2006 RESULTS AND ANALYST PRESENTATION. INTRODUCTION 2006 Results2006 Results Current PositionCurrent Position Strategic PlanStrategic Plan ConclusionConclusion

2006 RESULTS ANDANALYST PRESENTATION

INTRODUCTION

• 2006 Results2006 Results

• Current PositionCurrent Position

• Strategic PlanStrategic Plan

• ConclusionConclusion

• AnnexuresAnnexures

– A : Balance SheetsA : Balance Sheets

– B : Market Value of FleetB : Market Value of Fleet

– C : Fleet SummaryC : Fleet Summary

– D : Impact of Rand / USD Exchange RateD : Impact of Rand / USD Exchange Rate

– E : Shipping Market ReportE : Shipping Market Report

2006 RESULTS2006 RESULTS

EARNINGS FROM SHIPS

Bulk Carriers Tankers Container

Ships

Total

2006

Total

2005Handysize Panamax Capesize Chemical Mid-Range

Product

Daily Income ($/day) 13 900 20 800 32 400 14 000 18 900 13 500 17 800 19 500

Daily Cost ($/day) 7 700 9 100 20 800 11 000 14 500 10 300 11 200 10 700

Average No. of ships 18.7 2.0 5.6 3.4 5.7 1.3 36.7 35.7

Profit Contribution $41 m $9 m $24 m $4 m $9 m $2 m $89 m $114 m

International Operations $75 m $105 m

SA Based Operations $14 m $9 m

Conclusion2006 Results Current Position Strategic Plan

Owned & Long Term Chartered

INCOME STATEMENT

2006 2005 Growth Comments

Shipping Services

Earnings from ships ($ million) 74.8 105.1 Lower shipping markets

Other shipping income 5.1 0.6 Favourable contracts

Trading profits from ship sales ($ million) 35.3 9.8

Overheads / Forex profit / Other interest ($ million) 7.1 (3.5) Increased interest income

Profit from international operations ($ million) 122.3 112.0 9.2%

Profit from international operations (R million) 829 714 16.1%

Profit from SA based operations 81 81

910 795 14.5%

Trading, Freight and Financial Services

Trading Services 25 22

Freight Services 127 66

Financial Services 15 6 Bank only

167 94 77.7% H2 growth = 99%

Group Overheads / Pref Dividends / STC / Disposal Adjustment (69) (38)

Marriott profit in 2005

Mainly pref dividends

Profit Attributable to Ordinary Shareholders 1 008 851 18.4% 19.2% growth in HEPS


•See Annexure A for split between International Shipping & SA based Shipping, Trading, Freight & Financial Services

•See Annexure B for detail on revaluation of fleet to market value

2006

Rm

2005

Rm

Comments

Fixed Assets / Investments 7 401 5 679 •R1.3 b increase in fleet value

Bank Loans, Advances and Liquid Assets 680 - •Acquisition of 100% of Grindrod Bank

Current Assets 2 230 1 571 •Trading Services – high December

volumes + high commodity prices•Acquisitions

Total Assets 10 311 7 250

Equity 7 166 5 108 •R250 m Preference shares issued•Exchange rate movement (11% depreciation)•Increase in profits and fleet value•Share Buy Back (4% at avg price of R12.22)

Net Debt 526 642 •Ship Sales (R650 m) / Capex (R1 068 m)•Increase in cash resources

Bank Deposits 711 - •Acquisition of 100% of Grindrod Bank

Other Liabilities 1 908 1 500 •Trading volumes / acquisitions

Total Equity & Liabilities 10 311 7 250

Gearing - Book Value

- Fleet at Market Value

0.19:1

0.07:1

0.33:1

0.13:1

BALANCE SHEET Including Revaluation of Fleet to Market Value


Cash v Headline earnings per share

302

214

165

463431

16 13 2535

50

121

185

221

0

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005 2006

Cen

ts

Cash Earnings per share (cents)

Headline Earnings per share (cents)

KEY FINANCIAL RATIOS

Return on ordinary shareholders funds

16.1 20.226.7

42.4

75.7 74.6

57.2

0

10

20

30

40

50

60

70

80

90

100

2000 2001 2002 2003 2004 2005 2006

Pe

rce

nta

ge

Lower due to growth in book value of equity


CEPS CAGR 63%

HEPS CAGR 60%

Dividends per share

4 5.6 812

35

52

66

0

10

20

30

40

50

60

70

80

2000 2001 2002 2003 2004 2005 2006

Cen

ts

KEY FINANCIAL RATIOS

Interest cover

2.03.4

5.64.2

9.710.7

15.9

0

2

4

6

8

10

12

14

16

18

2000 2001 2002 2003 2004 2005 2006

Tim

es c

ove

r


CAGR = 60%

CURRENT POSITIONCURRENT POSITION

• Substantial growth over last seven years• Strong balance sheet with little gearing

– Target Debt : Equity = 1:1– In theory could spend R 3 billion per annum over next 3 years– Will spend judiciously on ships and freight services

