GRIN - Earnings call transcript Q2 2021 | Grindrod Shipping Holdings Ltd.

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Operator

Thank you for standing by, ladies and gentlemen and welcome to the Grindrod Shipping Holdings Ltd. Conference Call on the Second Quarter and First Half 2021 Financial Results.

We have with us Mr. Martyn Wade, Chief Executive Officer and Mr. Stephen Griffiths, Chief Financial Officer of the company. advise this must recorded is I today. Instructions] you conference that being [Operator the of to Mr. now floor We pass one your today, speakers Wade. Please go ahead.

Martyn Wade

our of XXXX. Thank you quarter, everyone Welcome, quarter call joining second half you, first for first and and the operator. for thank

this refer including On statements performance. future bulk and we and me regarding dry statement tanker please charter are today. with contracts, management These forward-looking certain outlooks operating to other our you Let include will statements matters. #X markets as information make Slide regarding operating the the and disclaimer. future time based call, statements, for on forward-looking expectations of and These statements the beliefs financial of

carefully with presentation Our in the uncertainties to actual results result forward-looking We in differ our and risk from required and our SEC. may as read assume risks the by report information, the law. new factors of the whether obligation described materially no otherwise, statements, well events slide future our press other except annual or should as update today’s or as filings release and in as revise included Investors expectations. a

be during we addition, call, measures. certain will this financial non-GAAP In discussing

to Gross XXXX to to in the year. second the highlights. filings deck, quarter in XXXX to these slide to XXXX which second Additional disclosures to million XX company adjusted to the compared from million and is quarter the $X.X quarter results release owners year to of the compared $XX.X second XXXX, first please on million profit the turn Please due reconciliation $X.X million for attributable with of including XXXX X, of see to half of Net press quarter, Slide quarter SEC. Financial the directly to share, a posted the of million was second financial year. $XX.X favorable website XXXX relating of profit per non-GAAP financial XXXX, the in first and quarter million previous compared comparable measures, in most yesterday’s EBITDA increased second per measures, the of the $X.XX in conditions. and second of the profit our and GAAP Pages of increased of increased market previous from our in XX for increased quarter $XX.X of while $XX.X share of loss loss a $X.XX EPS, to in quarter previous the quarter the second XXXX second while the

gross to was half, net million. $XX.X the profit EBITDA $XX.X company million. on profit $XX.X For was Adjusted the million attributable first owners of was

sold of products Finally, We of buyers $X.XX $X.X in million Can XXXX-built the share year? half first second Slide XXXX. April now was look XX, quarter for to delivery gross the tanker, of profit with on turn XXXX. the at the Breede operational please the to in highlights to per we small a X the price

XX a that year, X of $X.X not and of in with a have this XXXX-built the On such Kingdom gross prompted to prior with deliveries to Revenue April dispute the buyers Customs, $XX.X respect Upper in Leopard found respect in with tax medium-range HMRC in the HMRC. and the to million dispute million Her tax of release Majesty’s disclosed periods. sold the recorded April total & favor previously been which decided for May decision, also Sun, Leopard appeal provisions We our United price Tribunal this on Moon tankers, XX year.

XX,XXX we June with a an XX, Capital affiliate financial we the purchased the ordinary On quarterly to a In the the NASDAQ share. price reporting. credit second open May semiannual On per on and $X.XX total the market we also outstanding our average at of shares X, JSE of reporting Bain Credit. the transition approximate – an in $XX.X combined quarter, senior announced secured XXXX, million from combination the on repaid remaining amounts a of facility

The to sheet Slide XX, of agreement to for to values and X the May for occur shares. to by discuss $XX.X equity developments? turn can into based Now, the preference price subject $XX.X appraised balance April Bulk remainder as of September an the July XXXX. and Bain Bain than a later IVS entered On is total The recent group please acquire IVS ordinary XX, no comprising customary XX, of XXXX. XX, shares conditions for with million, the agreement consideration as we was million $X.X closing XXXX on of purchase of with Bulk closing to held the million

of value are the separate owners attractive On termination the purchase period owners of the right, the XX the first the of of XXXX agreement. vessel into to chartered years terms remain prevailing have the reduced we the original an order after we the vessel we $XX.X back will on due whereby in gross to XX, expected price with Phoenix, while X currently vessel amount the into XXXX, arrangement has of carrier, Japanese-built company the its September the Transactions million, Japanese $XX will bareboat on agreement until closing. of charter. bulk a Ultramax August up years the entered finance for for management’s acquisition, Shipping terms by significantly market a acquire close not the to financing end million, but estimate and from charter a entered obligation were early a reflects fair In to at vessel of which relative Grindrod the the IVS simultaneously which to charter to to priced the believe charter-in

