26 January
2024
Taylor
Maritime Investments Limited (the "Company" or "TMI")
Quarterly
NAV Announcement, Trading Update and Publication of
Factsheet
3.9% NAV
total return due to end of year market improvement
Benchmark
indices reached 13-month highs in December on tightening supply
conditions
Company
debt-to-gross assets at 24.9% due to $11.4 million repayment and
slightly higher asset values
Interim
dividend of 2 cents per share declared
Taylor Maritime Investments
Limited, the specialist dry bulk shipping
company, today announces that as at 31
December 2023 its unaudited NAV was $1.36
per Ordinary Share compared to $1.31 per Ordinary Share as
at 30 September 2023. The Company is pleased
to declare an interim dividend in respect
of the period to 31 December 2023 of 2 cents per Ordinary
Share. The NAV total return for the quarter was
3.9%.
The third quarterly factsheet of the
current financial year is also now available on the Company's
website, www.taylormaritimeinvestments.com.
Commenting on the trading update
Edward Buttery, Chief Executive Officer, said:
"We are harnessing the operating
leverage of the Grindrod transaction which has
delivered a younger, more efficient combined fleet, an increased
carrying capacity and expected synergies and cost efficiencies to
drive earnings power into a firming charter rate environment.
Reducing debt remains a strategic priority and further
progress has seen debt to gross assets fall below 25% at quarter
end. We took advantage of strengthening market conditions
towards the end of the period with 13 month index highs and locked
in higher charter rates on a portion of the fleet. Tight
supply-demand fundamentals for the geared dry bulk segment continue
to drive positive forward sentiment. The management team
remain closely aligned with shareholders and maintain strong
conviction in the Company's prospects as reflected by a purchase by
the Principals of the original Taylor Maritime group of a further
3.9 million shares during the period. There remains plenty to
do in 2024 and I am confident of achieving our goals."
Key
Highlights (to 31 December 2023)
Opportunity to lock in higher charter rates as indices reached
13-month highs
· The
Company capitalised on the rapid strengthening of market conditions
from mid-November through to mid-December, when the adjusted
BHSI TCA (net) and the
adjusted BSI TCA (net)[1] reached a peak of $13,660 per day and $17,006 per day
respectively
· Charter income for the combined TMI and Grindrod Shipping
Holdings Limited ("Grindrod") fleet increased c.15% to an average
time charter equivalent ("TCE") rate of $11,977 per day for the
quarter. At quarter end, the combined average TCE was $11,996
per day (versus $10,695 at 30 September 2023)
· As
enquiry and rates for 3-5 month charters increased from November,
several period charters were fixed on TMI vessels at rates in the
range of $12,350 and $15,200 TCE per day to straddle Chinese New
Year
· Overall, the combined Handysize fleet and Supra/Ultramax fleet
outperformed the Company's benchmark indices by c.US$1,896 per day
(22%) and c.US$2,734 per day (24%), respectively, for the 2023
calendar year
Vessel sales and fleet market value
· The
Company completed the sale of the two oldest vessels in the TMI
fleet; a 2004 built 34k dwt Handysize vessel for gross proceeds of
$7.8 million, generating an IRR of 44.2% and MOIC of c.1.8x, and a
2007 built 33k dwt Handysize vessel for gross proceeds of $9.0
million, generating an IRR of c.19% and MOIC of c.1.4x (as
announced on 5 December 2023)
· Grindrod completed the sale of the last two Chinese built
Handysize bulk carriers for aggregate gross proceeds of $23.2
million, resulting in a combined fleet of fully Japanese built
vessels (as announced on 11 December 2023)
· The
Market Value of the combined fleet increased by approximately 3.7%,
on a like for like basis, to $734.4 million (TMI $275.8 million and
Grindrod $458.6 million excluding chartered-in ships without
purchase options) with improving market conditions over the
period
·
Following the selective fleet divestments, the
combined owned fleet comprised 40 Japanese-built vessels at quarter
end (TMI 19 and Grindrod 21[2]) with an
attractive average age of 10.5 years and a larger average carrying
capacity of c.40k dwt, with commensurate increased earnings
capacity. The fleet renewal, facilitated by Grindrod's fleet
of younger and, on average, larger vessels, positions the portfolio
well for expected medium-term improvement in the bulker market and
in terms of rising capital values when it is anticipated that more
modern tonnage will outperform older less efficient
ships
·
Overall, the sixteen divestments since the
Grindrod transaction have averaged a 3.7% discount to carrying
