Your freight logistics and shipping service provider

GNDE - GRINDROD LIMITED - Audited results and dividend announcement for the year ended 31 December 2016

02/03/2017 08:00:00

GND GNDP 201703020010A
Audited results and dividend announcement for the year ended 31 December 2016

Grindrod Limited
Registration number: 1966/009846/06
Incorporated in the Republic of South Africa
Share code: GND & GNDP
ISIN: ZAE000072328 and ZAE000071106

AUDITED RESULTS AND DIVIDEND ANNOUNCEMENT
for the year ended 31 December 2016

KEY FINANCIAL INFORMATION
The group continues to position itself for a turn in the commodity cycle by focusing on integrating source-to-destination logistics services and
progressing capital projects and aligned investments.

- Revenue R24 930.5 million inclusive of joint ventures (2015: R27 995.4 million)
- Revenue in second half R13 859.4 million (H1: R11 071.1 million)
- EBITDA R690.4 million inclusive of joint ventures (2015: R1 747.5 million)
- Headline loss of R459.5 million (headline loss H1: R381.1 million; headline earnings 2015: R558.8 million)
- Headline loss per share 61.2 cents (2015: headline earnings per share 74.4 cents)
- Loss per share 254.2 cents (loss per share 2015: 189.8 cents)
- Net asset value per share 2 007 cents (2015: 2 450 cents)
- Cash generated by operations R491.7 million (2015: R1 412.6 million)
- Low gearing of 2% (2015: net cash R33.9 million)
- No final ordinary dividend was declared (2015: 6.0 cents per share)

SUMMARISED CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2016

Audited Audited
31 December 31 December
2016 2015
R000 R000
Revenue 9 031 783 10 192 369
Earnings before interest, taxation, depreciation and amortisation 469 323 1 098 900
Depreciation and amortisation (584 061) (675 482)
Operating (loss)/profit before interest and taxation (114 738) 423 418
Non-trading items (1 419 242) (1 587 631)
Interest received 348 528 254 063
Interest paid (257 864) (220 731)
Loss before share of joint venture and associate companies' profit (1 443 316) (1 130 881)
Share of joint venture companies' loss after taxation (224 874) (120 097)
Share of associate companies' profit after taxation 20 604 72 660
Loss before taxation (1 647 586) (1 178 318)
Taxation (191 919) (190 255)
Net loss for the year (1 839 505) (1 368 573)
Attributable to:
Ordinary shareholders (1 907 695) (1 426 473)
Preference shareholders 67 970 61 141
Owners of the parent (1 839 725) (1 365 332)
Non-controlling interests 220 (3 241)
(1 839 505) (1 368 573)
Exchange rates (ZAR/USD)
Opening exchange rate 15.60 11.57
Closing exchange rate 13.69 15.60
Average exchange rate 14.73 12.78
EARNINGS PER SHARE INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2016

Audited Audited
31 December 31 December
2016 2015
R000 R000
Reconciliation of headline (loss)/earnings
(Loss) attributable to ordinary shareholders (1 907 695) (1 426 473)

Adjusted for: 1 448 180 1 985 296
Impairment of goodwill 445 982 -
Impairment of other investments 806 619 612 365
Impairment of ships, intangibles, vehicles and equipment 271 483 1 205 990
Net loss/(profit) on disposal of investments 18 799 (216 919)
Net profit on disposal of plant and equipment (3 380) (448)
Negative goodwill realised - (13 233)
Foreign currency translation reserve release (120 261) (124)
Joint ventures and associates:
Foreign currency translation reserve release - 2 447
Net profit on disposal of investments (216) -
Net profit on disposal of plant and equipment (253) (471)
Impairment of ships, intangibles, vehicles and equipment 49 649 382 428
(Reversal of impairment)/impairment of other investments (12 175) 17 252
Total non-controlling interest effects of adjustments (2 962) (2 233)
Total taxation effects of adjustments (5 105) (1 758)

Headline (loss)/earnings (459 515) 558 823
Ordinary share performance
Number of shares in issue less treasury shares (000s) 750 548 750 959
Weighted average number of shares (basic) (000s) 750 539 751 452
Diluted weighted average number of shares (000s) 753 712 754 146
Loss per share: (cents)
Basic (254.2) (189.8)
Diluted (254.2)* (189.8)*
Headline (loss)/earnings per share: (cents)
Basic (61.2) 74.4
Diluted (61.2)* 74.1
Dividends per share: (cents) - 19.6
Interim - 13.6
Final - 6.0
Dividend cover (headline) (times) - 3.8

* Diluted loss per share and diluted headline loss per share were calculated on weighted average number of shares due to the anti-dilutive effect of the
long-term incentive scheme shares.

