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Grindrod Ltd - Interim Results
GRINDROD LIMITED
(Registration Number 1966/009846/06)
(Incorporated in the Republic of South Africa)
Share code: GND ISIN number: ZAE000030805
Share code: GNN ISIN number: ZAE000030813
2002 INTERIM REPORT AND
DIVIDEND ANNOUNCEMENT
* 80% increase in headline
earnings per share
* 75% increase in interim
dividend
CONSOLIDATED INCOME
STATEMENT
Year
ended
Six months ended 30 31
June December
2002 2001 Change 2001
(Unaudited) (Unaudited (Audited)
)
R000 R000 % R000
Revenue
1,112,839 861,316 29 1,761,776
Trading income
133,520 122,538 221,351
Depreciation
(30,572) (46,167) (64,641)
Operating income before
interest and taxation 102,948 76,371 156,710
Net interest paid
(19,560) (26,401) (41,259)
Income before taxation
83,388 49,970 115,451
Taxation
(1,994) 131 12,832
Income after taxation
81,394 50,101 128,283
Non-trading items -
amortisation of goodwill (345) (902) (1,007)
Outside shareholders`
interest (984) (128) (319)
Income attributable to
ordinary shareholders 80,065 49,071 126,957
Headline earnings
80,410 49,973 61 127,964
Number of shares in issue
less treasury shares (000`s) 94,165 104,256 99,329
Weighted average number of
shares on which earnings per 97,682 109,482 105,535
share are based (000`s)
Earnings per share (cents)
82.0 44.8 120.3
Headline earnings per share
(cents) 82.3 45.6 80 121.3
Dividends per share (cents)
Interim
14.0 8.0 8.0
Final
- - 20.0
Dividend cover (times)
6.1 5.6 4.1
Exchange rates (R/US$)
Opening exchange rate
12.00 7.56 7.56
Closing exchange rate
10.40 8.06 12.00
Average exchange rate
11.03 7.93 8.62
ANALYSIS OF HEADLINE EARNINGS
Divisional analysis of headline earnings Year
ended
Six months ended 30 31
June December
2002 2001 2001
R000 R000 R000
Shipping Services
51,845 40,563 94,382
Continuing operations
69,345 42,304 100,346
Discontinued operations
(17,500) (1,741) (5,964)
Freight and Financial
Services 28,565 9,410 33,582
Continuing operations
28,565 11,610 36,700
Restructured operations
- (2,200) (3,118)
- -
80,410 49,973 127,964
CONSOLIDATED BALANCE SHEET
30 June 31
December
2002 2001 2001
(Unaudited) (Unaudited)
(Audited)
R000 R000 R000
Fixed assets
1,188,662 1,063,651 1,046,574
Goodwill
15,039 12,355 15,447
Investments in associates
170,075 111,314 135,075
Other investments
172,060 98,523 136,492
Bank balances and cash
128,181 191,967 337,270
Other current assets
265,195 234,974 238,326
Total assets
1,939,212 1,712,784 1,909,184
Ordinary shareholders` funds
604,451 496,537 719,588
Outside shareholders`
interest 3,233 2,060 2,249
Deferred taxation
405 19,949 390
Provision for post-
retirement medical aid 66,323 61,550 64,833
Interest bearing debt
852,716 809,286 684,299
Other liabilities
412,084 323,402 437,825
Total liabilities
1,939,212 1,712,784 1,909,184
Net asset value per share
(cents)
Ships and investments at
current valuation 637 532 750
Net debt : equity ratio 0,91 : 1 0,94 : 1 0.29 : 1
Capital expenditure
301,902 17,405 73,404
Capital commitments
Contracted for
525,272 228,308 561,420
Due within one year
184,106 106,199 430,200
Due thereafter
341,166 122,109 131,220
Authorised by directors not
yet contracted for 4,398 3,437 7,219
STATEMENT OF CHANGES IN
EQUITY
Share Foreign Accumulated Total
Capital & Currency & Profit
Premium Other
Reserves
R000 R000 R000 R000
Balance at 1 January 2001
As previously reported
173,718 188,340 173,000 535,058
Provision for post-
retirement medical aid (61,550) (61,550)
Deferred taxation
adjustment 5,369 5,369
As restated
173,718 188,340 116,819 478,877
Share options exercised
439 439
Treasury shares acquired
(34,803) (34,803)
Foreign currency translation
adjustments 20,108 20,108
Profit attributable to
