TIDMTMIP TIDMTMI

RNS Number : 3487Q

Taylor Maritime Investments Limited

27 October 2021

27 October 2021

Taylor Maritime Investments Limited (the "Company")

Quarterly NAV Announcement, Publication of Factsheet and Post 30 September Trading Update

Unaudited NAV up c.24% since 30 June and c.43% since IPO

Interim dividend of 1.75 cents per share declared

Taylor Maritime Investments Limited, the specialist dry bulk shipping company, today announces that as at 30 September 2021 its unaudited NAV was $1.3982 per share, an increase of c.24% since 30 June 2021 and c.43% since IPO in late May 2021.

The Company is also pleased to declare an interim dividend in respect of the period to 30 September 2021 of 1.75 cents per Ordinary Share in line with its dividend target and policy (per the previous dividend announcement).

The second quarterly factsheet for the Company is also now available on the Company's website, www.taylormaritimeinvestments.com .

Key Factsheet Highlights

-- As at 30 September 2021, the Company's fleet consisted of 20 delivered vessels and 12 undelivered vessels. Of the 32 vessels, 30 are Handysize and 2 are Supramax

-- The fleet's average net time charter rate at 30 September 2021 was approximately $17,000 per day, with an average duration of eight months and average annualized unlevered return in excess of 20%

-- At 30 September 2021, the portfolio valuation of 25 vessels (from 30 June) had increased by $68m (19%) over the 30 June valuation. The valuation of the remaining seven vessels (acquisition announced 11 August) had increased by $11m (10%) over the aggregate purchase price

   --      The Market Value of the vessel portfolio was $535m as at 30 September 

Post-Period Trading Update (Since 30 September 2021)

-- Four ships have delivered in October to date taking the delivered fleet to 24 vessels with a fifth ship expected to deliver before the end of the month

-- Current average net charter rates increased to approximately $19,500 per day by the end of October

   --      Delivered fleet currently yielding annualized unlevered return in excess of 25% 
   --      Demand growth expected to continue to outpace supply growth in 2022 

-- Further asset value upside possible as secondhand ships remain attractive relative to Depreciated Replacement Cost

Commenting on the trading update, Edward Buttery, Chief Executive Officer, said:

"Given the prevailing market strength and healthy operating cashflows, the Company should be able to achieve its dividend target set out at IPO with the potential to modestly exceed this by the end of the financial year in March 2022. This is while ensuring that we have built up responsible reserves."

Fleet and charter update since 30 September

The Company has taken delivery of four ships in October to date and expects to take delivery of a fifth ship before the end of the month. This will bring the delivered fleet to 25 vessels.

All five vessels have been employed on period charters. We continue to spread our contracted revenue across short, medium and long term charters with a bias to the longer term. T wo vessels are on two year charters, and one vessel is on a three year charter, all to first class counterparties including major global commodity houses and conglomerates. Two of these four ships are yielding over 15% and the third is yielding over 20%. The final two ships are fixed on a short term charters (4 months) at yields in excess of 40%.

After updating for these five ships, the TMI fleet average net charter rate increases to approximately $19,500 per day versus $17,000 at 30 September, whilst at the same time achieving the benefit of three longer term charters. The updated average annualized unlevered gross cash yield has increased to over 25%. The updated average remaining charter duration increased to 11 months from 8 months at 30 September.

Firm dry bulk shipping market

In terms of key demand drivers, minor bulk growth from June to September was strong and underpinned increased freight rates even in the face of disruption to the grain trade due to Hurricane Ida. The grain trade has since started to pick up again and will support rates through calendar year Q4. Clarksons' 2021 minor bulk demand growth forecast has been increased to 6.3%.

There has been some additional support for Handysize freight rates from container cargoes being carried on dry bulk ships and from port congestion both of which might recede in the medium term.

Handysize supply dynamics continue to be favourable with the orderbook remaining historically low (lowest since 2003) and the lowest compared to all larger dry bulk segments and non-dry bulk shipping segments. Although strong charter rates have traditionally led to an increase in new ordering activity, the Company considers that this cycle has its own particular characteristics which may limit this, in part due to the continuing uncertainty surrounding decarbonisation and its impact on future ship designs (not yet available) exacerbated by a long delay between order and delivery. Furthermore, after 2023, we anticipate effective supply may be reduced by lower operating speeds in response to incoming regulations to limit carbon emissions.

