Grindrod : GND - GRINDROD LIMITED - Unaudited interim results and dividend announcement for the six months ended 30 June 2014

Unaudited interim results and dividend announcement for the six months ended 30 June 2014 GRINDROD LIMITED Registration number: 1966/009846/06 Incorporated in the Republic of South Africa Share code: GND & GNDP ISIN: ZAE000072328 and ZAE000071106 UNAUDITED INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2014 HIGHLIGHTS - Successful capital raise of R2,4 billion secures equity for growth plan - Successful B-BBEE consortium transaction of R1,6 billion - Revenue increased by 22% to R4,4 billion (H1 2013: R3,6 billion) - Earnings per share up 25% to 112,5 cents (H1 2013: 90,2 cents) - Headline earnings per share down 32% to 52,0 cents (H1 2013: 76,2 cents) - Net asset value per share up to 2 125 cents (H1 2013: 1 879 cents) - Interim ordinary dividend per share 13,6 cents per share (H1 2013: 20,0 cents) SUMMARISED CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2014 Unaudited Unaudited Audited 30 June 2014 30 June 2013*^ 31 December 2013^ R000 R000 R000 Continuing operations Revenue 4 370 776 3 636 534 7 924 335 Earnings before interest, taxation, depreciation and amortisation 506 244 481 235 925 909 Depreciation and amortisation (247 571) (214 628) (455 853) Operating profit before interest and taxation 258 673 266 607 470 056 Non-trading items 371 345 83 958 679 193 Interest received 66 153 34 563 78 663 Interest paid (83 450) (60 119) (110 567) Profit before share of joint venture and associate companies' profit 612 721 325 009 1 117 345 Share of joint venture companies' profit after taxation 146 698 293 214 544 248 Share of associate companies' profit after taxation 19 431 12 031 30 625 Profit before taxation 778 850 630 254 1 692 218 Taxation (84 591) (64 185) (146 690) Net profit from continuing operations for the period 694 259 566 069 1 545 528 Discontinued operations Net profit/(loss) from discontinued operations for the period 42 174 9 943 (283 478) Net profit for the period 736 433 576 012 1 262 050 Attributable to: Ordinary shareholders 693 656 533 197 1 177 172 Preference shareholders 28 804 27 450 55 354 Owners of the parent 722 460 560 647 1 232 526 Non-controlling interests 13 973 15 365 29 524 736 433 576 012 1 262 050 Exchange rates (R/USD) Opening exchange rate 10,55 8,48 8,48 Closing exchange rate 10,64 9,93 10,55 Average exchange rate 10,73 9,23 9,67 Reconciliation of headline earnings Profit attributable to ordinary shareholders 693 656 533 197 1 177 172 Adjusted for: (373 093) (82 703) (475 356) Impairment of goodwill - - 186 447 Impairment of other investments - - 64 530 Impairment of ships, intangibles, plant and equipment 83 802 - 58 992 Net profit on disposal of investments (424 352) (83 006) (87 655) Net loss/(profit) on disposal of plant and equipment 469 (952) 190 Negative goodwill realised (23 187) - (3 937) Foreign currency translation reserve recycled on cessation of operations following restructure (6 289) (6) (698 028) Joint ventures: Negative goodwill realised - (5 920) (4 642) Net profit on disposal of plant and equipment (3 536) (53) - Total taxation effects of adjustments - 7 234 8 747 Headline earnings 320 563 450 494 701 816 Ordinary share performance Number of shares in issue less treasury shares (000s) 752 874 590 986 591 586 Weighted average number of shares (basic) (000s) 616 344 590 870 591 109 Diluted weighted average number of shares (000s) 620 300 593 519 593 665 Earnings per share: (cents) Basic 112,5 90,2 199,1 Diluted 111,8 89,8 198,3 Earnings per share from continuing operations^ (cents) Basic 105,7 89,4 248,5 Diluted 105,0 89,0 247,4 Earnings per share from discontinued operations^ (cents) Basic 6,8 0,9 (49,3) Diluted 6,8 0,9 (49,1) Headline earnings per share: (cents) Basic 52,0 76,2 118,7 Diluted 51,7 75,9 118,2 Headline earnings per share from continuing operations^ (cents) Basic 44,9 76,3 134,3 Diluted 44,6 75,9 133,7 Headline earnings per share from discontinued operations^ (cents) Basic 7,1 - (15,6) Diluted 7,1 - (15,5) Dividends per share: (cents) 13,6 20,0 37,1 Interim 13,6 20,0 20,0 Final 17,1 Dividend cover (times) 8,3 4,5 5,4 * The June 2013 comparative information has been restated for the treatment of the acquisition of a joint venture in terms of IAS 28. In the prior year this acquisition was accounted for in terms of IFRS 3. ^ Restated to disclose the commodity trading business and Financial Services division as discontinued operations. SUMMARISED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2014 Unaudited Unaudited Audited 30 June 2014 30 June 2013* 31 December 2013 R000 R000 R000 Profit for the period 736 433 576 012 1 262 050 Other comprehensive income: Items that may be reclassified subsequently to profit and loss Exchange differences on translating foreign operations Exchange differences arising during the period 71 461 1 200 000 1 618 579 Cash flow hedges 217 (523) (1 038) Business combination acquisition - - (9 148) Fair value loss arising on available-for-sale instruments - (25 029) (25 029) Reclassification of available-for-sale financial instruments - - 50 029 Items that will not be reclassified subsequently to profit and loss Actuarial gains - - 8 579 Total comprehensive income for the period 808 111 1 750 460 2 904 022 Total comprehensive income attributable to: Owners of the parent 793 998 1 727 324 2 865 201 Non-controlling interest 14 113 23 136 38 821 808 111 1 750 460 2 904 022 * The June 2013 comparative information has been restated for the treatment of the acquisition of a joint venture in terms of IAS 28. In the prior year this acquisition was accounted for in terms of IFRS 3. SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014 Unaudited Unaudited Audited 30 June 2014 30 June 2013*^ 31 December 2013 R000 R000 R000 Ships, property, terminals, vehicles and equipment 6 831 332 6 380 510 6 698 871 Investment property - 122 785 - Intangible assets 1 508 576 731 869 559 763 Investments in joint ventures 3 517 010 2 423 112 3 616 166 Investments in associates 807 683 566 745 788 118 Deferred taxation 90 536 109 058 99 772 Other investments and derivative financial assets 617 840 314 894 493 161 Recoverables on cancelled ships 258 457 222 545 236 440 Total non-current assets 13 631 434 10 871 518 12 492 291 Loans and advances to bank customers - 3 606 323 3 674 567 Liquid assets and short-term negotiable securities - 432 505 1 044 432 Short-term loans 239 365 638 888 - Bank balances and cash 2 599 648 3 129 844 6 076 314 Other current assets 3 830 610 4 317 409 2 718 056 Non-current assets held for sale 10 112 719 277 916 2 416 467 Total assets 30 413 776 23 274 403 28 422 127 Shareholders' equity** 16 678 673 11 733 480 12 036 428 Non-controlling interests 62 115 113 808 96 239 Total equity 16 740 788 11 847 288 12 132 667 Interest-bearing borrowings 2 108 496 1 998 180 1 973 390 Financial services funding instruments - 881 903 1 082 986 Deferred taxation 125 732 152 985 144 426 Other non-current liabilities 148 225 113 699 110 810 Non-current liabilities 2 382 453 3 146 767 3 311 612 Deposits from bank customers - 3 816 019 8 014 890 Current interest-bearing borrowings 574 705 2 521 976 1 127 074 Financial services funding instruments - 241 979 160 253 Other liabilities 2 345 396 1 584 732 1 460 392 Non-current liabilities associated with assets held for sale 8 370 434 115 642 2 215 239 Total equity and liabilities 30 413 776 23 274 403 28 422 127 * Restated due to reclassification of joint venture intercompany balances. ** Included in the current year is the share issue of R1,6 billion relating to the Acquisition and Consortium Placement which were accounted for at 30 June 2014 with the final conditions completed before the listing of the shares on 29 July 2014. ^The June 2013 comparative information has been restated for the treatment of the acquisition of a joint venture in terms of IAS 28. In the prior year this acquisition was accounted for in terms of IFRS 3. General note: Following the decision to dispose of the commodity trading and Financial Services businesses, they have been classified as non-current assets and non-current