ordinary shareholders 49,071 49,071
Dividends paid
(17,155) (17,155)
Balance at 30 June 2001
139,354 208,448 148,735 496,537
Share options exercised
148 148
Cancellation of share
capital (13,985) (13,985)
Treasury shares acquired
(5,567) (5,567)
Foreign currency translation
adjustments 172,809 172,809
Profit attributable to
ordinary shareholders 77,886 77,886
Dividends paid
(8,240) (8,240)
Non-distributable reserve
transfers (62) 62 -
Balance at 31 December 2001
119,950 381,195 218,443 719,588
Share options exercised
2,694 2,694
Treasury shares acquired
(8,233) (8,233)
Cancellation of share
capital (31,267) (31,267)
Foreign currency translation
adjustments (138,275) (138,275)
Profit attributable to
ordinary shareholders 80,065 80,065
Dividends paid
(20,121) (20,121)
Balance at 30 June 2002
83,144 242,920 278,387 604,451
CONSOLIDATED CASH FLOW
30 June 31 December
2002 2001 2001
(Unaudited) (Unaudited) (Audited)
R000 R000 R000
Cash generated from
operations 118,416 94,367 203,679
Working capital changes
(49,241) 4,307 93,722
Net interest paid
(19,560) (26,401) (41,259)
Net dividends paid
(18,153) (16,243) (21,713)
Taxation paid
(350) - (935)
Net cash inflow from
operating activities 31,112 56,030 233,494
Acquisition of fixed assets
and investments (358,478) (43,304) (92,924)
Proceeds from disposal of
fixed assets and 878 83,788 316,980
investments
Loans advanced to
associated companies (21,188) - (30,492)
Net cash (outflow) / inflow
from investing activities (378,788) 40,484 193,564
Repurchase of ordinary
share capital (39,500) (34,803) (54,355)
Proceeds from issue of
ordinary share capital 2,694 - 588
Proceeds from borrowings
123,510 4,380 -
Payment of capital portion
of long term borrowings (44,435) (128,454) (275,641)
Short-term loan raised
160,542 - 9,405
Net cash inflow / (outflow)
from financing activities 202,811 (158,877) (320,003)
- -
Net (decrease) / increase
in cash and cash (144,865) (62,363) 107,055
equivalents
GRINDROD LIMITED - 2002 INTERIM REPORT AND DIVIDEND ANNOUNCEMENT
COMMENTS
RESULTS
The group is pleased to report another record half year performance.
Headline earnings for the six months ended 30 June 2002 increased to
R80,4 million or 82,3 cents per share representing an 80% increase in
headline earnings per share over the six months ended 30 June 2001.
Group revenue increased by 29% from R0,86 billion to R1,11 billion.
SHIPPING SERVICES
(Unicorn Shipping, Island View Shipping and Quadrant Container Line)
Generally the tanker and bulk shipping markets, in which most of the
group`s shipping services operate, were soft during the period under
review but have shown some improvement in the latter months.
Notwithstanding this, Unicorn Shipping has contributed substantially to
the group`s results due to a low cost base and some fixed charter
contracts. Depreciation charges were lower due to the sale of ships in
the second half of last year. Provisions for contracted losses continue
to be held.
Island View Shipping has performed satisfactorily in difficult trading
conditions.
The losses Quadrant Container Line experienced in 2001 continued and
early in 2002 a decision was made to discontinue the operation, which by
30 June 2002, had been substantially completed. Full provision for any
losses has been made in these results.
FREIGHT & FINANCIAL SERVICES
(Grindrod Ships Agencies, Auto Carrier Transport, CMC Grindrod, Grindrod
Perishable Cargo Agents, Kusasa Bulk Terminals, P&O Grindrod Logistics,
Rhlig-Grindrod Unicorn Lines and Marriott)
The group`s freight management division performed well during the period
substantially increasing its contribution to the group`s half year
results.
Grindrod Ships Agencies have benefited from increased business and cargo
flows.
