GNDE - GRINDROD LIMITED - Grindrod Limited Unaudited Interim Resultsfor the six months ended 30 June 2019

23/08/2019 08:00:00

GND GNDP 201908230007A
Grindrod Limited Unaudited Interim Results
for the six months ended 30 June 2019

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

Grindrod Limited Unaudited Interim Results
for the six months ended 30 June 2019

Business review
With the Freight Services business focus firmly on "trade corridors supported by key infrastructure" the businesses have used the first half of the year to drive
the basics and focus on the customers' need for efficient and effective freight logistics services. All the businesses have displayed good progress and continue
to add scale and diversification to the core business.

The core Bank has been further capitalised following good growth in deposits and advances and is re-establishing its retail business. The private equity businesses
have been split out and are now being driven as a separate focused business.

The Marine Fuel and Agricultural investments do not form part of the strategic focus and are held for sale.

Continuing operations
Continuing operations generated earnings of R136.7 million for the first half of 2019 against a loss of R418.2 million in 2018. Headline earnings grew
by 118% to R136.7 million compared to R62.6 million in 2018.
Unaudited Unaudited
30 June 30 June
2019 2018 %
Continuing operations Note R000 R000* Change
Earnings before interest, taxation, depreciation and amortisation (1) 443 292 235 784 88
Profit/ (loss) attributable to ordinary shareholders (1) 136 715 (418 192) 133
Headline earnings (1) 136 650 62 646 118
Weighted average number of shares (2) 680 483 752 504 (10)
Basic earnings/ (loss) per share (cents) (1) 20.1 (55.6) 136
Headline earnings per share (cents) (1) 20.1 8.3 142

Note 1:
Financial results for 2018 have been restated to reflect the exit of the Marine Fuel and Agricultural investments, and continuation of the Rail
leasing business in accordance with the provisions of IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations. Notwithstanding the offers
received for the Rail leasing business, opportunities to deploy the extracted 24 Sierra Leone locomotives were more commercially attractive, supporting
management's decision to continue with this business.

In addition to the IFRS 5 transactions, the group adopted IFRS 16 Leases in the current year using a full retrospective approach. Under this approach,
the 2018 results were restated. The standard resulted in the recognition of right-of-use assets and corresponding lease liabilities for all open leases in 2018
and 2019 which are longer than a year. The major make-up of the right-of-use assets for the Group is port concessions, vessel charters and leased landside footprint.

The reconciliation of the 2018 restatement for both IFRS 5 and IFRS 16 is outlined below.
Headline
Headline Earnings earnings
Earnings earnings per share per share
Item R000 R000 (cents) (cents)
2018 results previously reported 351 346 284 790 46.7 37.8
IFRS 5 – Rail leasing business continuing (662 091) (118 127) (88.0) (15.6)
IFRS 5 – Marine Fuel and Agricultural investments now held for sale (45 513) (42 083) (6.0) (5.6)
IFRS 16 – Effect of lease rental reversal, depreciation and interest expense (61 934) (61 934) (8.3) (8.3)
2018 restated results (418 192) 62 646 (55.6) 8.3

Note 2:
In the second half of 2018, 8.7 million shares were repurchased by the group and 64.0 million shares were treated as treasury shares following consolidation of
the B-BBEE consortium effective December 2018.

Port and terminals
The Maputo Port and Terminals business increased earnings from the prior period by 66% to R102.3 million on the back of strong iron ore prices and a weaker rand
against the US dollar. The development of the Ngqura liquid bulk storage facility commenced during the current year.

Logistics
The Logistics business generated profits of R47.3 million, up 108% on the prior period. The current period performance benefited from a ramp-up in volumes at the
graphite operations in Mozambique. The Rail leasing business returned to profitability following the recovery of locomotives from Sierra Leone resulting in
structural cost reductions and improved locomotive deployment in our Rail leasing joint venture. The Rail logistics business performed well on the throughput-traffic
but struggled with the Zimbabwe in-country operations and deteriorating foreign exchange rate on real-time gross settlement against the US dollar.

Bank
The Bank deposits and advances grew 7% and 5% to R9.4 billion and R7.9 billion respectively, compared to prior year. Further equity investment of R100 million
ensures that the Bank is well capitalised. The Bank is re-positioning its retail business and enhancing the SMME offering.

Group
Costs relating to group increased in the current period following consolidation of the group's B-BBEE ownership structure as at December 2018. This consolidation
however, has a positive effect on the earnings per share due to an increase in treasury shares.

The private equity and property exposure, previously included in the Financial Services segment, are now reflected in the group segment. These investments are in
the process of being realised. Private equity investment benefited from a significant fair value uplift on its foreign property investment in the prior year,
which was realised towards the end of 2018.