liabilities held for sale. Net worth per ordinary share - at book value (cents) 2 125 1 879 1 926 Net debt:equity ratio (0,01):1 0,14:1 0,22:1 Capital expenditure 1 080 555 671 442 2 020 953 30 June 2014 30 June 2014 30 June 2013 30 June 2013 31 December 2013 31 December 2013 R000 USD000 R000 USD000 R000 USD000 Capital commitments 230 312 56 806 339 511 122 273 184 978 57 711 Authorised by directors and contracted for 139 154 22 206 300 926 82 731 116 640 25 427 Due within one year 138 291 19 754 258 262 29 895 116 140 23 590 Due thereafter 863 2 452 42 664 52 836 500 1 837 Authorised by directors not yet contracted for 91 158 34 600 38 585 39 542 68 338 32 284 SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2014 Unaudited Unaudited Audited 30 June 2014 30 June 2013*^ 31 December 2013 R000 R000 R000 Operating profit before working capital changes 505 223 379 778 734 765 Working capital changes 45 416 (127 231) (86 937) Cash generated from operations 550 639 252 547 647 828 Net interest paid (64 867) (43 636) (92 930) Net dividends paid (117 257) (120 053) (173 870) Taxation paid (93 338) (79 238) (219 585) 275 177 9 620 161 443 Net bank advances to customers and other short-term negotiables (2 480 671) (1 069 323) 2 465 696 Deposits - retail banking (2 461 848) (1 268 123) 2 196 780 Other (18 823) 198 800 268 916 Net cash flows (utilised in)/generated from operating activities before ship sales and purchases (2 205 494) (1 059 703) 2 627 139 Refund on ships under construction cancelled - 205 718 197 248 Proceeds on disposal of ships and locomotives 233 149 - 306 061 Cash payments on ship options exercised (115 390) - - Capital expenditure on ships (15 405) (182 937) (406 251) Net cash flows (utilised in)/generated from operating activities (2 103 140) (1 036 922) 2 724 197 Acquisition of investments and subsidiaries, property, terminals, vehicles and equipment (578 320) (468 332) (1 463 632) (Acquisition)/proceeds on disposal of other investments (24 428) 9 521 (171 056) Proceeds from disposal of property, terminals, vehicles, equipment and investments 32 403 121 268 160 889 Net payments made to acquire financial assets and finance lease receivables (66 151) - - Intangible assets acquired (11 170) (19 525) (63 162) Proceeds from disposal of intangible assets 304 - 175 Loans advanced to joint venture and associate companies 35 864 45 403 100 074 Acquisition of preference share capital investment (400 000) - - Acquisition of additional investments in subsidiaries, joint ventures and associates (77 460) - (107 451) Net cash flows utilised in investing activities (1 088 958) (311 665) (1 544 163) Net proceeds from issue of ordinary share capital** 3 488 335 6 255 11 737 Long-term interest-bearing debt raised 199 720 429 987 811 560 Payment of capital portion of long-term interest-bearing debt (491 260) (541 325) (720 807) Short-term interest-bearing debt (repaid)/raised (1 329 631) 226 350 571 560 Net cash flows generated from financing activities 1 867 164 121 267 674 050 Net (decrease)/increase in cash and cash equivalents (1 324 934) (1 227 320) 1 854 084 Cash and cash equivalents at beginning of the period 6 131 503 4 250 250 4 250 250 Difference arising on translation (3 807) 19 032 27 169 Cash and cash equivalents at end of the period 4 802 762 3 041 962 6 131 503 * Restated due to reclassification of joint venture intercompany balances. ^ The June 2013 comparative information has been restated for the treatment of the acquisition of a joint venture in terms of IAS 28. In the prior year this acquisition was accounted for in terms of IFRS 3. ** Included in the current year share issue is the R2,4 billion Bookbuild listed on 16 May 2014 and the R1,6 billion relating to the Acquisition and Consortium Placement which were accounted for at 30 June 2014 with the final conditions completed before the listing of the shares on 29 July 2014. SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2014 Unaudited Unaudited Audited 30 June 2014 30 June 2013** 31 December 2013 R000 R000 R000 Share capital and share premium 6 027 860 2 