Grindrod Limited
Unaudited condensed consolidated interim results for the six months ended 30 June 2023
OPERATIONAL HIGHLIGHTS | |||||||
LTIFR | Port volumes | Mozambique | |||||
terminal volumes | |||||||
0.36 | 30% | 17% | |||||
versus 0.5 target | 5.9 million tonnes | 6.0 million tonnes | |||||
(2022 H1: 0.40) | (2022 H1: 4.5 | (2022 H1: 5.1 | |||||
million tonnes) | million tonnes) | ||||||
FINANCIAL HIGHLIGHTS | ||||||||
Revenue from core | EBITDA from core | Headline earnings | ||||||
operations * | operations * | from core operations * | ||||||
32% | 16% | 26% | ||||||
R3.8 billion | R1.1 billion | R563.4 million | ||||||
(2022 H1: R2.9 | (2022 H1: R1.0 | (2022 H1: R445.7 | ||||||
billion **) | billion **) | million **) | ||||||
Interim ordinary | Net asset | Capital | ||||||
dividend | value | expenditure * | ||||||
100% | 10% | 77% | ||||||
34.4 cents per share | R13.33 per shares | R509.9 million | ||||||
(2022 H1: 17.2 | (2022 H2: R12.11 | (2022 H1: R287.6 | ||||||
cents per share) | per share) | million) | ||||||
- Inclusive of joint ventures.
- Prior period figures have been re-presented to exclude the Bank segment as it is a discontinued operation following the disposal in the 2022 financial year.
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Grindrod Limited
Unaudited condensed consolidated interim results for the six months ended 30 June 2023
BUSINESS OVERVIEW
Grindrod achieved core headline earnings growth of 26% for the six months ended 30 June 2023 ("period"), supported by continued strong demand for Grindrod's logistics solutions through its cargo terminals infrastructure footprint and complementary logistics service offerings.
Port and Terminals
Port and Terminals headline earnings grew 31% on the prior period underpinned by strong export volumes.
Maputo port volumes increased by 30% compared to the prior period, resulting in record performance of 5.9 million tonnes exported during the period. The port also achieved a notable monthly volume performance of one million tonnes in April and May as it drove efficiencies on its quayside operations. Two mobile harbour cranes at a cost of R391.9 million (at 100% shareholding) were delivered and commissioned during the period, adding to the port's vessel loading capacity.
Grindrod's Mozambique drybulk terminals in Maputo and Matola handled 6.0 million tonnes, up 17% on the prior period as the strong demand for its export terminal footprint persisted. The first phase of the Matola drybulk export terminal upgrade is progressing well with debt raising to fund the project underway and a bankable feasibility study well advanced. Detailed design work on key plant components has also commenced.
The Richards Bay back-of-port drybulk terminals performance was impacted by operational constraints in and out of the port due to trucking, resulting in volume contraction of 39% compared to the prior period. Reconstruction of the conveyor belt linking Grindrod's Navitrade and Transnet's Richards Bay export drybulk port is progressing.
Logistics
The Eswatini multimodal corridor operation which provides customers in the Mpumalanga area with an alternative route to Maputo and Matola export terminals performed well, enabling export drybulk volume growth of 143% through this route.
The northern Mozambique operations delivered solid results for the period with headline earnings up 15% on the prior period. The Pemba port warehouse, a 3 000m2 facility costing R28.7 million, constructed to enable the new route-to-market solution (through the Pemba port) for the graphite cargo (currently exported through Nacala) has been completed. The solution will also form the basis for other strategic collaboration with the Pemba Port Authority.
Grindrod's East Africa expansion is progressing well, with capital expenditure of R58.3 million made during the period for the purchase of a landing craft vessel to facilitate a frequent marine freight service between the various commercial ports on the East Africa seaboard. A further expenditure of R120.1 million for the project cargo handling equipment and vehicles deployed in Uganda, for the crude oil pipeline logistics solution, was made during the period.
Grindrod's ships agency and clearing and forwarding headline earnings were strong, up 149% on the prior period, due to new customer contracts and growing port calls. Integration of Grindrod's and Maersk's South African container handling businesses, following the merger transaction implemented at the start of the year, is progressing well and the operations are ramping up in line with expectations. The outcome of the recapitalisation of Grindrod's United Container Depot business is in line with the plan and the additional 26 626 m2 of container handling footprint development in Denver, Johannesburg
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Grindrod Limited
Unaudited condensed consolidated interim results for the six months ended 30 June 2023
has been completed at a cost of R21.6 million.
