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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