SUMMARISED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016
Audited Audited
31 December 31 December
2016 2015
R000 R000
Loss for the year (1 839 505) (1 368 573)
Other comprehensive (loss)/income:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations (1 387 904) 3 396 262
Net movement in cash flow hedges 54 636 21 045
Business combination 3 469 (6 906)
Items that will not be reclassified subsequently to profit or loss
Actuarial losses (2 184) (45)
Fair value (loss)/gain arising on available-for-sale instruments (2 420) 1 493
Total comprehensive (loss)/income for the year (3 173 908) 2 043 276
Total comprehensive (loss)/income attributable to:
Owners of the parent (3 182 753) 2 054 339
Non-controlling interest 8 845 (11 063)
(3 173 908) 2 043 276

SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016

Audited Audited
31 December 31 December
2016 2015
R000 R000
Ships, property, terminals, machinery, vehicles and equipment 5 351 224 7 632 489
Intangible assets 1 060 807 1 604 159
Investments in joint ventures 3 947 765 4 806 687
Investments in associates 852 225 922 350
Deferred taxation 87 062 205 705
Other investments and derivative financial assets 1 948 728 1 757 307
Total non-current assets 13 247 811 16 928 697
Loans and advances to bank customers 5 854 734 4 915 854
Liquid assets and short-term negotiable securities 1 801 065 1 065 730
Bank balances and cash 9 478 073 8 393 256
Other current assets 4 245 485 4 871 336
Non-current assets held for sale 1 549 072 281 892
Total assets 36 176 240 36 456 765
Shareholders' equity 15 752 437 19 146 165
Non-controlling interests 48 919 (6 274)
Total equity 15 801 356 19 139 891
Interest-bearing borrowings 1 423 339 2 061 818
Financial Services funding instruments 803 489 798 288
Deferred taxation 261 817 224 675
Other non-current liabilities 121 446 89 191
Non-current liabilities 2 610 091 3 173 972
Deposits from bank customers 13 610 140 9 979 739
Current interest-bearing borrowings 909 037 1 326 418
Financial Services funding instruments 191 187 173 005
Other liabilities 1 831 320 2 573 890
Non-current liabilities associated with assets held for sale 1 223 109 89 850
Total equity and liabilities 36 176 240 36 456 765
Net worth per ordinary share - at book value (cents) 2 007 2 450
Net debt:equity ratio 0.02:1 (0.00):1
Capital expenditure 676 627 913 042

31 December 31 December 31 December 31 December
2016 2016 2015 2015
R000 USD000 R000 USD000
Capital commitments 154 315 17 582 122 723 41 845
Authorised by directors and contracted for 131 278 - 122 723 25 304
Due within one year 131 278 - 11 020 25 146
Due thereafter - - 111 703 158
Authorised by directors not yet contracted for 23 037 17 582 - 16 541

SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016

Audited Audited
31 December 31 December
2016 2015
R000 R000
Operating profit before working capital changes 425 960 1 190 897
Working capital changes 65 749 221 723
Cash generated from operations 491 709 1 412 620
Net interest received/(paid) 16 888 (9 403)
Net dividends received/(paid) 29 451 (150 996)
Taxation paid (110 343) (188 251)
427 705 1 063 970
Net deposits from customers and other short-term negotiables 1 956 186 1 485 349
Deposits - Retail Banking 2 288 800 1 253 006
Other (332 614) 232 343

