TIDMTMIP TIDMTMI
RNS Number : 4868H
Taylor Maritime Investments Limited
28 July 2023
28 July 2023
Taylor Maritime Investments Limited (the "Company")
Quarterly NAV Announcement, Trading Update and Publication of
Factsheet
Continued focus on debt reduction
Asset values firm relative to charter rates indicating positive
market outlook
Interim dividend of 2 cents per share declared
Taylor Maritime Investments Limited, the specialist dry bulk
shipping company, today announces that as at 30 June 2023 its
unaudited NAV was $1.56 per Ordinary Share compared to $1.71 per
Ordinary Share as at 31 March 2023. The Company is also pleased to
declare an interim dividend in respect of the period to 30 June
2023 of 2 cents per Ordinary Share. The NAV total return for the
quarter was -7.6%.
The first quarterly factsheet of the current financial year is
also now available on the Company's website,
www.taylormaritimeinvestments.com .
Key Highlights (to 30 June 2023)
-- TMI made further progress reducing its debt by $12 million
from net proceeds generated from the sale of a 2008 built 32k dwt
Handysize vessel, which generated an IRR of c.63% and MOIC of
c.2.0x. This resulted in a debt to gross assets ratio of 28.5% for
TMI at quarter end (27.7% as at 31 March 2023)
-- Grindrod repaid approximately $28 million of debt from
operations and proceeds from vessel sales completed during the
quarter, resulting in an estimated debt to gross assets ratio on a
'look through' [1] basis at 30 June 2023 of 37.8% (38.9% as at 31
March 2023)
-- During the period, Grindrod agreed the sale of a 2011 Chinese
built 33k dwt Handysize vessel for gross proceeds of $10.8 million,
with expected delivery by the end of August
-- The combined owned fleet comprised 47 vessels at quarter end
(TMI 22 [2] and Grindrod 25 [3] ). The Market Value of the fleet
was $880 million [4] (TMI $331 million and Grindrod $549 million
which excludes chartered-in ships without purchase options), a
decrease of approximately 5.7% on a like for like basis over the
quarter
-- The net time charter rate for the TMI fleet was $10,600 per
day at quarter end, outperforming the adjusted BHSI (Baltic
Handysize Index) Time Charter Average (net) [5] which stood at
$6,712. TMI's balanced chartering strategy continued to mitigate
the impact of softening dry bulk markets emanating from a
slower-than-expected economic recovery in China and macroeconomic
headwinds impacting demand
-- The average charter duration for the TMI fleet stands at
three months, with a large portion of the fleet positioned to
capture improvements in the charter market expected in the latter
part of 2023, and the average annualized unlevered gross cash yield
was 7.9% at quarter end
-- The blended net time charter equivalent (TCE) across the TMI
and Grindrod fleet was $12,735 per day for the quarter (including
Handysize and Supra/Ultramax vessels)
-- On 1 June 2023, Henry Strutt was appointed Non-Executive
Chair of the Company with the Interim Chair Frank Dunne remaining
as Senior Independent Director
Post-Period Trading Update (since 30 June 2023)
-- Since quarter end, TMI agreed the sale of two vessels to
Grindrod on an arm's-length basis. The transactions include a 2011
built 38.5k dwt Handysize vessel due to complete in July for $15
million net proceeds and a 40k dwt Handysize newbuild due for
delivery in Q1 of calendar year 2024 for net proceeds of $33.75
million
-- Together, these transactions achieve a balance of strategic
fleet management, improving the overall attractiveness of the fleet
profile of TMI and Grindrod and keeping an optimal number of ships
operational ahead of the expected improvement in rates to come in
the latter part of 2023, whilst also supporting TMI's de-gearing
plans
-- Since quarter end, TMI agreed one long-term charter of 20 to
24 months at a net time charter rate of $12,000 per day with a
blue-chip charterer, a rate significantly above the current index
reflecting positive forward market sentiment and the benefits of
broader chartering opportunities arising as a result of the
Grindrod investment
-- On 13 July, Grindrod announced an EGM to be held on 10 August
2023 to propose a capital reduction which would result in a total
cash distribution of up to a maximum of $45 million, of which up to
a maximum of $37 million would be payable to TMI in line with its
83.23% ownership. The surplus cash available to fund the proposed
capital reduction has been generated from recent vessel sales after
accounting for related debt repayments. Should the capital
reduction go ahead, with any initial distribution expected to be
made within financial year Q3, TMI would use proceeds to further
reduce debt
-- TMI has covered 26% of fleet days for the Financial Year
ending 31 March 2024 at a time charter equivalent rate of c.$12,100
per day
Commenting on the trading update Edward Buttery, Chief Executive
Officer, said:
"Despite current pressure on rates we continue to outperform our
benchmark index thanks to our balanced chartering strategy. Asset
values remain above historical averages and the building blocks of
an improved earnings environment for the next two years are
evident. We continue to prioritise debt reduction and delivering
synergies by integrating management of the TMI and Grindrod fleets
and making the most of opportunities given our enhanced scale so
we're in a strong position to capitalise on market improvements
when they come."