value[3]
Progress with debt reduction
· The
Company's debt-to-gross assets ratio was 24.9% at the end of
December (versus 26.9% at 30 September
2023) as a result of a repayment of $11.4 million of debt and a
slight rise in asset values. This is now below the 25%
target set by management following the Grindrod
acquisition. The Company's
outstanding debt was $156.2[4] million at the
quarter end
· Excluding lease liabilities and so taking interest bearing
debt only, look-through debt-to-gross assets was 35% at 31 December
2023 with outstanding debt of $298.7 million on a look-through
basis
· In
line with our strategy of being free of significant structural
leverage, TMI will continue to reduce Company debt from agreed and
planned vessel sales as well as reducing 'look through' leverage to
25-30% of gross assets
Grindrod capital reduction
· Grindrod distributed $32.4 million of cash in two tranches per
its previously announced capital reduction with TMI
receiving $26.7 million in line with its
82.3% ownership with proceeds partly used to reduce debt and partly
retained for general corporate purposes
Board changes
· As
previously announced, Charles Maltby was appointed as an
independent non-executive Director of the Company with effect from
1 January 2024 bringing over 20 years of experience in the shipping
industry. Prior to his appointment, Charles was serving as a
Director of Grindrod before his retirement from the Board and from
Grindrod's Compensation and Nomination Committee on 31 December
2023
· Also
as previously announced, Helen Tveitan will retire as a
non-executive Director and Chair of the Company's ESG &
Engagement Committee on 31 March 2024, in order to devote greater
time to her other business and personal commitments
Increased shareholder alignment
· Principals of the original Taylor Maritime group acquired a
total of 3,910,450 ordinary shares in the market during the period
taking the total number of ordinary shares in the Company owned by
such persons (directly or indirectly) to 26,493,914 ordinary shares
(c.8% of issued share capital)
Post-Period Trading Update (since 31 December
2023)
· Grindrod agreed to divest a Handysize vessel, expected to
complete this quarter for gross proceeds of $10.4 million, a 1.5%
premium to carrying value
· There
have been strong levels of charter enquiries and firm rates ahead
of Chinese New Year
· The
number of ship days for the fleet which are covered for the 2024
calendar year stands at 42% at an average TCE rate of $12,387 per
day
Dry bulk market review and
outlook
Dry bulk charter rates surged from
mid-November with the BHSI and BSI reaching 13-month highs in
mid-December due to increased port congestion in Brazilian grain
load ports and further tightening of drought-related transit
restrictions at the Panama Canal (expected to continue through the
first half of 2024). Longer wait times and increased
tonne-miles applied upward pressure on rates, as vessels re-routed
via Cape Horn and the US and South America saw robust grain trading
activity.
Spot market rates then softened over
the holiday period. However, rates have remained more stable
than usual and are expected to remain so through Chinese New Year,
reflecting positive forward sentiment. Short-term period
charter enquiry and rates remain firm as charterers seek to lock in
tonnage before the typical rate recovery following Chinese New
Year.
Looking further into 2024,
restocking of global inventories of bulk commodities should ensure
that charter rates and asset values remain relatively strong and
demand may be bolstered if interest rates are considered to have
peaked, with the possibility of cuts later in the year.
Specific to the geared dry bulk segment, improving industrial
trends in China and firm forecasts for global grain exports are
expected to result in significant growth in minor bulk and grain
tonne-miles. In addition to the Panama Canal, ongoing
tensions in the Red Sea have begun to impact global shipping,
causing further re-routing and increased voyage times, providing
further potential upside given the resulting impact on effective
supply.
Strong positive momentum in freight
rates at the end of last quarter suggests demand and supply are
finely balanced in our segment. We maintain a favourable
medium-term investment outlook for our defensive asset class
transporting necessity goods with anticipated tightening in supply
owing to sustained low new ordering activity. Environmental
regulatory pressures resulting in continued reductions in operating
speeds and recycling of older less efficient units will also impact
effective supply. These factors are likely to contribute to
strong market improvement and capital appreciation over the next
two to three years.