Net cash flows generated from operating activities before ship sales and purchases 2 383 891 2 549 319
Refund on ships under construction cancelled - 319 838
Proceeds on disposal of ships 180 843 158 414
Capital expenditure on ships (368 145) (198 980)
Net cash flows generated from operating activities 2 196 589 2 828 591
Acquisition of investments, subsidiaries, property, terminals, vehicles and equipment (339 257) (616 269)
Net proceeds from disposal of property, terminals, vehicles, equipment and investments 266 482 68 301
Net receipt from finance lease receivables 11 160 19 931
Intangible assets acquired (25 253) (26 035)
Proceeds from disposal of intangible assets 602 1 027
Funds advanced to joint ventures and associate companies (644 288) (264 028)
Acquisition of preference share investment (5 367) (14 650)
Acquisition of additional investments in subsidiaries, joint ventures and associates (44 240) (307 723)
Net cash flows utilised in investing activities (780 161) (1 139 446)
Net proceeds from issue of ordinary share capital - 6 255
Acquisition of treasury shares (8 671) (25 710)
Proceeds from disposal of treasury shares 914 366
Long-term interest-bearing debt raised 821 780 499 225
Payment of capital portion of long-term interest-bearing debt (952 600) (1 459 032)
Short-term interest-bearing debt (repaid)/raised (132 726) 51 443
Net cash flows utilised in financing activities (271 303) (927 453)
Net increase in cash and cash equivalents 1 145 125 761 692
Cash and cash equivalents at beginning of the year 8 340 917 7 188 626
Difference arising on translation (191 585) 390 599
Cash and cash equivalents at end of the year 9 294 457 8 340 917

SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
Audited Audited
1 December 31 December
2016 2015
R000 R000
Share capital and share premium 5 971 719 5 970 727
Balance at beginning of the year 5 970 727 5 982 924
Share options vested 6 892 6 892
Share issue - 6 255
Treasury shares acquired (8 671) (25 710)
Treasury shares sold 2 771 366
Preference share capital 2 2
Balance at beginning of the year 2 2
Equity compensation reserve 68 513 63 643
Balance at beginning of the year 63 643 57 566
Share-based payments 11 762 12 969
Share options vested (6 892) (6 892)
Foreign currency translation reserve 4 546 313 6 063 103
Balance at beginning of the year 6 063 103 2 661 342
Foreign currency translation realised (120 261) (2 323)
Foreign currency translation adjustments (1 396 529) 3 404 084
Other non-distributable statutory reserves (51 592) (126 302)
Balance at beginning of the year (126 302) (123 092)
Financial instrument hedge settlement 53 873 65 483
Foreign currency translation adjustments 6 006 (22 540)
Fair value adjustment on hedging reserve 4 641 (34 607)
Deferred tax effect on cash flow hedge (6 415) 5 804
Net business combination acquisition 16 605 (17 350)
Accumulated profit 5 217 482 7 174 992
Balance at beginning of the year 7 174 992 8 853 554
Fair value gain arising on available-for-sale financial instruments (2 420) 1 493
Actuarial losses recognised (2 184) (45)
Loss for the year (1 839 725) (1 365 332)
Ordinary dividends paid (45 211) (253 537)
Preference dividends paid (67 970) (61 141)
Total interest of shareholders of the company 15 752 437 19 146 165
Equity attributable to non-controlling interests of the company 48 919 (6 274)
Balance at beginning of the year (6 274) 48 185
Foreign currency translation adjustments 8 625 (7 822)
Non-controlling interest disposed 49 860 (1 494)
Profit/(loss) for the year 220 (3 241)
Dividends paid (3 512) (41 902)
Total equity attributable to shareholders of the company 15 801 356 19 139 891