Grindrod has made several strides in its rail business. Grindrod is collaborating with Transnet Freight Rail and Mozambique Port and Railways ("CFM") on the ongoing initiative to move cargo on trains running seamlessly between South Africa and Mozambique. Grindrod's strategic relationship and co-operation with Zambia Railways, eSwatini Rail and CFM has resulted in the re-establishment of Grindrod's rail activities in Zambia and an increase in traffic flow between eSwatini and Mozambique through seamless train operations. Grindrod's strategic relationship with the National Railway of Zimbabwe has been strengthened. Grindrod's rail leasing business in Sierra Leone continues to deliver, having exceeded the 10 million tonne-mark since its inception in February 2021. The rail leasing business was also recently awarded a contract for the operation of a manganese rail siding in the Northern Cape. Grindrod is focusing on a systematic increase of its rolling stock capacity over the coming years in response to the anticipated demand increase and to reduce logistics costs for customers.
Group
The Group segment results benefited from the interest earned on the proceeds from the disposal of Grindrod Bank in 2022 and ongoing cost control measures to contain group overheads.
Non-core operations
Private equity portfolio
The private equity investment portfolio has a carrying value of R290.5 million at the end of June 2023, with one material investment relating to the asset financing business remaining. Results include net fair value loss of R24.9 million on the portfolio.
KwaZulu-Natal north coast property loans
Results include net impairment and fair value losses of R53.8 million relating to the KwaZulu-Natal north coast property loans and advances, mainly due to the increase in interest rates. The carrying value of the loans and advances as at 30 June 2023 amounted to R1.0 billion.
Marine Fuels
Marine Fuels achieved positive headline earnings albeit down 40% from the prior period due to the softer oil prices. Grindrod continues to actively engage its co-shareholders in this business on the way forward.
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Grindrod Limited
Unaudited condensed consolidated interim results for the six months ended 30 June 2023
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2023 | ||||
Unaudited | Unaudited | Audited | ||
30 June | 30 June | 31 December | ||
2023 | 2022 * | 2022 | ||
R'000 | R'000 | R'000 | ||
Continuing operations | ||||
Revenue | 2 470 255 | 2 221 577 | 5 883 735 | |
Trading profit ** ^ | 507 334 | 514 915 | 1 372 265 | |
Expected credit losses ^ | (20 278) | (2 470) | (267 114) | |
Depreciation and amortisation | (191 316) | (235 015) | (486 338) | |
Profit before interest and non-trading items | 295 740 | 277 430 | 618 813 | |
Non-trading items | (34 595) | (22 383) | 61 002 | |
Interest income | 129 884 | 53 076 | 141 487 | |
Interest expense | (97 800) | (88 610) | (218 024) | |
Profit before share of joint venture and associate | 293 229 | 219 513 | 603 278 | |
companies' profit | ||||
Share of joint venture companies' profit after taxation | 349 968 | 240 623 | 543 041 | |
Share of associate companies' profit after taxation | 7 602 | 6 689 | 31 563 | |
Profit before taxation | 650 799 | 466 825 | 1 177 882 | |
Taxation | (173 985) | (131 744) | (347 864) | |
Profit for the period from continuing operations | 476 814 | 335 081 | 830 018 | |
Discontinued operations | ||||
Profit / (loss) after taxation from discontinued operations | - | 83 437 | (175 153) | |
Profit for the period | 476 814 | 418 518 | 654 865 | |
Attributable to: | ||||
Owners of the parent | 444 135 | 385 214 | 601 081 | |
From continuing operations | 444 135 | 301 777 | 776 234 | |
From discontinued operations | - | 83 437 | (175 153) | |
Preference shareholders | 35 806 | 25 022 | 56 396 | |
Non-controlling interests ^^ | (3 127) | 8 282 | (2 612) | |
476 814 | 418 518 | 654 865 | ||
Basic earnings / (loss) per share | (cents) | |||
From continuing operations | 66.6 | 45.3 | 116.4 | |
From discontinued operations | - | 12.5 | (26.3) | |
Total | 66.6 | 57.8 | 90.1 | |
Diluted earnings / (loss) per share | (cents) | |||
From continuing operations | 66.5 | 45.2 | 116.3 | |
From discontinued operations | - | 12.5 | (26.3) | |
Total | 66.5 | 57.7 | 90.0 |
- Re-presentedfor the impact of IFRS 5: Non-Current Assets Held for Sale and Discontinued Operations. Refer to basis of preparation.
- Current period trading profit includes R92.9 million net fair value losses (2022 H1: R100.2 million) relating to the private equity and property segment. ^ These items combined constitutes earnings before interest, taxation, depreciation and amortisation (EBITDA).
^^ Non-controlling interests relate to continuing operations only.
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Grindrod Limited published this content on 25 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 August 2023 06:09:02 UTC.