TIDMTMIP TIDMTMI

RNS Number : 3888S

Taylor Maritime Investments Limited

14 July 2022

TAYLOR MARITIME INVESTMENTS LIMITED

FULL YEAR RESULTS STATEMENT FOR THE PERIOD 31 MARCH 2021 TO 31 MARCH 2022

COMPELLING SHAREHOLDER RETURNS AND STRONG VISIBILITY WITH POSITIVE OUTLOOK

14 July 2022 - Taylor Maritime Investments Limited (TMI / TMIP), the specialist dry bulk shipping company, announces its full year results for the financial period ended 31 March 2022.

KEY FINANCIAL HIGHLIGHTS

-- Fleet of 31 vessels with total market value of US$546m, comprising US$480m of vessels and US$66m of assets held for sale

   --      Average net time charter rate of US$18,600 
   --      Average annualised unlevered return in excess of 24% 
   --      Audited NAV per ordinary share of US$1.74 and Total NAV of $575m 
   --      NAV total return of 81.3% and share price total return of 45.5% 
   --      Profit before tax of $253m (US$79m operating profit and US$174m fair value gains) 

-- Dividends paid in respect of the period, including special dividend, of approximately 10% on annualised basis

   --      Grindrod Shipping investment amounted to $125m of the Group's NAV 

COMMENTARY

-- Taylor Maritime Investments Limited concluded a successful initial public offering on 27 May 2021, raising US$254 million (comprising US$160 million cash and US$94 million in consideration shares), followed by a subsequent capital raise of US$75 million on 28 July 2021

-- At 31 March 2022, the Group's fleet consisted of 31 vessels (including vessels contracted to sell) with a total market value of US$546 million. Of the 31 vessels, 29 were Handysize and 2 were Supramax. The average age of the fleet is 11.4 years

-- Audited NAV per Ordinary Share of US$1.74 as at 31 March 2022, delivering Total Net Asset Value ('NAV') return per Ordinary Share of +81.3% for the period from the Initial Public Offering ('IPO'). This was driven by operating profit, increased vessel values and an attractive gain on the Grindrod Shipping investment which appreciated substantially over the investment cost

-- The Company's Ordinary Shares closed at a price of US$1.42 on 31 March 2022. The Company's Total share price return per Ordinary Share was +45.5% for the period from the IPO to 31 March 2022 (excluding the interim dividend for the quarter ended 31 March 2022 and the special dividend which both went ex-dividend after the period end).

-- Profit for the period before tax was US$253 million, comprising (on a look-through basis) US$79 million of operating profit, after finance costs, and US$174 million fair value gain

-- The fleet's average net time charter rate at 31 March 2022 was approximately US$18,600 per day, with an average duration of six months and generating an average annualised unlevered return in excess of 24%. This compares favourably with the same figures as at the end of 30 June 2021 (the Company's first quarter end), when the average net time charter rate for the fleet was approximately US$15,600 per day, with an average duration of 10 months and an average annualised unlevered gross yield of 20%

-- During the period, the Group completed an acquisition of a 26.6% stake in Grindrod Shipping Holdings Ltd., a dual NASDAQ and Johannesburg Stock Exchange listed shipping business (NASDAQ: GRIN, JSE: GSH "Grindrod Shipping") secured at an average price of US$17.64 per share. At 31 March 2022, the Grindrod Shipping's share price was US$25.44 per share, amounting to US$125 million of the Group's NAV. The Group also received two dividends of US$0.72 per share in both December 2021 and March 2022 (total dividends of US$1.44 per share for the period) from Grindrod Shipping, representing an annualised yield of c.16% on the investment

-- Total dividends paid in respect of the period ended 31 March 2022, amounted to 8.47 US cents, representing a dividend yield on the Initial Issue Price of approximately 10% on an annualised basis

-- The Group announced its commitment to achieving a long-term target of zero carbon emissions by 2050 . Substantial technological advances are a key element of this for the broader shipping industry, but the Company has clearly defined near-term initiatives with incremental progress made through the period, including investment in vessel modifications, primarily retrofits during regular maintenance periods and ongoing dialogue with major customers around trialling lower carbon fuels and energy saving measures

Commenting on performance in the full year period, Nicholas Lykiardopulo, Independent Chair, said:

"TMI has made a dynamic and successful start as a listed investment company as this outstanding first period of trading testifies, with excellent levels of profitability and cashflow. Our leading position in the Handysize dry bulk vessel segment, the workhorses of the dry bulk shipping trade, continues to deliver strong shareholder returns. We remain confident that market fundamentals will lead well into 2024 and we will continue to monitor the orderbook for indicators on market direction beyond that period".

