrod Limited, as well as other administrative
costs relating to the two non-core businesses sold on January 1, 2018.
Other operating expenses were $3.4 million and $37.0 million in the six months ended
December 31, 2018 and 2017, respectively. The decrease in operating expenses for the six months
ended December 31, 2018 was primarily due to impairment losses on vessels of $16.5 million,
impairment loss on goodwill and intangibles of $12.1 million and impairment on assets of the two non-
core businesses sold on January 1, 2018 of $5.1 million recorded in the six months ended December
31, 2017.
Share of results of joint ventures was a profit of $0.9 million for the six months ended
December 31, 2018 and a loss of $11.8 million for the six months ended December 31, 2017. The
improvement for the six months ended December 31, 2018 was primarily due to the recognition of
impairment losses on vessels in our joint ventures for the six months ended December 31, 2017.
We recorded an impairment loss on financial assets of $1.6 million in the second half of 2018 and no
impairment loss on financial assets in the second half of 2017.
Interest income was $1.8 million for the six months ended December 31, 2018 and $3.9 million for the
six months ended December 31, 2017. The decrease in interest income for the six months ended
December 31, 2018 was primarily due to repayment of certain loans to our joint ventures.
Interest expense was $3.6 million for the six months ended December 31, 2018 and $3.5 million for the
six months ended December 31, 2017.
Income tax expense for the six months ended December 31, 2018 was a credit of $0.8 million and for
the six months ended December 31, 2017 was an expense of $1.3 million. The reduction of income tax
expense for the six months ended December 31, 2018 was primarily due to the exclusion of the two
non-core businesses sold on January 1, 2018 from our results since that date.
Loss for the six months ended December 31, 2018 was $7.2 million and loss for the six months ended
December 31, 2017 was $53.9 million.
Results for the Full Years Ended December 31, 2018 and 2017
Our results for the full year ended December 31, 2018 relative to the full year ended December 31,
2017 were impacted by the sale of two non-core businesses on January 1, 2018, which had combined
revenues of $54.9 million, combined cost of sales of $39.3 million and a combined profit of $6.9 million
for the full year ended 2017. In the drybulk business, our handysize and supramax/ultramax operating
days declined from 15,304 days in the 12 months ended December 31, 2017 to 12,810 days for the 12
months ended December 31, 2018, primarily as a result of a reduction of short-term chartered-in days.
Handysize and supramax/ultramax drybulk spot market rates were generally stronger in fiscal 2018
than fiscal 2017, and particularly so in the first half of 2018 compared to the first half of 2017. On the
other hand, while there was an improvement in the medium range tanker market since November 2018,
overall this tanker market was generally weaker in fiscal 2018 than compared to fiscal 2017.
Revenues were $319.0 million for the 12 months ended December 31, 2018 and $409.5 million for the
12 months ended December 31, 2017. Vessel revenues were $303.9 million for the 12 months ended
December 31, 2018 and $386.0 million for the 12 months ended December 31, 2017.
In the drybulk business, handysize total revenues and supramax/ultramax total revenues were
$126.7 million and $147.3 million, respectively, for the 12 months ended December 31, 2018 and
$126.7 million and $157.4 million, respectively, for the 12 months ended December 31, 2017.
Handysize vessel revenues and supramax/ultramax vessel revenues were $116.4 million and $146.1
million, respectively, for the 12 months ended December 31, 2018 and $118.3 million, and $156.5
million, respectively, for the 12 months ended December 31, 2017.
In the tankers business, our medium range tankers and small tankers total revenues were $37.9 million
and $21.2 million, respectively, for the 12 months ended December 31, 2018 and $53.3 million and
$22.7 million, respectively, for the 12 months ended December 31, 2017. Medium range tankers and
small tankers vessel revenues were $37.9 million and $17.4 million, respectively, for the 12 months
ended December 31, 2018 and $42.6 million and $22.7 million, respectively for the 12 months ended
December 31, 2017.
Handysize TCE per day was $9,032 per day for the 12 months ended December 31, 2018 and $7,675
per day for the 12 months ended December 31, 2017. Supramax/ultramax TCE per day was $11,878
per day for the 12 months ended December 31, 2018 and $10,551 per day for the 12 months ended
December 31, 2017.
Medium range tankers TCE per day was $11,258 per day for the 12 months ended December 31, 2018
and $11,691 per day for the 12 months ended December 31, 2017. Small tankers TCE per day was
$11,392 per day for the 12 months ended December 31, 2018 and $13,014 per day for the 12 months
ended December 31, 2017.
Cost of sales was $307.9 million for the 12 months ended December 31, 2018 and $387.4 million for
the 12 months ended December 31, 2017.
In the drybulk business, handysize segment and supramax/ultramax segment cost of sales was
$117.6 million and $146.6 million, respectively, for the 12 months ended December 31, 2018 and
$124.0 million and $155.9 million, respectively, for the 12 months ended December 31, 2017.
Handysize voyage expenses and supramax/ultramax voyage expenses were $57.7 million and $71.1
million, respectively, for the 12 months ended December 31, 2018 and $59.0 million, and $76.5 million,
respectively, for the 12 months ended December 31, 2017. Handysize vessel operating costs and
supramax/ultramax vessel operating costs were $26.5 million and $3.4 million for the 12 months ended
December 31, 2018, respectively, and $26.5 million and $3.3 million, respectively for the 12 months
ended December 31, 2017. Handysize vessel operating costs per day were $5,201 per day for the 12
months ended December 31, 2018 and $5,034 per day for the 12 months ended December 31, 2017.
Supramax/ultramax vessel operating costs per day were $4,641 per day for the 12 months ended
December 31, 2018 and $4,519 per day for the 12 months ended December 31, 2017.
The average daily charter-in costs for our long-term supramax/ultramax fleet was $12,886 per day for
the year ended December 31, 2018, and $13,092 per day for the year ended December 31, 2017.
