Grindrod Ltd Unsp/Adr

Good morning and a very warm welcome to Gringard's 2026 Interim Financial Results presentation. My name is Reshmi Soni from Investor Relations. We are delighted to welcome our analysts, shareholders, and members of our management team. A special welcome to our non-executive directors joining us online. In today's session, we'll cover the performance highlights, a financial and divisional overview, followed by an outlook. We will thereafter open the floor for your questions. On your screen, you'll see a question box. Please use that to send us your questions this morning. With us this morning, Kwazi Mabaso, our Group CEO, and Fatima Ali, our Group CFO. Before we begin, please take note of the forward-looking statement on your screen. I will allow you to peruse this at your own time. With that, I hand over to Kwasi.

Good morning and thank you for joining us today. The first half showed the strength of our strategy, the resilience of our asset base, and the quality of the growth opportunities ahead of us. I'll begin with the macro context shaping our markets. Global commodity markets were volatile through the first half, shaped by the Iran-US conflict, sharp swings in oil and gas prices, and shifting Chinese demand. The global economy is projected to grow around 3% in 2026, constrained by trade tensions, tariffs and softer commodity prices towards the period end. Breaking that down for the economies that matter to us as Green Road. China is expected to grow 4.6% easing from 2025 as property sector weakness and global uncertainty offset continued fiscal and credit stimulus. India continues to be the standout, projected at 6.4% underpinned by resilient private consumption and increasingly relevant to our export demand. South Africa is anticipated at 1.1% supported by structural reforms but held back by higher energy prices and global uncertainty. Mozambique faces the most challenging near-term setup at 0.5%, reflecting the impact of the January 2026 floods on agriculture, transport corridors and infrastructure, compounded by fiscal pressure and forex shortages. For Mozambique The recovery is anchored to the meaningful resumption of the Mozambique LNG project and continued monetary easing by the Bank of Mozambique. Across the SADC region, Zambia, Zimbabwe, Botswana and Namibia remain resilient on mining, agriculture and energy investment. Let me spend a little more time on commodities. Because the price movements of the first half tells you a lot about the resilience of our volumes. It was a period defined largely by the Iran-US conflict and its ripple effects across energy markets, freight and refining inputs. Thermal coal was a clear example. Prices climbed sharply from January through May, driven not by coal fundamentals alone, but by energy costs. Crude oil rose through January and February on Middle East supply concerns, then spiked in March following military actions and regional oil exports all but ceased. With gas and oil elevated, European and Asian utilities switched to coal-fired generation and increased imports, which lifted South Africa's export prices. rose from January to April on strong Chinese ferrochrome demand. This reversed from May as high Chinese port inventories, weak stainless steel demand and the seasonal consumption slowed down weight on ferrochrome production. A firm first half overall, softening in the latter part. Iron ore held above $100 a tonne throughout but ended lower after a sharp June pullback. It rebounded in March when Australian cyclones tightened seabourn supply, then fell in June as Chinese port inventories built up and property sector weakness persisted. Turning to copper, and this is where sulphur becomes material. Copper rose through most of the half on structural demand due to electrification, renewables, and the rapid build-out of the AEI data centers. A critical part of the story, however, was the supply tightness driven by sulfur. The Iran conflict disrupted the global trade in sulfur and sulfuric acid, which are both essential inputs to copper refining and leaching. The sulphate-driven input squeeze tightened the copper market. Finally, the battery complex, which includes lithium carbonate and spodumene, both rose strongly from January to May on battery energy storage demand. Prices then eased in June as new supply came on stream. The longer term electrification and energy security fundamentals remain compelling, turning to performance for this period. Safety remains a non-negotiable at Green Road. We are deeply saddened by the loss of a colleague during this period. While our lost time injury frequency rate improved, this incident is a reminder Operational momentum was very strong. with owned handled volumes at the port of Maputo rising 29% from 6.5 million tons in the prior period to a record first half performance of 8.4 million tons. Drive back terminals delivered 8.1 million tons up 2% from prior period. This was mainly driven by record volumes of 1.7 million tons at the Richards Bay Navitrade facility