031 510 2 036 992 Balance at beginning of the period 2 036 992 2 025 255 2 025 255 Share options exercised - 6 255 11 737 Share issue* 3 990 868 - - Preference share capital 2 2 2 Balance at beginning of the period 2 2 2 Equity compensation reserve 56 937 46 251 50 551 Balance at beginning of the period 50 551 42 126 42 126 Share-based payments 6 386 4 125 8 425 Foreign currency translation reserve 1 980 759 2 201 207 1 916 514 Balance at beginning of the period 1 916 514 1 005 260 1 005 260 Foreign currency translation realised (6 289) - (698 028) Foreign currency translation adjustments 70 534 1 195 947 1 609 282 Other non-distributable reserves (34 487) (67 235) (23 151) Balance at beginning of the period (23 151) (37 965) (37 965) Fair value adjustment of available-for-sale financial instrument - (25 029) (25 029) Foreign currency translation adjustments 787 - - Reclassification of available-for-sale investments - - 50 029 Cash flow hedge 217 (3 718) (1 038) Business combination release (12 340) (523) (9 148) Movement in accumulated profit 8 647 602 7 521 745 8 055 520 Balance at beginning of the period 8 055 520 7 079 678 7 079 678 Actuarial gains - - 8 579 Profit for the period 722 460 560 647 1 232 526 Ordinary dividends paid (101 574) (91 130) (209 909) Preference dividends paid (28 804) (27 450) (55 354) Total interest of shareholders of the company 16 678 673 11 733 480 12 036 428 Equity attributable to non-controlling interests of the company 62 115 113 808 96 239 Balance at beginning of the period 96 239 126 533 126 533 Foreign currency translation adjustments 140 7 771 9 297 Business (disposals)/acquisitions 13 211 (34 000) (54 502) Non-controlling interest disposed (55 633) - - Profit for the period 13 973 15 365 29 524 Dividends paid (5 815) (1 861) (14 613) Total equity attributable to shareholders of the company* 16 740 788 11 847 288 12 132 667 * Included in the current year share issue is the R2,4 billion Bookbuild listed on 16 May 2014 and the R1,6 billion relating to the Acquisition and Consortium Placement which were accounted for at 30 June 2014 with the final conditions completed before the listing of the shares on 29 July 2014. ** The June 2013 comparative information has been restated for the treatment of the acquisition of a joint venture in terms of IAS 28. In the prior year this acquisition was accounted for in terms of IFRS 3. SEGMENTAL ANALYSIS FOR THE SIX MONTHS ENDED 30 JUNE 2014 Unaudited Unaudited Audited 30 June 2014 30 June 2013*^ 31 December 2013 R000 R000 R000 Revenue Freight Services 2 762 805 2 971 184 6 167 722 Shipping 10 623 297 8 522 835 18 158 014 Group 4 386 1 358 4 905 13 390 488 11 495 377 24 330 641 Segmental adjustments** (9 019 712) (7 858 843) (16 406 306) 4 370 776 3 636 534 7 924 335 Earnings before interest, taxation, depreciation and amortisation Freight Services 578 269 619 994 1 227 335 Shipping 238 381 326 414 636 954 Group 29 791 (13 817) (64 933) 846 441 932 591 1 799 356 Segmental adjustments** (340 197) (451 356) (873 447) 506 244 481 235 925 909 Operating profit/(loss) before interest and taxation Freight Services 427 275 504 953 962 711 Shipping 39 892 171 481 294 624 Group 28 210 (15 818) (68 841) 495 377 660 616 1 188 494 Segmental adjustments** (236 704) (394 009) (718 438) 258 673 266 607 470 056 Share of associate companies' profit/(loss) after taxation Freight Services 19 431 12 031 30 625 Profit/(loss) attributable to ordinary shareholders Freight Services 495 487 407 110 701 491 Shipping 157 330 130 197 809 975 Group (1 335) (14 053) (50 816) Discontinued operations 42 174 9 943 (283 478) 693 656 533 197 1 177 172 * The June 2013 comparative information has been restated for the treatment of the acquisition of a joint venture in terms of IAS 28. In the prior year this acquisition was accounted for in terms of IFRS 3. ^ Trading businesses have now been included in the Freight Services and Shipping divisions. The prior year has been restated to disclose the commodity trading business and Financial Services division as discontinued operations and change in basis