will dividend Board Singapore X, This required our company cash sustainable key while where be repurchases. other results be income. policy The needs and that market of extraordinary and/or repurchases and/or dividends and approximately determined the will factors, restrictions of by Now, share shareholders further affected policy intends, adjusted circumstances the additional will an capital from subject quarterly transparent, in XX, factors. we that to and will create the provision that September the please pay of simple, and the return financial dividend a our combination and over base per policy? to dividend items balance of other expenditures amounts XX% ending intends material a law payments sheet I operating to be timing adjusted payment share Slide earnings in could we dividend quarterly would quarter our growth, of turn and the can agreements, and and our new reiterate a Directors to by our go various share debt minimum its affecting through and shareholders like Commencing of shareholders capital for $X.XX to including return to with company repurchases. of consist strengthen company and/or additional net component to of to dividends strength. allows variable is focus rewarding The share pursue retain significant of flow to dividends times to return capital

Financial over quarter who Now, go to I will of performance financial the the will and the pass XXXX. over second Steve Officer, Griffiths, our Steve? for highlights floor Chief

Stephen Griffiths

Thank Martyn. you,

attributable XX, million profit for ended million metrics gross X million ended key increased $X.X share XXXX. $X.XX to June XX, on XXXX. March owners the X or the increased XX, for the the per compared per for Profit March months million the $X.XX company June quarter, to from to X the Focusing for from for second or ended X the XX, to $XX.X months XXXX first of ended $XX.X share some $XX.X months months quarter XXXX

gross half, as figures, June was owners ended the $X.XX considerable liquidity Slide over of to the through $XX.X timely we while strategies. the the into XX XX, positioned or all XX, is June $XX.X refinance XX, June XX, expected now maturities while company million over months per was cash tankers. looking the half the $XX able to to company the X the debt. our its growth spent And million the first With in reduced or to believe Slide net On to partly repaying last redeem of our million simultaneously of X million during XXXX, profit for return effort profit XX, for and company materially capital share. $XXX of company upcoming Now, pursue the our months months XXXX, sales XXXX was to attributable ended well enhance turning debt first

profile Now, amortization the limited forward. a debt with maturities until going XXXX, provide the combined sheet flexibility balance with conservative company

Let’s Slide XX. to turn

in of drybulk for $XX,XXX briefly business in quarter June ended handysize per TCE per second business, In day for same $X,XXX same X the for day ended We in and June was TCE $XX,XXX $X,XXX will XX, the months XXXX. per XX, the to months the Supramax/Ultramax XXXX day the day XXXX. period X XXXX per per drybulk the for period the day day discuss per now for was compared results XXXX.

As XX, day we average The an Supramaxes. for slide approximately of average expected days of day. and half $XX,XXX to of is Supramax/Ultramax per $XX,XXX X,XXX first day our XXXX, average for contracted be half day have per for and XXXX. XXXX operating per days at for at the long-term the approximately of of also X,XXX charter-in QX figures The cost for provides TCE our TCE approximately an operating August handysizes XX,XXX per fleet second the

far the rise XXXX in XX, dry Now, easily in our freight results. demonstrated the turning thus is historical Slide of the to versus rates scale bulk

exceptionally During the for index-linked or $X,XXX to the spot of our half company short-term freight the XX% one equated million trading was during take day first strong advantage TCE XXXX $X.X well-positioned market, rate revenue time per either of predominantly TCE and cargo on in environment. in core half, to the Every the contracts, that’s of change fleet fleet. charters leaving approximately

was vessel analysis cash G&A, back day drybulk slide the day. to core Slide fleet XXXX. Long-term includes first per Now, per With per day to that, cash and breakeven shows vessel per turn net interest XX, half charter-in breakeven the to like breakeven expenses, was would Martyn. this rate and $XX,XXX The expense, repayment. I for owned call breakeven the of over debt turning operational $XX,XXX per

Martyn Wade

far against Please, further bulk XXXX, to The demand, ton-miles. bag recovery fundamentals and rebound at material you cargoes scrap and more global the is Steve. XXXX been environment. leading demand more were pandemic minor breakbulk the bulk which of a I market sector with iron have coal business, trade have developing while and turn container been correlated Handysize resilient. in bulk far ask by certain ore in Thanks, and and by size grains Slide carriers. robust they XX? and like a to new Thus helped we steel the dry coal seen hardest and to shipping to which demand, how in returning shipping dry and the look hit in minor to can have i.e., the global Let’s Supramaxes to in bulk has is congestion cargoes figures led demand, closely GDP. raw both bulk Pent-up