Dry bulk market outlook
After showing signs of improvement at the end of Q1 of the
calendar year, demand disappointed in Q2 as China's expected
recovery failed to materialize with the BHSI decreasing by 35% from
31 March to 30 June. Asset values, however, held up relative to
charter rates through the quarter, decreasing by 8% (Clarksons 10
year old 37k dwt Handysize vessel benchmark) reflective of more
positive forward sentiment with improving industrial trends and
re-stocking in China expected, and ample seaborne grain supply from
record harvests to meet firm demand across key importing regions.
As a result, charter rates may improve towards the latter part of
the year before the onset of the typically softer holiday period
from Christmas through to the Chinese New Year.
Overall, the combined minor bulk and grain trade is forecast to
grow by 3.0% in 2023 in tonne-mile terms according to Clarksons and
by 3.9% in 2024 when market analysts anticipate a structural
recovery in the Chinese economy driven by further policy support in
line with the Chinese Government's stated ambitions of delivering
long-term, sustainable growth.
Meanwhile, several years of limited newbuilding activity will
see Handysize fleet supply growth of 3.0% in 2023 followed by
modest 1.3% growth in 2024 as environmental regulations are
expected to lead to increased demolition of older, less efficient
tonnage. The Supra/Ultramax fleet is forecast to grow by 3.0% in
2023 and 2024. Newbuilding activity is expected to remain
constrained given shipyards are generally full until the second
half of 2026 with orders from other segments dominating and
uncertainty over future fuel choices deterring newbuild ordering.
Given this tightening supply picture and forecasts of positive
demand growth, we maintain a favourable view for 2024 and 2025 for
both charter rates and asset values.
Financing
TMI's debt balance stands at $210 million, down from $222
million at the end of March, which represents a debt to gross
assets ratio of 28.5% based on Fair Market Values as at end of June
(27.7% as at 31 March 2023).
Grindrod's estimated debt balance was $178 million with a 'look
through' debt to gross assets ratio of 37.8% based on end of June
Fair Market Values (38.9% as at 31 March 2023) (including TMI and
Grindrod debt).
After applying $15 million proceeds to repay debt from the
additional TMI vessel sale, due to complete within July 2023, TMI
debt to gross assets will reduce to 26.8% based on June Fair Market
Values.
TMI's priority is strengthening its balance sheet consistent
with its long-term commitment to a prudent capital structure. TMI
will continue to reduce its debt from agreed and planned vessel
sales as well as from proceeds from the proposed capital reduction
by Grindrod. TMI remains focused on achieving the 25% target for
TMI of debt to gross assets and this is supported by a similar
strategy at Grindrod.
ESG
During the period, a further two TMI vessels were fitted with
energy saving devices including boss-cap fins, high performance
paints, pre-swirl ducts and fuel efficiency monitoring systems. The
carbon intensity of TMI's fleet, as measured by the EEOI ("Energy
Efficiency Operational Index"), improved by 18% y-o-y over the FY22
period, primarily driven by the divestment of less-efficient
vessels, installation of energy saving devices and other efficiency
initiatives onboard.
TMI continues to work closely with its commercial and technical
managers to ensure the fleet is compliant with the new industry
decarbonisation regulations that came into force in January 2023,
designed to meet the IMO's 2030 GHG reduction targets.
S
For further information, please contact:
Taylor Maritime Investments IR@tminvestments.com
Limited
Edward Buttery
Camilla Pierrepont
Jefferies International Limited
Stuart Klein
Gaudi Le Roux +44 20 7029 8000
Montfort Communications TMI@montfort.london
Alison Allfrey
George Morris Seers
Sanne Fund Services (Guernsey)
Limited
Matt Falla +44 1481 737600
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 Supramax 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 22 vessels in
the geared dry bulk segment. The ships are employed utilising a
variety of employment/charter strategies.
On 20 December, 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
currently owns 21 geared dry bulk vessels complementary to the
Company's fleet. They are mostly Japanese built, including 13
Handysize vessels and 8 Supra/Ultramax vessels. Grindrod has seven
vessels in its chartered in fleet with purchase options on
four.
The combined TMI and Grindrod fleet numbers 47 vessels
(excluding three long term chartered in vessels without 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 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
industry professionals are based in Hong Kong, Singapore and
London.
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.
[1] Including Grindrod debt
[2] Excluding the newbuild vessel due to be delivered in the
first quarter of calendar year 2024
[3] Including one vessel held for sale, 4 chartered in ships
with purchase options including one which has been exercised, but
excluding 3 chartered in ships without purchase options
[4] Including one Grindrod asset held for sale
[5] BHSI index is basis a 38k dwt type (since Jan 2020),
therefore the Company uses adjusted BHSI figures weighted according
to average dwt of the Company's fleet
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END
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