where we handle coal and the 1.3 million tons at Devon's multi-purpose terminal where we handle spodumene. with delivered quality financial growth, with EBITDA increasing by 52% to R884 million from prior period and a headline earnings flat at R593 million. This was driven primarily by ports and terminals following the full consolidation of Madola TCM and this consolidation contributed $371 million in incremental EBITDA. Cash generation was a strong feature of the period. Cash generated from operations increased to $561 million from $439 million in the prior period, demonstrating the quality of our earnings and our ability to convert performance into cash. We close the period with a strong and flexible balance sheet underpinned by the net cash of 535 million rand and 3.6 million rand in cash. This cash strength is what funds both growth and returns without stretching the balance sheet. The Board declared an interim ordinary dividend of $0.243 per share, up 66% on the prior period, with headline earnings cover of 3.5 times, consistent with our 3 to 4 times guidance. Turning to ports and terminals, this segment remains a key driver of Greenrose growth. The port closed June with record monthly owned handled throughput of 1.6 million tons, giving us strong momentum into the second half. Port owned handled volumes reached 8.4 million tons in the first half, representing a 17% compound annual growth rate since 2022. The port of Maputo has commenced a 22-month rollout of the port community system, a single digital platform that will connect port users, authorities and logistics partners more effectively. This is another important step in strengthening efficiency and the competitiveness of the Maputo corridor. At Matola TCM, the first half volumes were 4.2 million tons, reflecting a 3% compound annual growth rate since 2022. However, This first half performance was 7% below last year's 4.5 million turns, reflecting weather disruption in Palabura area and elevated freight cost. Importantly, the full consolidation of Magdala TCM is now delivering a step change in EBITDA and cash generation, reinforcing Madola TCM strategic value to the group. Across the remaining portfolio, Richards Bay and Multipurpose Terminal delivered strong volume growth at 10% and 46% respectively, while Maputo Car Terminal matched full prior volumes, demonstrating the operational leverage within the ports and terminal segment. Turning to logistics, which delivered a mixed result. Ships agency and clearing and forwarding businesses traded in a soft market. Rail earnings were constrained by lower locomotive deployment rates and the wind down of the Eswatini Inland Terminal, following the discontinuation of coal transiting to Maputo via the Eswatini route. Higher graphite volumes out of northern Mozambique provided a partial temporary offset. We remain focused on this segment for many reasons. The recovery in this segment is largely within our control is already accelerating in the second half, now sitting at 65% from 46% in the first half, providing a clear pathway to improved earnings. Secondly, and more strategic, the executed rail access agreement represents a significant milestone to improve this logistics segment. Logistics is the more cyclical component of the portfolio today. It remains the connective layer that underpins terminal sustainability and long-term customer retention. It is ultimately what makes The integrated logistics solution strategy to work. It is not an ancillary business, but the critical enabler of the broader system. Our ports and terminals do not operate in isolation. Their throughput depends entirely on reliable inbound and outbound flows. Logistics which is rail, container, ships agency, clearing and forwarding is what moves commodity from mine to terminal and from terminal to market. It is the layer that secures volume at the front end inbound and guarantees evacuation at the back end on the key side, converting standalone infrastructure like port and terminals into a seamless corridor. This integration delivers three tangible advantages. Firstly, volume security. By controlling the logistics chain, we reduce our dependency on third party operators and protect terminal utilization, which is the single most important driver of terminal profitability. Secondly, customer stickiness. An end-to-end solution from rail slot to terminal to vessel is materially harder for a customer to unwind than a single point of service. This integrated solution deepens customer relationships and lengthens contract tenure. Thirdly, margin capture. Integration allows us to retain value across the chain rather than seeding it To intermediaries and it allows us to optimize cost and efficiencies across the corridor. So the right way to assess logistics. is not on its stand-alone cyclicality in any single half, but on the structural role it plays in underpinning terminal sustainability and long-term earnings quality. I'll now hand over to Fatima to take you through the financial performance in more detail.