The landfreight logistics businesses have performed well in an
increasingly competitive market. Expansion of the Kusasa Bulk Terminal
in Richards Bay is being undertaken to cater for the export of
beneficiated heavy mineral product. These additions are expected to be
completed during the second half of 2002.
The seafreight logistics business, Unicorn Lines, performed well during
the period.
On 13 June 2002 the group announced the formation of a new joint venture
between Unicorn Lines and Safmarine Container Lines to service African
coastal liner shipping. The joint venture will be known as Unifeeder
and will cover the domestic and regional port ranges from Mombasa on the
east coast to Luanda on the west coast of Africa. The joint venture is
subject to approval by the Competition Commission.
Marriott continues to perform well in its three operating divisions,
namely Merchant Banking, Asset Management and Property Management.
CAPITAL EXPENDITURE AND CAPITAL COMMITMENTS
Capital expenditure and capital commitments of the group are:-
CAPITAL
DESCRIPTION EXPENDITURE CAPITAL COMMITMENTS
R000s 6 MONTHS 6 MONTHS 2003 2004
30.06.02 31.12.02
SHIPS 292 283 122 839 88 452 252 714
BULK TERMINALS - 53 161 - -
OTHER 9 619 8 106 - -
TOTAL 301 902 184 106 88 452 252 714
GROUP BORROWINGS
Group borrowings have increased from R684 million to R853 million and
the debt equity ratio from 29% to 91%. This is due to the acquisition
of ships during the first half of the year, progress payments on ships
under construction and a lower equity. This ratio is in line with the
group`s guidelines of 1:1. The group has taken a strong position in
renewing its fleet at, what it believes to be, a low in the market
cycle, and therefore when markets improve, this will allow for increased
earnings and capital appreciation.
EQUITY
During the period the group bought back a further 6,63 million shares
for R39,5 million at an average price of R5,96 per share. Following
this buy-back 6,63 million `N` ordinary shares were cancelled. The
group continues to hold 11,4 million of its own shares in a subsidiary.
NET ASSET VALUE
The majority of the group`s assets are ships which are priced in US
Dollars. The net asset value in Rand terms of the group has therefore
declined because of the Rands appreciation against the US Dollar during
the period.
ACCOUNTING POLICIES AND PRESENTATION
This report has been prepared in accordance with Statements of Generally
Accepted Accounting Practice. The accounting policies and methods of
computation are consistent with those applied in the annual financial
statements for the year ended 31 December 2001.
DIVIDENDS
An interim dividend of 14 cents per share (2001 : 8,0 cents per share)
has been declared.
PROSPECTS
Although certain shipping markets have been at low levels in their
market cycles there are some signs of improvement in market conditions.
The group is confident of achieving similar or better results in the
second half of the year and as a consequence a favourable growth in
earnings per share in 2002 is anticipated.
For and on behalf of the Board
W M Grindrod I A J Clark
Chairman Group Managing Director
8 August 2002
DECLARATION OF INTERIM DIVIDEND
Notice is hereby given that an interim dividend of 14,0 cents per
ordinary and `N` ordinary share (2001 : 8,0 cents per share) has been
declared payable to shareholders in accordance with the under-mentioned
timetable. The dividend is declared in the currency of the Republic of
South Africa.
Last day to trade cum-dividend Friday 30 August 2002
Trading ex-dividend commences Monday 2 September 2002
Record date Friday 6 September 2002
Dividend payment date Monday 9 September 2002
No dematerialisation or rematerialisation of shares will be allowed for
the period from 2 September 2002 to 6 September 2002, both days
inclusive.
By order of the Board
C A S Robertson
Secretary
8 August 2002
Directors
W M Grindrod* (Chairman), D R D White* (Deputy Chairman), I A J Clark
(Group Managing Director), H Adams*, I M Groves*, J C Hall* CBE, R A
Norton*, A K Olivier, L R Stuart-Hill
* Non-executive
Registered Postal Transfer secretaries Postal
office address Computershare Investor address
Quadrant House P O Box 1 Services Ltd P O Box 1053
115 Victoria Durban 8th Floor, 11 Diagonal Johannesburg
Embankment 4000 Street 2000
Durban Johannesburg
4001 2001
Date: 07/08/2002 03:17:48 PM Produced by the JSE SENS Department
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