| Mon 6 Aug 2001, 0:00 | | Grindrod Limited - 2001 Interim Report And Dividen |
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GRINDROD LIMITED
(FORMERLY GRINDROD UNICORN GROUP LIMITED)
(Registration number 1966/009846/06)
(Incorporated in the Republic of South Africa)
2001 INTERIM REPORT AND DIVIDEND ANNOUNCEMENT
- 127% Increase in headline earnings per share
- Increase in interim dividend
- Further reduction in gearing
Consolidated Income Statement
Year ended
Six months ended 30 June 31 December
2001 2000 Change 2000
(Unaudited) (Unaudited) (Audited)
R000 R000 % R000
Revenue 861 316 666 360 29 1 474 451
Trading income 136 198 101 370 34 242 824
Provisions for
Contracted charter
losses (13 660) (5 250) (17 393)
Depreciation (46 167) (42 268) (88 889)
Operating income before
interest and taxation 76 371 53 852 42 136 542
Net interest paid (26 401) (29 111) (61 714)
Income before taxation 49 970 24 741 102 74 828
Taxation 131 (1 821) (144)
Income after
taxation 50 101 22 920 119 74 684
Non-trading items (902) (89) (317)
Outside shareholders'
interest (128) - -
Income attributable
to
ordinary shareholders 49 071 22 831 115 74 367
Headline earnings 49 973 22 920 118 74 684
Weighted average
number of
shares on which
earnings
per share are
based (000's) 109 482 114 076 114 080
Earnings per
share (cents) 44,8 20,0 65,2
Headline earnings
per share (cents) 45,6 20,1 127 65,5
Dividends per
share (cents)
Interim 8,0 5,0 5,0
Final - - 15,0
Dividend cover (times) 5,6 4,0 3,25
Exchange rates (R/US$)
Opening exchange rate 7,56 6,15 6,15
Closing exchange rate 8,06 6,78 7,56
ANALYSIS OF HEADLINE EARNINGS
The divisional analysis of headline earnings was as follows:
Year ended
Six months ended 30 June 31 December
2001 2000 2000
R000 R000 R000
Shipping Services 40 563 15 510 69 768
Freight Management 3 265 3 838 (3 105)
Continuing operations 5 465 3 838 6 720
Restructured operations (2 200) - (9 825)
Financial Services 6 145 3 572 8 021
49 973 22 920 74 684
NON-TRADING ITEMS
Year ended
Six months ended 30 June 31 December
2001 2000 2000
R000 R000 R000
Amortisation of goodwill (902) 822 (68)
Discontinued operations - (911) (249)
(902) (89) (317)
CONSOLIDATED BALANCE SHEET
30 June 31 December
2001 2000 2000
(Unaudited) (Unaudited) (Audited)
R000 R000 R000
Fixed assets 1 063 651 1 057 980 1 076 355
Goodwill 12 355 5 561 9 671
Investments 111 314 80 054 80 872
Cash deposit 98 523 81 508 92 362
Bank balances and cash 191 967 168 883 121 653
Other current assets 234 974 151 106 222 606
Total assets 1 712 784 1 545 092 1 603 519
Ordinary shareholders'
funds 552 718 447 446 535 058
Outside shareholders'
interest 2 060 - -
Deferred taxation 19 949 18 905 20 213
Interest bearing debt 809 286 816 115 778 497
Other liabilities 328 771 262 626 269 751
Total liabilities 1 712 784 1 545 092 1 603 519
Net asset value per
share (cents)
Ships and investments
at book value 530 392 469
Ships and
investments at
current valuation 532 344 446
Net debt : equity ratio 0,94 : 1 1,26 : 1 1,05 : 1
Capital expenditure 17 405 872 28 170
Capital commitments
Contracted for 228 308 105 294 174 813
Authorised by
directors not
yet contracted for 3 437 - 63 116
STATEMENT OF CHANGES IN EQUITY
Foreign
currency
Share capital and other Accumulated
and premium reserves profit Total
R000 R000 R000 R000
Balance at 1 January 2000 173 491 109 752 104 275 387 518
Foreign currency
translation
adjustments 37 097 37 097
Profit attributable to
ordinary shareholders 22 831 22 831
Balance at 30 June 2000 173 491 146 849 127 106 447 446
Share options exercised 227 227
Foreign currency
translation
adjustments 41 553 41 553
Profit attributable
to ordinary shareholders 51 536 51 536
Dividends paid (5 704) (5 704)
Non-distributable
