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GRINDROD LIMITED - 2002 FINAL RESULTS AND DIVIDEND ANNOUNCEMENT
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 FINAL RESULTS AND DIVIDEND ANNOUNCEMENT
43% Increase in Headline Earnings per Share
30% Increase in final dividend
GROUP INCOME STATEMENT
Year ended 31
December
Reviewed Audited
2002 2001 Change
R000 R000 %
Revenue
2,163,594 1,761,776 23
Trading income
268,185 206,281
Depreciation
(61,940) (64,641)
Operating income before interest
and taxation 206,245 141,640
Non-trading items
(2,814) (2,199)
Interest received
24,319 29,872
Interest paid
(60,846) (71,131)
Income before taxation
166,904 98,182
Taxation
(19,378) 12,832
Income after taxation
147,526 111,014
Income from associated companies
18,902 16,262
Income after taxation including
associated companies 166,428 127,276
Outside shareholders` interest
(990) (319)
Income attributable to
shareholders 165,438 126,957
Reconciliation of headline
earnings
Income attributable to
shareholders 165,438 126,957
Adjusted for non-trading items
2,814 2,199
Goodwill
1,200 1,007
Cost of discontinuing operations
3,878 -
(Profit) / loss on sale of
containers and equipment (2,264) 1,192
Headline earnings
168,252 129,156 30
Number of shares in issue
less treasury shares 94,497 99,329
(000`s)
Weighted average number of shares
on which earnings per share are 96,172 105,535
based (000`s)
Diluted weighted average number of
shares on which diluted earnings 102,179 110,922
per share are based (000`s) *
Earnings per share (cents)
Basic
172.0 120.3
Diluted *
161.9 114.5
Headline earnings per
share (cents)
Basic
174.9 122.4 43
Diluted *
164.7 116.4
Dividends per share
(cents)
Paid
14.0 8.0
Declared
26.0 20.0 30
Dividend cover (times)
4.19 4.06
Exchange rates (R/US$)
Opening exchange rate
12.00 7.56
Closing exchange rate
8.63 12.00
Average exchange rate
10.54 8.62
*Assuming all outstanding
share options are
exercised
DIVISIONAL ANALYSIS OF EARNINGS
Year ended 31 December
Reviewed Audited
2002 2001
R000 R000
Shipping Services
104,045 100,145
Continuing operations
121,644 111,358
Discontinued operations
(17,599) (11,213)
Freight & Financial Services
61,393 26,812
Continuing operations
61,393 29,930
Restructured operations
- (3,118)
165,438 126,957
GROUP BALANCE SHEET
31 December
Reviewed Audited
2002 2001
R000 R000
Fixed assets
1,093,476 1,046,574
Goodwill
16,208 15,447
Investments in associates
132,054 135,075
Equity investment
25,213 -
Cash / financial investments
152,695 136,492
Bank balances and cash
194,904 337,270
Other current assets
290,118 238,326
Total assets
1,904,668 1,909,184
Ordinary shareholders` equity
521,499 719,588
Shareholders equity excluding
NDR 430,566 338,393
Non distributable reserves
90,933 381,195
Outside shareholders` interest
3,239 2,249
Deferred taxation
12,121 390
Provision for post retirement
medical aid 57,735 64,833
Interest bearing debt
959,013 684,299
1,553,607 1,471,359
Other liabilities
351,061 437,825
Total funding
1,904,668 1,909,184
Net debt : equity ratio 1,07:1 0,29:1
Capital expenditure
358,325 73,404
Capital commitments
Authorised by directors and
contracted for 735,629 561,420
Due within one year
126,351 430,200
Due thereafter
609,278 131,220
Authorised by directors not
yet contracted for 13,266 7,219
STATEMENT OF CHANGES IN EQUITY
Share Foreign Accumulat Total
capital currency ed Profit
and and other
premium reserves
R000 R000 R000 R000
Balance at 31 478,877
December 2000 173,718 188,340 116,819
Share options 588
exercised 588
Cancellation of share (13,986)
capital (13,986)
Treasury shares (40,370)
acquired (40,370)
Foreign currency 192,917
translation 192,917
adjustments
Attributable to 246,337
exchange rate 246,337
movement
Realised on repayment (53,420)
of loans / sale of (53,420)
ships
Profit attributable 126,957
to ordinary 126,957
shareholders
Dividends paid (25,395)
(25,395)
Non distributable
reserve transfers (62) 62 -
Balance at 31 719,588
December 2001 119,950 381,195 218,443
Reversal of property (2,879)
revaluations (1,616) (1,263)
As restated 716,709
119,950 379,579 217,180
Share options 4,142
exercised 4,142
Cancellation of share (34,326)
capital (34,326)
Treasury shares (8,458)
