Grindrod Shipping posts record Q2 financial results

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Grindrod Shipping, a global provider of maritime transportation services predominantly in the drybulk sector, announced its earnings results for the three months and the six months ended June 30, 2022.

Financial Highlights for the Three Months Ended June 30, 2022

  • Revenues of $161.6 million
  • Gross profit of $64.6 million
  • Profit for the period and attributable to owners of the Company of $56.8 million, or $2.99 per ordinary share
  • Adjusted net income of $53.3 million, or $2.81 per ordinary share(1)
  • Adjusted EBITDA for the period of $73.9 million(1)
  • Handysize and supramax/ultramax TCE per day of $27,479 and $31,021, respectively(1)

Financial Highlights for the Six Months Ended June 30, 2022

  • Revenues of $271.9 million
  • Gross profit of $105.3 million
  • Profit for the period and attributable to owners of the Company of $85.8 million, or $4.56 per ordinary share
  • Adjusted net income of $83.1 million, or $4.42 per ordinary share(1)
  • Adjusted EBITDA of $124.1 million(1)
  • Handysize and supramax/ultramax TCE per day of $24,990 and $27,604, respectively(1)
  • Period end cash and cash equivalents of $160.0 million and restricted cash of $9.7 million

(1) Adjusted EBITDA, Adjusted net income and TCE per day are non-GAAP financial measures. For the definitions of these non-GAAP financial measures and the reconciliation of these measures to the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to the definitions and reconciliations in “Non-GAAP Financial Measures” at the end of this press release.

Operational Highlights for the Three Months Ended June 30, 2022

  • On June 1, 2022, we sold the 2016-built medium range product tanker, Matuku for a gross price of $30.0 million.
  • On May 10, 2022, we exercised the purchase option on the chartered-in 2015-built supramax bulk carrier, IVS Pinehurst, for an amount of $18.0 million with delivery to us on July 25, 2022. The vessel remained chartered-in at her original contract rate until delivered to us.
  • On May 12, 2022, we agreed to extend the long-term charter on the 2014-built supramax bulk carrier, IVS Crimson Creek, for a period of 11 to 13 months at a charter-in rate of $26,276 per day commencing May 1, 2022.

Recent Developments

  • On August 17, 2022, the Company’s Board of Directors declared an interim quarterly cash dividend of $0.84 per ordinary share, payable on or about September 19, 2022, to all shareholders of record as of September 9, 2022 (the “Record Date”). As of August 17, 2022, there were 18,996,493 common shares of the Company outstanding (excluding treasury shares).

    In view of the Record Date of September 9, 2022, shareholders may not reposition shares between the JSE and the U.S. Register during the period from September 7, 2022, at 9.00 a.m. (South African time) until September 12, 2022 at 9.00 a.m. (South African time).

  • As of August 10, 2022, we have contracted the following TCE per day for the third quarter of 2022 (1):
    • Handysize: approximately 1,020 operating days(2) at an average TCE per day of approximately $25,127
    • Supramax/ultramax: approximately 1,524 operating days(2) at an average TCE per day of approximately $26,766

(1) TCE per day is a non-GAAP financial measure. For the definition of this non-GAAP financial measure and the reconciliation of this measure to the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to the definitions and reconciliations in “Non-GAAP Financial Measures” at the end of this press release.

(2) Operating days: the number of available days in the relevant period a vessel is controlled by us after subtracting the aggregate number of days that the vessel is off-hire due to a reason other than scheduled drydocking and special surveys, including unforeseen circumstances. We use operating days to measure the aggregate number of days in a relevant period during which vessels are actually available to generate revenue.

CEO Commentary

Stephen Griffiths, the Interim Chief Executive Officer and Chief Financial Officer of Grindrod Shipping, commented:

“Grindrod Shipping reported another record quarterly performance with a strong second quarter of 2022 reflecting the resilient markets in our handysize and supramax/ultramax drybulk carrier segments. For the second quarter of 2022, we achieved $73.9 million of Adjusted EBITDA and $53.3 million of Adjusted net income, or $2.81 per ordinary share from continuing operations. These robust results have allowed us to announce our highest quarterly dividend to date of $0.84 per ordinary share, continuing our flexible capital return policy of rewarding our shareholders with material dividends in times of market strength. Since our first dividend with respect to the third quarter of 2021, we have declared a combined total dividend of $2.75 per ordinary share over the last four quarters.”

“The dry bulk market remained healthy in the second quarter 2022, despite the ongoing Russian-Ukraine conflict and disruptions in traditional trade routes. The smaller segments in which we operate are still earning a premium over the larger vessels due to their versatility, benefiting from a broader base of cargoes and continued spillover from the container trade. The supply picture remains at very healthy levels with continued minimal ordering of new vessels due to concerns over environmental regulations and higher newbuilding prices. As we head into the second half of the year, more macroeconomic concerns have emerged as the global economy grapples with elevated inflation levels and rising interest rates. Thus far the impact on the dry cargo market has been minimal, though we remain prudent in our approach to risk management given the potential uncertainty.”