SEGMENTAL ANALYSIS
FOR THE YEAR ENDED 31 DECEMBER 2016
Audited Audited
31 December 31 December
2016 2015
R000 R000
Revenue
Freight Services 3 846 303 5 059 813
Shipping 20 585 634 22 058 351
Financial Services 492 216 452 756
Group 6 389 424 499
24 930 542 27 995 419
Segmental adjustments* (15 898 759) (17 803 050)
9 031 783 10 192 369
Earnings/(loss) before interest, taxation, depreciation and amortisation
Freight Services 458 356 837 685
Shipping (82 999) 662 177
Financial Services 303 213 255 011
Group 11 851 (7 415)
690 421 1 747 458
Segmental adjustments* (221 098) (648 558)
469 323 1 098 900
Operating profit/(loss) before interest and taxation
Freight Services 89 891 438 528
Shipping (559 619) 169 473
Financial Services 297 312 250 318
Group 11 675 (12 159)
(160 741) 846 160
Segmental adjustments* 46 003 (422 742)
(114 738) 423 418
Share of associate companies' profit after taxation
Freight Services 20 604 71 879
20 604 71 879
Segmental adjustments* - 781
20 604 72 660
(Loss)/profit attributable to ordinary shareholders
Freight Services (1 239 856) (108 994)
Shipping (928 411) (1 495 674)
Financial Services 171 006 164 662
Group 89 566 13 533
(1 907 695) (1 426 473)
*Joint venture earnings are reviewed together with subsidiaries by the key decision-makers. Segmental adjustments relate to joint ventures and are
necessary to reconcile to IFRS presentation.

BUSINESS COMBINATIONS
FOR THE YEAR ENDED 31 DECEMBER 2016

ACQUISITION OF SUBSIDIARIES
During the year, the group acquired the following interests:
Company acquired Nature of business Percentage Interest acquired Purchase consideration
acquired 2016 R000
Nacala Intermodal Terminal Investments Integrated Logistics 75 31 October 46 726
Total purchase consideration 46 726

REASONS FOR ACQUISITION
The reason for the acquisition was to obtain a majority share in the existing container depot outside the Port of Nacala Mozambique which will serve as an
anchor point for the Integrated Logistics supply chain in the Nacala corridor. The initial accounting for Nacala Intermodal Terminal Investments was
provisionally determined at the end of the reporting period.

IMPACT OF THE ACQUISITION ON THE RESULTS OF THE GROUP
From the date of the acquisition, the acquired business contributed additional profits of R0.3 million.
Net assets acquired in the subsidiaries' transactions and the goodwill/intangible assets arising, are as follows:

Acquirees' carrying
amount before
combination at fair
Net assets acquired value
R000
Property, plant and equipment 12 527
Intangibles 42 559
Working capital 648
Cash and bank 57
Non-controlling interest (1 383)
Long-term liabilities (7 682)
Total 46 726
Earnout (13 690)
Total purchase consideration 33 036
Cash acquired (57)
Net assets acquired 32 979
DISPOSAL OF SUBSIDIARIES AND JOINT VENTURES
During the year, the group disposed of the following interests:
Company disposed Nature of Percentage Interest Disposal
business disposed disposed consideration
2016 R000
Grindrod Asset Management Holdings Proprietary Limited Financial Services 100 12 December 125 300
CoreShares Holding Proprietary Limited Financial Services 100 12 October 13 500
Vanguard Rigging Proprietary Limited Integrated Logistics 50 1 July 53 383
Vitol Coal South Africa BV Terminals 35 31 July 33 349
Total disposal consideration 225 532
REASONS FOR DISPOSALS
During the period, Grindrod Asset Management Proprietary Limited was rebranded to Bridge Fund Managers and the business was sold to Infinitus in which
Grindrod Limited, via its subsidiary GFS Holdings Proprietary Limited, holds an interest. The transaction is expected to provide the business with expanded
growth opportunities under its new identity and shareholding structure.

The disposal of the coal trading, machine handling and rigging businesses was to rationalise operations to assist in the delivery of the group's long-term
goals.
Net assets disposed Fair value
R000
Property, plant and equipment 1 381
Intangibles 54 608
Investments 62 252
Taxation (3 280)
Working capital (20 548)
Cash and bank 40 272
Business combination reserve 16 605
Deferred taxation 6 741
Total 158 031
Earnout (50 299)
Profit on disposal -
Cash disposed (40 272)
Net assets disposed 67 460

LEASES AND SHIP CHARTERS
FOR THE YEAR ENDED 31 DECEMBER 2016

Audited Audited
31 December 31 December
2016 2015
R000 R000
Operating leases and ship charters
Income* 1 368 637 1 345 991
Expenditure 4 121 075 5 303 916
Finance lease liabilities - -
*Relates only to future committed income under non-cancellable operating leases and does not include revenue earned through the spot market.