Edward Buttery, CEO , added:

"I am delighted that the differentiated shipping investment opportunity we have created for investors continues to deliver sustainable yield and capital appreciation from our high quality assets. Our focus will remain on managing the company with a carefully balanced chartering strategy, strong liquidity and financial prudence to deliver consistent earnings and compelling dividends".

Outlook

We expect a continued strong market for 2022 with 2.1% tonne mile growth for minor bulk and 2.7% for 2023 expected against net fleet supply growth of 1.9% and -2.2% respectively and subject to actual fleet removals (Clarksons Research). The short-term impact of the war in Ukraine has seen a shift in trading patterns for the shipping of necessity goods, both to source alternative suppliers and with Russia exports shipping to different destinations. So far, the net change to demand seems to be negligible for our segment, once the decrease in volumes is offset by increased tonne-miles. We expect current Covid lockdowns in China to be transitory and for demand to rebound, as experienced following previous lockdowns. Acknowledging uncertainty in the wider economy, we remain optimistic about the Handysize segment given tightening supply over the next two years and possibly longer. The orderbook remains at historical lows and a significant uptick in newbuild contracting remains unlikely for now given both cost inflation and pending more deep-seated change to ship designs to meet evolving environmental demands. This dynamic will continue to support firm asset valuations and charter rates.

Click on or paste the following link into your web browser to view the Annual Report.

https://taylormaritimeinvestments.com/wp-content/uploads/taylor_maritime_annual_report_and_audited_consolidated_financial_statements_31Mar21_to_31Mar22.pdf

The full results are available on the Company's website at www.taylormaritimeinvestments.com .

http://www.rns-pdf.londonstockexchange.com/rns/3888S_1-2022-7-13.pdf

Notes to editors

Enquiries:

 
Taylor Maritime Investments Limited        IR@tminvestments.com 
 Edward Buttery 
 Camilla Pierrepont 
Jefferies International Limited 
 Investment Banking 
 Stuart Klein 
 Gaudi Le Roux                             +44 20 7029 8000 
Montfort Communications                    TMI@montfort.london 
 Alison Allfrey 
 George Morris Seers 
Sanne Fund Services (Guernsey) Limited 
 (formerly Praxis Fund Services Limited) 
 Tom Daish 
 Matt Falla                                +44 1481 737600 
 

Notes to editors

About the Company

Taylor Maritime Investments Limited is an internally managed shipping 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 Supramax bulk carrier segments of the global shipping sector. The Company invests in a diversified portfolio of vessels which are primarily second-hand and which, historically, have demonstrated average yields in excess of the Company's target dividend yield of 7% p.a. (on the Initial Issue Price). The shares offer a compelling and differentiated investment opportunity with the aim of delivering strong cashflow, stable income and potential for capital growth.

The Company invests in high quality, Japanese built vessels which are primarily second-hand and acquired at valuations below long-term average prices and depreciated replacement cost. The current portfolio numbers 27 vessels. The Company has a leading position in the Handysize shipping sector and, thanks to versatile geared vessels delivering necessity goods, provides an attractive, defensible yield underpinned by zero long-term structural gearing, financial discipline and an optimal balance of charter rates and durations. It has a selective growth strategy focusing on accretive opportunities to increase shareholder returns and recycle capital efficiently.

The Company intends to pay dividends of 1.75 cents per Ordinary Share on a quarterly basis representing an annual yield of 7% on the IPO price of $1.00, with a targeted total NAV return of 10-12% per annum (net of expenses and fees but excluding any tax payable by Shareholders) over the medium to long-term. The Board approved a special dividend of 3.22 US cents per share in respect of the period to 31 March 2022 paid on 6 May 2022, which brought total dividends declared for the period from IPO to 31 March 2022 to 8.47 US cents per share, representing a dividend yield on the IPO price of approximately 10% on an annualised basis. This reflected excess cash generation in what continues to be a historically strong market and a desire to return capital to shareholders in a timely manner.

Sustainability is at the heart of the way in which the Company is managed and it is committed to achieving a long-term target of zero carbon emissions by 2050. Substantial technological advances are a key element of this for the broader shipping industry, with near term incremental progress effected by initiatives such as retrofitting the fleet with energy saving devices, using low sulphur fuels and trialling biofuels.

The Company has the benefit of an experienced Executive Team led by Edward Buttery. The Executive Team worked closely together at the Commercial Manager, Taylor Maritime. Established in 2014, Taylor Maritime is a privately owned ship-owning and management business with a seasoned team that includes 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). Taylor Maritime's team of experienced industry professionals are based in Hong Kong, Singapore and London.

About Geared Vessels

Geared vessels are characterised by their own loading and unloading equipment. The Handysize market segment is particularly attractive, given the flexibility, versatility and port accessibility of these vessels which carry necessity goods - principally foodstuffs and products related to infrastructure building - ensuring broad diversification of fleet activity and stability of earnings.

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