Q4 2021 Grindrod Shipping Holdings Ltd Earnings Call

We had a bit of a struggle to actually go through but I think that the whole Q1 figures are going to be pretty good I mean, the average at the moment. The BSI is averaging tick over 20000, obviously, we're well ahead of that so far on the hand is a below just below 19000 I'm.

I'm sorry, just below 20000, I think we're well placed there.

And then we will go forward, it's looking good.

Obviously, starting this year as it is I mean, it's great to actually be a profitable Q1, its been an awful long time since anyone in dry cargo shipping reported that.

And again reasonably predictable with China's signaled with Blue skies for the Beijing Olympics slow things down and is now interesting of course literally as Chinese new year starts you start to see a pickup in demand China has.

Is relaxed.

Credit Rolls and is encouraging more more spending on real estate and infrastructure Allied to the fact that they took a bit of a hatchet to on oil prices, which always quite a positive for that buyers going.

Going forward cover it's an interesting one yes because of course, one year rates are.

Looking attractive so it's not something we've done up to now we have the ships, we have been putting out <unk> tended to be four to six months five to seven.

Something as we move forward, we will start to look at especially view cost base is so low and again, it's always the case of the REIT to signature.

And people that we trust to pay but I think.

We might start looking at a little bit more cover having basically run make it to the market last year, although we do have.

Core business index linked so we operate round that but.

As this market develops of course common sense dictates that we should be looking potentially looking in some earnings.

Sure Alright.

Fair balance that's it for me Congrats again, thank you.

Thanks, Ryan I appreciate it.

Thank you your.

Your next question comes from the line.

Please go ahead. Your line is open thank you.

Okay.

Great. Good afternoon, Martin good afternoon, Steve.

Yeah.

Hello, Brad.

Noble capital markets.

I need more of an injection howdy doody.

Alright.

Okay.

What.

Randy covered a lot of the ground, but you didnt ask about specifically the option that you have that expires at the ended the year.

Can you just talked about how youre looking at that.

Especially with the options that you have.

Below market rates.

Are we looking at similar scenario to what happened last year with.

It was a situation where you might be able to.

Bye.

A pretty significant discount even with the purchase option stated 15 six.

Okay.

Yes.

Chip.

Archie purchase option runs through and if we don't declare it next year, we can declare it year after all the year. After so so that ships that we have one other.

The charter expires. This year, so we will be looking at that purchase option, but again, Steve on the financial figures.

These ships are very cheap and we actually buy them.

Cash for them obviously it comes onto our books are very very attractive levels reduces our whole cost of.

The fleet down so it's a great position to be in especially if we're able to sell some of our.

All behind Us.

Cash.

ICD by Brian .

Five six year old ships, it's very positive it's a great decision to be and we had a very positive at board meeting yesterday.

And it's not to be able to discuss this and I think it's now just a matter of timing when we want to pull the trigger.

It's already and then.

And then if we could talk about the dividend policy.

It's.

Hugh you paid out well over stated minimum on your.

Reported earnings per share.

And you even more than made up.

The share purchase.

Kept the cash portion at 72.

How should we be looking at 2022, its course that dividend.

Doesn't seem like share buybacks or at this point in time.

Likely as they were in the fourth quarter.

So how should we be looking at.

The cash dividend in 2022, especially over the first half of the years when you do have that seasonal weakness.

I'll, let Steve answer this one I'm sorry.

I'm, sorry, I'm, sorry, we stuffed up Youll research that are a little bit we apologize for that I know you had calculated correctly.

And what we plan to have some stable payable ounce right.

<unk> is positioned to be in.

Yes the cup.

Are things.

Hopefully I'll be able to answer all your questions, but in this quarter. The board decided that due to the strong dry bulk markets out of the cash and liquidity position that we wouldn't deduct the full amount that we had spent on share buybacks.