Now, in healthy demand flows remained a faster with depicts, from healthy has can we As iron in expectations, Grain XXXX the Slide slide to very turn Coal still early than remains ore expected after but levels. trade Declines strong rebounded XXXX. XXXX. exceeded XX? continuing XXXX. trade below XXXX

the minor cement, the alumina demand forestry mean, the key bulks, logs, trades. segment the and for and a ore at nickel strongly, Grindrod forestry, driven which rebounded partly has Looking business by Shipping, are steel, I

last course TCE of the the Slide to increased in The XXXX, XX. seen Supramax steadily indicates left handysize chart rates Now, levels over on reaching have XXXX.

the have despite rates. XXXX, higher late reached prices below comparative since XXXX of levels in rebounded charter remain but Asset also lows

the respectively. XX constrained uncertainty is or emissions. to Turning fleet order market book fleet. years fleet Despite older. X.X% to is by bulk of older XX, strong and dry Handysize current or lows multi-decade of or conditions, in only the Slide fleet, continues shrink and Supramax new X.X% the XX order engine bulk books bulk years relating to XX% estimated the X% are bulk smallest XX% dry the of and the remains is to ordering dry and dry technology

strategy. and turn Finally, XX for Slide conclusions let’s our to

Let’s of that remainder IVS valuation. listing highest result our XXXX. remaining led dry conditions acquire tankers our agreement with us announced focus attractive Accordingly, at the beginning time. to an dry the bulk market bulk achievements at at The has an start on product with our an spin-off trading the strong we since all spot of to of to sale allowed Bulk optimal financial and our

On short-time significant of our that the both dynamic fruit. opportunistically order of vessels on approach bearing is includes side, the chartering charters long cargo commercial contracts company the to in and service

market market current the and/or contracted be well below vessels believe in favorable option price evidenced charter prevailing what below pursue purchase announcement secondhand long-term is in growth IVS that the that levels to price to value. options now our allows rates acquisition, notably as options and current in sorry. charter the the charter This Phoenix extension are us below contain Our markets and considerably we most of fixed

have with fleet with model. we options predominantly chartering a fleet, been addition, a able Together these our In complement number own charter flexibility vessels, which hold extension favorable levels. the short-term of of commercially series core of options our demonstrate the to our Japanese-built vessels, we operating at

of On we financial the have transition and strategic reporting. corporate transactions, series announced to side, a having concluded transformational a our quarterly

dividend reward capital our we third return pleased are and with In to a addition, beginning of with the shareholders quarterly quarter. policy initiation the

achieved the continued rates freight supported in rebounding by XXXX financial bulks. bulk to suave commodity XXXX Now, of demand been increase before across wide have including ore, rates looking to commodities, grains, levels and coal iron last dry a minor pricing and ahead, Freight crisis. have

for dry Due seeing in record dry means To bulk in In water window market. to are in container market orders our not up for the extent to Operator? shareholders. to and looking if for decades were growth its today joining potential to further could demand orders significant vessel bulk the we at reinforce smallest supply questions. to with earliest. on progress value With Grindrod stronger far to the fundamentals, recover. that up most like our demand would amounts open market create continues With an Shipping. confident forward to moderately, multiyear as newbuilding available attractive the orders supply I While we new are we capacity this due environment Shipping order of market growth all materially, new shipyard and the that, this, you thank Grindrod pick even the thus constriction recovery for can continues call position ship reporting XXXX, limited lack that grow leads to hit book of supporting XXXX that in

Operator

you. you. Thank Thank [Operator Instructions]

take first now go will Please our question. ahead. We

open. line Your is now

Randy Giveans

Giveans it’s Gentlemen, from is going? How Jefferies. it Randy

Martyn Wade

Hi, Randy.

Stephen Griffiths

Hi, Randy.

Martyn Wade

you imagine. Great can Good. as Thanks.

Randy Giveans

listener, I can imagine, thanks long-time first-time sure. for having caller, so I am here. on a me for

mentioned about ‘XX above You trying two some slip the should days XQ? do slides I then Supras. to the bulk, of into of $XX,XXX or all at you X,XXX break a to XQ operating about little we that one am percentage expect Are for the XQ? have XQ handy, number entirely for And guess on that questions. same days compared to a the days down days in ‘XX? X,XXX booked XX,XXX those I XQ of

Stephen Griffiths

here. Randy, Yes, I take will Steve this,

in short-term for as for QX. on – think the first to operating QX had that the then that’s including same your pretty expectation we So question, first And cover only. yes, we be yes, have the I what is total the much days, our

Randy Giveans

Okay.

that of and XX% Supras? guess XX% works I So Handys out around to

Stephen Griffiths

Yes, yes.