Discontinued operations
Unaudited Unaudited
30 June 30 June
2019 2018 %
Discontinued operations Note R000 R000* Change
Basic (loss)/ earnings per share (cents) (3) (95.4) 377.0 (125)
Headline earnings per share (cents) (3) (37.9) 38.0 (200)

The discontinued businesses comprise the Marine Fuel and Agricultural investments. This segment reported a headline loss of R257.5 million (2018: headline earnings
of R286.2 million) due to an impairment in the marine fuel UAE business. Several employees have been dismissed and legal proceedings instituted. The business has
notified the insurers of a potential claim. Agricultural investments have reported good results despite the late planting season in South Africa, which has resulted
in a timing delay in the earnings from storage in comparison to the prior year. As the discontinued businesses are now held for sale, an impairment provision has
been raised against the investment carrying values to reflect management's estimate of the recoverable value.

Note 3:
The restatement of prior year results are reconciled as follows:
Headline
Headline Earnings earnings
Earnings earnings per share per share
Item R000 R000 (cents) (cents)
2018 results previously reported 2 036 421 (263 505) 270.6 (35.0)
IFRS 5 – Rail leasing business continuing 662 091 118 127 88.0 15.6
IFRS 5 – Marine Fuel and Agricultural investments now held for sale 45 513 42 083 6.0 5.6
IFRS 16 – Effect of lease rental reversal, depreciation and interest expense 92 678 389 540 12.4 51.8
2018 restated results 2 836 703 286 245 377.0 38.0

Total operations
Unaudited Unaudited
30 June 30 June
2019 2018 %
Total operations R000 R000* Change
Earnings before interest, taxation, depreciation and amortisation 443 292 508 717 (13)
Basic (loss)/ earnings per share (cents) (75.3) 321.4 (123)
Headline (loss)/ profit per share (cents) (17.8) 46.3 (138)
Net asset value per share 1 177 1 232 (5)
Net debt/ (cash): equity 0.06:1 (0.02):1 (400)

Prospects
With the core business firmly focused along key trade corridors, Grindrod is well positioned to serve customers with efficient and effective freight services in
sub-Saharan Africa. The recapitalised Grindrod Bank will focus on its core lending book and the development of its SMME and retail offering.

Change in directorate
Mr S Zungu resigned effective 23 August 2019, following nine and a half years on the board. The board thanks Mr Zungu for his valuable contributions over the many
years of dedicated service. The board welcomes Mr W Grindrod as a non-executive director effective immediately.

Declaration of interim dividend

Ordinary dividend
Notice is hereby given that an interim dividend of 5.0 cents has been declared out of income reserves for the-six month period ended 30 June 2019
(H1 2018: No interim dividend declared). The interim net dividend is 4.0 cents per share for ordinary shareholders who are not exempt from dividends tax.

At the date of this announcement, there were 762 553 314 ordinary shares.

Preference dividend
Notice is hereby given that a gross interim dividend of 447.0 cents per cumulative, non-redeemable, non-participating and non-convertible preference share
(H1 2018: 442.0 cents) has been declared out of income reserves for the six-month period ended 30 June 2019, payable to preference shareholders in accordance with
the timetable below.

At the date of this announcement, there were 7 400 000 cumulative, non-redeemable, non-participating and non-convertible preference shares in issue. The interim
net preference dividend is 357.6 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%; and
- Grindrod Limited's tax reference number is 9435/490/71/0.

Preference and ordinary dividend timetable
Declaration and finalisation date Friday, 23 August 2019
Last date to trade cum-dividend Tuesday, 10 September 2019
Securities start trading ex-dividend Wednesday, 11 September 2019
Record date Friday, 13 September 2019
Payment date Monday, 16 September 2019

No dematerialisation or rematerialisation of shares will be allowed for the period Wednesday, 11 September 2019 to Friday, 13 September 2019, both days inclusive.

The dividend is declared in the currency of the Republic of South Africa.

Directors' statement
This short-form announcement is the responsibility of the directors and is only a summary of the information of the full announcement and does not contain
full or complete details. The full announcement is available for inspection at no charge, Monday to Friday, during office hours at the company's registered office,
the office of the sponsor and on the company's website at www.grindrod.com. The full announcement is available on SENS on 23 August 2019 at
https://senspdf.jse.co.za/documents/2019/jse/isse/GNDE/2019SENS.pdf. Copies of the full announcement may also be requested by email at
investorrelations@grindrod.com or telephonically from the company's registered office and the offices of the sponsor. Any investment decision by investors
and/ or shareholders should be made having considered the full announcement as a whole.

By order of the board

Mrs Cathie Lewis
Group Company Secretary 22 August 2019

Registered office and business address
Grindrod Mews, 106 Margaret Mncadi Avenue, Durban 4001

Sponsor
Grindrod Bank Limited
Fourth Floor, Grindrod Tower
8A Protea Place, Sandton 2196 PO Box 78011, Sandton 2146

* Restated for the impact of IFRS 5 Non-Current Assets Held For Sale and Discontinued Operations and IFRS 16 Leases.

Date of announcement: 23 August 2019

Date: 23/08/2019 08:00:00
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