Thank you Kwavi. Good morning everyone and a warm welcome from our side. I think Quasi has provided very helpful context on Grinrod's performance for the first half of 2026 and overall it's been a resilient performance against a tough trading environment and reflects commendable efforts by our teams. If we unpack the performance, at the pre-co session that we held in June, We communicated that Grinrod was simplifying its segmental reporting with respect to joint ventures in this financial year. Accordingly, the income statement that you see before you reflects all joint venture share of earnings in a single line. Period on period revenue increased robustly by 19% and trading profit by 52%. This is largely due to Metolla being consolidated for one month in the prior period vs the full 6-month trading period in the first half of 2026. We are very pleased to see the benefits of this material acquisition come through in the current period. To provide meaningful comparison, we have normalised H1 2025 to exclude the material non-trading items that came about as a consequence of corporate action in the prior period. Additionally, we've normalized it to reflect Mottola for a full six-month trading period. This rebases earnings to $637 million. The consequential increase in headline earnings of $42 million relates to the additional 35% of shares profits acquired for five months, partially offset by amortization on the material intangible assets we recognized, as well as interest on the deferred consideration that is still payable. Against the normalized results, H1 2026 revenue is moderately lower, primarily due to the adverse weather conditions in Q1 which impacted Mottola, as well as the wind-down of the sidings business in Eswatini, as explained by Kwasi earlier. EBITDA was also moderately lower, mainly due to the subdued logistics performance and the non-recurrence of fair value gains on the private equity portfolio that we recognized in the prior period. Exceptional terminal EBITDA margins contributed to the overall group EBITDA margins of 31%, showing that this is a firmly anchored group margin. Depreciation was lower as the concession extension resulted in extension of the write-off period on certain terminal infrastructure assets. Record volume performance at the port of Maputo with own-handled volumes up 29% resulted in $265 million of share of joint venture and associate earnings. Overall, the group reported earnings of $598 million and headline earnings of $593 million, having rebounded approximately $59 million following the translation effects of an 11% stronger rand against the US dollar. If we look at segmental performance. Segmental performance was previously reported by proportionately consolidating joint ventures on a line by line basis. This treatment has been discontinued by Grinrod and prior period results have been restated to reflect the joint venture share of earnings in a single line. You will note that H1 2025 headline earnings remains unchanged at $448 million for the segment while the share of profits from JVs and associates is now higher by $160 million to $319 million. Similar to the Group Income Statement and to provide meaningful comparison with H1-2026, the restated H1-2025 results have been normalised for a full six months of trading performance of Metolla. The additional $50 million of headline earnings relates to the additional 35% share acquired for the first five months, partially offset by amortization on intangibles raised. Against the normalized prior period, H1-2026 revenue was down 7% linked to Mottola volumes, again as Kwasi indicated earlier. Terminals EBITDA and margins rallied exceptionally, supported by strong performance at the Maputo car terminal Record performance at our NaviTrade facility in Richards Bay as well as strong contribution from our Durban Maiden Wharf terminal. EBITDA margins increased by 13% to 43% after normalising for non-recurring prior period COVID business interruption proceeds of R54 million. Robust port performance contributed to equity accounted earnings of R242 million for the period. Port and Terminal's headline earnings closed at $535 million, up 18% if the prior period COVID-19 business interruption proceeds are excluded. And this is despite the segment being a US dollar anchored business with 85% of its EBITDA earned in hard currency. The segment delivered a solid return on equity of 20%. From a logistics perspective, performance was softer. The logistics segment, which is a key enabler of our integrated customer solutions strategy, faced headwinds. Challenging market conditions continued from H2 2025 and were compounded by geopolitical tensions in the current period. Similar to ports and terminals, the prior period headline earnings remains unchanged at $140 million. while the restatement resulted in an increase in share of profits from joint ventures and associates of 27 million to an overall 29 million. The northern Mozambique business delivered both revenue and EBITDA growth, however the Esfutini closure subdued agency offshore performance and low rail deployment weighed in on revenue and EBITDA. The EBITDA impact was compounded by non-recurring COVID business interruption proceeds of $58 million reported in the prior period. Normalised margins for this segment reflected at 16%, excluding the low-margin transport brokering business. Modest headline earnings of $32 million for this segment is reported for H1 2026. The H22026 outlook for logistics is more optimistic and the segment is showing strong signs of recovery. Rail deployment is currently at 65% and momentum in the northern Mozambique business is continuing. Additionally, the extent of Esotini closure losses in H1 are non-recurring going into H2. From a balance sheet perspective, our property plant and equipment and right of use assets are marginally lower, as additions of $165 million were offset by depreciation and translation impacts. Investments rose 6% after robust port performance, as indicated earlier. And from a working capital perspective, our trade receivables were up 17% while trade creditors remained flat. The increase in receivables was due to higher balances due from an integrated logistics customer and Mozambique bulk business as well as the agency and clearing and forwarding. This is not unusual for our business. Cash decreased 7% due to the special dividends paid in April 2026. The net asset value per ordinary share closed at R1350 underpinned by strategic infrastructure assets and investments that are difficult to replicate. Grunrath's balance sheet has seen significant restructuring following the realization of non-core assets together with the settlement of related debt as well as consolidation of core assets, all underpinned by disciplined capital allocation. The balance sheet is healthy and provides capacity to fund the group's growth aspirations. The balance sheet is also supported by strong cash generation from operations which rose 28% in the current period to $561 million. The group remains in a net cash position. We commenced the period with net cash of $699 million and following the cash generation mentioned earlier we dispersed $591 million in interest, tax and dividend obligations. Net capital expenditure was reported at $183 million Additionally, the group reported receipts of $90 million from Marine Fuels shareholder repayment of loans following settlement of their long-standing insurance claim. After accounting for lease liability modifications as well as additions and non-cash movements in the borrowings and cash, we closed the period on net cash of $535 million. Additionally, growth set fell 4% period on period due to repayments. With balance sheet capacity and a strong growth pipeline, it was necessary for Grunerod to implement a funding platform to be able to leverage the balance sheet through scalable debt raises. Accordingly, a common terms arrangement structure has been implemented and concluded in three jurisdictions, which will result in 96% of Grunerod's long-term borrowings 1.2 billion being refinanced at the end of August 2026. The CTA will result in a more streamlined covenant framework with obligors providing cross guarantees. The restructure will improve debt maturity profile and is expected to deliver estimated savings for the group of between 40 to 50 million over the period of the new debt, which is between 5 to 7 years. As of 30 June, the Group's incremental debt capacity sat at between 4 and 5 billion rand. This debt capacity will be accessed with continued capital allocation discipline, balancing preservation of our existing asset base whilst investing in growth and ensuring that we deliver shareholder returns through sustainable dividends. From 2022 onwards, the Group has allocated 5.3 billion to capital expenditure, including authorized or committed CAPEX of $1 billion that is still to come, of which $3.8 billion is expansionary in nature. Portland Terminals took up the lion's share of this at 67% of the total expansionary CAPEX and this segment is generating solid returns. The group has declared ordinary dividends of $2.4 billion since 2022, tracking an average dividend cover of three and a half times, well within the dividend policy of three to four times headline earnings. And this is excluding the specials in financial year 2022 and 2025. The group is well positioned to take the business forward. with clear fundable growth opportunities and frameworks that support disciplined capital allocation and decision making. I'll now hand you back to Kwazi. Thanks.