of segmentation. ** Joint venture earnings are reviewed together with subsidiaries by the key decision maker. Segmental adjustments relate to joint ventures necessary to reconcile to IFRS presentation. BUSINESS COMBINATIONS FOR THE SIX MONTHS ENDED 30 JUNE 2014 Acquisition of subsidiaries, joint ventures and associates During the period, the group acquired the following interests: Company acquired Nature of business Percentage acquired Interest acquired 2014 Purchase consideration R000 RRL Grindrod Locomotives Proprietary Limited Rail 49 30 June 264 110 RRL Grindrod Proprietary Limited Rail 50 30 June 37 500 Unicorn Calulo Shipping Services Proprietary Limited Shipping Services 50 30 June 26 800 Unicorn Calulo Bunker Services Proprietary Limited Bunker Services 25 30 June 127 400 Sturrock Grindrod Maritime Holdings Proprietary Limited Ships Agencies 50 30 June 190 400 Grindrod South Africa Proprietary Limited Freight Services 25 30 June 30 022 Grindrod Rail Construction Proprietary Limited Rail 25 30 June 9 000 Grindrod Corridor Management Proprietary Limited Terminals 30 30 June 7 900 Total purchase consideration 693 132 Reasons for acquisitions The primary reasons for acquisitions were to enable Grindrod to create greater alignment between subsidiary companies and the group, eliminate any conflicts of interest which might exist, enable more efficient management of the businesses, appropriately capitalise the businesses and leverage the group's balance sheet in raising debt facilities. Impact of the acquisitions on the results of the group The acquired businesses did not contribute any attributable profit to the results as the acquisition was effective 30 June 2014. Net assets acquired in the transactions and the goodwill/intangible assets arising are as follows: Net assets acquired Acquirees' carrying amount before combination at fair value R000 Property, plant and equipment 483 395 Intangibles 121 419 Interest in associate companies (213) Financial assets 28 020 Taxation (21 671) Working capital 84 461 Cash and bank 229 772 Non-controlling interest 55 633 Business combination reserve 12 341 Long-term liabilities (336 619) Post-retirement medical aid (1 979) Short-term borrowings (122 595) Deferred taxation 19 622 Total 551 586 Earnout (72 800) Less: disposal of investment in joint ventures (219 621) Less: profit on sale on disposal of investment in joint ventures (421 278) Goodwill and intangible assets arising on acquisition 855 245 Total purchase consideration 693 132 Cash acquired (229 772) Net assets acquired 463 360 The goodwill arising on the acquisition is attributable to the anticipated profitability of these businesses. ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS FOR THE SIX MONTHS ENDED 30 JUNE 2014 Following the decision to dispose of the commodity trading and Financial Services businesses, they have been classified as discontinued operations. Summarised income statement from the discontinued operations Unaudited Unaudited Audited 30 June 2014 30 June 2013 31 December 2013 R000 R000 R000 Revenue 3 875 126 3 212 643 7 737 691 Earnings/(loss) before interest, taxation, depreciation and amortisation 98 457 32 425 (39 221) Depreciation and amortisation (6 216) (3 615) (7 258) Operating profit/(loss) before interest and taxation 92 241 28 810 (46 479) Non-trading items (1 789) 6 (199 733) Interest received 12 462 40 840 51 298 Interest paid (40 032) (58 920) (112 323) Profit/(loss) before share of joint venture and associate companies' profit 62 882 10 736 (307 237) Share of joint venture companies' profit after taxation - 7 489 884 Share of associate companies' profit after taxation 3 607 (1 382) (7 275) Profit/(loss) before taxation 66 489 16 843 (313 628) Taxation (24 315) (6 900) 30 150 Profit/(loss) for the period 42 174 9 943 (283 478) Cash flows from the discontinued operations are as follows Net cash flows (utilised in)/generated from operating activities (2 257 175) (1 217 081) 2 587 396 Net cash flows utilised in investing activities (37) (145 492) (404 054) Net cash flows (utilised in)/generated from