FAIR VALUE OF FINANCIAL INSTRUMENTS
AS AT 31 DECEMBER 2016

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1
to 3 based on the degree to which the fair value is observable:

Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
Level 3 Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 2 and 3 fair values were determined by applying either a combination of, or one of the following, valuation techniques: market-related interest rate
yield curves to discount expected future cash flows; projected unit method; market value; the net asset value of the underlying investments; and a price
earnings multiple or a discounted projected income/present value approach.
The fair value measurement for income approach valuation is based on significant inputs that are not observable in the market. Key inputs used in the
valuation include discount rates and future profit assumptions based on historical performance but adjusted for expected growth. Management reassess the
earnings or yield multiples at least annually based on their assessment of the macro and micro economic environment.
Audited Audited Audited Audited
31 December 31 December 31 December 31 December
2016 2016 2016 2016
R000 R000 R000 R000
Level 1 Level 2 Level 3 Total
Financial assets
Derivative financial assets - 3 255 - 3 255
Financial assets designated at fair value through profit or loss - 753 752 1 084 948 1 838 700
Total - 757 007 1 084 948 1 841 955

Financial liabilities
Derivative financial instruments - (26 365) - (26 365)
Financial liabilities designated at fair value through profit or loss - (100 200) - (100 200)
Total - (126 565) - (126 565)

Audited Audited Audited Audited
31 December 31 December 31 December 31 December
2015 2015 2015* 2015*
R000 R000 R000 R000
Level 1 Level 2 Level 3 Total
Financial assets
Derivative financial assets - 8 290 - 8 290
Financial assets designated at fair value through profit or loss 23 758 483 602 888 133 1 395 493
Total 23 758 491 892 888 133 1 403 783

Financial liabilities
Derivative financial instruments - (102 773) - (102 773)
Financial liabilities designated at fair value through profit or loss - (97 127) - (97 127)
Total - (199 900) - (199 900)

*Comparative figures have been revised to reflect more appropriate disclosures of financial instruments.

Fair value gains recognised in the statement of comprehensive income for Level 3 financial instruments were R39.3 million (2015: R77.7 million).
Reconciliation of Level 3 fair value measurements of financial assets

Audited Audited
31 December 31 December
2016 2015*
R000 R000
Opening balance 888 133 559 229
Additions 158 499 277 054
Disposals (993) (25 815)
Total gains recognised
- in other comprehensive income (3 770) 2 206
Profit and loss 43 079 75 459
Closing balance 1 084 948 888 133
*Comparative figures have been revised to reflect more appropriate disclosures of financial instruments.

CONTINGENT ASSETS/LIABILITIES
AS AT 31 DECEMBER 2016
The company guaranteed loans and facilities of subsidiaries and joint ventures amounting to R5 030 118 000 (2015: R5 895 868 000) of which R2 032 903 000
(2015: R2 714 947 000) had been utilised at the end of the year.
The company guaranteed charter-hire payments of subsidiaries amounting to R665 767 000 (2015: R1 082 546 000). The charter-hire payments are due by the
subsidiaries in varying amounts from 2017 to 2022.
The group placed R190 618 106 (2015: R190 618 106) on deposit as security with the funders of the BEE consortium and provided a guarantee of R130 000 000
in their favour to secure the structure. Grindrod continues to have the ability, but no obligation, to increase its funding within the structure should the
current lenders wish to exit.

BUSINESS REVIEW
OVERVIEW
Grindrod recorded an attributable loss of R1.91 billion in 2016 (2015: R1.43 billion), mainly as a result of extremely depressed market conditions in the
first half of the year and impairments in Shipping and Freight Services Rail businesses.

A headline loss of R459.5 million and headline loss per share of 61.2 cents is reported for the year (headline earnings 2015: R558.8 million and headline
earnings per share 2015: 74.4 cents). Headline earnings were impacted by net foreign exchange losses of R138 million, arising primarily from the Mozambique
operations and UK investments.
In the second half of the year, business performance improved as increasing demand supported commodity prices. The annual average and year-end prices of
three major commodities in the Grindrod logistics chain were: thermal coal averaged USD64 a tonne in 2016, but ended the year at USD83, iron ore averaged
USD58 and closed at USD76, while copper averaged USD4 867 and ended the year at USD5 523.