In the tankers business, medium range tankers and small tankers cost of sales were $39.8 million and
$18.6 million, respectively, for the 12 months ended December 31, 2018 and $56.5 million and $18.5
million, respectively, for the 12 months ended December 31, 2017. Medium range tankers voyage
expenses and small tankers voyage expenses were $8.0 million and $3.5 million, respectively, for the
12 months ended December 31, 2018 and $7.6 million and $3.7 million, respectively, for the 12 months
ended December 31, 2017. Medium range tankers vessel operating costs and small tankers vessel
operating costs were $11.3 million and $9.0 million, respectively, for the 12 months ended December
31, 2018 and $13.3 million and $9.5 million, respectively, for the 12 months ended December 31, 2017.
Medium range tankers vessel operating costs per day were $6,888 per day for the 12 months ended
December 31, 2018 and $6,869 per day for the 12 months ended December 31, 2017. Small tankers
vessel operating costs per day were $7,069 per day for the 12 months ended December 31, 2018 and
$7,427 per day for the 12 months ended December 31, 2017.
The average daily charter-in costs for our long-term medium range tanker fleet was $14,995 per day
for the year ended December 31, 2018 and $14,756 per day for the year ended December 31, 2017.
Gross profit was $11.1 million for the 12 months ended December 31, 2018 and $22.1 million for the
12 months ended December 31, 2017. Gross profit for the 12 months ended December 31, 2017
included $15.7 million of gross profit of the two non-core businesses that were sold on January 1, 2018.
Other operating income was $11.5 million for the 12 months ended December 31, 2018 and $4.7 million
for the 12 months ended December 31, 2017. Profit on sale of the two non-core businesses of $3.8
million were recorded in the 12 months ended December 31, 2018 and foreign exchange gains were
$3.5 million higher for the same period.
For the year to December 31, 2018 administrative expenses were $31.6 million, and they were
$32.9 million for the year to December 31, 2017.
Other operating expenses were $5.4 million and $39.2 million in the 12 months ended
December 31, 2018 and 2017, respectively. The decrease in other operating expenses for the six
months ended December 31, 2018 was primarily due to impairment losses on vessels of $16.5 million,
impairment loss on goodwill and intangibles of $12.1 million and impairment loss on assets of disposal
group of $5.1 million for the 12 months ended December 31, 2017.
Share of losses of joint ventures was $0.5 million for the 12 months ended December 31, 2018 and
$12.9 million for the 12 months ended December 31, 2017. The decrease was primarily due to
impairment losses on vessels recorded in the 12 months ended December 31, 2017.
We recorded an impairment loss on financial assets of $1.6 million for the year ended
December 31, 2018 and no impairment loss on financial assets in 2017.
Interest income was $3.8 million for the 12 months ended December 31, 2018 and $7.2 million for the
12 months ended December 31, 2017. Interest on loans to our joint ventures decreased for the 12
months ended December 31, 2018 due to partial repayments of certain borrowings.
For each of the year to December 31, 2018 and the year to December 31, 2017, interest expense was
$6.5 million.
Income tax expense for the 12 months ended December 31, 2018 was $1.4 million and for the 12
months ended December 31, 2017 was $3.2 million. Income tax expense decreased in 2018 due to the
exclusion of the non-core businesses sold on January 1, 2018 from our results since that date.
Loss for the 12 months ended December 31, 2018 was $20.6 million and loss for the 12 months ended
December 31, 2017 was $60.8 million.
Cash from operating activities was an outflow of $37.4 million for the 12 months ended
December 31, 2018 and an inflow of $3.4 million for the 12 months ended December 31, 2017. Cash
from operating activities for the 12 months ended December 31, 2018 includes capital expenditure on
vessels of $21.4 million, proceeds from vessel sales of $8.3 million and payments to related parties of
$6.0 million. For the 12 months ended December 31, 2017, cash from operating activities includes
capital expenditure on vessels of $5.2 million, proceeds from vessel sales of $17.7 million and
payments to related parties of $5.0 million.
Cash generated from (used in) investing activities was an inflow of $40.0 million for the 12 months
ended December 31, 2018 and an outflow of $2.1 million for the 12 months ended December 31, 2017.
Cash generated from (used in) investing activities was impacted by the proceeds from the sales of the
two non-core businesses in the 12 months ended December 31, 2018 of $25.3 million and payments
received from related parties of $14.1 million.
Cash used in financing activities was an outflow of $11.9 million for the 12 months ended December
31, 2018 and an outflow of $19.8 million for the 12 months ended December 31, 2017. Cash used in
financing activities in the 12 months ended December 31, 2018 was primarily impacted by the
repayment of loans from related parties of $8.4 million, movement of cash to restricted cash of $8.6
million and a net inflow of $6.8 million from the incurrence of new debt and the repayment of existing
debt. Cash used in financing activities in the 12 months ended December 31, 2017 was primarily
impacted by the issuance of equity to Grindrod Limited of $15.0 million and repayment of loans from
related parties of $42.0 million.
The above cash flow figures are reflected in the summarized cash flow information shown in tabular
form in a subsequent section of this announcement under the heading “Unaudited Summary Statement
of Cash Flows”, which reflects $33.5 million of cash and cash equivalents as at December 31, 2018,
which is after deducting $13.8 million of restricted cash which is pledged to certain banks to secure
loans and other credit facilities. As of December 31, 2018, we had cash and cash equivalents of $47.3
million including the $13.8 million of restricted cash.
Conference Call Details
On Thursday, February 28, 2019 at 8:00 a.m. Eastern Savings Time / 3:00 p.m. South African Standard
Time / 9:00 p.m. Singapore Time, the Company's management will host a conference call and webcast
to discuss the earnings results.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers:
+866 966 1396 (US Toll Free Dial In), +0800 376 7922 (UK Toll Free Dial In), +800 852 6250 (Singapore
Toll Free Dial In), or +0800 014 553 (South Africa Toll Free Dial In), +44 (0)2071 928000 (International
Standard Dial In). Please enter code: 9069683.
An audio replay of the conference call will be available until Thursday, March 7, 2019, by dialing +866
331 1332 (US Toll Free Dial In), +65 3158 3995 (Singapore Dial In), +44 (0)3333 009785 (International
Standard Dial In). Access code: 9069683.