And we decided to keep the dividend the same as the previous quarter and again just for a bit of background. If we had the full amount of the share buybacks. The dividend would have been 33 things and if we would reverse the flu shot if we had reversed the full share buyback the dividend would have been <unk>.

But this quarter the shape is.

That's the equivalent of 55, <unk> and with the dividend at 72 things.

Two of those adding up together, we did we did.

Distribute more than what our Opex and policy of 50% this quarter. It was 46%, but we must say that non tech. This is the fact that if we have share buybacks later in the quarter that prevented deducted from our dividend.

<unk> will be made based on the circumstances at each quarter and in terms of are we going to buyback.

So a process dependent.

We have the ability to do buyback.

And we just think about the.

The share price.

Great.

Could just expand on.

The.

The minimum is 30% if it were all cash right now.

Still see a pretty big drop.

In the first quarter to the fourth quarter dividend.

Ed.

Your liquidity position is likely to get better over the course of 2022, especially even in the first quarter 'twenty two.

So how should we be looking at the cash dividend.

I think.

The intention is to stick to that policy as we said we were looking to pay down some debt and as I say that first of all of these ships, even though they all in the money the cost of the title of the fog option ships over $100 million.

We can put that money to work and we just want to fund.

Good morning.

Okay and then.

Martin can you just talk about you were correct, Matt potentially lengthening the book and you're only booking right now 46 months out in advance.

If you look at it like Mi book.

The other thing that's interesting that there is pansies are trading close to.

Supers in ultras and <unk>.

It sounds like it's more related to the container market congestion and whats going on container market, but can you just address that.

Situation and how much longer you expect it to.

To continue.

It's interesting because obviously, we have benefited hugely from from what's happening in the container market, but also if you look at the whole hand, the fleet, especially.

When we report we basically base.

Basically a 373000 tons, we have some of your symptoms. The Baltic index is premised on the 37, so we're actually beating the index on smaller ships.

Those smaller ships of course are very popular and.

The Q4 last year, but I've seen no have you sizes delivered a tool in that book.

Order book is non existent.

On the existing fleet is getting older. So like everything with emerging market, some new trade routes and what's happening in the world generally with good trade routes changing these shifts are really coming into their own. So it is obviously massively helped by the line of side, but there is really.

Genuine new trades opening up for these ships because of deadweight draft with the bigger ships cant get into and they need care.

Very very exciting a size that a few years ago was basically being written off.

Now really come into its own and with no new ships coming.

Really really excites us and yes, I mean super Max earning the same as.

His hand is on both.

Earning vastly more than guidance, which of course once upon a time it could never happen mouth.

Disconnected.

<unk>, Yeah, it's really really exciting.

A lot of trade has changed and maybe some people were a bit slow to actually realize it.

What has happened.

And these are yes, they come into their own and they've got a long a lot further to go by the look of it.

So you would argue it's more structural than just.

Somewhat temporary factors.

It's a combination but literally with no new ships delivering.

And if you actually go back to the bond market, especially 2020 and leaderships prescribed so I think its structural as well.

But we are ending up.

With the size of ship has a definitive markets.

And no new supply coming along.

We are seeing on the cake of course is the container side Wes we have a few ships.

On charter to what would normally be kind of container bright bulk operators carrying containers and I don't think thats going away because obviously the fact that these there is a shortage of some of these container ships and by taking bulk carriers, we're very flexible and we can go into certain ports, we have to cure.

Yeah.

You never quite know in shipping, but structurally something has changed and that is very positive.

Great well I look forward to seeing what.

2022 holds in store for us Thanks for your time.

Thanks, Paul very exciting times I appreciate it.

Thank you I'll now hand, the call back to Martin.

Thank you very much and everyone. Thank you for listening to us.

Results, even though we say Saar ourselves were exciting times and.

Things are looking very very positive going forward. So thank you again for joining our.

Presentations call.

Thanks, everyone.

Thank you.

Includes our conference for today. Thank you for participation you may now disconnect.

Yeah.

Okay.

Okay.

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