• Valuable fleet of ships + well diversified

• Firm shipping markets / prices

CURRENT POSITION

• Smooth handover from Ivan Clark

• Fleet set to grow by 54% - Contracted at favourable prices• Good contracted income base


• Management team restructured

• Non-shipping business positioned for growth

SHIPPING MARKETS

BULK CARRIERNew Building Prices

0

10

20

30

40

50

60

70

80

US$

mil

170K DWT Capesize Bulkcarrier New building Prices 120K DWT Capesize Bulkcarrier New building Prices 75K DWT Panamax Bulkcarrier New building Prices

23/30K DWT Handysize Bulkcarrier New building Prices 32/35K DWT Handysize Bulkcarrier New building Prices

BULK CARRIERSecond Hand Prices (5 yr)

0

10

20

30

40

50

60

70

80

90

US$

mil

Capesize 170K 5 Year Old Secondhand Prices Panamax 73K Bulkcarrier 5 Year Old Secondhand Prices Handysize 25K-30K 5 Year Old Secondhand Prices

BULK CARRIER1 Year Time Charter Rates

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

US$

per

day

1 Year Bulkcarrier Timecharter Rates 150,000 dw t 1 Year Bulkcarrier Timecharter Rates 170,000 dw t 1 Year Bulkcarrier Timecharter Rates 65,000 dw t

1 Year bulkcarrier Timecharter Rates 70/72,000 dw t 1 Year Bulkcarrier Timecharter Rates 30,000 dw t


Bulk Carrier - New building prices

Bulk Carrier – 1-year time charter rates

Bulk Carrier – 2nd hand prices (5-yr old)

SHIPPING MARKETS


STRATEGIC PLANSTRATEGIC PLAN

• Drybulk- Continued growth in cargo movement – China still a big driver- Newbuildings not excessive compared to demand growth (Growth in coal / iron ore

movements will offset fleet growth)- Increased scrapping forecast- Handysize market has very good fundamentals – Declining fleet / continued

requirement for these ships to service ports with restrictions

• Tankers- Continued growth in demand – Refining capacity constraints, change in trade

patterns, continued consumer demand- Legislative requirements have impact on supply- However, still possible oversupply of larger product tankers from big order book- Small product and chemical tanker markets have more favourable outlook

- High stainless steel prices- Limited newbuildings / Current fleet is old- Demand from regional trades

Market Outlook to 2010

SHIPPING SERVICES


• Restructure of operations• Continued focus on areas of expertise

Bulk Carriers Handysize Panamax Capesize

Tankers Mid Range Product Small Product Small Chemical

Container Ships Feeder

• Portfolio shift towards small product and chemical tankers• Longer term contract cover

Key Strategic Initiatives

SHIPPING SERVICES


Contracted Out at 31/12/2006

Bulk Carriers Tankers ContainerShips

BunkerBarges

Total

Handysize Panamax Capesize Chemical MidRange

Small

2007 Number(Average)

11.6 2.0 3.7 2.7 4.3 - - - 24.3

Revenue(US$/day)

15 000 20 800 33 500 13 100 18 700 - - - 18 700

2008 Number (Average)

3.5 2.0 3.4 1.1 2.9 - - - 12.9

Revenue(US$/day)

16 400 20 700 36 100 22 100 21 200 - - - 23 900

2009 Number (Average)

0.7 2.0 2.3 - 1.3 - - - 6.3

Revenue(US$/day)

17 900 20 700 33 600 - 21 000 - - - 25 200

CONTRACTED EARNINGS


36%

54%

74%

-

-

26.8

18.918.9 2009

84.257.4 2007

40.240.2 2008

% of fleet fixed

out by dwtShipSalesUS$m

TOTAL

US$m

Charters

US$m

Contracted Profits (US$m)

• Lock in value through ship sales - Value > PV of expected earnings- Better opportunities in other sectors

• Expand fleet at the right time in the right sectors- Underinvested sectors- Take advantage of anticipated trading pattern changes- Against medium / long term contract

• International listing / Unbundling- Investigation ongoing- Realize hidden value in shipping and SA based operations- Will allow for international comparison- Broader shareholder base and analyst coverage- Shareholder approval will be required

Key Strategic Initiatives (continued)

SHIPPING SERVICES


TRADING SERVICES

• Current Operations– Atlas Trading & Shipping – soft commodities – Oreport (50%) – Mineral commodities– Cocket Marine (50%) – Bunkers (fuel for ships)

• Grow through new markets / acquisitions

• Improve efficiency through utilization of Group shipping and logistics infrastructure

TRADING, FREIGHT & FINANCIAL SERVICES


FREIGHT SERVICES• Key Drivers

– Export / Import trade volumes– Domestic growth– SA logistics hub for regional growth– Infrastructural spend (rail, terminals, ports, roads, etc)

• Positioning for Growth– Staffing expertise– Development of existing terminal facilities– Acquisition of assets (locomotives, trucks, materials handling

equipment)– Acquisition of complimentary business from within existing

operations



FREIGHT SERVICES – STRATEGY

• Restructure and consolidation of freight services business into focused operating divisions

• Terminals

- develop Maputo (R139m capex approved)

- develop Richards Bay (R168m capex approved)

- develop Maydon Wharf Facilities (R 59m capex approved)

• Intermodal (container logistics)

- consolidate, then grow

• Ports - develop PPP opportunities in Southern Africa



FREIGHT SERVICES – STRATEGY (continued)

• Rail- acquire additional locomotives and rolling stock - enhance rail integration capability

• Logistics

- acquire strategic businesses- buy-up in existing JV’s - enhance Lead Logistic Provider capability

• Seafreight- grow business through expanded trading scope and enhanced feeder offering

• Ships agency - expand agency network



FINANCIAL SERVICES



Grindrod Bank• Why Grindrod Bank?