Randy Giveans

with into at charters longer ‘XX term these And levels? any or coverage into some XXXX then XQ time

Martyn Wade

at moment. the Not

to be the honest, some I had a running market. are, weeks are spot discussion and ago We you we to as

nicely. feel We the QX with the will we concentrate something be moving forward. we to looking very QX levels moment, happy and it into market developing we But but up, are take is will that on, at still is

there will again. convinced New not are Chinese We be Year a

ease it’s So, going be we a market strong. maybe think bit, the continuing to suspect will that but we

happy to be cover, at are to moment, market. limited the run point, at some yes, we taking So we will cover spot but the some very

Randy Giveans

up said here like dividend two of your share between ago calculation dividends. net instead of XX% of did dividends the kind with can those dividend then if a or me. has We policy? Good. How split you question, of income $X.XX, components other policy additional two number about determine level in weeks a of liquidity? base number? few guess and it the see questions. come XX% on And of NAV it, or from any then or that how I based yes, you touch payouts. of XX% kind you Is on a So for terms talked last And do kind question you second I repurchases? XX%

Stephen Griffiths

you want do me Martyn, Yes, to…

Martyn Wade

Yes, the will yes. I say part, other

Stephen Griffiths

Yes.

the between against then be and against if – is allocated buybacks split to obviously the NAV, whole is share obviously, close be dividend. there trading is buybacks share dividends need price share So to for allocated will us our any at and then no portion will do the

coming XX%, or... of with to terms In up Martyn, me happy this are that you take for

Martyn Wade

Yes, XXX%.

Stephen Griffiths

Yes.

a I the items because the keep of by are initially, is improve strengthen recent I of we is In are this lot and/or way balance to strong looking there the cash. terms to are the that there but something allocation buybacks to our future, aside Obviously, value mean, allocation we then that looking with earnings. into then of per – we well whole to underway But And and liquidity. XX%, shareholders cash, we mean, of share cash go of in grow. return to policy, as need of dividends the sheet

against We paying at debt. like lower. a time, fleet, down on will available then some to options our and I but our about to guess the some moment, be would At chartered we bit as purchase looking cash not about had over fleet. the all be becomes once, exercise XX% And long-term leverage we

of thought that spot all taken XX% into those us. yes, sweet for just a we things the So was account,

Martyn Wade

think It it and market forward I sheet it obviously, can then keeps But of going, is from peers flexible can And the it’s to gets I generated position great all very conservative I just for obviously, a in you be to on has – time bulletproof many, cash there. the as Randy, and be we as this as years are move mean, maybe our add, It’s again. kind develops cash. many in. generating first be a balance

for from. said, he years, was Steve As is the coming wondering cash where

he is it. what do Now wondering to with

So it’s times. exciting

Randy Giveans

especially third either be there. share income will pretty bookings seems substantially quarter, clearly, dividend net robust forward the for plus of with will be repurchases or than it Yes, payout like return capital your this XQ higher your

So the to keep again XQ forward that and we looking up will release. great work. Thanks, be

Martyn Wade

Great. Thanks, Randy.

Stephen Griffiths

Randy. Thanks,

Operator

you. Thank

question. We our Please next take now go will ahead.

line now is Your open.

Poe Fratt

Steve? can Martyn Yes, But for you sure. and me, hear

Martyn Wade

Yes.

Stephen Griffiths

Yes.

Poe Fratt

okay. Yes,

doing little from a way is Poe it’s moderator Sorry, the Capital the But Markets. Noble this. Fratt it’s

you as of couple You far is production can macro surprise? XXXX? that just color anything you said the into market state ripples the be of right China just questions. first clamping what some talk what you on that concerns through there Would give if look Martyn, towards that as drybulk expect market Just say can of you all, the of about seasonally, are about and really be you as the year little you the a of sort more us a down on environment? concerned steel would just now but end it the the or easing

Martyn Wade

It about how tied having pilots world’s are much do actually the yesterday, That’s in We quarantine shipping. in trades certainly is the Board asked actually what you And congestion the the basically X% it’s the wrong? another all going in reports Most COVID can Yanxi heard are from staggering coastal China. which what’s you talking China to they fleet at go that we in XX% possibly the all with me And on that got China, It’s do. Chairman hands today figure up a of positive. very of on of question. congestion River, to think about Good at our moment. river world’s congestion. perspective want beauty interesting when never compulsory

yes, steel industry, the might On slow down. it

was steel is since the in and very time fact first positive China production is such for outside well XXXXs demand is of the levels. Although in world the record at that

there. is demand So

A So, what it well, when very it the QX levels. we commodity pleasing that of actually has lot looked reached still rebounded. at was hasn’t all XXXX was figures,

crossing with realistically you it very despite Supermax end home. I healthy a the the steaming XXX would year, every expected against off. to it’s QX I is But very change positive. caution can think this ships mean, FFAs, it’s And at XX. the have for XX-XX lot what shippings to I all for despite we feeding year, allow as expect container China oceans longer, found as of along with we and side in commodity, gangbusters comes million go to Traditionally, QX people So,

what taking our end is is feeling figures soon. now. overall, stronger, a has demand with If be in there lowest that’s order little be And suggests up, there’s always the know only but of at and anytime the it that So the picking many quarter-by-quarter could going book decades, the anything might but always we then an book, that years order that’s and started moment in next, positive. away kind to nothing we’re happens

So I all all, think quite it’s in optimistic.