Improved demand in the second half of the year is reflected in Grindrod's dry-bulk terminal utilisation, which increased from an average 41 per cent in the
first half to 69 per cent in the second half of the year. Capacity in the Matola and Richards Bay dry-bulk terminals is fully contracted in 2017.

In the first half of the year, dry-bulk shipping rates slumped to historical lows (H1 average indices: Handysize USD4 107; Supramax USD4 741) and then
began recovering (H2 average indices: Handysize USD6 387; Supramax USD7 599), driven by increased dry-bulk commodity demand, a significant number of vessel
scrappings, and a slow-down in new-building deliveries.
Rates in the tanker market declined during the year, reflecting the effects of the high product stock levels and further new-building deliveries
particularly in the first half of 2017.
The rail manufacturing businesses continued to experience constraints with the cancellation of planned capital investments in mining projects in Africa.
Given the subsequent anticipated inability to secure the desired, sustainable return in these businesses, the Grindrod strategy was reviewed and a decision
was taken to withdraw from the rail manufacturing businesses. Further impairments of R644 million across the Rail businesses have been raised.
The rest of the businesses are aligned to the Grindrod strategy, namely to grow the business organically, by acquisition and seeking synergies within the
group, with specific focus on Africa, to become a fully integrated freight and logistics service provider.
Business performance
Management focused on mitigating the effects of the markets, through restructuring businesses for improved efficiency, exploring inter-group synergies,
brokering more favourable rates for customers in partnership with other logistics service providers to retain volume, negotiating contracts with existing
and new customers and laying the foundation for commodity diversification.
Maputo Port despite challenging conditions in the first half, maintained its profit due to the recovery in volumes in the second half of 2016.

The 75-km dredging project to make the port accessible for fully laden panamax vessels was completed in January 2017 and has already shown benefits with
increased volumes in the last quarter of 2016. Other investments in the port included improving berths, roads and paved areas. The project to deepen the
Grindrod TCM berth to accommodate the larger vessels commenced in August and is scheduled for completion during August 2017.
Terminals recorded low utilisation in the first half of the year. Utilisation improved in the second half and a further improvement is expected in 2017
following concerted efforts to extend current contracts and to secure competitive integrated logistics chain costs.
Progress with the development of a petroleum-products terminal in the Port of Ngqura (Coega) by OTGC was made when the long-term concession agreement
between Transnet National Ports Authority (TNPA) and OTGC was signed in December 2016. Customer engagement has re-commenced and a final feasibility study
is expected during the second half of 2017.

Rail performance slumped due to lack of demand, the postponement of capital investments in green-fields infrastructure and aggressive road-haulage rates.
This was partially offset by good performance in the rail leasing businesses. No further material rail contracts have been won since the beginning of 2015,
prompting the decision to exit the business.

Carrier Logistics maintained profitability despite severe market challenges in both the auto- and fuel-transportation businesses.
Grindrod Intermodal, which recorded improved financial results during the latter part of 2016 following business interventions and restructuring, laid the
foundation for further expansion in Mozambique by acquiring the majority shareholding in a terminal at the Port of Nacala, a developing logistics hub for
the region and neighbouring countries.
Ships Agency and Clearing and Forwarding experienced increased competition, resulting in lower margins and volumes. This was exacerbated by declining
volumes at South African ports.

Shipping reported a loss for the second consecutive year. Despite the challenging conditions, the division managed to outperform major rates indices. The
division remains geared to benefit from increased demand, signs of which are evident in the dry-bulk market. The shipping policy of investing in next-
generation, eco-friendly vessels manufactured by reputable Japanese and Korean Shipbuilders ensures that it remains in the global lower-cost quartile and
meets increasingly stringent environmental regulations.
At year-end, Shipping owned, jointly owned and long-term chartered 26 dry-bulk (2015: 24) and 15 tanker vessels (2015: 14).

Seafreight continued to provide profitable feeder services between major ports in Mozambique, South Africa, Namibia and Angola. Ship-operating also
performed well in a challenging market.

Cockett Marine Oil reported a loss on lower volumes, smaller margins, the impact of the cancellation of a lease contract and the provision for material
doubtful debts.

