REG - Taylor Maritime Taylor Maritime -TMI - Full Year Results for the period to 31 March 2022

Taylor Maritime InvestmentsAnnouncement

14/07/2022 07:00

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RNS Number : 3888S  Taylor Maritime Investments Limited  14 July 2022

TAYLOR MARITIME INVESTMENTS LIMITED

FULL YEAR RESULTS STATEMENT FOR THE PERIOD 31 MARCH 2021 TO 31 MARCH 2022

COMPELLING SHAREHOLDER RETURNS AND STRONG VISIBILITY WITH POSITIVE OUTLOOK

 

14 July 2022 - Taylor Maritime Investments Limited (TMI / TMIP), the
specialist dry bulk shipping company, announces its full year results for the
financial period ended 31 March 2022.

KEY FINANCIAL HIGHLIGHTS

·      Fleet of 31 vessels with total market value of US$546m,
comprising US$480m of vessels and US$66m of assets held for sale

·      Average net time charter rate of US$18,600

·      Average annualised unlevered return in excess of 24%

·      Audited NAV per ordinary share of US$1.74 and Total NAV of $575m

·      NAV total return of 81.3% and share price total return of 45.5%

·      Profit before tax of $253m (US$79m operating profit and US$174m
fair value gains)

·      Dividends paid in respect of the period, including special
dividend, of approximately 10% on annualised basis

·      Grindrod Shipping investment amounted to $125m of the Group's NAV

COMMENTARY

·      Taylor Maritime Investments Limited concluded a successful
initial public offering on 27 May 2021, raising US$254 million (comprising
US$160 million cash and US$94 million in consideration shares), followed by a
subsequent capital raise of US$75 million on 28 July 2021

·      At 31 March 2022, the Group's fleet consisted of 31 vessels
(including vessels contracted to sell) with a total market value of US$546
million. Of the 31 vessels, 29 were Handysize and 2 were Supramax. The average
age of the fleet is 11.4 years

·      Audited NAV per Ordinary Share of US$1.74 as at 31 March 2022,
delivering Total Net Asset Value ('NAV') return per Ordinary Share of +81.3%
for the period from the Initial Public Offering ('IPO'). This was driven by
operating profit, increased vessel values and an attractive gain on the
Grindrod Shipping investment which appreciated substantially over the
investment cost

·      The Company's Ordinary Shares closed at a price of US$1.42 on 31
March 2022. The Company's Total share price return per Ordinary Share was
+45.5% for the period from the IPO to 31 March 2022 (excluding the interim
dividend for the quarter ended 31 March 2022 and the special dividend which
both went ex-dividend after the period end).

·      Profit for the period before tax was US$253 million, comprising
(on a look-through basis) US$79 million of operating profit, after finance
costs, and US$174 million fair value gain

·      The fleet's average net time charter rate at 31 March 2022 was
approximately US$18,600 per day, with an average duration of six months and
generating an average annualised unlevered return in excess of 24%. This
compares favourably with the same figures as at the end of 30 June 2021 (the
Company's first quarter end), when the average net time charter rate for the
fleet was approximately US$15,600 per day, with an average duration of 10
months and an average annualised unlevered gross yield of 20%

·      During the period, the Group completed an acquisition of a 26.6%
stake in Grindrod Shipping Holdings Ltd., a dual NASDAQ and Johannesburg Stock
Exchange listed shipping business (NASDAQ: GRIN, JSE: GSH "Grindrod Shipping")
secured at an average price of US$17.64 per share. At 31 March 2022, the
Grindrod Shipping's share price was US$25.44 per share, amounting to US$125
million of the Group's NAV. The Group also received two dividends of US$0.72
per share in both December 2021 and March 2022 (total dividends of US$1.44 per
share for the period) from Grindrod Shipping, representing an annualised yield
of c.16% on the investment

·      Total dividends paid in respect of the period ended 31 March
2022, amounted to 8.47 US cents, representing a dividend yield on the Initial
Issue Price of approximately 10% on an annualised basis

·      The Group announced its commitment to achieving a long-term
target of zero carbon emissions by 2050. Substantial technological advances
are a key element of this for the broader shipping industry, but the Company
has clearly defined near-term initiatives with incremental progress made
through the period, including investment in vessel modifications, primarily
retrofits during regular maintenance periods and ongoing dialogue with major
customers around trialling lower carbon fuels and energy saving measures

 

Commenting on performance in the full year period, Nicholas Lykiardopulo,
Independent Chair, said:

"TMI has made a dynamic and successful start as a listed investment company as
this outstanding first period of trading testifies, with excellent levels of
profitability and cashflow. Our leading position in the Handysize dry bulk
vessel segment, the workhorses of the dry bulk shipping trade, continues to
deliver strong shareholder returns. We remain confident that market
fundamentals will lead well into 2024 and we will continue to monitor the
orderbook for indicators on market direction beyond that period".

Edward Buttery, CEO, added:

"I am delighted that the differentiated shipping investment opportunity we
have created for investors continues to deliver sustainable yield and capital
appreciation from our high quality assets. Our focus will remain on managing
the company with a carefully balanced chartering strategy, strong liquidity
and financial prudence to deliver consistent earnings and compelling
dividends".

