Grindrod : 2023 Grindrod Final Results Booklet

Grindrod Limited

Reviewed condensed consolidated financial statements and cash dividend declaration for the year ended 31 December 2023

H IGH L IGH TS

SHERQ

Fatality

1

versus target of nil (2022: nil)

LTI

20

versus target of nil (2022: 16)

LTIFR

0.48

versus 0.5 target (2022: 0.43 *)

Financial

EBITDA from core operations **

16%

R2.5 billion

(2022: R2.2 billion ^)

Capital expenditure **

Operational

Record port volumes

28%

12.6 million tonnes (2022: 9.8 million tonnes)

Record Mozambique terminal volumes

14%

12.9 million tonnes

(2022: 11.3 million tonnes)

Maputo port concession extension to 2058

Navitrade conveyor belt in Richards Bay restored

Shareholder

Headline earnings from core operations **

29%

R1.4 billion

(2022: R1.1 billion ^)

Interim and final ordinary dividend

84%

72.4 cents per share (2022: 39.4 cents per share)

Net asset value per share

13%

1 368 cents per share (2022: 1 211 cents per share)

44%

R1.1 billion

(2022: R0.8 billion)

• Restated to exclude the disposal of the container depot business in the prior year.
• Core operations includes Port and Terminals, Logistics and Group and is inclusive of joint ventures.

• Prior year figures exclude discontinued operations.

All percentages reflected above are based on unrounded amounts.

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Grindrod Limited

Reviewed condensed consolidated financial statements and cash dividend declaration for the year ended 31 December 2023

BUSINESS OVERVIEW

Core operations

Grindrod achieved headline earnings growth of 29% in its core operations compared to the full year ended 31 December 2022 ("the prior year").

Port and Terminals

Port and Terminals headline earnings grew 35% on the prior year due to strong volume performance.

The port of Maputo achieved record volumes of 12.6 million tonnes, up 28% from the prior year. Volume growth was underpinned by continued strong demand for chrome and ferrochrome volume exports and an eight percent increase in rail volumes transported. The port successfully concluded its concession extension by a further 25 years to 2058 with the Conceding Authority.

Grindrod's drybulk terminals in Mozambique handled record 12.9 million tonnes, up 14% on the prior year. The first phase of the Matola drybulk export terminal upgrade is progressing well. The conveyor belt linking Grindrod's Navitrade drybulk facility in Richards Bay is now commissioned.

Logistics

Grindrod's logistics segment delivered strong results despite subdued charter market rates in the seafreight business. Excluding the impact of this, and the sale of 51% of the container depot business, this segment grew its headline earnings by 12% on the prior year. Headline earnings from ships agency and clearing and forwarding businesses grew 49% on the prior year. Grindrod's locomotive deployment rate closed strong at 70%. eSwatini multimodal corridor solution, in collaboration with eSwatini Rail, CFM and Grindrod, continued to perform well; volume grew 40% on this route.

Group

The Group segment results benefited from the interest earned on the proceeds from the disposal of Grindrod Bank in 2022. Current year results include R45.3 million (2022: R167.1 million) from Grindrod's value added services initiatives.

Non-core operations

The results include full impairment of the asset financing investment of R241 million, fair value losses to the other private equity investment portfolio of R14.7 million, and provisions and fair value losses of R77.9 million relating to the KwaZulu- Natal North Coast property loans. Marine Fuels achieved positive headline earnings albeit down 39% from the prior year due to the softer oil prices.

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Grindrod Limited

Reviewed condensed consolidated financial statements and cash dividend declaration for the year ended 31 December 2023

C ON D EN SED CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2023
		Reviewed	Audited
		31 December	31 December
	2023	2022
		R'000	R'000
Continuing operations
Revenue *	4 845 572	5 883 735
Trading profit ** ^	1 015 055	1 372 265
Expected credit losses ^ #	(92 030)	(267 114)
Depreciation and amortisation	(391 631)	(486 338)
Profit before interest and non-trading items	531 394	618 813
Non-trading items	(15 175)	61 002
Interest income	240 642	141 487
Interest expense	(219 967)	(218 024)
Profit before share of joint venture and associate companies' profit	536 894	603 278
Share of joint venture companies' profit after taxation	805 237	543 041
Share of associate companies' profit after taxation	19 228	31 563
Profit before taxation	1 361 359	1 177 882
Taxation	(301 606)	(347 864)
Profit for the year from continuing operations	1 059 753	830 018
Discontinued operations
Profit after taxation from discontinued operations	-	(175 153)
Profit for the year	1 059 753	654 865
Attributable to:
Owners of the parent	987 776	601 081
From continuing operations		987 776	776 234
From discontinued operations		-	(175 153)
Preference shareholders	74 378	56 396
Non-controlling interests	(2 401)	(2 612)
	1 059 753	654 865
Basic earnings / (loss) per share	(cents)
From continuing operations	148.0	116.4
From discontinued operations	-	(26.3)
Total	148.0	90.1
Diluted earnings / (loss) per share	(cents)
From continuing operations	147.9	116.3
From discontinued operations	-	(26.3)
Total	147.9	90.0

• Revenue was impacted by reduced value added service mineral export sales, charters and the disposal of Grindrod Logistics in the current year. Revenue includes R999.4 million (2022: R3 024.5 million) relating to the above-mentioned revenue streams.
• Current year trading profit includes R348.7 million net fair value losses (2022: R311.4 million) relating to the private equity and property segment.

