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GNDE - Grindrod Limited - 2001 Audited Results And Divide

21/02/2002 00:00:00

GRINDROD LIMITED
(FORMERLY GRINDROD UNICORN GROUP 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
2001 Audited results and dividend announcement
85% increase in headline earnings per share
Increase in final dividend
Consolidated Income Statement
Year ended 31 December
2001 2000 Change
R000 R000 %
Revenue 1 761 776 1 474 451 19
Trading income 317 258 240 540 32
Provisions for contracted
charter losses (35 401) (17 393)
(Loss)/Profit on sale of
ships (60 506) 2 284
Depreciation (64 641) (88 889)
Operating income before
interest and taxation 156 710 136 542
Net interest paid (41 259) (61 714)
Income before taxation 115 451 74 828
Taxation 12 832 (144)
Income after taxation 128 283 74 684
Minority interest (319) -
Income after minority interest 127 964 74 684
Non-trading items (1 007) (317)
Income attributable to
ordinary shareholders 126 957 74 367
Headline earnings 127 964 74 684 71
Number of shares in issue
less treasury shares (000's) 99 329 114 169
Weighted average number of
shares on which earnings
per share are based (000's) 105 535 114 080
Earnings per share (cents) 120,3 65,2
Headline earnings per
share (cents) 121,3 65,5 85
Dividends per share (cents)
Paid 8,0 5,0
Declared 20,0 15,0
Dividend cover (times) 4,06 3,25
Exchange rates (R/US$)
Opening exchange rate 7,56 6,15
Closing exchange rate 12,00 7,56
Average exchange rate 8,62 6,94
ANALYSIS OF HEADLINE EARNINGS
Year ended 31 December
2001 2000
Divisional analysis of headline earnings R000 R000
Shipping Services 94 382 55 035
Freight Management 20 039 11 628
Continuing operations 23 157 21 453
Restructured operations (3 118) (9 825)
Financial Services 13 543 8 021
127 964 74 684
NON-TRADING ITEMS
Year ended 31 December
2001 2000
R000 R000
Amortisation of goodwill (1 007) (68)
Discontinued operations - (249)
(1 007) (317)
CONSOLIDATED BALANCE SHEET
31 December
2001 2000
R000 R000
Fixed assets 1 046 574 1 076 355
Goodwill 15 447 9 671
Investments in associates 135 075 80 872
Cash deposit 136 492 92 362
Bank balances and cash 337 270 121 653
Other current assets 238 326 222 606
Total assets 1 909 184 1 603 519
Ordinary shareholders' funds 719 588 535 058
Minority interest 2 249 -
Deferred taxation 390 20 213
Provision for post-retirement medical aid 64 833 -
Interest bearing debt 684 299 778 497
1 471 359 1 333 768
Other liabilities 437 825 269 751
Total funding 1 909 184 1 603 519
Net asset value per share (cents)
Ships and investments at book value 724 469
Ships and investments at
market valuation 750 446
Net debt: equity ratio 0,29 : 1 1,05 : 1
Capital expenditure 73 404 28 170
Capital commitments
Contracted for 561 420 174 813
Due within one year 430 200 22 907
Due thereafter 131 220 151 906
Authorised by directors not yet
contracted for 7 219 63 116
STATEMENT OF CHANGES IN EQUITY
Foreign
currency
Share capital and other Accumulated
and premium reserves profit Total
R000 R000 R000 R000
Balance at
31 December 1999 173 491 109 752 104 275 387 518
Share options exercised 227 227
Foreign currency
translation
adjustments 82 577 82 577
Deferred taxation (3 927) (3 927)
Profit attributable to
ordinary shareholders 74 367 74 367
Dividends paid (5 704) (5 704)
Non-distributable reserve
transfers (62) 62 -
Balance at 31
December 2000
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 587 587
Cancellation of
share capital (13 985) (13 985)
Treasury shares
acquired (40 370) (40 370)
Foreign currency
translation adjustments 192 917 192 917
Profit attributable
to ordinary shareholders 126 957 126 957
Dividends paid (25 395) (25 395)
Non-distributable reserve
transfers (62) 62 -
Balance at
31 December 2001 119 950 381 195 218 443 719 588
CONSOLIDATED CASH FLOW STATEMENT
31 December
2001 2000
R000 R000
Cash generated from operations 297 401 184 752
Net interest paid (41 259) (61 714)
Net dividends paid (21 713) (3 321)
Taxation (paid)/refunded (935) 79
Net cash inflow from operating activities 233 494 119 796
Acquisition of fixed assets and investments (92 924) (62 274)
Proceeds from disposal of fixed assets