Financial Services continued to grow profits and to generate a good return on capital, with strong growth in its balance sheet and third-party assets under
management.
Expansion initiatives included finalising the establishment of the ETF CoreShares business as a separate entity and the merger of Asset Management and
private equity house Infinitus Holdings Proprietary Limited to form Bridge Fund Managers. Retail will focus on ensuring that the interests of the 10.5
million SASSA grant beneficiaries are protected when the Net1 contract expires in March 2017.

Sustainability
A continued focus on the Grindrod sustainability pillar of safety and health is evidenced in the improvement in the group's safety record. Core to
business sustainability is the safety of employees, contractors and visitors and we are saddened by the death of a Shipping employee in March during
cargo-hold cleaning on a dry-bulk ship. The incident was reported to the relevant authorities and investigated, and management continues to enforce strict
adherence to the safety procedures and in particular the procedure that was transgressed.

CAPITAL EXPENDITURE AND COMMITMENTS
Capital expenditure Capital commitments Split as follows
R million 2016 2017 2018 2019+ Total Approved not contracted Approved and contracted
Freight Services 350 617 30 6 653 359 294
Port and Terminals 120 178 6 - 184 54 130
Rail 53 73 - - 73 36 37
Carrier Logistics 56 107 24 6 137 130 7
Integrated Logistics 115 259 - - 259 139 120
Agricultural Logistics 6 - - - - - -
Shipping 770 68 - - 68 - 68
Dry bulk 357 68 - - 68 - 68
Tankers 413 - - - - - -
Financial Services 7 - - - - - -
Group 1 - - - - - -
1 128 685 30 6 721 359 362
Split as follows:
Subsidiaries 677 388 24 6 418 287 131
Joint venture 451 297 6 - 303 72 231

Total capital and investment expenditure was R1 128 million (2015: R1 354 million), of which 77 per cent was expansionary and the balance maintenance or
replacement capital expenditure. The capital expenditure mainly comprised payments on the acquisition of dry-bulk ships and a product tanker acquired
against long-term contracted employment.

CASH FLOW AND BORROWINGS
The financial position reflects net debt of R372.6 million (2015 net cash: R33.9 million). The group generated operating profit before working capital cash
flows of R426.0 million (2015: R1 190.9 million) during the year. Working capital contributed to a net inflow of R65.7 million (2015: R221.7 million net
inflow).

STATEMENTS OF FINANCIAL POSITION
With total assets of R36 176 million (2015: R36 457 million) and low gearing of two per cent, the group's financial position remains strong. Book net asset
value per share is 2 007 cents (2015: 2 450 cents).

Shareholders' equity decreased to R15 752 million (2015: R19 146 million) mainly as a result of the strengthening year-end South African rand and current
year losses. The decrease of R1 396.5 million to the foreign currency translation reserve was due to the strengthening of the Rand/US Dollar exchange rate
from R15.60/USD to R13.69/USD.

Ordinary shares in issue remained unchanged at 762 553 314 shares.

Following the board's decision to exit the locomotive assembly business, this business has been transferred to non-current assets and liabilities
associated with assets held for sale. The net carrying value of R326 million represents management's best estimate of the proceeds to be received.

BASIS OF PREPARATION
The audited summarised consolidated financial statements have been prepared in accordance with the framework concepts and the recognition and measurement
criteria of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and
Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, and as a minimum, contains the information required by IAS 34:
Interim Financial Reporting and comply with the Listings Requirements of the JSE Limited and the Companies Act of South Africa, 2008.

The full consolidated annual financial statements from which these summarised consolidated financial statements were derived are electronically available
on the group's website www.grindrod.com.

These summarised consolidated financial statements and the full consolidated annual financial statements have been prepared under the supervision of AG
Waller, CA(SA) and were approved by the board of directors on 1 March 2017.

ACCOUNTING POLICIES
The accounting policies applied in the preparation of the full consolidated annual financial statements from which the summarised consolidated financial
statements were derived are in accordance with IFRS and are consistent with those of the audited consolidated annual financial statements for the year
ended 31 December 2015.