Looking at the growth pipeline where Green Road Strategy is translating into tangible delivery. Matola Terminal Expansion Backup Terminal This is our most advanced project and the one closest to earnings contribution. Importantly, it is near completion and funded. It is the single most visible driver of near-term terminal growth and it converts directly into volume trajectory. This project remains on track and within its $40 million budget and it will lift capacity to 12 million tons per annum by Q1 2027 while improving handling efficiency. With the Rail Access Agreement signed in May, South Africa's open access process is clearly moving from policy into execution. SA Rail Open Access is a very important discipline growth lever for Green Road from 2027. We are encouraged by Transnet Rail Infrastructure Manager's publication of the draft Network Statement Version 4, which marks further progress in the open access process. On infrastructure, the draft network statement version 4 provides a transparent and a realistic view of the network, giving operators the clarity needed to plan with confidence. That is why, as GreenRoad, our entry as a train operating company is deliberately phased and focused on execution certainty. We are well advanced in preparing to run a test train before year end, a big step in confirming operational readiness ahead of planned operations in April 2027. We will deploy existing assets, 4 locomotives and 50 wagons to start running two slots and then ramp it up to three slots a week when we have received the additional 50 wagons from the route from Belfast to Comartiport. And we're going to utilize this initial phase to establish the business case for future scaling of Greensboro's rail capability and capacity. The Maputo trading program is expected to commence in the second half of this year. It is still targeted for completion in Q4 2027. This trading campaign remains a significant strategic value unlock for the Maputo corridor. The trading program will deepen the Maputo channel and enable Matola TCM to handle Cape-sized vessels of up to 170,000 tons. The commercial logic is straightforward. Larger vessels lower the cost per ton, improving the overall landed cost. It will also improve our competitiveness against alternative corridors and unlock incremental volumes that deeper draft makes possible. Brazing will improve the economics of every turn moving through Matola, making this both a margin enhancement and a volume growth opportunity. The Richards Bay Container Handling Facility, targeted for 2028, continues to progress. This project will extend Greenrose Terminal Platform into container operations, which will be part of the logistics segment. The Richard Bay Dry Bug Terminal PSP represents a significant medium term strategic opportunity with 27 million tons per annum of potential capacity across coal, chrome and magnetite. The request for qualification closes at the end of October and Green Road is still participating. The important threat on all these five growth opportunities These are projects that are phased, contracted and disciplined projects sequenced so that near-term projects like Madola TCM will fund and de-risk the more ambitious medium-term PSP opportunities. Each of these projects either expands capacity on an existing corridor or deepens our integration. and each is being delivered within the capital framework that protects the balance sheet. In closing, our investment case is stronger today because it is underpinned by delivery and three clear pillars. Firstly, strategic infrastructure. Our port and terminal assets sit in key regional trade corridors. and are genuinely hard to replicate. That positioning is what delivers a 43% port and terminals EBITDA margin, with 85% of that segment's EBITDA end in US dollars. Secondly, visible growth. This is committed, contracted capacity expansion. Port volumes compounding at 17%, Matole at 3%, and a defined project pipeline, building multi-year earnings trajectory. Thirdly, disciplined capital allocation. Our capital allocation framework remains unchanged, staying business capex first, then growth capex aligned with our strategy, then sustainable dividends and opportunistic share buybacks. Beneath this investment case are the strategic pillars that shape how GreenRod executes and creates sustainable long-term value. Firstly, people and communities. Our people are the foundation of every corridor we strengthen, every time we move, and every customer commitment we meet. Their discipline and pride drive delivery, while the communities around us remain central to our license to operate. Secondly, operational excellence. This is how we convert strategic infrastructure into consistent performance by operating safely and serving customers reliably across ports, terminals and logistics platforms. Thirdly, growth execution. We are disciplined about where we grow. Investing only in corridors where Green Road has a clear competitive advantage, visible demand, and the ability to protect returns. And fourthly, shareholder value. Our balance sheet strength, disciplined capital allocation, Ltd Ltd Unsp Deliver integrated logistics solutions for our customers and build a stronger, more competitive business for tomorrow. Thank you. I will hand over to Rashmi for Q&A.