and investments 316 980 33 000
Loans (advanced to)/repaid by
associated companies (30 492) 1 992
Deposit repaid - 3 283
Net cash inflow/(outflow) from
investing activities 193 564 (23 999)
Repurchase of ordinary share capital (54 355) -
Proceeds from issue of ordinary share capital 588 227
Proceeds from borrowings and
preference share financing - 1 156
Payment of capital portion of long-term
borrowings (275 641)(103 291)
Short-term loan raised/(repaid) 9 405 (20 007)
Net cash outflow from financing activities (320 003)(121 915)
Net increase/(decrease) in cash and
cash equivalents 107 055 (26 118)
Cash and cash equivalents at
beginning of period 107 190 124 212
Difference arising on translation 82 987 9 096
Cash and cash equivalents at end of period 297 232 107 190
COMMENTS
Results
The group is pleased to report a record year with headline earnings of
R127,9 million which is a 71% growth on 2000 headline earnings of R74,7
million and an 85% growth in headline earnings per share to 121,3 cents
(2000: 65,5 cents). The benefits of previous acquisitions, rationalisation
of group overheads, good markets in the fields in which we operate, and a
depreciating Rand against the US Dollar have all contributed to this
improvement. Group revenue increased by 19% from R1,47 billion to R1,76
billion.
Freight Management (Grindrod Ships Agencies, Unicorn Lines, Auto Carrier
Transport, CMC Grindrod, Kusasa Bulk Terminals, P&O Grindrod Logistics,
R hlig-Grindrod and R hlig Perishable Cargo Agents)
The group's freight management activities, which now includes Unicorn Lines'
seafreight logistics business, had improved results for the year and will
expand further as acquisition and partnership opportunities are developed.
The group's ships agency business acquired Inchcape Shipping Services, which
was renamed ISS-Voigt Shipping, and Ellerman & Bucknall during the year.
Ships agencies performed satisfactorily in a competitive market.
The seafreight logistics business continues to grow through Unicorn Lines,
with operations having been extended to Angola.
CMC Grindrod, our joint venture container depot operation, which was formed
during the year has performed well.
During the year the Kusasa Bulk Terminal project at Richards Bay was
completed and commissioned. The terminal is now in operation and performing
well and will be expanded in the months ahead.
The group also acquired a 75% stake in Rohlig Perishable Cargo Agents, to be
renamed Grindrod Perishable Cargo Agents, the major perishable cargo agent
by air in South Africa.
Shipping Services (Unicorn Shipping, Island View Shipping and Quadrant
Container Line)
Most shipping markets improved in the early part of 2001, however they
declined in the latter part of the year.
Unicorn Shipping's shipowning and operating activities contributed
substantially to group results, and Island View Shipping improved its
results after a difficult 2000. Quadrant Container Line has had a difficult
year, however, it continues to add value to the group's other operations.
Financial Services (50% investment in The Marriott Group)
Marriott performed well during the year. Towards the end of the year it
assembled and successfully listed SA Retail Properties on the JSE Securities
Exchange South Africa.
CAPITAL EXPENDITURE, ACQUISITIONS AND DISPOSALS
The group disposed of three multi-purpose vessels and two container ships
during the year. Despite a substantial loss on sale of the container ships
it was deemed prudent to dispose of them as the market for these types of
vessels was extremely weak and was expected to weaken further. This
completes the programme to dispose of the non-performing vessels in our
fleet.
Two newbuilding handysize bulk carriers are currently being built in China
for delivery in 2002. In addition, a 35 000 dwt newbuilding product carrier
has been contracted to be built in Korea for delivery in 2004 in an
empowerment joint venture with Dudula Shipping for a committed charter to
South African oil majors. A contract to purchase two five year old handysize
bulk carriers in a 50/50 joint venture with an international shipowner and
operator for delivery in February 2002 was concluded early in 2002.