Poe Fratt

look Great. And of that kind book When if for what magnitude of market. thought wasn’t about you it’s happen can at in like how presentation, be made – Yes, us FFA the buying may you in if or give you market commitments can other of order just you recent – in could FFAs it discounting could statement? XXXX? a about XXXX. when you temper you an order the what hit seasonality your that talked – properly sounded factors for potential you the And any And that have true, might you might clarify potentially XXXX. talk

Martyn Wade

to it the need hedge at at fixed change to only We we we feel in actually point, a little. a contracts because if particular switch to people moment, have we that index-linked bought could use we any have one to very counterparties fixed rate. don’t the have FFAs, couple The rate. a option Very, the

brought respect. the fixed lot ships, done lot level ourselves our And at But we’re on with a are paper amount below very chartered undervalued. XX that is less we’ve we we kind very paper small to of core all and of just fleet than that the gone what ships a options a in happy. yes, is of So otherwise, the still But is a our is hedge have feel, that. no, our

piece we paper, hedge specifically of any do particular to business. if So a it purely is

at no, involved not no, We the paper. prefer So the moment, trade the physical. to we’re in heavily

Poe Fratt

how purchase had an that option, about? talked then about I Okay. you you little you you you one able purchase that a idea us the And to And secondly, about acquire give wasn’t quantify right you a a and it. to And what of options think now? And you worth can came yet surprised the then bit were you because talked to discount? was Phoenix it’s would be that potentially discount willing that quantify discount or can

Martyn Wade

Steve, XX own are years we where basically of over flagship, taken was we’ve ship-owning. for number another they of Japan. getting the out on. their a this ships had took number that the a is and relationship consolidated ships well a And now And is yard several ago. what happened the in yard with of And has years, yard this that

buy at options, only it, to So ship had to and came And owner obviously, there the with and on they charter. was us, fixed they then we future a into we like asked to they existing maintain going the had period and they we’d charter. whether could because this and really the was ship the it sell value in the we obviously, another looked or

compare have would but been our made on liked, not much for So of as $XX then I would amicable Japanese ship it we arrangement at type we ship have maybe the is the they million. is discount friends, have new with that what them to these us you a agreed building that making very can the we XXXX and came is say as a sell could to charter How this with Well, a relationships market Japan all in to price. this – delivery, the days.

talking So conservatively $XX we’re the a it’s $XX million, ship, value. now X-year-old million

pretty buy do. of years. price. our we back We wanted it if a And it’s to after base cost So great we the right have charter. a as maintain we crackerjack X the said, got We’ve

at of very So a I ultra out generating competitive our and have think modern ship be of win-win where a fleet cash very, lot we’ll it’s we in price an a it.

it of a to the here. is lot do the it relationships power, and deal. a trust And good it’s So with

this to get position. You

come never a then price and change, that’s renege favor. was We said, when yes, anything. agreed. you, And You and they it things they’d ask on like a

Poe Fratt

Steve, Great. I’m something you or… did to add That’s helpful. sorry, want And then

Stephen Griffiths

says, add confusion value just what then, on about to to at the there’s what We obviously, and $XX Kinglet, of $XX vessel ship said, the – been the we’ve what they’re at getting and bit million. Martyn the million to Yes, to $XX Japanese similar But a buying million financed financing secured vessels, $XX.X financing is done million. Knot, Martyn Magpie Matuku. with

of million $XX that $XX $XX So the valuation million. against million, loans

Poe Fratt

Crimson something on that And could the the be maybe Great. next And then to next options? you transaction? I chartered-in comes about as coming potentially options discuss that to that’s actual option or if negotiation? a purchase you Are asked the similar Is purchase Pinehurst the year, up have And looking options charter. five because charter that’s are set have up we you one those that floors like purchase without subject watch on you the or are year, market-based the that on have capacity. how on the at should options those those a

Martyn Wade

it, from sure love to X to we Well, years, sell friends want I’m would afford to would honest. on Marubeni to don’t we Marubeni. had with and for probably able be to a to option our now But at whether as have purchase X, keep we’ve the a buy. extending price, on us we we Crimson be Creek, around won’t

where for is that the number a of a charter. we’ve the options declare of we years. to ships last our couple have So On ones, been other able purchase

That’s a of Pinehurst. is the them and that is the other is year. mixture every at yen, which fixed depreciates the One of IVS And and Naruo, dollar price. one

at the moment, attractive. charter the obviously, So very is

are owner We [indiscernible], doing hold well. we Again, but that we very incredibly it’s option. will know well there, another

either and And we discussing at point, We or to option able be that back flip into are him. fleet. the will with some take it declare

and the options the a declare there’ll couple at just the another So gauging it’s it time – and to of year, right option. we matter next have when is looking where be and

of number older a have We hands.