• These items combined constitute earnings before interest, taxation, depreciation and amortisation (EBITDA).

• Prior year includes impairments of R24.5 million relating to the private equity and property portfolio and an impairment of R222.5 million on the loan previously advanced to set up the Richards Bay black empowerment structure.

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Grindrod Limited

Reviewed condensed consolidated financial statements and cash dividend declaration for the year ended 31 December 2023

HEADLINE EARNINGS RECONCILIATION

for the year ended 31 December 2023

Reconciliation of headline earnings

Profit / (loss) attributable to ordinary shareholders

From continuing operations

From discontinued operations

Adjusted for:

Impairment of goodwill *

Net profit on disposal of investments

Loss on disposal of business

Foreign currency translation reserve release

Profit on disposal of non-current assets held for sale and liabilities associated with assets held for sale

Impairment / (reversal of impairment) of intangibles, property, terminals, machinery, ship, vehicles and equipment

Net profit on disposal of plant, terminals, machinery, ship, vehicles and equipment

Loss on scrapping of intangibles, property, terminals, machinery, ship, vehicles and equipment due to KZN floods

Impairment of intangibles, property, terminals, machinery, ship, vehicles and equipment due to KZN floods

Insurance compensation on property, terminals, machinery, ship, vehicles and equipment impaired and scrapped due to KZN floods

Total taxation effects of adjustments

Joint ventures and associates:

Reviewed	Audited
31 December	31 December
2023	2022
R'000	R'000
987 776	601 081
987 776	776 234
-	(175 153)
24 649	258 633
137 330	-
(34 226)	(7 376)
257	-
6 549	-
(92 758)	-
27 608	(15 225)
(7 965)	(43 120)
-	45 211
-	5 349
(21 620)	(54 115)
7 783	31 814

Net profit on disposal of intangibles, property, terminals, machinery, ship, vehicles and equipment

Impairment of intangibles, property, terminals, machinery, ship, vehicles and equipment

Discontinued operations:

Loss on disposal of investments

Net profit on disposal of plant, terminals, machinery, ship, vehicles and equipment

Total taxation effects of adjustments

(3 829)	(54)
5 520	4 512

• 265 616
• (99)
• 26 120

Headline earnings	1 012 425	859 714
Continuing operations	1 012 425	743 230
Discontinued operations	-	116 484

• On 30 June 2023 the goodwill applicable to the Richards Bay Terminals cash generating unit was impaired down to its recoverable amount of Rnil which was assessed based on value-in-use.

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Grindrod Limited

Reviewed condensed consolidated financial statements and cash dividend declaration for the year ended 31 December 2023

		Reviewed	Audited
		31 December	31 December
		2023	2022
Number of shares in issue less treasury shares	(000s)	667 760	667 296
Weighted average number of shares (basic)	(000s)	667 223	666 860
Diluted weighted average number of shares	(000s)	667 750	667 656
Basic headline earnings per share:	(cents)
From continuing operations		151.7	111.5
From discontinued operations		-	17.4
Total		151.7	128.9
Diluted headline earnings per share	(cents)
From continuing operations		151.6	111.4
From discontinued operations		-	17.4
Total		151.6	128.8
Ordinary dividends
Dividends per share - interim	(cents)	34.4	17.2
Dividends per share - final	(cents)	38.0	22.2
Dividend cover (headline)	(times)	2.1	3.3
Dividends per share - special	(cents)	-	55.9
Preference dividends
Dividends per share - interim	(cents)	483.0	337.0
Dividends per share - final	(cents)	521.0	421.0

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Grindrod Limited

Reviewed condensed consolidated financial statements and cash dividend declaration for the year ended 31 December 2023

CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

for the year ended 31 December 2023
	Reviewed	Audited
	31 December	31 December
	2023	2022
	R'000	R'000
Profit for the year	1 059 753	654 865
Other comprehensive income / (loss):
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations	436 655	266 083
Items that will not be subsequently reclassified to profit or loss
Actuarial losses *	(5 229)	(1 382)
Fair value (loss) / gain arising on financial instruments *	(1 234)	403
Total comprehensive income for the year	1 489 945	919 969
Total comprehensive income / (loss) attributable to:
Owners of the parent	1 417 267	866 155
Preference shareholders	74 378	56 396
Non-controlling interests	(1 700)	(2 582)
	1 489 945	919 969

• Net of taxation.

