Member Info for Mike1959

Hi Riverboy, now more sells but the share price is now showing as down 0.93%.

Overall, like us, the market is perceiving the Grindrod Q3 result as being a little disappointing. The Grindrod capital reduction in the form of a cash distribution has yet to be completed and the business will not pay out any more dividends for 2023.

Hi Sam, Q3 net loss was $6.5m or adjusted net loss of $5.2m so worse than my expected bottom end of $2m loss but I think this just reflects that the BHSI index in this quarter, particularly July was lower than we want to remember and interest rates have increased further

.As you say, the TCE rates are increasing. For me the Grindrod breakeven handysize only number was around $10,000/day 12 months ago and now $11,000+/day based on current interest rates/operating level/admin costs spread over less vessels.

Obviously this will reflect on the Q3 TMI number but I am still expecting a better number.

My expected final divi as mentioned on 17th Oct is 2.50-2.75 cents but Moneyman/SeaTank put out a good discussion for more.

Hopefully we will find out by Monday next week.

Hi Sam,

I totally agree with your sentiment and Riverboy and Krusty before, like you, I am down here and hanging on for the ride.

I have already tried to include the factors you have mentioned and just tried to be realistic , see the recent numbers for Eagle Bulk ,and hope like you that I am way too conservative and the actual numbers are much better , we will see on Tuesday or Wednesday.

I have had another look at the BHSI for July to Sept and the quarter was the lowest of the year so my expectation now for Grindrod's Q3 is Net Income/ Profit after tax of between -$2 m to +$2 m so broadly break even and no change to the NAV which might initially seem disappointing but the number should be considerably higher in Q4.

Riverboy, I know what you mean. the Grindrod numbers out early next week will be Q3 (July-Sept) and 9 months (Jan-Sept).

The figures for the first 6 months were revenue $185.8m, profit after tax $1.2 m EPS 6 cents/share. Since then, as you say, Time Charter rates has marginally recovered, the bigger factor is what have vessel values done since the end of June and I think they have also recovered so as you say fingers crossed and good luck to all.

The BDI had a massive 13.3% increase on Friday and up 15.5% for the week which bodes well for even better numbers in the current quarter.

Glad to hear it and you are in their summer.

BHSI up 3.40% today and back into positive territory YTD.

Sotolo, I have just looked on the Tharisa website (Investors-Investors Calendar) and it is still says TBC FY 2023 Financials.

Just to show how uncertain it is to calculate the uptake of EV cars and the reduction in PGM demand for catalytic convertors , in March the UK Office for Budgetary Responsibility was using a forecast for EV share of new car sales in 2027 of 67% but yesterday reduced this to just 38%!

Sam, yes the BHSI has been up for the last 7 days in a row and up a massive 4.01% today. Grindrod up 3.79% today on Nasdaq.

How if your hol going?

The Tharisa website had been showing the FY results as out on 4th December but the share news today says Thursday 28th Nov and the Tharisa website says "TBC". Hopefully that means good news!

......something brewing at Grindrod shipping, on Friday the share price increased 6.36% on Nasdaq and 7.17% on JSE.

Candidinvestor/Sam, I agree with both of you. Paying 6-7%/year on debt is a massive cost at the moment particularly when the business cycle is down and net profit is running below these levels. But you are right that you cannot sell off all of the family silver. Like a lot of thinks it is all about timing , also the ships sold are the older less efficient vessels and in the coming years with current and particularly future environmental requirements tightening the costs of running these older vessels will increase relative to newer vessels.

Sam,

wow another holiday and for a month!

I am seriously envious- enjoy😎

Great time to go in our winter and their summer especially after the rugby!

I know you will not be able to resist checking , like us all .

The BHSI has been falling for the last 2 weeks and is now down 10% in the last month (down about 5% YTD). Normally there is a dip about one month before the Christmas period which generally only improves after the Chinese New Year but it seems to have started earlier this year. Our vessels have benefitted from good soya/grain harvests but this is probably now dipping a little. Still concern worldwide on where the world economy is heading and this is reflected in the current malaise with world stock markets.

TMIP is profitable at these levels although at current levels it is still far away from what would be considered a reasonable return on investment and there are still questions about vessel values and if the dividend can be maintained if time charter rates do not pick up until after the Chinese New Year. Everything is very cagey and we just have to grind things out, quarter by quarter which should see that NAV discount gradually shrink. As said below, TMIP is doing all of the right things like reducing debt and cutting costs but as I have said before this is a highly cyclical business and you can't buck the trend although you can remain in the top quartile of shipping companies.

The restrictions in the Panama canal is actually good news for us when vessels are paid by the day rather than the journey and it does tie up more capacity so that there is less slack in the system.

As you know I had expected the result to be worse than the previous 2 quarters, which they were, but my initial reaction was still one of disappointment particularly with the vessel valuations which were a massive 8% reduction when I was hoping for around 1% and the annual blended TMI/Grindrod Time Charter equivalent was only $10,695/day. Krusty, no mention of dividend cover as I calculate on these numbers the gross operating profit was very slightly negative so the dividend is currently financed out of vessel sales/reserves but this will change in the current quarter.

But with a bit more contemplation, even on these numbers the actual NAV/share is around $1.31 with the share at $73.8 representing a 32% discount to NAV. But the good news here is that vessel values are back to their June vessels which adds about $66m back into NAV or about $0.20/share which means the current share price is around a 41% discount to current NAV. With charter rates back above Q1 levels the operating performance should be positive this quarter so I expect a big increase in NAV/share at the end of this quarter. Vessel sales were higher than expected but as said below, reducing debt by selling off older and lower value vessels remains prudent policy is a high interest environment.

As for the efficiency situation this is as much stick as carrot but the bigger vessels have a clearer route forward and the ESG future for Hanysize/ Supramax vessels is less clear.

As the old BT advert goes "it's good to talk".

Don't forget the smaller Handysize index has suffered more than the bigger vessel indices but of course you might be right and we we will find out in just Oliver a week

Moneyman/Seatank, I like your style but the Company has its stated payout policy which Is pretty clear and the PE is actually better now than it was 12 months ago.

Likewise I understand your comment about mothballing Karo but this is not a decision to be taken lightly given the other stakeholders involved. As I have said before let us wait for the updated Karo resource statement which will influence the decision either way.

PGM production for the year slightly lower than I had expected although chrome slightly higher than I had expected. Reef milled the lowest for 3 years and reef mined as I expected, the lowest since 2015! Excellent news on net cash. I echo the sentiment that the delay on Karo is the right call and buys us some time.

My guestimate for FY 2023 is PBT $137m, PAT $103m, attributable to shareholders 97%, EPS 17 cents, total divi 5.65 cents so final divi 2.50 or 2.75 cents. Current PE 2.2.

The production guidance for 2024 is disappointing but understandable given that ROM stocks have been run down and that waste stripping will continue and presumably poor PGM recoveries will continue. Based on current prices, for 2024 I expect PBT of $105m and PAT $$78 m and chrome contributing 75% of turnover.