older and sit options. a does market have proceeds in, we’re five just option some it the moment, the to going renewing there be monitor have them It’s of a hands. with selling to could We There’s right. nice But timing and from is to and the with in. these be of be at when going purchase and to it’s point, great a decide value at and position those then some we lot

Poe Fratt

to Understood. more And looking pretty of that JV months – had growth a of interest, back you sort you it at road. year ago, of a more that visible over lot end the was the whether it’s you’re you had control little XX a have – was frankly, –

And you Are vessels. the Now in beyond those, point chartered have you you purchase the options Martyn, on now? would time? how looking at in the this market characterize right S&P

Martyn Wade

rate cash-generating S&P XX,XXX, you is which X-year miles in you – still it’s think probably Well, not take of a it’s Ultramax, if when the rate X-year starting undervalued, on is I mid-XXs properties. market. million and the I a with think the an X

with X X think it has are all how interesting. our S&P of I so or Greece which why I think capability least a London. being go in to cash, aggressive friends at in another XX% market, much That’s the friends and is

usual, long This is as going shipping, no set. we’re last. it’s it’s interesting to knows us, one because, For how

your to have as to the at amount usual, use want but mind. quickly. of below the it’s we’re of quality we age what we shipping. cheap the we is to generated, immediately millions of the way opportune. very fleet where long value assess an for, this have with so it’s many, good is We but – I kind is funds cash But want declaring options mean of improving values we a open a being it will And there, it. gone position be. still the yes, yes, the don’t never chase have with There – you’re be But purchase they’re nice could of You fleet, your chase ships. market, market, options many with

what, stupid you in think I business don’t years do things. the taught XX has me

are calculated. markets it’s to off, be taking when So got

So accordingly. we it look assess at will and

Poe Fratt

Understood. IVS quarter? could benefiting about weren’t from the end there an Are from And to need closing talk the a just the concerning how are statements. any the secondly, in that And standpoint financial it talk have you conditions maybe we be standpoint, included closing if then what economically you accounting of or then, for you the JV. second about fine-tuned results third Steve, that XX from quarter April of that is could by Bulk anything

that’s can how into talk financials? and rolled fleet So rolled to into about going you be the the

Stephen Griffiths

Sure. sure. Yes,

So that of in just to terms advance going in of September that. position deal well in we’re we’re a close the deadline, now

there September, of in no issues is terms can around date, issues the closing, target the no that so, I So meeting not September foresee.

will be the In income statement. doesn’t sheet terms on the that April accrue gets of we to go will but sort for of through it the through when a closes. it from this, cash balance or the That a in go obviously, it goodwill how cash end earnings of the accrued us,

to which, finalize alone because go of ownership, because statement date of possible will soon be say, as September. transfer welling earnings we’re this through then why keen also will as all from as of of income I the it’s So the

Poe Fratt

since And on us balance is you how any has idea the Can cash sheet update – April changed that something... of XX. financial it or the balance

Stephen Griffiths

Look until completed. at moment disclose rather the is not any transaction the further fondness we’d in

long. going to So share and are too that we’re happy hopefully

Poe Fratt

Okay.

Michael for and the and there half were your first or the ‘XX, fourth at year. OpEx the to quarter what And OpEx change even then the maybe third should from maybe of you numbers of Sounds question quarter be material any or good. just in looking standpoint

Stephen Griffiths

a Yes. costs OpEx issues. OpEx. the some under year, expensive of target like we We’ve I have from COVID issues we this some hit on mean higher arriving the quarantine. to be has day, and had been have we It total been flat repatriation $X,XXX

come in also then our we breakeven of improve that bit Sankaty cash figure. interest payback feel we bank our charter costs. So, that off loan, with And expect we can on a to the the

seen half for second you’ve As second higher. the half slightly is for – the

this by offset so on believe the than the we than can breakeven the increase costs on of and lower interest XX% be year. cost yes, the that we charter slightly second more to decreases half in the OpEx targeted side, the So cash in

Martyn Wade

with on and the times, weeks it’s to crewman earlier as sure change about to ongoing just end done I we’re mentioned ballast battle be do China, you it OpEx, having because to can yes, at the it. a making do with add that up Can permanent an I crew it’s got several a quarantine, that if where ship with

been I the only through the there. it out owner not does OpEx. everyone’s We’re caught to and flow mean

we’re coming blue, the and something is it matter. doesn’t of finally is get you every hit. Is this then, on, It positive? positive? but and is get this force you you your now have it protocols And guy all it So striving out the

You then have make plan. to a

and to need spend – people. whatever that at this So point, money market, you repatriate on you