Audio Webcast - Slides Presentation
There will be concurrent live and then archived slides and audio webcast of the conference call,
accessible via the internet through the Grindrod Shipping website www.grinshipping.com. Participants
to the live webcast should register on the website approximately 10 minutes prior to the start of the
webcast.
The slide presentation of the results for the second half and full year ended December 31, 2018 will be
accessible in PDF format 10 minutes prior to the conference call and webcast on the Investor Relations
section of our website located at www.grinshipping.com. Participants to the webcast can download the
PDF presentation. The conference call will take participants through the slide presentation on the
website.
About Grindrod Shipping Holdings Ltd.
Grindrod Shipping owns and operates a diversified fleet of owned and long-term and short-term
chartered-in drybulk vessels and product tankers. The drybulk business, which operates under the
brand “Island View Shipping” (“IVS”) includes a fleet of 18 handysize drybulk carriers and 12
supramax/ultramax drybulk carriers on the water with five ultramax drybulk carriers under construction
in Japan due be delivered in 2019 and 2020. The tanker business, which operates under the brand
“Unicorn Shipping” (“Unicorn”) includes a fleet of eight medium range tankers and three small tankers.
The Company is based in Singapore, with offices in London, Durban, Tokyo, Cape Town and
Rotterdam. Grindrod Shipping is listed on NASDAQ under the ticker “GRIN” and on the JSE under the
ticker “GSH”.
Fleet Table
The following table sets forth certain summary information regarding our fleet as of the date of
this press release:
Drybulk Carriers – Owned Fleet (24 Vessels)
Ownership
Vessel Name Built Country of Build DWT Percentage Type of Employment
Handysize – Eco
IVS Tembe(3) 2016 Japan 37,740 33.5% IVS Commercial(8)
IVS Sunbird(3) 2015 Japan 33,400 33.5% IVS Handysize Pool
IVS Thanda(3) 2015 Japan 37,720 33.5% IVS Commercial(8)
IVS Kestrel(3) 2014 Japan 32,770 33.5% IVS Handysize Pool
IVS Phinda(3) 2014 Japan 37,720 33.5% IVS Commercial(8)
IVS Sparrowhawk(3) 2014 Japan 33,420 33.5% IVS Handysize Pool
Handysize
IVS Merlion 2013 China 32,070 100% IVS Handysize Pool
IVS Raffles 2013 China 32,050 100% IVS Handysize Pool
IVS Ibis 2012 Japan 28,240 100% IVS Handysize Pool
IVS Kinglet 2011 Japan 33,130 100% IVS Handysize Pool
IVS Magpie 2011 Japan 28,240 100% IVS Handysize Pool
IVS Orchard 2011 China 32,530 100% IVS Handysize Pool
IVS Knot 2010 Japan 33,140 100% IVS Handysize Pool
IVS Sentosa 2010 China 32,700 100% IVS Handysize Pool
IVS Triview(1) 2009 Japan 32,280 51% IVS Handysize Pool
IVS Kingbird 2007 Japan 32,560 100% IVS Handysize Pool
IVS Kawana 2005 Japan 32,640 100% IVS Handysize Pool
IVS Nightjar 2004 Japan 32,320 100% IVS Handysize Pool
Supramax/Ultramax – Eco
IVS Swinley Forest(3) 2017 Japan 60,490 33.5% IVS Supramax Pool
IVS Gleneagles(3) 2016 Japan 58,070 33.5% IVS Supramax Pool
IVS North Berwick(3) 2016 Japan 60,480 33.5% IVS Supramax Pool
IVS Bosch Hoek(3) 2015 Japan 60,270 33.5% IVS Supramax Pool
IVS Hirono(3) 2015 Japan 60,280 33.5% IVS Supramax Pool
IVS Wentworth(3) 2015 Japan 58,090 33.5% IVS Supramax Pool
Drybulk Carriers – Long Term Charter-In Fleet (6 Vessels)
Charter-In
Vessel Name Built Country of Build DWT Period Type of Employment
(7)
IVS Hayakita 2016 Japan 60,400 2023-26(2) IVS Supramax Pool
IVS Windsor 2016 Japan 60,280 2023-26(2) IVS Supramax Pool
IVS Augusta(7) 2015 Philippines(4) 57,800 2020-22(2) IVS Supramax Pool
IVS Pinehurst(7) 2015 Philippines(4) 57,810 2020-22(2) IVS Supramax Pool
IVS Crimson Creek 2014 Japan 57,950 2019-21(2) IVS Supramax Pool
IVS Naruo(7) 2014 Japan 60,030 2021-24(2) IVS Supramax Pool
Drybulk Carriers Under Construction – Owned Fleet (2 Vessels)
Vessel Name Expected Country of Build DWT Ownership
Delivery Percentage
Supramax/Ultramax - Eco
IVS Okudogo 3Q 2019 Japan 61,000 100%
IVS Prestwick 3Q 2019 Japan 61,000 100%
Drybulk Carriers Under Construction – Long Term Charter-In Fleet (3 Vessels)
Vessel Name Expected Country of Build DWT Charter-In Period
Delivery
Supramax/Ultramax-Eco
IVS Phoenix 2Q 2019 Japan 60,000 2022-24(2)
IVS Pebble Beach(7) 3Q 2020 Japan 62,000 2022-24(2)
IVS Atsugi(7) 3Q 2020 Japan 62,000 2022-24(2)
Tankers – Owned Fleet (11 Vessels)(9)
Vessel Name Built Country of DWT IMO Ownership Type of Employment
Build Designation Percentage
Medium Range Tankers – Eco
Matuku 2016 South Korea 50,140 II,III 100% Bareboat Charter (Expires 2020-
22) (2)
Leopard Moon 2013 South Korea 50,000 III 100% Vitol Commercial(6)
Leopard Sun 2013 South Korea 50,000 III 100% Vitol Commercial(6)
Medium Range Tankers
Lavela(5) 2010 South Korea 40,100 III 50% Handy Tanker Pool
Rhino 2010 South Korea 39,710 II, III 100% Handy Tanker Pool
Inyala 2008 South Korea 40,040 III 100% Handy Tanker Pool
Small Product Tankers
Umgeni 2011 China 16,480 II, III 100% Brostrom Tanker Pool
Kowie 2010 China 16,890 II, III 100% Brostrom Tanker Pool
Breede 2009 China 16,900 II, III 100% Spot Market and COA
Tankers – Long Term Charter-in Fleet (2 Vessels)
Country of
Vessel Name Built Build DWT IMO Charter-In Type of Employment
Designation Period
Medium Range Tankers – Eco
Doric Breeze 2013 South Korea 51,570 II, III 2Q 2020 Vitol Commercial(6)
Doric Pioneer 2013 South Korea 51,570 II, III 1Q 2020 Vitol Commercial(6)
(1)
Owned through a joint venture with Mitsui & Co Ltd. in which we have a 51% interest.