reserve transfers (62) 62 -
Balance at 31
December 2000 173 718 188 340 173 000 535 058
Share options exercised 439 439
Buy-back of share capital (34 803) (34 803)
Foreign currency translation
adjustment 20 108 20 108
Profit attributable to
Ordinary shareholders 49 071 49 071
Dividends paid (17 155) (17 155)
Balance at 30 June 2001 139 354 208 448 204 916 552 718
CONSOLIDATED CASH FLOW STATEMENT
30 June 31 December
2001 2000 2000
(Unaudited) (Unaudited) (Audited)
R000 R000 R000
Cash generated from
operations 98 674 98 106 184 752
Net interest paid (26 401) (29 111) (61 714)
Dividends received 912 786 2 383
Dividends paid (17 155) - (5 704)
Taxation (paid)/received - (56) 79
Net cash inflow from
operating activities 56 030 69 725 119 796
Acquisition of fixed assets
and investments (43 304) (34 250) (62 274)
Proceeds from disposal of
fixed assets and investments 83 788 31 400 33 000
Loans paid to associated
companies - (5 225) 1 992
Deposit (raised)/repaid - (10 325) 3 283
Net cash inflow/(outflow) from
investing activities 40 484 (18 400) (23 999)
Buy-back of share capital (34 803) - -
Proceeds from borrowings and
preference share financing 4 380 - 1 383
Payment of capital portion of
long-term borrowings (128 454) (46 980) (103 291)
Net cash outflow from
financing activities (158 877) (46 980) (101 908)
Net (decrease)/increase in cash
and cash equivalents (62 363) 4 345 (6 111)
COMMENTS
Results
The group improved headline earnings for the six months ended 30 June 2001
to R49,9 million or 45,6 cents per share which represents a 127% increase in
headline earnings per share over the comparable period last year.
Shipping Services (Unicorn, Island View Shipping and Quadrant) The Product
Tanker market was buoyant during the period and Unicorn benefited from
higher charter rates and the depreciation of the Rand against the US Dollar.
Container and bulk shipping rates remained fairly steady and did not have a
material effect on the increase in group profitability. Island View
Shipping improved its results during the period notwithstanding the bulk
shipping market being extremely competitive out of South Africa. Unicorn's
liner services between Mo ambique and Namibia attracted good volumes and has
recently been extended to include Angola. Quadrant Container Line, our cargo
container operator, performed satisfactorily.
Freight Management (Ships Agency, P&O Grindrod Logistics, R hlig-Grindrod,
R hlig Perishable Cargo Agents, Auto Carrier Transport, CMC Grindrod, Kusasa
Bulk Terminals and Logistics)
The group continued to develop its landside freight logistics businesses in
partnership with first class operators in worldwide logistics.
During the period the group acquired a 75% share in R hlig Perishable Cargo
Agents, the major mover of perishable cargo by air from South Africa. In
addition, the group acquired Ellerman & Bucknall, a ships agency business
based in Cape Town servicing mainly the fishing industry. A 50/50 joint
venture was entered into between Confreight Cargo Management Centre and
Grindrod Container Services which now trades under the new brand name CMC
Grindrod in the field of container husbandry. The bulk storage facilities
being developed in Richards Bay with partners and which was referred to in
the 2000 annual financial statements has been named Kusasa Bulk Terminals.
The group has a 45% stake in this development which is expected to be fully
commissioned later in the year to service the export of Iscor's heavy
minerals.
The group continues to develop a network of solid freight logistics
businesses which are able to service Customer needs by land, air and sea.
There is potential to increase our market share and profitability in this
field.