OpEx, it but So hoping it something has impacted to yes, we’re that, is improve. our

Poe Fratt

disruptions Yes. have into of or the Maybe the second any yes, year XXXX? downtimes any you drydocking expenses, expenses do or or over planned maintenance half

Martyn Wade

not... Steve, does

Stephen Griffiths

No, it’s in Every we constant ships a of over absolutely drydocking the years, and and spread go vessels our time. there’s so program. try X.X it

So in half second the unusual, of would I year. there’s say, nothing the

Poe Fratt

you said that Pinehurst be Okay. follow-up I fixed share think, a They that option, option. with us. just a price you the Great. fixed on willing option. a purchase Would had And to are Martyn, price

Martyn Wade

very not at just that no, but attractive. moment, attractive, at I it’s leave no, No, and it the

Poe Fratt

Thank Great. ask. to had much. so Sorry, you

Martyn Wade

Poe. Thanks, it. Appreciate

Stephen Griffiths

Poe. you. Thanks, Thank

Operator

you. Thank

go take We will our Please question. now ahead. next

Your line now open. is

J Mintzmyer

Value How Mintzmyer Hi, good Edge. are morning, from gentlemen. Investors you It’s doing? J

Stephen Griffiths

Hi, J.

Martyn Wade

Doing very well. you. Thank

J Mintzmyer

format. shifting Yes. It’s quarterly to call. on a Congrats good to on the be

gentleman front up lot. excellent had the going to that’s And things questions. of open some think in a I me

the So things. I hit think of most

just mostly is left small what’s think modeling I questions.

and report or was regular the breakdown, QX and you missing you EBITDA actual those sales from me, just like loss sale I’m your an way the a at transactions? sales Looking obvious, to on seems income. you maybe but But on something QX adjusted report confusing what little gain It and have proceeds. your

Stephen Griffiths

transactions were sale of what the Sorry, ships?

Martyn Wade

The gain, yes.

J Mintzmyer

Correct.

Stephen Griffiths

No, all of selling there those we was nothing down those price. – no gains on and – were wrote vessels that. mean, tankers, to the I

So previous end there periods those the loss last in in impairments figures, the of no was been or done towards profit have year. all

J Mintzmyer

just it of cost has just an in line, the Okay. interesting… revenue It’s interesting ship sale Understandable. and

Stephen Griffiths

and fleet revenue. issue, legacy a It’s purpose your sales reporting ships

J Mintzmyer

Okay.

Just strip trying out… to

Stephen Griffiths

point, at Yes. Happy to it take you Jeff. some through

J Mintzmyer

July, Yes, Bulk. the that’s question. then fine. IVS of Bain And just modeling this understand a taking kind closing Or Is like enjoying out I when to of that profits close next. share September? the did the But quarter It’s back few later actual revenue order that’s rest Bain from other the this question transaction, over? on the a switch ago. in August, months the does or

Stephen Griffiths

of April. the end at closes that So

get sign So said income deal. but as the only we the earlier, can it I we statement we through the take once cash,

our But to possible, I goodwill as the go will reduced tend a grow yes, so it field the value get say of bottom and So negative the line. sort sheet can we as so to that’s why balance soon of done assets. we our

J Mintzmyer

mind? little leverage in wanting Understandable. a bit. any the bring target number your it like Yes, deal to And do any you XX% XX%? have whenever range? Is massive or you stated. It’s of finally, is there have a sort Or will then up about you down Do XX% that catch about closes. talked you be

Martyn Wade

I, Steve school. old yes, do I’m and zero I Let Steve have that. Greek and leverage. me very friends, say my knows where

appreciate it’s I very Now that difficult.

but zero. So we couple on mean? do a what is it’s knows of the – somewhere XX%, years between where XX%, it’s market, I yes, XX%, mean... Steve, we are what Obviously, who and

Stephen Griffiths

mean, think have mind. in just values the get But percentage the fixed goes XX%. But as up, Obviously, Yes, I market value trying to towards heading better. again, seat to difficult the then I market of that current low. on gets a get

J Mintzmyer

but very down think top at Yes, the Randy QX up, and the days combining question, his fine. is number on certainly expectation QX? right? valid alluded Is makes just way doing XX% want that sense. looking bottom earlier flows this I X,XXX available I you to at roughly mean sheets, your you’re you going reasonable the through segments? So for a the want that two X% at the and in

Martyn Wade

again? I you that. So get didn’t that say

You’re we… the because color talking about we –

J Mintzmyer

of... Amount

Martyn Wade

we estimate through have operating. of difficult a you see in quarter are to trying some that under with fleet, They And to part short-term to is the of longer ships they’re not on are of at XX our days. Amount probably Randy what’s just think the obviously, in And of is halfway on was at of we short-term XX is just what are And indication – operating. at go I months XX It’s that some short-term on there, quarter. percentage. the start XX% the but XXX% that core the the to them say each no, there’s last than fair of – the But happened fair. in where supers that XX% is estimate number being ships. do handys very

J Mintzmyer

on this helpful. Okay. the and the done, great we’re forward directions. It’s congrats I different same Yes, look asking quarterly call Yes, and thing next that’s to question quarter. getting in a

Martyn Wade

Thanks very much, J.

