REG - Taylor Maritime Taylor Maritime -TMI - Factsheet, Trading Update & Quarterly NAV

Taylor MaritimeAnnouncement

27/04/2023 07:00

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RNS Number : 6153X  Taylor Maritime Investments Limited  27 April 2023

27 April 2023

 

Taylor Maritime Investments Limited (the "Company")

 

Quarterly NAV Announcement, Trading Update and Publication of Factsheet

 

Grindrod Shipping investment delivering benefits of scale and synergies with
TMI CEO Edward Buttery appointed CEO

On track to reach debt reduction target by end of June with total of c.$64
million of debt repaid across TMI and Grindrod in the quarter

Balanced chartering strategy outperforming index and should benefit from
market upside with continued positive outlook

Interim dividend of 2 cents per share declared

 

Taylor Maritime Investments Limited, the specialist dry bulk shipping company,
today announces that as at 31 March 2023 its estimated unaudited NAV was $1.72
per ordinary share compared to $1.67 per ordinary share as at 31 December
2022.  The Company is also pleased to declare an interim dividend in respect
of the period to 31 March 2023 of 2 cents per Ordinary Share.  The NAV total
return for the quarter was 3.8%.

The fourth quarterly factsheet of the current financial year is also now
available on the Company's website, www.taylormaritimeinvestments.com
(http://www.taylormaritimeinvestments.com) .

Key Highlights (to 31 March 2023)

·      Continuing to successfully execute on deleveraging strategy with
total of $37 million of TMI debt repaid from vessel sale proceeds, resulting
in debt to gross assets ratio of 27.7% at quarter end and on track to reduce
this to below 25% by the end of June in line with its commitment in the
Company's investment policy.  When combined with Grindrod's debt repayments
during the period, a total of c.$64 million of debt was repaid across TMI and
Grindrod

·      Overall improvement in asset values resulting in 2.7% increase in
the Market Value of TMI's vessel portfolio on a like-for-like basis.
Grindrod's NAV increased by an estimated 3.4%.  Excluding three chartered-in
vessels without purchase options, the combined fleet comprised 51 vessels with
a Market Value of $999 million

·      Dividend cover for the financial year to 31 March 2023 was 2.6x
(excluding the special dividend)

·      TMI's strategy of ship sales in order to reduce leverage was
supported by a strong sale and purchase market.  TMI completed two vessel
sales for aggregate net proceeds of $24.4 million generating IRRs of 35% and
68% and MOIC of 1.56x and 1.54x.  As already announced, a third vessel was
declared a constructive total loss due to the war in Ukraine with insurance
proceeds used to prepay debt.  TMI's fleet therefore comprised 23 vessels at
the quarter end

·      The earnings environment improved from the second half of the
quarter, as expected.  The net time charter rate for the TMI fleet was
$14,500 per day at quarter end.  The Company outperformed the adjusted BHSI
(Baltic Handysize Index) Time Charter Average (net) 1  (#_ftn1) which stood at
$10,331 at quarter end.  TMI's chartering strategy mitigated the impact of a
typically weaker first quarter, given Chinese New Year.  The average charter
duration stands at four months, with a large portion of the fleet positioned
to capture improving market conditions expected in the lead up to summer, and
the average annualized unlevered gross cash yield was c.17.5% at quarter end

·      Edward Buttery was appointed Chief Executive Officer of Grindrod
with effect from 1 April 2023, securing alignment of strategy as TMI seeks to
crystallise value from its investment in Grindrod

·      At Grindrod, one previously announced vessel sale completed
during the period.  A further three vessels were contracted for sale
(completion expected by 30 June 2023).  The contracted vessel sales will fund
a further $16.1 million of debt repayments once completed

Post-Period Trading Update (since 31 March 2023)

·      TMI agreed a further sale of a 2008 built 32k dwt Handysize
vessel due to complete this quarter for net proceeds of $11.7 million to be
applied to reduce debt, generating an IRR of c.63% and MOIC of c.2.0x

·      The Company has covered 24% of fleet days for the Financial Year
ending 31 March 2024 at an average net time charter rate of c.$16,250 per day

·      Synergies from TMI's investment in Grindrod have started to
crystallise with the relocation of respective staff in London and Singapore
into the same office space and with Edward Buttery's leadership as dual CEO
reducing overheads.  Fleet marketing is now coordinated which will strengthen
the overall commercial position.  An integration plan is in progress to
formally combine commercial and technical management of the fleets in due
course which will deliver economies of scale

·      The process of recruiting a new Chairman for TMI is now at an
advanced stage

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

"We've made solid progress to deleverage TMI's balance sheet, benefiting from
a healthy secondary market as long-term fundamentals remain favourable for
geared dry bulk.  It's exciting to see synergies already crystallising from
the Grindrod transaction - my role as CEO of both companies will enable the
execution of a clear commercial strategy.  Further plans are expected to come
to fruition over the next couple of quarters and should bring cost benefits
across the fleet.  We're in a strong position to capitalise on what we expect
to be a firming market for the benefit of all shareholders."