Financial Services (50% investment in Marriott)
Marriott performed well during the half year. It has a strong management
team and is well positioned to capitalise on its good product range
particularly in the property sector. In July 2001, additional capital of
R18,2 million was introduced in equal amounts by the group and other
Marriott shareholders.
CAPITAL EXPENDITURE, ACQUISITIONS AND DISPOSALS
At 30 June 2001, the group had sold and delivered a bulk carrier and a multi-
purpose vessel realising approximately R80 million. In addition, the group
has concluded the sales of two multi-purpose vessels which realised an
additional R80 million in July 2001 and two container vessels for delivery
in September 2001 which will realise a further R190 million. The container
vessels have been chartered back for three years at market rates. This
completes our programme to sell ships.
The group has concluded a contract to purchase a further handysize bulk
carrier from a Chinese shipyard bringing the total number of ships purchased
from this yard by our joint venture partners and ourselves to four vessels.
We have subsequently agreed with our partners that we will each own two
vessels outright. The vessels will deliver in 2002 and 2003 and be employed
by Island View Shipping, who have also entered into long term charters for
four similar Japanese built handysized bulk carriers. These vessels commence
delivery later this year and will be fully delivered by the end of 2002.
Unicorn has entered into three long term charters of 45 000 ton product
tankers, one of which will be delivered in August 2001 and the others in
2003/2004. Two of the product tankers have been chartered in joint venture
with partners. These transactions have been completed to take advantage of
good charter opportunities and the vessels will be entering a pool
arrangement which will ensure their long term employment.
The group invested R23,7 million in the acquisition of various logistics
based businesses and e-business initiatives.
The buy-back of 10,13 million Grindrod Limited shares at an average price of
R3,44 per share was concluded during the period and there are now 104,2
million shares in issue.
GROUP BORROWINGS
The debt-equity ratio reduced to 94% at 30 June 2001 compared to 105% at 31
December 2000. It will further reduce with the sale of ships already
concluded and to be concluded in the second half of the year.
ACCOUNTING POLICIES AND PRESENTATION
This report has been prepared in accordance with the Statement of Generally
Accepted Accounting Practice on interim reporting. Apart from the
accounting treatment of post-employment benefits, the accounting policies
and methods of computation are consistent with those applied in the annual
financial statements for the year ended 31 December 2000. In terms of the
transitional provisions contained in the statement on employee benefits, the
group's liability in respect of post-employment benefits is being provided
on a straight line basis over a period of five years. An amount of R5
million was charged against income in terms of these transitional provisions
in the current period.
DIVIDENDS
An interim dividend of 8,0 cents per share (2000: 5,0 cents per share) has
been declared. The group has increased the interim dividend in order to
achieve a better ratio between the interim and final dividends.
PROSPECTS
At this stage we see no reason why second half earnings should not exceed
those earned in the first half. Earnings for the full year should therefore
be above those earned in 2000.
For and on behalf of the board
WM Grindrod IAJ Clark
Chairman Group Managing Director
6 August 2001
DECLARATION OF INTERIM DIVIDEND
Notice is hereby given that an interim dividend of 8,0 cents per ordinary
and "N" ordinary share (2000: 5,0 cents per share) has been declared payable
to shareholders in accordance with the undermentioned timetable. The
dividend is declared in the currency of the Republic of South Africa.
Last day to trade cum-dividend Friday 24 August 2001
Trading ex-dividend commences Monday 27 August 2001
Record date Friday 31 August 2001
Dividend payment date Friday 7 September 2001
By order of the board
CE Maple
Secretary
6 August 2001
Directors: WM Grindrod* (Chairman), DRD White* (Deputy Chairman), IAJ Clark
(Group Managing Director), H Adams*, IM Groves*, PJ Guillou*+, JC Hall* CBE,
B Martineau*+, RA Norton*, AK Olivier, LR Stuart-Hill
*Non-executive +French
Registered office
Quadrant House
115 Victoria Embankment
Durban 4001
Postal address
PO Box 1
Durban
4000
Transfer secretaries
Mercantile Registrars Limited
10th Floor, 11 Diagonal Street
Johannesburg 2001
Postal address
PO Box 1053
Johannesburg
2000