Stephen Griffiths

Thanks.

Operator

you. Thank

take next We go will Please question. now ahead. our

open. now is line Your

Unidentified Analyst

[ph] from Gavin It’s guys. Hi, PSG.

Martyn Wade

Hi, Gavin.

Unidentified Analyst

Congrats Yes. with the results.

spot Just north at rate of million look of in a your at I run year we a of a could look line. at on we a quick hypothetical policy, year sort if dividend bottom full rates, so question something your guess, terms $XXX

excess million, vessels, away left with question If thinking business. is you say, tip in like I million. you let’s cash your substantial you’re should my the cash quite amount dividends left going probably And of a debt, in on this free to of $XX how that’s still you excess excess be million out, hands? of be XX% special that about $XX and some if still $XXX purchase in And

Stephen Griffiths

profits that every question. sustained and to need it’s a it. looking There’s started for at off other because obviously, with a run. yes, us have got we percentage these And We good of things dividend the if chance improving Gavin, we’ve of we type XX% do.

we’re and allocation But I is earlier, question, I And be any – that – $XXX this relook – at over cash XX% much free terms if cash. million. can hypothetical left time. it of this of As having mentioned at think. probably we’d would in if changed

But definite at So give policy. just answer a that we’ll it’s a flexible flexible. obviously it, but your it answer. to Yes. question It’s you directly, say And look there I is for can’t now.

Martyn Wade

translate through XX X, But Gavin, done quite you months another mass. of market, maths yes. what the It’s or could have happen this simple after to easy

Unidentified Analyst

Yes.

debt purchases those and above gradual follow-up repayments a think as dividends? vessel just be should strategy maybe there I prioritization So would would special bulk about of a be, or

Martyn Wade

also, restrictions – boxes. are run be to have also it’s them factor will as options ESG years, the a purchase have X, the making of obviously, and taking still five X we they’re all some sure we hands, X, next at fleet charters the modern where we Well, many over them. that going we and on length with and selling older and the that And these point got the and to have in depending

So some to it would then be older a matter sell if our we were ships. of

that So the them best some to we’ve possible way had in using options. of very debt on the little exercise

do $XX money for back pocket and XXXX, is million, ship think flipping $XX the don’t with actually has And in option going million. much happened options say, purchase we’re flip in it’s how $XX we them the let’s million, know mean smart I don’t where to well, at companies the where I ‘XX you depending is. have done. thing to market So the be on other just

we have there’s and it’s where the of where nothing. end yes, adapt cash. don’t course, policy we’ll our seeing yes, it. look doing we always will – no point But do much where you will, dividend have Steve as so will could conservative. something depend up It appreciate market. on it’s a this because we with And we at we dream, you very in cash are it around said, are to being So make we And target, we

start direction at be looking right the a on will the way. and least It’s let’s but we great we’re be get in first So or there heading it, well at

Operator

Thank you.

go will take We Please ahead. our next now question.

now Your line open. is

Unidentified Analyst

Hi, Steve and Martyn. I am [indiscernible].

Just a…

Martyn Wade

Shaw. Hi,

Unidentified Analyst

shareholders of and I which Remgro, obviously, just one XX% are Grindrod you How said one your voted two stake not Shipping. has Quick they’re publicly guys? holders Grindrod around think mean long-term quick I around of got shares? allocation the possibility been them. Have around some up some acquire from those there the shares of The any and to thoughts that? capital you around picking potential discussions going about forward

Stephen Griffiths

that Shaw, long-term, I of to have specific the I’ll want mean from own timing in they get And I their really out that. they’d decision. decision. of look, terms that’s Yes, Obviously, think to insider. an Singapore what but It’s we wanting at some shareholders we – their do. be law, said point, take can’t is

on So through – we the it do other have do do whatever or to to from buybacks would have brokers. in it a we market open We we not do, them. certainly

Unidentified Analyst

Okay, thank you. job. Good

Operator

further remarks. no are you. questions at management hand now back Thank There for closing time. to this I to would like

Martyn Wade

And much, Thanks Thanks, due we yes. course. to everyone. look very Well, in operator. QX forward reporting on

thank everyone. you, So

Stephen Griffiths

you. Thank

Operator

for our today. Thank conclude does you for conference That participating.

You disconnect. may all

Grindrod Shipping (GRIN) 19 Aug 212021 Q2 Earnings call transcript