TIDMTMIP TIDMTMI
RNS Number : 2550W
Taylor Maritime Investments Limited
11 December 2023
11 December 2023
Taylor Maritime Investments Limited (the "Company" or "TMI"
)
Unaudited Interim Results for the period 1 April 2023 to 30
September 2023
Vessel sales completed leading to significant debt reduction at
TMI and Grindrod Shipping ("Grindrod")
Refinancing of TMI debt with improved margin and extended
term
Integration of management teams underway to unlock further
commercial synergies and technical savings
Continued positive momentum in charter rates with BHSI and BSI
hitting 13-month highs in December
Taylor Maritime Investments Limited, the specialist dry bulk
shipping investment company, announces its interim results for the
six month period ended 30 September 2023.
The Interim Report of the current financial period is also now
available on the Company's website,
www.taylormaritimeinvestments.com , and on the National Storage
Mechanism, https://data.fca.org.uk/#/nsm/nationalstoragemechanism
.
Commenting on the interim results, Henry Strutt, Chairman,
said:
"While challenging macroeconomic conditions persisted throughout
the period, TMI continued to take great strides in strengthening
its position to deliver long-term value to shareholders. Foremost
was the continued reduction in debt with a total of US$91 million
having been repaid at 30 September 2023 since the acquisition of
Grindrod in December 2022 with the ambition to deliver on a
strategy free of significant structural leverage. The Board remains
cognisant of the ongoing uncertainty in the wider global economy
but, overall, we maintain a favourable outlook for the Group and
the segment in which it operates given our expectation of
constrained supply going forward and gradually improving global
demand. We are also acutely aware of the discount to NAV at which
our shares trade at and view the discount as unwarranted,
especially in context of the NAV validation we have delivered
through vessel sales. As we progress our de-levering process,
capital allocation will continue to be a significant focus area for
the Board."
Edward Buttery, Chief Executive Officer, added:
"We have focused on delivering our strategic priorities to
deleverage and strengthen the Group's balance sheet. We are also
now in full swing of integrating commercial and technical
management of the combined fleets which should translate into
increased future operating profit for the Group. In terms of the
market, the recovery of the last month supports our view that the
world is short of inventory after a year of business confidence
being damaged by rising interest rates and that with receding fears
of rising rates we shall see increased activity. We are already
seeing stronger levels discussed for longer periods."
Key Highlights (1 April 2023 to 30 September 2023)
Vessel Sales
-- The Company agreed the sale of two ships to Grindrod on an
arms-length basis during the period: a 2011 built 38k dwt Handysize
vessel for gross proceeds of US$15.0 million (completed during the
period) and a 40k dwt Handysize newbuild vessel due for delivery in
Q1 of calendar year 2024 for gross proceeds of US$33.75 million
-- TMI also completed the sale of a 2008 built 32k dwt Handysize
vessel for gross proceeds of US$11.9 million, generating an IRR of
c.63% and MOIC of c.2.0x
-- At Grindrod, six vessel sales completed during the period; a
2010 built Handysize bulk carrier for gross proceeds of US$10.9
million, a 2011 built Handysize bulk carrier for gross proceeds of
US$10.8 million, a 2014 built Handysize bulk carrier for gross
proceeds of US$17.22 million, a 2015 built Ultramax bulk carrier
for gross proceeds of US$23.25 million and, in an en-bloc deal ,a
2015 built Ultramax bulk carrier and a 2016 built Ultramax bulk
carrier for aggregate gross proceeds of US$46.5 million
-- At 30 September 2023, the combined fleet consisted of 44
vessels (including two vessels contracted to sell) (31 March 2023:
51 vessels) with a total market value of US$750 million (31 March
2023: US$997 million). Of the 44 vessels, 34 are Handysize vessels
and 10 are Supramax/Ultramax vessels including 3 chartered-in
vessels with purchase options
Refinancing and progress with debt reduction
-- The Company replaced its existing Revolving Credit Facility
("RCF") and Acquisition Facility (in relation to the Grindrod
transaction) with a new RCF with an improved margin and extended
term
-- During the period, the Company's outstanding debt decreased
by US$54.6 million to US$167.6 million (31 March 2023: US$222.2
million). The Company's debt-to-gross assets ratio was 26.9% based
on Fair Market Value at the end of September 2023 (31 March 2023:
27.8%)
-- Including Grindrod debt, the Group's debt balance decreased
by US$90.7 million over the period to US$338.1 million on a
'look-through' basis (31 March 2023: US$428.8 million)
Grindrod developments - integration of management teams underway
and capital reduction
-- Ship management of the TMI and Grindrod fleets was brought
together under one entity with Grindrod's acquisition of TMI's
commercial and technical managers and, as a result, benefits of
scale will be more fully realisable
-- Grindrod announced the effective date of the proposed capital
reduction with a cash distribution taking place in two tranches
(the first tranche was paid in October 2023 and the second payable
in December 2023). Of the total US$32.4 million cash distribution,
a total of US$26.7 million would be payable to TMI in line with its
ownership
Chartering
-- During the period, TMI agreed one long-term charter of 20 to
24 months at a net time charter rate of US$12,000 per day with a
blue-chip charterer, significantly above the prevailing index
rate
-- The charter income for the combined fleet amounted to an
average time charter equivalent ("TCE") rate of US$11,550 per day
for the period. Whilst this is a decrease versus the equivalent six
month period to 30 September 2022, the combined Handysize fleet and
Supra/Ultramax fleet were c.US$2,510 per day and c.US$3,450 per
day, respectively, above our benchmark indices [1] for the
period
-- The average time charter rate net of commissions for the
combined fleet was US$12,122 per day at 30 September 2023 with an
average duration of two months with a large portion of the fleet
poised to capture improvements in market conditions as they roll