 

Outlook

We expect a continued strong market for 2022 with 2.1% tonne mile growth for
minor bulk and 2.7% for 2023 expected against net fleet supply growth of 1.9%
and -2.2% respectively and subject to actual fleet removals (Clarksons
Research). The short-term impact of the war in Ukraine has seen a shift in
trading patterns for the shipping of necessity goods, both to source
alternative suppliers and with Russia exports shipping to different
destinations. So far, the net change to demand seems to be negligible for our
segment, once the decrease in volumes is offset by increased tonne-miles. We
expect current Covid lockdowns in China to be transitory and for demand to
rebound, as experienced following previous lockdowns. Acknowledging
uncertainty in the wider economy, we remain optimistic about the Handysize
segment given tightening supply over the next two years and possibly longer.
The orderbook remains at historical lows and a significant uptick in newbuild
contracting remains unlikely for now given both cost inflation and pending
more deep-seated change to ship designs to meet evolving environmental
demands. This dynamic will continue to support firm asset valuations and
charter rates.

 

Click on or paste the following link into your web browser to view the Annual
Report.

https://taylormaritimeinvestments.com/wp-content/uploads/taylor_maritime_annual_report_and_audited_consolidated_financial_statements_31Mar21_to_31Mar22.pdf
(https://linkscan.io/scan/ux/aHR0cHM6Ly90YXlsb3JtYXJpdGltZWludmVzdG1lbnRzLmNvbS93cC1jb250ZW50L3VwbG9hZHMvdGF5bG9yX21hcml0aW1lX2FubnVhbF9yZXBvcnRfYW5kX2F1ZGl0ZWRfY29uc29saWRhdGVkX2ZpbmFuY2lhbF9zdGF0ZW1lbnRzXzMxTWFyMjFfdG9fMzFNYXIyMi5wZGY=/4C3DA633C927E4BD23A85F21CA31058BD910171868F97A12B540BF7D7B47D748?c=2&i=1&docs=1)

The full results are available on the Company's website
at www.taylormaritimeinvestments.com
(http://www.taylormaritimeinvestments.com/) .

http://www.rns-pdf.londonstockexchange.com/rns/3888S_1-2022-7-13.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3888S_1-2022-7-13.pdf)

Notes to editors

Enquiries:

 

 Taylor Maritime Investments Limited        IR@tminvestments.com

 Edward Buttery

 Camilla Pierrepont

 Jefferies International Limited            +44 20 7029 8000

 Investment Banking

 Stuart Klein

 Gaudi Le Roux

 Montfort Communications                    TMI@montfort.london

 Alison Allfrey

 George Morris Seers

 Sanne Fund Services (Guernsey) Limited     +44 1481 737600

 (formerly Praxis Fund Services Limited)

 Tom Daish

 Matt Falla

 

Notes to editors

About the Company

Taylor Maritime Investments Limited is an internally managed shipping 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
and which, historically, have demonstrated average yields in excess of the
Company's target dividend yield of 7% p.a. (on the Initial Issue Price). The
shares offer a compelling and differentiated investment opportunity with the
aim of delivering strong cashflow, stable income and potential for capital
growth.

The Company invests in high quality, Japanese built vessels which are
primarily second-hand and acquired at valuations below long-term average
prices and depreciated replacement cost. The current portfolio numbers 27
vessels. The Company has a leading position in the Handysize shipping sector
and, thanks to versatile geared vessels delivering necessity goods, provides
an attractive, defensible yield underpinned by zero long-term structural
gearing, financial discipline and an optimal balance of charter rates and
durations. It has a selective growth strategy focusing on accretive
opportunities to increase shareholder returns and recycle capital efficiently.

 The Company intends to pay dividends of 1.75 cents per Ordinary Share on a
quarterly basis representing an annual yield of 7% on the IPO price of $1.00,
with a targeted total NAV return of 10-12% per annum (net of expenses and fees
but excluding any tax payable by Shareholders) over the medium to long-term.
The Board approved a special dividend of 3.22 US cents per share in respect of
the period to 31 March 2022 paid on 6 May 2022, which brought total dividends
declared for the period from IPO to 31 March 2022 to 8.47 US cents per
share, representing a dividend yield on the IPO price of approximately 10% on
an annualised basis. This reflected excess cash generation in what continues
to be a historically strong market and a desire to return capital to
shareholders in a timely manner.

Sustainability is at the heart of the way in which the Company is managed and
it is committed to achieving a long-term target of zero carbon emissions by
2050. Substantial technological advances are a key element of this for the
broader shipping industry, with near term incremental progress effected by
initiatives such as retrofitting the fleet with energy saving devices, using
low sulphur fuels and trialling biofuels.

The Company has the benefit of an experienced Executive Team led by Edward
Buttery. The Executive Team 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 experienced industry
professionals are based in Hong Kong, Singapore and London.

About Geared Vessels

 

Geared vessels are characterised by their own loading and unloading equipment.
The Handysize market segment is particularly attractive, given the
flexibility, versatility and port accessibility of these vessels which carry
necessity goods - principally foodstuffs and products related to
infrastructure building - ensuring broad diversification of fleet activity and
stability of earnings.

 

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