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Grindrod Limited

Reviewed condensed consolidated financial statements and cash dividend declaration for the year ended 31 December 2023

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2023
	Reviewed	Audited
	31 December	31 December
	2023	2022
	R'000	R'000
Property, terminals, machinery, ship, vehicles and equipment	1 773 131	1 681 084
Right-of-use assets	481 727	636 853
Investment property	668 051	113 252
Goodwill and intangible assets	350 437	356 678
Investments in joint ventures	4 695 899	3 440 943
Investments in associates	221 385	187 590
Other investments	203 620	567 770
Deferred taxation assets	121 824	124 722
Finance lease receivables	429 477	111 023
Loans and advances	1 014 288	1 072 958
Long-term receivable	-	204 950
Total non-current assets	9 959 839	8 497 823
Inventories	54 442	38 827
Trade and other receivables	1 660 150	1 670 186
Current portion of finance lease receivables	82 959	22 338
Current portion of long-term receivable	253 589	-
Taxation receivable	38 848	20 005
Money market funds	416 336	-
Cash and cash equivalents	2 105 909	2 605 514
Total current assets	4 612 233	4 356 870
Non-current assets classified as held for sale	-	974 805
Total assets	14 572 072	13 829 498

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Grindrod Limited

Reviewed condensed consolidated financial statements and cash dividend declaration for the year ended 31 December 2023

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

as at 31 December 2023
	Reviewed	Audited
	31 December	31 December
	2023	2022
	R'000	R'000
Capital and reserves
Share capital and premium	3 936 323	3 934 557
Non-distributable reserves	2 607 411	2 163 645
Accumulated profit	3 387 863	2 785 174
Equity attributable to owners of the Company	9 931 597	8 883 376
Non-controlling interests	(53 500)	(61 914)
Total equity	9 878 097	8 821 462
Long-term borrowings	1 443 595	1 087 767
Lease liabilities	523 368	446 344
Long-term private equity funding	120 653	108 924
Deferred taxation liabilities	55 309	14 132
Provision for post-retirement medical aid	19 891	20 202
Provisions and other liabilities	185 077	140 325
Total non-current liabilities	2 347 893	1 817 694
Current portion of long-term borrowings	154 518	235 820
Current portion of lease liabilities	114 450	161 829
Current portion of private equity funding	-	63 444
Trade and other payables	1 677 816	1 662 610
Taxation payable	92 893	251 518
Current portion of provisions and other liabilities	40 126	40 350
Short-term borrowings and bank overdraft	266 279	410 967
Total current liabilities	2 346 082	2 826 538
Non-current liabilities associated with non-current assets held for sale	-	363 804
Total equity and liabilities	14 572 072	13 829 498

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Grindrod Limited

Reviewed condensed consolidated financial statements and cash dividend declaration for the year ended 31 December 2023

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 December 2023
	Reviewed	Audited
	31 December	31 December
	2023	2022
	R'000	R'000
Profit before interest and non-trading items	531 394	724 762
From continuing operations	531 394	618 813
From discontinued operations	-	105 949
Non-cash adjustments	923 899	1 228 044
Operating profit before working capital changes	1 455 293	1 952 806
Working capital changes	(305 048)	(265 058)
Cash generated from operations	1 150 245	1 687 748
Net interest paid	(18 945)	(122 887)
Net dividends paid	(230 406)	(300 222)
Taxation paid	(468 017)	(253 610)
	432 877	1 011 029
Other operating cash flows from Private Equity and Bank
Net advances and other liquid assets and negotiable securities	(2 388)	(487 236)
Net cash flows from operating activities	430 489	523 793
Net movement in acquisition of property, terminals,	(616 669)	(454 245)
machinery, ship, vehicles and equipment
Net movement on disposal of investments, subsidiaries, and businesses	(23 570)	450 055
Net proceeds on disposal of non-current assets held for sale	272 413	65 000
Acquisition of money market funds	(405 617)	-
Funds received from joint ventures and associate companies	-	21 607
Net cash flows from investing activities	(773 443)	82 417
Acquisition of treasury shares	-	(715)
Borrowings raised	1 204 062	1 365 852
Borrowings repaid	(1 288 442)	(1 329 199)
Net cash flows from financing activities	(84 380)	35 938
Net (decrease) / increase in cash and cash equivalents	(427 334)	642 148
Cash and cash equivalents at the beginning of the year	2 194 553	1 518 020
Difference arising on translation	72 411	34 385
Cash and cash equivalents at the end of the year * ^	1 839 630	2 194 553

• Cash and cash equivalents comprise the net of bank and cash balances of R2.1 billion (Dec 2022: R2.6 billion) and the overdraft balance of R266.3 million
  (Dec 2022: R411.0 million).

• The year end cash and cash equivalents and Money Market funds of R2.5 billion (Dec 2022: R2.6 billion) are the total funds available to the Group.

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