(2)
Expiration date range represents the earliest and latest redelivery periods due to extension options.
(3)
Owned through a joint venture with Regiment Capital Ltd. and Sankaty European Investments III, S.a.r.l. in which we have a 33.5%
interest.
(4)
Constructed at Tsuneishi Cebu Shipyard, a subsidiary of Tsuneishi Shipbuilding of Japan.
(5)
In February 2019 the joint venture with Engen Petroleum Limited, in which we have a 50% interest, entered into an agreement to
sell the medium range tanker Lavela to a third party. The vessel is scheduled to deliver to her new owners during March 2019.
(6)
Our eco Medium Range product tankers, other than Matuku, are commercially managed by Mansel Limited. Mansel, an affiliate
of Vitol, procures shipping for various oil cargoes traded by Vitol.
(7)
Includes purchase options for Grindrod Shipping. For IVS Augusta and IVS Pinehurst, we have the option to purchase either, but
not both, of these vessels of our choice.
(8)
Commercially managed by us alongside the IVS Handysize Pool.
(9)
Fleet table does not include the remaining vessel owned by the Leopard Tankers joint venture, which is expected to be delivered
to Vitol imminently.
Selected Historical and Statistical Data of Our Operating Fleet(1)
Set forth below are selected historical and statistical data of our operating fleet for the six months ended
December 31, 2018 and 2017, and the 12 months ended December 31, 2018 and 2017, that we believe
may be useful in better understanding our operating fleet's financial position and results of operations.
This table contains certain information regarding TCE per day, which is a non-GAAP measure. For a
discussion and reconciliation of these measures, see "Non-GAAP Financial Measures" at the end of
this press release.
Six months ended December 31, Year ended December 31,
(In U.S. dollars where indicated) 2018 2017 2018 2017
Drybulk Carriers Business
Handysize Segment ............
Calendar days(2) ............. 3,411 4,010 6,704 7,942
Available days(3) ............ 3,382 3,977 6,565 7,840
Operating days(4) ............. 3,366 3,887 6,495 7,720
Owned fleet operating days(5) 2,576 2,556 4,915 5,114
Long-term charter-in days(6) 40 184 221 365
Short-term charter-in days(7) 750 1,147 1,359 2,241
Fleet Utilization(8)........... 99.5% 97.7% 98.9% 98.5%
Handysize Segment Average Daily Results
TCE per day (9) ..................... $ 9,066 $ 8,422 $ 9,032 $ 7,675
Vessel operating costs per day(10).... $ 5,167 $ 5,124 $ 5,201 $ 5,034
Long-term charter-in costs per day(11) $ 8,600 $ 8,600 $ 8,600 $ 8,600
Supramax/Ultramax Segment
Calendar days(2) .................. 2,930 3,864 6,401 7,702
Available days(3) ................. 2,922 3,864 6,345 7,702
Operating days(4) ................. 2,913 3,789 6,315 7,584
Owned fleet operating days(5) 361 349 704 692
Long-term charter-in days(6) 1,103 1,257 2,299 2,524
Short-term charter-in days(7) .. 1,449 2,183 3,312 4,368
Fleet Utilization(8)............... 99.7% 98.1% 99.5% 98.5%
Supramax/Ultramax Segment Average Daily
Results
TCE per day (9) ..................... $ 12,795 $ 10,639 $ 11,878 $ 10,551
Vessel operating costs per day(10)..... $ 4,667 $ 4,592 $ 4,641 $ 4, 519
Long-term charter-in costs per day(11) $ 12,668 $ 13,095 $ 12,866 $ 13,092
Tankers Business
Medium Range Tankers Segment
Calendar days(2) .......................... 1,375 1,505 2,733 3,055
Available days(3) ......................... 1,375 1,460 2,721 2,999
Operating days(4) ......................... 1,349 1,460 2,660 2,994
Owned fleet operating days(5) ........... 808 907 1,587 1,893
Long-term charter-in days(6) ........... 541 553 1,073 1,101
Short-term charter-in days(7) .............. - - - -
Fleet Utilization(8)...........................98.1% 100% 97.8% 100%
Medium Range Tanker Segment Average Daily
Results
TCE per day (9) ........................ $ 10,950 $ 10,592 $ 11,258 $ 11,691
Vessel operating costs per day(10)...... $ 6,502 $ 6,806 $ 6,888 $ 6,869
Long-term charter-in costs per day(11) . $ 14,972 $ 14,358 $ 14,995 $ 14,756
Six months ended December 31, Year ended December 31,
(In U.S. dollars where indicated) 2018 2017 2018 2017
Small Tanker Segment
Calendar days(2) ................... 634 654 1,268 1,469
Available days(3) ....................... 624 646 1,234 1,461
Operating days(4) 623 646 1,223 1,461
Owned fleet operating days(5) ............ 623 630 1,223 1,264
Long-term charter-in days(6) ............ - 16 - 197
Short-term charter-in days(7) ......... - - - -
Fleet Utilization(8)......................... 99.8% 100% 99.1% 99.0%
Small Tanker Segment Average Daily Results
TCE per day (9) .......................$ 11,453 $ 13,458 $ 11,392 $ 13,014
Vessel operating costs per day(10)... $ 6,390 $ 7,286 $ 7,069 $ 7,427
Long-term charter-in costs per day(11) $ - $ 10,938 $ - $ 10,905
(1)
Segment historical and statistical data of our operating fleet include the proportionate share of joint ventures which is not reflected
in our combined results of operations.