- Obtain control- Value proposition – Discount to NAV

• Additional capital injected (doubled to R250m / strong balance sheet)

• Investment bank focused on niche areas- Deposit taking- Property sector lending and advisory - Corporate and commercial asset based financing and structuring- Corporate finance - Private client wealth management- Structured investment products

FINANCIAL SERVICES



• Alignment with Group strategy - Property requirements - Expand services to Group clients (property finance, receivables finance and trade finance) - Creation of investment products to efficiently fund Group assets / expansion

• Acquisition / development of fee generating businesses

• Create offshore private client wealth management capability

• Net-1 initiative for card based wage payments

Grindrod Bank - Strategy

• BEE

– 18% of Grindrod Bank is being sold to BEE– Consolidating and expanding group’s current BEE

businesses– Continued focus on addressing other BEE scorecard

items

OTHER STRATEGIC INITIATIVES


CONCLUSIONCONCLUSION

• Sound prospects:– Shipping

• Long term charter rates / ship prices indicate expectation of a firm shipping market in the medium term

• Contracted growth in fleet (54% - detail in Annexure C)• Contracted earnings (2007 = 74%; 2008 =54%; 2009 = 36%)• Expectation of gradual weakening of Rand (10c move =

estimated R20m Income Statement impact – Annexure D)– Trading, Freight and Financial Services well positioned for

growth– Capacity to invest in expansion

• Consolidating and extracting value from existing businesses• Focus on expanding existing facilities to capitalise on SA growth• Successful, experienced management team

CONCLUSION


ANNEXURESANNEXURES

ANNEXURE A

BALANCE SHEETS

(Including Fleet at Market Value)2006 Rm

International Shipping

SA Shipping and Trading, Freight & Financial Services

Group

Fixed Assets / Investments 5 688 1 713 7 401

Bank loans, advances & liquid assets - 680 680

Current Assets 560 1 670 2 230

Total Assets 6 248 4 063 10 311

Equity 6 166 1 000 7 166

Net Debt (155) 681 526

Bank Deposits - 711 711

Other Liabilities 237 1 671 1 908

Total Equity & Liabilities 6 248 4 063 10 311

Gearing -2.5% 68.1% 7.3%

MARKET VALUE OF FLEET

Rm

Excess of market value over book 1 029value of owned ships

Value of long term charters 2 452

Value of ship purchase options on 862chartered ships 4 343

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 profitPV @ 8% (USD WACC) converted at closingexchange rate

Projected value of ship at end of charter compared to option strike pricePV @ 8% (USD WACC)

ANNEXURE B

The group valuation should consist of:1. the analyst’s valuation of Grindrod’s SA based operations 2. a valuation of the international shipping operation taking into account the fleet value,

comparison to peers and the analysts estimation of the group’s ability to extract value from its shipping fleet

Contracted In at 31/12/2006

Bulk Carriers Tankers Container Ships

Bunker Barges

Total

Handysize Panamax Capesize Chemical Mid Range

Small

2007 Number 19.8 2.0 5.1 4.4 6.5 1 - - 38.8

Cost (US$/day)

7 900 9 200 20 800 11 400 14 700 9 000 - - 11 200

2008 Number 20.7 2.0 4.4 4.0 7.4 3.1 - 2.0 43.6

Cost (US$/day)

8 000 9 200 19 300 14 600 14 600 9 800 - - 10 900

2009 Number 20.6 2.0 3.0 4.0 8.0 6.2 - 2.0 45.8

Cost (US$/day)

8 000 9 200 21 400 14 600 14 700 10 900 - - 11 100

Net Number of Ships to Deliver

2007 2 - 1 - 1 - - - 4

2008 1 - -3 - 1 3 - 2 4

2009 -1 - - - 1 4 - - 4

Fleet at end of 2009 20 2 3 4 10 8 - 2 49

ANNEXURE C

IMPACT OF RAND / USD EXCHANGE RATE - 10C MOVE

Income Statement

Translation Adjustment on $75 m = R 7.5 m

Average Rate impact on + $125 m* = R 12.5 m

R 20.0 m

Balance Sheet

Translation Adjustment on + $315 m* = R 31.5 m

* Based on 2006 numbers

ANNEXURE D

Documents

2006 RESULTS AND ANALYST PRESENTATION. INTRODUCTION 2006 Results2006 Results Current PositionCurrent Position Strategic PlanStrategic Plan ConclusionConclusion