Minor bulk demand growth of 3.2% in 2022 is expected to outpace fleet growth of just 0.7% (Clarksons). This compounds the current year's spread of 6.3% demand growth against 2.6% supply growth (Clarksons). The Company believes that there is a good rationale for charter rates to remain elevated for some time even if there are short term technical moderations.

Against this backdrop of solid fundamentals for the next 2-3 years, we consider there is further upside in secondhand asset values as 10 year old benchmarks remain below Depreciated Replacement Cost of increasing newbuild prices (note: Depreciated Replacement Cost refers to the theoretical value of a second hand ship based on prevailing newbuilding price depreciated to current age). Since 30 September, Clarksons' 10 year old benchmark for a 32k dwt Handysize vessel has increased from $17m to $17.5m.

Financing

At the end of September, the long-term debt of the Company was $25m associated with acquisition of the seed fleet. In line with our last Trading Update, in October the Company repaid $22m of this amount with the remaining $3m of long-term debt to be repaid before the end of December 2021. The Company remains committed to a financially prudent approach, maintaining an ungeared long term capital structure to support dividend yield and provide downside protection. As planned, and in association with completing the committed vessel acquisitions, in October the Company began to draw on its RCF. At the time of writing, the RCF is currently $35m drawn with the intention to repay drawn funds from future operating cashflow. The potential amount available for draw-down under the RCF facility has been increased from $60m to $80m with effect from 1 November 2021, in line with the growth of the Company since IPO.

Pipeline

In addition to the seven committed vessels to be delivered to the Company over the next four months, we continue to conduct selective due diligence on vessels where projected returns exceed the Company's target total returns and target dividend yields.

ESG

The Company's ESG policy will be published on our website shortly. A comprehensive report on ESG will be included in the Company's Annual Results for the period ending 31 March 2022 due to be published in July 2022 with an update also forming part of the Company's Interim Results for the period ended 30 September 2021 to be published in December 2021. TMI is a signatory to the Getting To Zero Coalition's "Call to Action." The Company is also a sponsor of the International Chamber of Shipping's presence at the COP26 Conference in early November.

LEI: 213800FELXGYTYJBBG50

S
 
For further information, please contact: 
 Taylor Maritime Investments      +852 2252 3882 
  Limited                          info@tminvestments.com 
  Edward Buttery 
  Alexander Slee 
 Jefferies International Limited  +44 20 7029 8000 
  Investment Banking 
  Stuart Klein 
  Gaudi Le Roux 
 
  Sector coverage 
  Doug Mavrinac 
  Hugh Eden 
 
  Montfort Communications 
  Nick Bastin                      TMI@montfort.london 
  Alison Allfrey 
  Miles McKechnie 
 
 
 

About the Company

Taylor Maritime Investments Limited is a recently established, internally managed investment company listed on the Premium Listing Category of the Official List and traded on the Main Market of the London Stock Exchange. 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. and were acquired at valuations that are expected to be below long-term average prices.

The Company's initial investments comprise Geared Bulk Carriers (Handysize and Supramax types) employed utilising a variety of employment/Charter strategies.

The Company intends to pay dividends on a quarterly basis with dividends declared in January, April, July and October. Once the Company is fully invested, the Company will target a Total NAV Return of 10 to 12% p.a. (net of expenses and fees but excluding any tax payable by Shareholders) over the medium to long term.

The Company has the benefit of an experienced Executive Team led by Edward Buttery. The Executive Team previously worked closely together for 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 and London.

For more information, please visit www.taylormaritimeinvestments.com .

About Geared vessels

The Company specializes in the acquisition and chartering of vessels in the Handysize and Supramax bulk carrier segments of the global shipping sector. These "Geared" vessels, which have their own loading equipment, are mostly acquired second-hand, leveraging valuations that are below long-term average prices. The Handysize market segment is 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.

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.

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