(2)
Calendar days: total calendar days the vessels were in our possession for the relevant period.
(3)
Available days: total number of calendar days a vessel is in our possession for the relevant period after subtracting off-hire days for
scheduled drydocking and special surveys. We use available days to measure the number of days in a relevant period during which
vessels should be available for generating revenues.
(4)
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 revenues.
(5)
Owned fleet operating days: the number of operating days in which our owned fleet is operating for the relevant period.
(6)
Long-term charter-in days: the number of operating days in which our long-term charter-in fleet is operating for the relevant period.
We regard chartered-in vessels as long-term charters if the period of the charter that we initially commit to is 12 months or more.
Once we have included such chartered-in vessels in our Fleet, we will continue to regard them as part of our Fleet until the end of
their chartered-in period, including any period that the charter has been extended under an option, even if at a given time the
remaining period of their charter may be less than 12 months.
(7)
Short-term charter-in days: the number of operating days for which we have chartered-in third party vessels for durations of less
than one year for the relevant period.
(8)
Fleet utilization: the percentage of time that vessels are available for generating revenue, determined by dividing the number of
operating days during a relevant period by the number of available days during that period. We use fleet utilization to measure a
company’s efficiency in technically managing its vessels.
(9)
TCE per day: vessel revenues less voyage expenses during a relevant period divided by the number of operating days during the
period. The number of operating days used to calculate TCE revenue per day includes the proportionate share of our joint ventures’
operating days and includes charter-in days. See “Non-GAAP Financial Measures” at the end of this press release.
(10)
Vessel operating costs per day: Vessel operating costs per day represents vessel operating costs divided by the number of calendar
days for owned vessels. The vessel operating costs and the number of calendar days used to calculate vessel operating costs per
day includes the proportionate share of our joint ventures’ calendar day and excludes charter-in costs and charter-in days.
(11)
Long-term charter-in costs per day: Charter hire expenses associated with long-term charter-in vessels divided by long-term charter-
in days for the relevant period.
The tables below presents the breakdown of charter hire expense into long-term charter hire
expense and short-term charter hire expense for the six months to December 31, 2018 and 2017, and
for the 12 months to December 31, 2018 and 2017:
Six months ended December 31,
2018 2017
Charter Charter
Short- Hire Short- Hire
(In thousands of U.S. dollars) Long-term term Expense Long-term term Expense
Handysize ............................. 348 7,325 7,673 1,583 11,053 12,636
Supramax/ultramax ...................13,973 18,775 32,748 16,461 21,266 37,727
Medium Range Tankers ............. 8,100 - 8,100 7,940 - 7,940
Small Tankers ........................... - - - 175 - 175
Other ................................ - 5,487
Adjustments(1) ............................. (2,153) (465)
46,368 63,500
Year ended December 31,
2018 2017
Charter Charter
Short- Hire Short- Hire
(In thousands of U.S. dollars) Long-term term Expense Long-term term Expense
Handysize ........................... 1,904 14,187 16,091 3,139 19,634 22,773
Supramax/ultramax ................. 29,580 39,848 69,428 33,038 40,298 73,336
Medium Range Tankers ............. 16,090 - 16,090 16,257 - 16,257
Small Tankers ........................... - - - 2,148 - 2,148
Other .......................................... 1,468 14,054
Adjustments(1) ............................. (2,429) (820)
100,648 127,748
(1)
Charter hire cost incurred by the joint ventures are included within the operating segment information on a proportionate
consolidation basis. Accordingly, joint ventures’ proportionate financial information are adjusted out to reconcile to the
unaudited interim condensed consolidated and combined financial statements.
Unaudited Condensed Consolidated and Combined Statement of Financial Position
December 31, 2018 December 31, 2017
US$’000 US$’000
ASSETS
Current assets
Cash and cash equivalents 47,263 46,522
Trade receivables 12,034 13,399
Contract assets 1,959 -
Other receivables and prepayments 17,902 17,187
Due from related parties 13,516 26,998
Loans to joint ventures 23,803 18,180
Derivative financial instruments - 123
Inventories 10,841 9,078
Current tax asset - 761
127,318 132,248
Assets classified as held for sale 7,258 54,954
Total current assets 134,576 187,202
Non-current assets
Other receivables and prepayments - 72
Loans to joint ventures - 7,301
Ships, property, plant and equipment 249,602 238,592
Interest in joint ventures 54,560 64,296
Intangible assets 41 61
Goodwill 7,351 8,419
Deferred tax assets 1,497 1,179
Total non-current assets 313,051 319,920
Total assets 447,627 507,122
December 31, 2018 December 31, 2017
US$’000 US$’000
LIABILITIES AND EQUITY
Current liabilities
Bank loans 18,323 87,964
Trade and other payables 22,364 28,354
Contract liability 4,223 -
Provisions 1,578 1,270
Due to related parties 6,238 16,930
Derivative financial instruments 867 138
Bank overdrafts - 4,028
Income tax payable 3,073 3,551
56,666 142,235
Liabilities associated with assets
held for sale - 21,014
Total current liabilities 56,666 163,249
December 31, 2018 December 31, 2017
US$’000 US$’000
Non-current liabilities
Bank loans 96,133 20,790
Retirement benefit obligation 1,922 2,180
Trade and other payables 403 1,167
Total non-current liabilities 98,458 24,137
Capital and reserves
Share capital 320,683 *
Parent invested capital - 313,978
Other reserves (21,140) 5,758
Accumulated losses (7,040) -
Equity attributable to owners of the
company 292,503 319,736
Total equity and liabilities 447,627 507,122