financing activities (941 295) 394 798 547 892 Summarised consolidated statement of financial position for the discontinued operations as at 30 June 2014 Unaudited Unaudited Audited 30 June 2014 30 June 2013 31 December 2013 R000 R000 R000 Ships, property, terminals, vehicles and equipment 286 852 730 63 667 Intangible assets 116 493 174 85 307 Investments in joint ventures 68 835 - - Investments in associates 12 936 - 3 952 Deferred taxation 96 670 14 755 96 101 Other investments and derivative financial assets 490 388 27 087 65 132 Total non-current assets 1 072 174 42 746 314 159 Loans and advances to bank customers 4 026 753 - - Liquid assets and short-term negotiable securities 1 036 042 - - Bank balances and cash 2 417 262 19 384 174 710 Other current assets 1 560 488 215 786 1 927 598 Total assets 10 112 719 277 916 2 416 467 Interest-bearing borrowings 36 281 - 69 219 Financial services funding instruments 1 070 169 - - Deferred taxation 10 250 - 461 Provision for post-retirement medical aid - 3 822 - Other non-current liabilities 16 785 - 54 236 Total non-current liabilities 1 133 485 3 822 123 916 Deposits from bank customers 5 878 016 - - Current interest-bearing borrowings 24 405 - 25 207 Financial services funding instruments 250 081 - - Other current liabilities 1 084 447 111 820 2 066 116 Total liabilities 8 370 434 115 642 2 215 239 BUSINESS REVIEW Overview In the first half of 2014 Grindrod continued to make progress in optimising operational assets in line with its vision to create sustainable returns and long-term value for its stakeholders. The Maputo businesses continued to reflect good contributions despite adverse market conditions. Performance of the Shipping division was acceptable, notwithstanding delayed recovery resulting from continued weakness in global shipping markets. Financial Services improved their operating performance over the first half of 2014. The Atlas operation was discontinued and is being wound down and sold according to plan. In order to optimise synergies, the remaining Trading operations, coal-trading, agricultural, minerals-handling and marine fuels businesses, have been incorporated in the Freight Services and Shipping divisions. Financial Services is accounted as a discontinued operation following the conclusion of a memorandum of understanding (MOU) for the proposed acquisition of Financial Services, comprising Grindrod Bank and Grindrod Asset Management, by the Bidvest Group. The group continued to focus on the further development and execution of various infrastructure projects, with specific focus on Maputo port, Matola terminal and Richards Bay terminal. Grindrod successfully raised equity capital of R2,4 billion (the Bookbuild Placement). Business alignment and efficiency improvements were achieved through the acquisition of the interests held by the group's long-term B-BBEE partners, Calulo Investments and Solethu Investments, in certain operating subsidiaries and joint ventures (the Acquisition). In conjunction with this, a consortium including Calulo Investments, Solethu Investments, Safika Holdings, Adopt-a-School Foundation and Brimstone Investment Corporation invested R1,6 billion in Grindrod at a holding level, providing for an 8,4 per cent B-BBEE ownership (the Consortium Placement). The Acquisition and Consortium Placement were accounted for at 30 June 2014 with the final conditions completed before the listing of the shares on 29 July 2014. Attributable earnings increased by 30 per cent to R693,7 million (H1 2013: R533,2 million). Non-trading items include the required raising of R430,6 million in earnings as a consequence of the change in control through the Acquisition. In addition, an impairment charge of R80 million was made against the carrying value of the transport fleet removed from use. Headline earnings decreased by 29 per cent to R320,6 million (H1 2013: R450,5 million), with headline earnings per share decreasing by 32 per cent to 52,0 cents (H1 2013: 76,2 cents). Earnings per share is calculated on a weighted average of 616 million shares, up from 591 