Dry bulk market outlook

The charter market made a swift recovery from mid-February with the BHSI
rising c.60% to the end of March following an earlier-than-usual Chinese New
Year.  Dry bulk earnings are expected to improve through 2023 partly boosted
by China, accounting for c.50% of the dry bulk market, which is showing early
signs of an economic recovery and global macroeconomic headwinds potentially
easing through the year.

Further support for charter rates is anticipated from increased seaborne grain
trade with Clarksons projecting tonne-mile growth of 4.7% year-on-year in
2023, driven by robust export volumes from Brazil, Ukraine and the US.
Clarksons has revised its forecast upwards for combined minor bulk and grain
demand growth (key drivers for the geared dry bulk segment) to 2.1% in 2023
and 3.2% in 2024 while the Handysize fleet grows modestly by 0.4% in 2023 and
is expected to contract by -1.0% in 2024.  The Supramax and Ultramax fleet is
forecast to grow by 2.2% in 2023 and 1.8% in 2024.

Asset values held firm, buoyed by supply-side pressure emanating from a
historically low orderbook and recently-introduced environmental regulations
which have fuelled expectations of greater levels of recycling and lower
operating speeds.  Asset values also improved with Clarksons' 10 year old 37k
dwt Handysize values increasing from $16.5 million to $18.5 million at quarter
end (the more moderate increase in TMI's fleet value is a result of vessels
becoming one year older).  We continue to anticipate support for earnings and
in turn second-hand asset values given ongoing supply side constraints.  We
maintain a positive outlook through to the end of 2024, and possibly into 2025
with the orderbook remaining near a historical low.

Financing

TMI repaid a total of $37 million of debt with a balance outstanding of $222
million at the quarter end resulting in debt to gross assets ratio of 27.7%.
TMI expects to reduce this to below 25% by the end of June through agreed and
planned vessel sales in line with its commitment in the Company's investment
policy.

Grindrod repaid $18.6 million of debt with a balance outstanding of $205
million at the quarter end.  On a 'look through' basis, debt to gross assets
ratio was 38.9% (including TMI and Grindrod debt).  TMI expects to reduce
this to c.35% by the end of June 2  (#_ftn2) .

TMI continues to be focused on ensuring a strong balance sheet consistent with
its long-term commitment to a prudent capital structure.

ESG

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.  During the period, a further five vessels were
fitted with energy saving devices including boss-cap fins, high performance
paints, pre-swirl ducts and fuel efficiency monitoring systems.  TMI aims to
achieve a long-term target of running a zero-emission fleet by 2050 and is a
signatory to the Getting to Zero Coalition's "Call to Action for Shipping
Decarbonisation".

 

ENDS

 

 For further information, please contact:

Taylor Maritime Investments Limited      IR@tminvestments.com (mailto:IR@tminvestments.com)

 Edward Buttery

 Camilla Pierrepont

 Jefferies International Limited          +44 20 7029 8000

 Stuart Klein

 Gaudi Le Roux

 Montfort Communications                  TMI@montfort.london (mailto:TMI@montfort.london)

 Alison Allfrey

 George Morris Seers

 Sanne Fund Services (Guernsey) Limited   +44 1481 737600

 Matt Falla

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 numbers 23 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 owns 24 geared dry bulk vessels
complementary to the Company's fleet.  They are mostly Japanese built,
including 15 Handysize vessels and 9 Supramax and Ultramax vessels.  Grindrod
has seven vessels in its chartered in fleet with purchase options on four.

 

The combined TMI and Grindrod fleet numbers 54 vessels (including chartered in
vessels).

 

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
(http://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.

 

LEI: 213800FELXGYTYJBBG50

 1  (#_ftnref1) As the BHSI index has been based on a 38k dwt type since Jan
2020, the Company uses adjusted BHSI figures weighted on the average dwt of
the Company's fleet

 2  (#_ftnref2) Look through debt to gross assets includes the TMI and
Grindrod level debt over both companies' gross assets

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