* Amount is less than US$1.00
Unaudited Condensed Consolidated and Combined Statement of Profit or Loss
For the six months ended For the twelve months ended
December 31, December 31,
2018 2017 2018 2017
US$’000 US$’000 US$’000 US$’000
Revenue 168,177 215,469 319,018 409,522
Voyage expenses (80,192) (84,463) (151,705) (166,924)
Vessel operating costs (16,313) (20,844) (32,657) (40,837)
Charter hire (46,368) (63,500) (100,648) (127,748)
Depreciation and amortization (7,445) (8,343) (14,094) (17,975)
Other expenses (1,500) (8,391) (1,146) (16,364)
Cost of ship sale (7,675) (17,560) (7,675) (17,560)
Gross profit 8,684 12,368 11,093 22,114
Other operating income 3,427 2,794 11,459 4,696
Administrative expenses (14,307) (19,333) (31,599) (32,868)
Other operating expenses (3,370) (37,036) (5,437) (39,198)
Share of income/(losses) of joint ventures 918 (11,758) (454) (12,946)
Impairment loss recognized on financial assets (1,583) - (1,583) -
Interest income 1,842 3,902 3,787 7,164
Interest expense (3,556) (3,469) (6,517) (6,548)
Loss before taxation (7,945) (52,532) (19,251) (57,586)
Income tax 758 (1,328) (1,389) (3,226)
Loss for the period (7,187) (53,860) (20,640) (60,812)
Loss per share: US$ US$ US$ US$
Basic and diluted, loss for the period attributable to
ordinary equity holders of the company(1)
(0.38) (2.83) (1.08) (3.19)
Diluted loss per share for the period attributable to
ordinary equity holders of the company(2)
(0.36) (2.83) (1.04) (3.19)
(1)
For comparative purposes, the calculations of basic and diluted loss per share for the periods ending December 31, 2017 are based on
19,063,833 ordinary shares issued and outstanding as at June 18, 2018.
(2)
Diluted loss per share for the periods ended December 31, 2018 was calculated based on 19,806,833 ordinary shares taking into account
the 743,000 ordinary shares that, as at the date of this press release, may at various future dates be issued under our Forfeitable Share Plan
(“FSP”). The award of the shares under our FSP is subject to vesting conditions and, at the Company’s discretion, new shares or treasury
shares may be used for the FSP.
Unaudited Summary Statement of Cash Flows
The following table presents an unaudited summary statement of cash flows for each of the years
ended December 31, 2018 and 2017:
Year ended December 31,
(In thousands of U.S. dollars) 2018 2017
Cash (used in) generated from operating activities ............. $ (37,360) $ 3,375
Cash generated from (used in) investing activities .............. 40,024 (2,062)
Cash used in financing activities ........................ (11,887) (19,840)
Decrease in cash and cash equivalents .................................... (9,223) (18,527)
Cash and cash equivalents, beginning of period ...................... 45,245 62,470
Differences in translation ............................................... (2,524) 1,302
Cash and cash equivalents, end of period.................................. 33,498 45,245
The cash and cash equivalents at the end of period reflected in the unaudited summary statement of
cash flows above is reconciled in the table below to the cash and cash equivalents reflected on our
unaudited condensed consolidated and combined statement of financial position set out in the section
of this press release headed “Unaudited Condensed Consolidated and Combined Statement of
Financial Position”.
Year ended December 31,
(In thousands of U.S. dollars) 2018 2017
Restricted cash(1) ................................................ $ 13,765 5,183
Cash on hand .................................................... 438 347
Cash at bank ..............................................................33,060 40,992
Cash and cash equivalents ................................................ 47,263 46,522
Less
Bank overdrafts ............................................................ - (4,028)
Restricted cash(1) ...................................................... (13,765) (5,183)
33,498 37,311
Add: Cash and cash equivalents included in disposal group held for sale .. - 7,934
Cash and cash equivalents in the unaudited summary statement of cash flows 33,498 45,245
(1)
Restricted cash is bank balances pledged to certain banks to secure loans and other banking facilities of the Company and its subsidiaries.
Certain Unaudited Financial Information of Our Joint Ventures
The table below sets out certain unaudited financial information of our joint ventures as at and for the
year ended December 31, 2018. Our ownership interest in each of the joint ventures is set out at the
bottom of the table.
As at / For the Year ended December 31, 2018
Leopard Petrochemica Tri-View Island Bulk
(In thousands of U.S. dollars) IVS Bulk(1) Tankers(2) l Shipping(3) Shipping(4) Carriers(5)
Financial position items as at
December 31, 2018
Non-current assets ......................... 268,247 108,000 14,484 11,284 403
Non-current liabilities ...................... (116,314) - - - -
Current liabilities............................. (21,602) (116,456) (7,050) (8,040) (3,499)
Cash and cash equivalents ............ 26,232 3,899 5,623 2,143 56
Summary EBITDA(6) reconciliation
Profit / (Loss) for the year ................ 1,111 5,079 (6,872) 920 (1,003)
Adjusted for:
Income tax credit ............................ - - - (11) -
Interest income .............................. (24) - (76) - -
Interest expense............................. 9,666 4,765 519 328 -
Depreciation and amortization ........ 12,894 3 957 - -
EBITDA .............................................. 23,647 9,847 (5,472) 1,237 (1,003)
Company’s ownership interest ............ 33.5% 50.0% 50.0% 51.0% 65.0%
(1)
A joint venture with Regiment Capital Ltd. and Sankaty European Investments III, S.a.r.l.
(2)
A joint venture with Vitol Shipping Singapore Pte. Ltd.
(3)
A joint venture with Engen Petroleum Limited
(4)
A joint venture with Mitsui & Co. Ltd.
(5)
A joint venture with Rogers Shipping Pte. Ltd.
(6)
EBITDA is a non-GAAP financial measure. For a discussion of non-GAAP financial measures, including EBITDA, refer to the section of this
press release headed “Non-GAAP Financial Measures”.