Thank you Kwazi, thank you Fatima. Once again a reminder to use the question and answer box on your screen to send us your questions. Our first question this morning perhaps Kwazi, Good morning Rowan from Conax Research. Thank you for your question. I see Rowan's got a few questions. The first one on the progress on the rail slot, I think we've covered that in the outlook, but moving to his second question Kwasi perhaps. Is the good performance at the Maputo car terminal sustainable? And the third question from Rowan, there seems to be a lot of opportunities with Transnet offering a number of

The progress on the rail slot, right now we are focusing on getting the test train on the line. Our target is by end of this year we will have already run a test train. There is our short term target and we are progressing in that aspect. The Maputo car terminal, I mean I really would love to repeat this good performance but we know that it was a result of the closure of the Strait of Hormuz that redirected the traffic into our terminal as a transshipment hub. So we are working hard to see whether we can create more value going forward in that regard. And then lastly, port opportunities. We look at all the opportunities that are made available, but we use our strategic lens as well as other metrics that we use internally to see whether we can pursue the opportunity or not. As I've highlighted earlier on that we try to chase discipline growth. We don't want to grow for the sake of growing.

Thank you. Thanks Kwazi. Maybe the next question around volumes. Good morning Wallace in Capital Management. The first one around how have the volumes developed in the second half at Metolla. Wallace, we don't necessarily give you a forecast, but we can talk a little bit about the cyclicality at Metolla. And the second question, how will the restart of the SA Ferrochrome smelters affect export volumes at the port of Maputu? So two questions there from Wallace, Kwasi, if you can assist us.

Okay, no, thanks. Even if you look at the past, Wallace, is that Most of our volumes come from the second half of the year. So 40% of our total volumes normally come from H1 and then 60% comes from H2. We've seen TCM Adola recovering from Q2 and that is why even the number moved from 10% behind to about 7% behind. So the recovery is still continuing at TCM. In terms of the ferrochrome demand because of the smelters being resuscitated, there's a huge demand of chrome ore in South Africa. Go out to China predominantly and right now you see Chrome finding itself in not so natural drive back terminals. So if there's an improvement on the ferrochrome production domestically, the chrome oil demand won't necessarily disappear in your traditional dry-pack terminals. But what you can see is then the less traditional dry-pack terminals starting to lose their volumes because there's open space available at the normal dry-pack terminal. Just to give you even more color on that, a port of Maputo they opened the new slab and within two weeks that slab was full because of the actual demand that exists out there of Chrome.

Thank you, thanks for that Kwazi. The next one perhaps Fakima you can assist. Peter from Merger Markets. Peter's question is will there be changes to the pool of lenders through the refinancing Are you seeing any new lenders being introduced? Peter, I'll remind you that our lenders are obviously sensitive and confidential, but maybe, Fatima, you can give a little bit of colour on the process.

Absolutely, and thanks for the question, Peter. Peter, we were very deliberate when we embarked on our debt restructuring, and the intention really was to capture as many of our existing fundings into the net under the CPA umbrella. And I'm glad to say we managed to do that. all top or top five bankers in South Africa are in and we previously had arrangement with all of these funders prior to the CTA arrangement but I guess what we've pleasantly managed to do now is to do away with multi bilateral arrangements with these funders and unite them under a single funding structure terms as well and try to get effectively have arrived at some balance in terms of How much of our funding or debt each of the funders take up?

Thanks, Fatima. Thank you. The next question, Yandre from Umtombu Wealth. Kwasi, perhaps I can give this to you. It's around the Maputo dredging. Peter, your question is quite specific around the volume and margin uplift. Unfortunately, we do not provide that guidance. I think maybe Quazi we can spend a minute sort of talking about the cape size vessels and the competitive advantage post the fridging.

So when you look at TCM Madola, currently we can handle baby capes but we can't handle the full cape size vessel. So what's happening, the cape size vessel can come to TCM, it will load up to about 110,000 and then it will go to another port terminal in South Africa and then it will top up to about 180,000 tons because that port actually has a deeper draft. Now by dredging the channel the vessel will come to TCM Madola and it will load the full 170,000 ton vessel and we're thinking it will take between two to three days to finish that vessel. So instead of loading 110,000 you are now loading 170,000 which increases the volume throughput but also it secures TCM Adola's competitive advantage going forward.

Thanks, thanks for that. I see there are no further questions online. I do know we are seeing many of you in the coming days. We thank you for your engagement and connecting with us. For those questions we received this morning, thank you. They've been insightful and your participation. We appreciate your continued interest in Brunrod and we look forward to seeing most of you in the coming week. With that, this concludes our morning's webinar. Once again, thank you everyone for joining and have a good day.