million in 2013. An interim ordinary dividend of 13,6 cents per share (H1 2013: 20,0 cents per share) has been declared. Capital expenditure and commitments Capital expenditure Capital commitments Split as follows R million H1 2014 H2 2014 2015 2016 2017+ Total Approved not Approved and contracted contracted Freight Services 902 341 353 244 5 943 696 247 Ports and Terminals 58 169 283 - - 452 332 120 Rail 456 61 70 244 5 380 336 44 Intermodal 132 83 - - - 83 - 83 Other logistics 256 28 - - - 28 28 - Shipping 506 311 466 244 - 1 021 - 1 021 Dry-bulk 348 311 466 244 - 1 021 - 1 021 Tankers 158 - - - - - - - Financial Services 3 - - - - - - - Group 1 2 - - - 2 - 2 1 412 654 819 488 5 1 966 696 1 270 Split as follows: Subsidiaries 1 081 443 354 28 5 830 455 375 Joint ventures 331 211 465 460 - 1 136 241 895 Capital continues to be committed to the strategic investment areas of port, terminal and rail infrastructure as well as the dry-bulk shipping fleet. Total capital and investment expenditure was R1,4 billion (2013 H1: R1,0 billion), of which 94 per cent was expansionary and the balance maintenance or replacement capital expenditure. The capital expenditure mainly comprised payments on the acquisition of 12 dry-bulk ships in the tripartite joint venture, the Acquisition, increased investment into the rail concession business, locomotives and expansion in the intermodal business. Future capital continues to be committed to the expansion of terminal capacity, rail infrastructure, locomotives and ships. Cash flow and borrowings Cash flow and borrowings reflect net cash of R92 million (2013 net debt: R2,7 billion), reflecting the inflow of equity funds raised over the period. Operating profit before working capital adjustments was R505,2 million (H1 2013 restated: R379,8 million). Working capital contributed to a net inflow of R45,4 million (H1 2013 restated: R127,2 million outflow). Statement of financial position With total assets of R30,4 billion (December 2013: R28,4 billion) and no net debt (net debt:equity December 2013: 22 per cent), the group's financial position is strong. Book net asset value per share is R21,25 (December 2013: R19,26). Shareholders' equity increased to 762 053 314 shares in issue (December 2013: 600 765 314). The increase is attributable to the successful completion of the Bookbuild Placement of 96 000 000 shares in May 2014, the issue of 1 288 000 shares as part of the Acquisition, and the Consortium Placement of 64 000 000 shares in July 2014. Basis of preparation The summarised consolidated financial information has been prepared and presented in accordance with the framework concepts and the measurement and recognition requirements of the International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the Listings Requirements of the JSE Limited, the information as required by IAS 34 Interim Financial Reporting and the requirements of the South African Companies Act, 71 of 2008. Following the decision to dispose of the commodity trading and Financial Services businesses, they have been classified as discontinued operations. The impact of the restatement has been included in the discontinued operations note. In addition, the June 2013 comparative information has been restated for the treatment of the acquisition of a joint venture in terms of IAS 28 Investments in Associates and Joint Ventures. In the prior year, this acquisition was accounted for in terms of IFRS 3 Business Combinations and had no impact on profit/loss. The accounting for the acquisitions and disposals made by the group has been provisionally determined as at 30 June 2014. At the date of finalisation of these results, the necessary market values and other calculations had not been finalised and they have therefore been provisionally determined based on the directors' best estimate of the likely values. These unaudited summarised consolidated interim results have been prepared under the supervision of the group financial director, AG Waller, CA(SA). Statements contained throughout this announcement regarding the prospects of the group have not