AUDIT OPINION
These summarised consolidated financial statements for the year ended 31 December 2016 have been audited by Deloitte & Touche, who expressed an unmodified
opinion thereon. The auditor also expressed an unmodified opinion on the full consolidated financial statements for the year ended 31 December 2016 from
which these summarised consolidated financial statements were derived. A copy of the auditor's report on the summarised consolidated financial statements
and the auditor's report on the full consolidated financial statements are available for inspection at the company's registered office, together with the
financial statements identified in the respective auditor's reports.
Deloitte & Touche has not audited future financial performance and expectations expressed by management included in the commentary in the summarised
consolidated financial statements and accordingly do not express an opinion thereon. The auditor's report does not necessarily report on all of the
information contained in the summarised consolidated financial statements. Shareholders are therefore advised that in order to obtain a full understanding
of the nature of the auditor's engagement, they should obtain a copy of the auditor's report together with the accompanying financial information from the
issuer's registered office.

POST BALANCE SHEET EVENTS
There are no material post balance sheet events to report.

PROSPECTS
There are signs that some markets are beginning to stabilise, although the supply and demand balance in Shipping remains fragile.

The group remains cash-generative at operating level and well positioned to capitalise on opportunities and investments outlined in its strategy and
business plan.

For and on behalf of the board
MJ Hankinson AK Olivier
Chairman Chief executive officer
1 March 2017 1 March 2017

DECLARATION OF FINAL DIVIDEND
ORDINARY DIVIDEND
Notice is hereby given that no gross final dividend has been declared out of income reserves for the year ended 31 December 2016 (2015: 6.0 cents).
At 2 March 2017, there were 762 553 314 ordinary shares in issue.

PREFERENCE DIVIDEND
Notice is hereby given that a gross final dividend of 466.0 cents per cumulative, non-redeemable, non-participating and non-convertible preference share
(2015: 423.0 cents) has been declared out of income reserves for the year ended 31 December 2016, payable to preference shareholders in accordance with
the timetable below.

At 2 March 2017, there are 7 400 000 cumulative, non-redeemable, non-participating and non-convertible preference shares in issue. The final net preference
dividend is 372.80000 cents per share for preference shareholders who are not exempt from dividends tax.
With respect to the preference dividend, in terms of the dividends tax effective since 22 February 2017, the following additional information is disclosed:

The local dividends tax rate is 20 per cent; and
Grindrod Limited's tax reference number is 9435/490/71/0.

PREFERENCE DIVIDEND TIMETABLE
Declaration and finalisation dated Thursday, 2 March 2017
Last day to trade cum-dividend Tuesday, 28 March 2017
Shares commence trading ex-dividend Wednesday, 29 March 2017
Record date Friday, 31 March 2017
Dividend payment Monday, 3 April 2017

No dematerialisation or rematerialisation of shares will be allowed for the period Wednesday, 29 March 2017 to Friday, 31 March 2017, both days inclusive.
The dividend is declared in the currency of the Republic of South Africa.

By order of the board
Mrs CI Lewis
Group company secretary
1 March 2017
CORPORATE INFORMATION

DIRECTORS
MJ Hankinson (Chairman)*, AK Olivier (Chief executive officer), H Adams*, MR Faku*, WD Geach*, GG Gelink*, G Kotze (Alternate)*, Z Malinga*, RSM Ndlovu (Alternate)*,
B Ntuli, DA Polkinghorne, NL Sowazi*, PJ Uys*, MR Wade (British), AG Waller (Group financial director), SDM Zungu*
* Non-executive

REGISTERED OFFICE
Quadrant House,
115 Margaret Mncadi Avenue, Durban, 4001
PO Box 1, Durban, 4000, South Africa

TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg, 2196
PO Box 61051, Marshalltown, 2107, South Africa

AUDITORS
Deloitte & Touche
Designated Audit Partner: Craig Sagar CA(SA)
SPONSOR
Grindrod Bank Limited
Fourth Floor, Grindrod Tower,
8A Protea Place, Sandton, 2196
PO Box 78011, Sandton, 2146, South Africa
Registration number: 1966/009846/06 Incorporated in the Republic of South Africa
Share code: GND & GNDP
ISIN: ZAE000072328 and ZAE000071106

For more information and additional analyst information, please refer to www.grindrod.com

Date: 02/03/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.

Back to securities exchange news feed