ESG
The Company released its second
annual ESG Report during the quarter, covering the financial year
ended 31 March 2023. The report can be viewed on TMI's
website. The Report highlights progress made on TMI's sustainability
priorities including decarbonisation, social and community impact,
and responsible business practices.
The Company obtained independent
assurance of its greenhouse gas emissions, as well as completing a
more comprehensive Scope 3 emissions measurement. TMI's ESG
disclosure follows guidance from the Task Force on Climate-related
Disclosure, the Global Reporting Initiative, and the Sustainability
Accounting Standards Board.
TMI continues to work closely with
Grindrod on ESG strategy and alignment.
ENDS
For further
information, please contact:
Taylor Maritime Investments
Limited
Edward
Buttery
Camilla Pierrepont
|
IR@tminvestments.com
|
Jefferies International
Limited
Stuart
Klein
Gaudi Le
Roux
|
+44 20 7029
8000
|
Sanne Fund Services (Guernsey)
Limited
Matt Falla
|
+44 (0) 203
530 3107
|
|
|
|
|
Notes to Editors
About the Company
Taylor Maritime Investments Limited
is an internally managed investment company listed on the Premium
Segment of the Official List, its shares trading on the Main Market
of the London Stock Exchange since May 2021. The Company
specializes in the acquisition and chartering of vessels in the
Handysize and Supra/Ultramax bulk carrier segments of the global
shipping sector. The Company invests in a diversified
portfolio of vessels which are primarily second-hand. TMI's
fleet portfolio currently numbers 19 vessels in the geared dry bulk
segment. The ships are employed utilising a variety of
employment/charter strategies.
On 20 December 2022, the Company
announced it acquired a controlling majority interest in Grindrod
Shipping Holdings Ltd ("Grindrod") (NASDAQ:GRIN, JSE:GSH), a
Singapore incorporated, dual listed company on NASDAQ and the
Johannesburg Stock Exchange. Grindrod has an owned fleet of
18 dry bulk vessels complementary to the Company's fleet excluding
vessels held for sale. They are Japanese built, including 11
Handysize vessels and 7 Supra/Ultramax vessels. Grindrod has
seven vessels in its chartered in fleet with purchase options on
three.
The combined TMI and Grindrod fleet
numbers 40 vessels
(including chartered in vessels with purchase
options).
The Company's target dividend policy
is 8 cents p.a. paid on a quarterly basis, with a targeted total
NAV return of 10-12% per annum over the medium to
long-term.
The Company has the benefit of an
experienced Executive Team led by Edward Buttery and who previously
worked closely together at Taylor Maritime. Taylor Maritime
was established in 2014 as a privately owned ship-owning and
management business with a seasoned team including the founders of
dry bulk shipping company Pacific Basin Shipping (listed in Hong
Kong 2343.HK) and gas shipping company BW Epic Kosan (formerly Epic
Shipping) (listed in Oslo BWEK:NO). The commercial and
technical management arms of Taylor Maritime were acquired by
Grindrod in October 2023.
For more information, please
visit www.taylormaritimeinvestments.com.
About Geared Vessels
Geared vessels are characterised by
their own loading equipment. The Handysize and Supra/Ultramax
market segments are particularly attractive, given the flexibility,
versatility and port accessibility of these vessels which carry
necessity goods - principally food and products related to
infrastructure building - ensuring broad diversification of fleet
activity and stability of earnings through the cycle.
IMPORTANT NOTICE
The information in this announcement
may include forward-looking statements, which are based on the
current expectations and projections about future events and in
certain cases can be identified by the use of terms such as "may",
"will", "should", "expect", "anticipate", "project", "estimate",
"intend", "continue", "target", "believe" (or the negatives
thereon) or other variations thereon or comparable terminology.
These forward-looking statements are subject to risks,
uncertainties and assumptions about the Company, including, among
other things, the development of its business, trends in its
operating industry, and future capital expenditures and
acquisitions. In light of these risks, uncertainties and
assumptions, the events in the forward-looking statements may not
occur.
References to target dividend yields
and returns are targets only and not profit forecasts and there can
be no assurance that these will be achieved.
LEI: 213800FELXGYTYJBBG50