been reviewed or reported on by the group's external auditors. The unaudited interim summarised consolidated results were approved by the board of directors on 20 August 2014. Accounting policies The accounting policies adopted and methods of computation used in the preparation of the summarised consolidated interim financial statements are in terms of IFRS and are consistent with those of the consolidated annual financial statements for the year ended 31 December 2013. Post balance sheet events There are no material post balance sheet events to report. Prospects Grindrod is well positioned to further capitalise on its opportunities using its extensive experience in the logistics value chain, respected brand and shareholder support. Current depressed shipping rates will put pressure on earnings in the near term. For and on behalf of the board MJ Hankinson AK Olivier Chairman Chief Executive Officer DECLARATION OF INTERIM DIVIDEND Preference dividend Notice is hereby given that an interim gross dividend of 389,0 cents per cumulative, non-redeemable, non-participating and non-convertible preference share (H1 2013: 371,0 cents) has been declared for the six-month period ended 30 June 2014, payable to preference shareholders in accordance with the timetable below. At 30 June 2014, there are 7 400 000 cumulative, non-redeemable, non-participating and non-convertible preference shares in issue. The net preference dividend is 330,65000 cents per share for preference shareholders who are not exempt from dividends tax. Ordinary dividend Notice is hereby given that an interim gross dividend of 13,6 cents per ordinary share (H1 2013: 20,0 cents) has been declared out of income reserves for the six-month period ended 30 June 2014, payable to ordinary shareholders in accordance with the timetable below. At 30 June 2014, there were 696 765 314 ordinary shares in issue. On 29 July 2014, a total of 65 288 000 ordinary shares were allotted and issued pursuant to the Acquisition and Consortium Placement, resulting in the total number of ordinary shares after allotment of 762 053 314. The net ordinary dividend is 11,56000 cents per share for ordinary shareholders who are not exempt from dividends tax. With respect to the preference and ordinary dividend, in terms of the dividend tax effective since 1 April 2012, the following additional information is disclosed: - The local dividend tax rate is 15 per cent; - No STC credits will be utilised for the interim ordinary or preference dividend; and - Grindrod Limited's tax reference number is 9435/490/71/0. Timetable Declaration date Thursday, 21 August 2014 Last day to trade cum dividend Friday, 12 September 2014 Shares commence trading ex dividend Monday, 15 September 2014 Record date Friday, 19 September 2014 Dividend payment date Monday, 22 September 2014 No dematerialisation or rematerialisation of shares will be allowed for the period Monday, 15 September 2014, to Friday, 19 September 2014, both days inclusive. The dividends are declared in the currency of the Republic of South Africa. By order of the board Mrs CI Lewis Group Company Secretary 20 August 2014 CORPORATE INFORMATION MJ Hankinson (Chairman)**, AK Olivier (Chief Executive Officer), H Adams**, AC Brahde** (Norwegian), JJ Durand*, MR Faku*, WD Geach**, GG Gelink**, IM Groves**, DA Polkinghorne, DA Rennie, NL Sowazi**, PJ Uys (Alternate)*, MR Wade (British), AG Waller (Group Financial Director), SDM Zungu** * Non-executive, ** Independent non-executive Registered office Quadrant House 115 Margaret Mncadi Avenue Durban 4001 PO Box 1, Durban, 4000 Transfer secretaries Computershare Investor Services Proprietary Limited 70 Marshall Street Johannesburg 2001 PO Box 61051, Marshalltown, 2107 Auditors Deloitte & Touche Designated Audit Partner: Craig Sagar CA(SA) Sponsor Grindrod Bank Limited Fourth Floor Grindrod Towers 8A Protea Place Sandton 2196 PO Box 78011, Sandton, 2146 For more information, please refer to www.grindrod.co.za Date: 21/08/2014 07:05:00 Produced by the JSE SENS Department. 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