Segment Results of Operations(1)
Six month ended December 31, Year ended December 31,
(In thousands of U.S. dollars) 2018 2017 2018 2017
Drybulk Carriers Business
Handysize Segment
Revenue .................................................................. $ 72,881 $ 72,323 $ 126,709 $ 126,731
Cost of sales............................................................ (66,953) (68,317) (117,554) (123,963)
Supramax/Ultramax Segment
Revenue .................................................................. $ 73,647 $ 78,739 $ 147,322 $ 157,428
Cost of sales............................................................ (71,857) (79,153) (146,612) (155,907)
Tanker Business
Medium Range Tanker Segment
Revenue .................................................................. $ 18,990 $ 29,722 $ 37,911 $ 53,307
Cost of sales............................................................ (20,086) (33,032) (39,795) (56,532)
Small Tanker Segment
Revenue .................................................................. $ 12,209 $ 10,927 $ 21,175 $ 22,740
Cost of sales............................................................ (10,263) (8,142) (18,641) (18,549)
(1)
Segment results of operations include the impact of the proportionate share of joint ventures which is not reflected in our condensed
consolidated and combined results of operations.
Non-GAAP Financial Measures
The financial information included in this press release includes certain ‘‘non-GAAP financial
measures’’ as such term is defined in SEC regulations governing the use of non-GAAP financial
measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating
performance, financial position or cash flows that excludes or includes amounts that are included in, or
excluded from, the most directly comparable measure calculated and presented in accordance with
IFRS. For example, non-GAAP financial measures may exclude the impact of certain unique and/or
non-operating items such as acquisitions, divestitures, restructuring charges, large write-offs or items
outside of management’s control. Management believes that the non-GAAP financial measures
described below provide investors and analysts useful insight into our financial position and operating
performance.
TCE Revenue and TCE per day.
TCE revenue is defined as vessel revenues less voyage expenses. Such TCE revenue, divided by the
number of operating days during the period, is TCE per day. Vessel revenues and voyage expenses
as reported for our operating segments include a proportionate share of vessel revenues and voyage
expenses attributable to our joint ventures based on our proportionate ownership of the joint ventures.
The number of operating days used to calculate TCE per day also includes the proportionate share of
our joint ventures’ operating days and also includes charter-in days.
TCE per day is a common shipping industry performance measure used primarily to compare daily
earnings generated by vessels on time charters with daily earnings generated by vessels on voyage
charters, because charter hire rates for vessels on voyage charters have to cover voyage costs and
are generally not expressed in per-day amounts while charter hire rates for vessels on time charters do
not cover voyage costs and generally are expressed in per day amounts.
Below is a reconciliation from TCE revenue to revenue for the six month periods to December 31, 2018
and 2017:
Six months ended December 31,
2018 2017
Voyage TCE Voyage TCE
(In thousands of U.S. dollars) Revenue Expenses Revenue Revenue Expenses Revenue
Vessel Revenue
Handysize ..................................... 63,417 (32,902) 30,515 64,528 (31,793) 32,735
Supramax/ultramax ....................... 73,015 (35,743) 37,272 78,214 (37,902) 40,312
Medium Range Tankers ................ 18,965 (4,193) 14,772 18,843 (3,378) 15,465
Small Tankers ............................... 8,429 (1,294) 7,135 10,927 (2,233) 8,694
Other drybulk carriers .................... 3 27,285
Other tankers ................................ 2,613 7,287
Other revenue ................................... 11,739 21,098
Adjustments(1) .................................... (10,004) (12,713)
Revenue ............................................ 168,177 215,469
(1)
Vessel revenue earned and voyage expenses incurred by the joint ventures are included within the operating segment information on a
proportionate consolidated basis. Accordingly, joint ventures proportionate financial information are adjusted out to reconcile to the unaudited
condensed consolidated and combined financial statements.
Below is a reconciliation from TCE revenue to revenue for the 12 month periods to December 31, 2018
and 2017:
Year ended December 31,
2018 2017
Voyage TCE Voyage TCE
(In thousands of U.S. dollars) Revenue Expenses Revenue Revenue Expenses Revenue
Vessel Revenue
Handysize ..................................... 116,372 (57,707) 58,665 118,262 (59,004) 59,258
Supramax/ultramax ....................... 146,097 (71,087) 75,010 156,517 (76,497) 80,020
Medium Range Tankers ................ 37,911 (7,966) 29,945 42,561 (7,555) 35,006
Small Tankers ............................... 17,395 (3,463) 13,932 22,740 (3,725) 19,015
Other drybulk carriers .................... 1,218 56,644
Other tankers ................................ 5,183 14,186
Other revenue ................................... 15,163 23,553
Adjustments(1) .................................... (20,321) (24,941)
Revenue ............................................ 319,018 409,522
(1)
Vessel revenue earned and voyage expenses incurred by the joint ventures are included within the operating segment information on a
proportionate consolidated basis. Accordingly, joint ventures proportionate financial information are adjusted out to reconcile to the unaudited
condensed consolidated and combined financial statements.
EBITDA and Adjusted EBITDA.
EBITDA is defined as earnings before income tax expense or credit, interest income, interest expense,
share of loss in joint ventures and depreciation and amortization. Adjusted EBITDA is EBITDA adjusted
to exclude the items set forth in the table below, which represent certain non-recurring, non-operating
or other items that we believe are not indicative of the ongoing performance of our core operations.
EBITDA and Adjusted EBITDA are used by analysts in the shipping industry as common performance
measures to compare results across peers. EBITDA and Adjusted EBITDA are not items recognized
by IFRS, and should not be considered in isolation or used as alternatives to loss for the period or any
other indicator of our operating performance.
Our presentation of EBITDA and Adjusted EBITDA is intended to supplement investors' understanding
of our operating performance by providing information regarding our ongoing performance that exclude
items we believe do not directly affect our core operations and enhancing the comparability of our
ongoing performance across periods. Our management considers EBITDA and Adjusted EBITDA to
be useful to investors because such performance measures provide information regarding the
profitability of our core operations and facilitate comparison of our operating performance to the
operating performance of our peers. Additionally, our management uses EBITDA and Adjusted EBITDA
as measures when reviewing our operating performance. While we believe these measures are useful
to investors, the definitions of EBITDA and Adjusted EBITDA used by us may not be comparable to
similar measures used by other companies.