off charters
Dividends
-- The Company declared dividends of 4.00 US cents per Ordinary
Shares in the period to 30 September 2023. In addition, the Company
declared an interim dividend on 25 October 2023 of 2.00 US cents
per Ordinary Share in respect of the quarter ended 30 September
2023, which was paid on 24 November 2023
Chair Appointment
-- Henry Strutt was appointed non-Executive Chair of the Company
with effect from 1 June 2023 bringing extensive financial services
experience from his time spent in senior positions at several
financial institutions. Frank Dunne, who acted as Interim Chair,
remains on the Board as Senior Independent Director
Post-Period Trading Update (since 30 September 2023)
-- The Company completed the sale of the two oldest vessels in
the TMI fleet post period; a 2004 built 34k dwt Handysize vessel
for gross proceeds of US$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 US$9.0 million, generating an IRR of c.19% and
MOIC of c.1.4x (as announced on 5 December 2023)
-- In connection with the vessel sales, US$11.4 million of debt
will be repaid by the end of the quarter to 31 December 2023,
resulting in a reduction to the Company's outstanding debt to
US$156.2 million (26.1% Debt to Gross Assets at TMI level based on
30 September 2023 Fair Market Values)
-- Grindrod completed the sale of two 2013 Chinese built
Handysize bulk carriers for aggregate gross proceeds of US$23.2
million
-- Overall, there have been fifteen asset disposals agreed and
completed across the Company and Grindrod in 2023 which have been
achieved at an average discount to carrying value of -4.0%
-- The combined fleet now comprises entirely of Japanese-built
vessels (after the disposal of all four Chinese-built vessels) with
an average age of 10.5 years and an average carrying capacity of
c.40k dwt. This compares favourably to the pre-acquisition TMI
fleet (average age of 13.0 years and average carrying capacity of
c.33k dwt) and provides evidence of the increased attractiveness of
the combined fleet
-- Dry bulk rates accelerated from mid-November before surging
at the end of the month with the adjusted BHSI TCA rising to
US$12,967 per day and the adjusted BSI TCA rising to US$16,715
which is 121% and 124%, respectively, above their mid-August low
points. The Company subsequently agreed medium-term charters for
three TMI Handysize vessels; a US$16,000 per day gross time charter
rate for 100 to 150 days, a US$19,000 per day gross time charter
rate for about 75 days and a US$13,000 per day gross time charter
rate for 100 to 150 days
-- At the time of writing, the combined fleet has coverage for
44% of the remaining days in the current financial year at a TCE of
US$11,634 per day
-- Post period, the Company released its second annual
Environmental, Social and Governance ("ESG") Report covering the
financial year ended 31 March 2023 which highlights progress made
on TMI's sustainability priorities including decarbonisation,
social and community impact, and responsible business practices
-- Post period, the Company appointed Deloitte LLP as Auditor
following an audit tender process
Outlook
After strengthening considerably late in the interim period, dry
bulk charter rates surged further in late November with the BHSI
and BSI reaching 13-month highs by early December. The
strengthening in rates has been driven by an increase in port
congestion in Brazilian grain load ports and further tightening of
drought-related transit restrictions on the Panama Canal which has
seen an increase in queue times and an increase in tonne-miles with
more owner-operators avoiding the route through the Canal. At the
same time, US and South American grain trading activity has been
robust, providing upside pressure on rates while delays and
congestion in the Atlantic absorb significant volumes of
tonnage.
Congestion outside Brazilian ports has eased from its peak
albeit queues remain at levels more than double than they were a
year ago. Meanwhile, Panama Canal restrictions appear to be
tightening. In the Pacific, rates have shown signs of stabilising
in recent weeks as cargo and tonnage become more balanced. Overall,
charter rates are expected to remain stable allowing an opportunity
to secure more charters to straddle the seasonally softer Christmas
and Chinese New Year holiday period.
Asset values, while lagging charter rates, also improved from
their mid-August low points with the Clarksons' benchmarks for a
10-year-old 37k dwt Handysize vessel and a 5-year-old
Supra/Ultramax vessel rising by c.3% and c.9%, respectively.
Looking to 2024, restocking of global inventories of bulk
commodities, which are believed to be at historically low levels
after a prolonged period of uncertainty, would partially offset the
dampening effects on demand if interest rates remain elevated.
Charter rates and asset values should remain relatively firm as a
result, with potential upside provided should interest rates peak,
particularly for the geared dry bulk segment where improving
industrial trends in China and firm forecasts for global grain
production are expected to result in significant growth in minor
bulk and grain tonne-miles, respectively. Reduction in effective
supply as a result of lower operating speeds and the potential for
increased demolition of older, less efficient tonnage with
emissions regulations tightening, would provider further potential
upside especially considering market fundamentals remain finely
balanced as evidenced by the recent surge in dry bulk charter
rates.
ENDS
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
Sanne Fund Services (Guernsey)
Limited
Matt Falla +44 20 3530 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. 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.
[1] Since the BHSI index is basis a 38k dwt type and the BSI
Index is basis a 58k dwt type, the Company uses adjusted BHSI and
BSI figures net of commissions and weighted according to average
dwt of the Group's combined Handysize and Supra/Ultramax fleets,
respectively
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
DOCURRWROOUUAAA
(END) Dow Jones Newswires
December 11, 2023 02:00 ET (07:00 GMT)
Taylor Maritime Investme... (LSE:TMI)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Taylor Maritime Investme... (LSE:TMI)
Gráfica de Acción Histórica
De May 2023 a May 2024