The group invested R27 million in the Kusasa Bulk Terminal storage project
in Richards Bay as our share of the partnership with P&O Ports and Worldwide
Africa Investment Holdings in a further empowerment initiative.
GROUP BORROWINGS
Group borrowings have reduced from R778 million to R684 million. The group
has substantial cash holdings and together with the reduction in debt has
seen the debt-equity ratio reduce from 105% to 29%. This ratio will increase
with the delivery of vessels in terms of our capital commitments programme.
EQUITY
During the year the group bought back 15,1 million shares for R54,3 million
at an average price of R3,59 per share. Of these, 3,7 million shares have
been cancelled and the balance of 11,4 million are held as treasury shares
in a subsidiary company.
Full provision of R64,8 million has been made for the group's post-
retirement medical aid liability, of which R61,6 million has been adjusted
against 2001 opening retained income.
Notwithstanding the above, group equity has increased to R719,6 million and
net asset value to R7,50 per share with ships and investments at market
valuation.
PROVISION FOR CONTRACTED LOSSES
In terms of Generally Accepted Accounting Practice the group has been
prudent in providing for losses on certain long term charter commitments
which are above current market levels. We have used current charter rates in
making these provisions, but we expect charter rates to improve as markets
are at a cyclical low.
TAXATION
A taxation credit of R12,8 million has been recognised due to a reduction in
the group's deferred tax liability arising substantially from contracted
loss provisions.
ACCOUNTING POLICIES AND PRESENTATION
This report has been prepared in accordance with the Statements of Generally
Accepted Accounting Practice. Apart from the accounting treatment of post-
employment benefits and the re-classification of a foreign subsidiary as an
integrated foreign operation, the accounting policies and methods of
computation are consistent with those applied in the annual financial
statements for the year ended 31 December 2000. In terms of the provisions
contained in the statement on employee benefits, the group's liability in
respect of post-employment benefits has been provided for in full as an
adjustment to 2001 opening retained income. Comparative information has not
been restated as it would be impracticable to obtain the necessary
information.
DIVIDENDS
A final dividend of 20 cents per share (2000: 15 cents per share) has been
declared, totalling 28 cents per share for the year (2000: 20 cents per
share).
PROSPECTS
Certain shipping markets have declined in line with lower world trade.
However, the group has made provision for known and expected charter losses
and in addition, now has a wide spread of investments in different shipping
markets and other logistics markets which makes it less cyclical. We are
confident of real growth in earnings in 2002.
For and on behalf of the board
WM Grindrod IAJ Clark
Chairman Group Managing Director
21 February 2002
DECLARATION OF FINAL DIVIDEND
Notice is hereby given that a final dividend of 20 cents per ordinary and
"N" ordinary share has been declared and is payable to shareholders in
accordance with the undermentioned timetable:
Last date to trade cum-dividend Thursday, 14 March 2002
Trading ex-dividend commences Friday, 15 March 2002
Record date Friday, 22 March 2002
Dividend payment date Monday, 25 March 2002
The dividend is declared in the currency of the Republic of South Africa.
No dematerialisation or rematerialisation of shares will be allowed for the
period from Friday, 8 March 2002 to Friday, 22 March 2002, 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, 29 May 2002. The annual report will be
posted to shareholders on or about 5 April 2002.
By order of the board
CAS Robertson
Secretary
21 February 2002
Directors: WM Grindrod* (Chairman), DRD White* (Deputy Chairman), IAJ Clark
(Group Managing Director), H Adams*, IM Groves*, PJ Guillou*+, JC Hall* CBE,
B Martineau*+, RA Norton*, AK Olivier, LR Stuart-Hill
*Non-executive +French
Registered office Postal address
Quadrant House PO Box 1
115 Victoria Embankment Durban
Durban 4001 4000
Transfer secretaries Postal address
Mercantile Registrars Limited PO Box 1053
10th Floor, 11 Diagonal Street Johannesburg
Johannesburg 2001 2000

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