The table below presents the reconciliation between loss for the period to EBITDA and Adjusted
EBITDA for the six month period ended December 31, 2018 and the comparative period ended
December 31, 2017; and for the 12 month period ended December 31, 2018 and the comparative
period ended December 31, 2017:
Six month
ended December 31, Year ended December 31,
(In thousands of U.S. dollars) 2018 2017 2018 2017
Loss for the Period .......................... $ (7,187) $ (53,860) $ (20,640) $ (60,812)
Adjusted for:
Income tax expense ........................... (758) 1,328 1,389 3,226
Interest income ..................................(1,842) (3,902) (3,787) (7,164)
Interest expense...................................3,556 3,469 6,517 6,548
Impairment loss recognized on financial assets ....1,583 - 1,583 -
Share of (profit)/losses of joint ventures .........(918) 11,758 454 12,946
Depreciation and amortization .....................7,529 9,494 14,292 19,680
EBITDA ............................................. 1,963 (31,713) (192) (25,576)
Adjusted for ......................................
Listing costs ............................... $ (497) $ - $ 3,582 $ -
Impairment loss on ships ............................. - 16,503 - 16,503
Impairment loss on goodwill and intangibles............- 12,119 - 12,119
Impairment loss on assets of disposal group ........ - 5,092 - 5,092
Gain on disposals of business ....................... - - (3,255) -
Gain on deemed disposal of previously held joint
venture ........ 111 - (213) -
ADJUSTED EBITDA ................................... 1,577 2,001 (78) 8,138
Headline Loss and Headline Loss Per Share.
The Johannesburg Stock Exchange (“JSE”) requires that we calculate and publicly disclose Headline
Loss Per Share and Diluted Headline Loss Per Share. Headline Loss Per Share is calculated using net
income which has been determined based on IFRS. Accordingly, this may differ to the Headline Loss
Per Share calculation of other companies listed on the JSE because these companies may report their
financial results under a different financial reporting framework such as U.S. GAAP.
Headline Loss for the period represents Loss for the period adjusted for the re-measurements that are
more closely aligned to the operating or trading results as set forth below, and Headline Loss 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 Loss for the period to Headline Loss for the
24
six month period ended December 31, 2018 and 2017, and the 12 month period ended December 31,
2018 and 2017:
Six
months ended December 31, Year ended December 31,
(In thousands of U.S. dollars, other than per share data which is
in U.S. dollars) 2018 2017 2018 2017
Reconciliation between loss for the period and headline earnings:
Loss for the period .............................................$ (7,187) $ (53,860) $ (20,640) $ (60,812)
Adjusted for:
- Impairment loss on joint venture’s ships ............................ 1,439 - 2,862 -
- Impairment loss on ships .............................................. - 16,503 - 16,503
- Impairment loss on goodwill and intangibles .............................. - 12,119 - 12,119
- Impairment loss on assets of disposal group .............................. - 5,092 - 5,092
- Gain/loss on disposals of plant and equipment ........................... - - (63) 2
- Gain on disposals of business ........................................... - - (3,255) -
- Gain on deemed disposal of previously held joint venture.................111 - (213) -
- Capital gains tax on sale of businesses ................................ (12) - 1, 797 -
Headline Loss.......................................................... (5,649) (20,146) (19,512) (27,096)
Number of shares on which the per share figures have been
calculated....................................................... 19,063,833 19,063,833 19,063,833 19,063,833
Loss per share ............................................. $ (0.38) $ (2.83) $ (1.08) $ (3.19)
Headline loss per share.................................... $ (0.30) $ (1.06) $ (1.02) $ (1.42)
Number of shares on which the diluted per share figures have been
calculated...................................................... 19,806,833 19,063,833 19,806,833 19,063,833
Diluted loss per share ......................................$ (0.36) $ (2.83) $ (1.04) $ (3.19)
Diluted headline loss per share ........................... $ (0.29) $ (1.06) $ (0.99) $ (1.42)
Forward-Looking Statements
This press release contains forward-looking statements 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;
cyclicality of the drybulk and tanker markets, including general drybulk and tanker shipping market
conditions and trends, including fluctuations in charter hire rates and vessel values; changes in supply
and demand in the drybulk and tanker shipping industries, including the market for Grindrod Shipping’s
vessels; changes in the value of Grindrod Shipping’s vessels; statements about business strategy and
expected capital spending or operating expenses, including drydocking, surveys, upgrades and
insurance costs; competition within the drybulk and tanker industries; seasonal fluctuations within the
drybulk and tanker industries; 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, especially major oil companies and oil producers; 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 condition including
additional tariffs imposed by the United States and China on their respective imports; 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; fluctuations in interest rates and foreign exchange rates
including the uncertainty of the continued existence of LIBOR in the future; 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; 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 complete acquisitions as planned; adequacy of Grindrod Shipping’s insurance coverage;
effects of new technological innovation and advances in vessel design; Grindrod Shipping’s ability to
realize the benefits of the separation from Grindrod Limited; Grindrod Shipping’s ability to operate as
an independent entity; and the other factors set out in in Item 3. Key Information-Risk Factors” in our
Registration Statement on Form 20-F filed with the Securities and Exchange Commission. Except as
required by law, 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.
Company Contact: Investor Relations / Media Contact:
Martyn Wade / Stephen Griffiths Nicolas Bornozis / Judit Csepregi
CEO / CFO Capital Link, Inc.
Grindrod Shipping Holdings Ltd. 230 Park Avenue, Suite 1536
200 Cantonment Road, #03-01 Southpoint New York, N.Y. 10169
Singapore, 089763 Tel.: (212) 661-7566
Email: ir@grindrodshipping.com Fax: (212) 661-7526
Website: www.grinshipping.com Email: grindrod@capitallink.com
By order of the Board
28 February 2019
Sponsor: Grindrod Bank Limited
Date: 28/02/2019 07:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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