acquired (8,458)
Foreign currency (288,646)
translation (288,646)
adjustments
Attributable to (172,250)
exchange rate (172,250)
movement
Realised on repayment (116,396)
of loans / sale of (116,396)
ships
Profit attributable 165,438
to ordinary 165,438
shareholders
Dividends paid (33,360)
(33,360)
Balance at 31 521,499
December 2002 81,308 90,933 349,258
GROUP CASH FLOW
31 December
Reviewed Audited
2002 2001
R000 R000
Cash generated from operations
excluding working capital 202,378 203,679
Working capital movements
(130,155) 93,722
Net interest paid
(41,985) (41,259)
Net dividends paid
(28,191) (21,713)
Taxation paid
(1,621) (935)
Net cash inflow from operating
activities 426 233,494
Acquisition of fixed assets
and investments (232,566) (92,924)
Proceeds from disposal of
fixed assets and investments 20,389 316,980
Cost of discontinuing
operations (3,878) -
Loans repaid by / (advanced
to) associated companies 26,693 (30,492)
Finance lease receipts
29,283 -
Net cash (outflow) / inflow
from investing activities (160,079) 193,564
Repurchase of ordinary share
capital (42,784) (54,355)
Proceeds from issue of
ordinary share capital 4,142 588
Proceeds from borrowings
60,014 -
Payment of capital portion of
long term borrowings (122,956) (275,641)
Short term loan raised
90,957 9,405
Net cash outflow from
financing activities (10,627) (320,003)
Net (decrease) / increase in
cash and cash equivalents (170,280) 107,055
Cash and equivalents at
beginning of period 297,232 107,190
Difference arising on
translation (41,108) 82,987
Cash and cash equivalents at
end of period 85,844 297,232
GRINDROD LIMITED
2002 FINAL RESULTS AND DIVIDEND ANNOUNCEMENT
COMMENTS
RESULTS
Following two years of significant earnings growth, the group is pleased to
report another record year with headline earnings increasing to R168,3 million
or 174,9 cents per share which is an increase of 43% over 2001. Group revenue
increased by 23% from R1,8 billion to R2,2 billion.
Freight and Financial Services (Grindrod Ships Agencies, Auto Carrier Transport,
CMC Grindrod, Kusasa Bulk Terminals, Kusasa Logistics, P&O Grindrod Logistics,
Rhlig-Grindrod, Grindrod Perishable Cargo Agents, Sure Jet International
Travel, Unifeeder and Marriott)
The group`s freight management division has grown substantially in size with a
far broader product mix and improved market share. The division is now a
substantial contributor to group profitability and will continue to look for
further growth in the freight logistics field during 2003.
Grindrod Ships Agencies performed well and increased its customer and cargo
base.
The landfreight logistics business has expanded its operations particularly in
Richards Bay where further terminal projects are in progress. The Kusasa Bulk
Terminal expansion project was completed on time in the last quarter of 2002.
Seafreight logistics, trading under the Unifeeder brand name, has settled down
well after the formation of the new joint venture between Unicorn Lines and
Safmarine Container Line to service African coastal feeder and regional shipping
needs.
The group`s financial services investment in Marriott has performed well with a
substantial increase in assets under management in its asset and property
management divisions. Marriott Merchant Bank has maintained its strong position
in a niche market with improvements in fee income during the year.
Shipping Services (Unicorn Shipping, Island View Shipping and Quadrant Container
Line)
Positive results were achieved by the division, despite the fact that shipping
markets were depressed for the majority of the year. The group took advantage
of the low markets in 2002 to charter in 15 dry bulk carriers on short, medium
and long term charters and to order three product tankers from Korea, one in
Southern Tankers, a joint venture Black Economic Empowerment company. Unicorn
Shipping completed its planned dry cargo fleet replacement program with the
acquisition of two high specification handysize bulk carriers which were
delivered from a Chinese shipyard during the year, and purchased a 50% interest
in two modern second-hand handysize bulk carriers in partnership with a
respected international operator.
