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August 2007 PowerPoint Presentation
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August 2007

August 2007

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August 2007

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Presentation Transcript

  1. August 2007

  2. 2007 Interim Results Shipping Markets Strategy Update Conclusion Annexures A : Market Value of Fleet B : Fleet Summary C : Shipping Market Report INTRODUCTION

  3. 2007 INTERIM RESULTS

  4. EARNINGS FROM SHIPS Owned & Long -Term Chartered

  5. INCOME STATEMENT

  6. BALANCE SHEETIncluding Revaluation of Fleet to Market Value See Annexure A for detail on revaluation of fleet to market value

  7. SHIPPING MARKETS

  8. SHIPPING MARKETS – DRY BULK • Comments • Continued demand for commodities • Newbuildings not meeting demand • Port delays • Creation of new trade lanes • Good long-term outlook BULK CARRIER – NEWBUILDING PRICES BULK CARRIER – 1 YEAR TIME CHARTER RATES

  9. SHIPPING MARKETS – PRODUCT TANKERS • Comments • Relatively stable as expected • Mid-range ships • Balanced supply and demand • Smaller ships • Undersupplied • Market outlook • Cautious in short-term • Stronger longer-term outlook • Legislation requirements • Scrapping

  10. STRATEGY UPDATE

  11. Shipping Services Shipping markets continue to be firm (but higher than expected) Continuing to focus on areas of expertise Fleet expansion in under-invested sectors Ordered 2 x 16 500 dwt product tankers Ordered 3 x handysize bulk carriers Sales contracted for 2 x 12 800 dwt product/chemical tankers Continue to add to long-term contract cover STRATEGY UPDATE

  12. CONTRACTED EARNINGS

  13. Trading operations now bedded down Freight Services Greater focus on infrastructure investment Restructure into distinct divisions completed Terminal Development Maputo (R100m capital commitment) Ferroslab Terminal – operational August 2007 Car Terminal – operational December 2007 Coal Terminal upgrade – complete December 2007 Bulk Liquids facility – complete October 2007 Further terminal opportunities under negotiation TRADING, FREIGHT & FINANCIAL SERVICES

  14. Terminal Development (continued) Richards Bay Terminal expansion (R168m capital commitment) – complete June 2008 Maydon Wharf Facility expansion (R59m capital commitment) – complete October 2007 Sold 6 locomotives – commercial decision Other acquisitions 50% in Vanguard Rigging (Heavy logistics) Tate & Lyle Molasses South Africa (Bulk liquids) Remaining 50% in Boltt Grindrod Remaining 50% in CMC Grindrod Grindrod Bank Performing according to plan Net 1 initiative taking shape TRADING, FREIGHT & FINANCIAL SERVICES

  15. International Listing/Unbundling Have completed investigation Will revisit when: Freight Services properly established Capital required Black Economic Empowerment Concluded Grindrod Bank transaction Freight Services BEE ownership transaction is in progress STRATEGY UPDATE

  16. CONCLUSION

  17. Shipping Long-term charter rates/ship prices indicate expectation of a firm shipping market in the medium-term Contracted growth in fleet (35% - detail in Annexure B) Contracted earnings at good levels (last 6 months 2007 = 89%; 2008 =58%; 2009 = 32%) Trading, Freight and Financial Services Well positioned for growth Focus on infrastructure Will take advantage of regional growth CONCLUSION

  18. ANNEXURES

  19. Rm Excess of market value over book 1 266 value of owned ships Value of long-term charters 3 483 Value of ship purchase options on 1 304 chartered ships 6 053 Indicative values obtained in consultation with reputable ship brokers Differential between Grindrod charter rate and current rate to replace charter i.e. does not include expected profit PV @ 8% (USD WACC) converted at closing exchange rate Projected value of ship at end of charter compared to option strike price PV @ 8% (USD WACC) ANNEXURE A Market Value of Fleet • The group valuation should consist of: • The analyst’s valuation of Grindrod’s SA based operations • A valuation of the international shipping operation taking into account the fleet value, comparison to peers and the analyst’s estimation of the group’s ability to extract value from its shipping fleet

  20. ANNEXURE B