Unicorn Shipping was a substantial contributor to group profitability due to its
low cost base and fixed charter contracts. Provisions for contracted charter
losses have reduced as a result of the improved markets and previously fixed
charters, either terminating or approaching expiry.
Island View Shipping substantially increased its chartered fleet during the year
and performed satisfactorily in difficult trading conditions. It further
developed a worldwide modern handysize pool in partnership with a respected
international shipowner and operator and increased its participation in the dry
bulk carrier markets in Capesize and Panamax vessels. This sees it well
positioned to take advantage of improved shipping markets during 2003.
Quadrant Container Line was closed during the year and full provision has been
made for discontinuation costs.
CAPITAL EXPENDITURE AND CAPITAL COMMITMENTS
Capital expenditure and capital commitments of the group are:-
Capital
Description Expenditu Capital Commitments
re
R000s 2002 2003 2004 2005
Ships 279 245 97 118 483 453 125 825
Bulk Terminals 27 310 28 917 -
Property, vehicles 51 770 13 582 -
and equipment
Total 358 325 139 617 483 453 125 825
GROUP BORROWINGS AND CASH FLOW
Group net borrowings increased to R764 million, and the debt equity ratio has
increased to 107% at year-end. The increase in borrowings was due to the
acquisition of three bulk carriers. In addition to these acquisitions we
currently have under construction three products tankers, which will be financed
through ship sales, operating income and ship loans. The debt equity ratio is
unlikely to increase above current levels.
EQUITY
During the year the group bought in a further 7 179 153 shares for R42.8 million
at an average price of R5,96 per share. Following this buy-in, 7 179 153
million `N` ordinary shares have been cancelled. The group continues to hold
11.4 million of its own shares in a subsidiary.
The group`s non-distributable reserves, resulting in the main from unrealised
foreign exchange gains, have reduced as a result of the South African Rand`s
appreciation against the US Dollar during 2002.
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, apart from the change in respect of the accounting for freehold and
leasehold properties by the requirements of AC135: Investment Property, are
consistent with those applied in the annual financial statements for the year
ended 31 December 2001.
AUDIT REPORT
The results have been reviewed by the auditors, Morrison Murray, and their
unqualified report is available at the company`s registered office.
DIVIDEND
A final dividend of 26 cents per share (2001 : 20 cents) has been declared
making a total of 40 cents per share for the year (2001 : 28 cents).
PROSPECTS
Despite the recent appreciation of the Rand against the US Dollar, the group is
confident of achieving further growth in earnings per share in 2003 through the
current strength in world bulk shipping markets and growth in existing business
activities.
For and on behalf of the Board
W M Grindrod I A J Clark
Chairman Group Managing Director
19 February 2003
DECLARATION OF DIVIDEND
Notice is hereby given that a dividend of 26 cents per ordinary and `N` ordinary
share (2001 : 20 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- Thursday 13 March 2003
dividend
Trading ex-dividend Friday 14 March 2003
commences
Record date Thursday 20 March 2003
Dividend payment date Monday 24 March 2003
No dematerialisation or rematerialisation of shares will be allowed for the
period from 14 March 2003 to 20 March 2003 both days inclusive.
ANNUAL GENERAL MEETING
The annual general meeting of the company will be held at the registered office
of the company on Wednesday, 28 May 2003. The annual report will be posted to
shareholders on or about 4 April 2003.
By order of the board
C A S Robertson
Secretary
19 February 2003
Directors
WM Grindrod* (Chairman), DRD White* (Deputy Chairman), IAJ
Clark (Group Managing Director),
H Adams*, IM Groves*, JC Hall* CBE, JG Jones, TJT McClure, RA
Norton*, AK Olivier, DA Rennie,
LR Stuart-Hill, RJH Whitley*
*Non-executive
Registered Postal Transfer secretaries Postal
office address address
Quadrant House P O Box 1 Computershare Investor P O Box 61051
Services Ltd
115 Victoria Durban 70 Marshall Street Marshalltown
Embankment
Durban 4001 4000 Johannesburg 2001 2107
Date: 19/02/2003 01:45:26 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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