26 July
2024
Taylor
Maritime Investments Limited (the "Company" or "TMI")
Quarterly
NAV Announcement, Trading Update and Publication of
Factsheet
TMI set
to own 100% of Grindrod Shipping Holdings Limited ("Grindrod")
following approval of the Selective Capital Reduction
NAV total
return for the quarter of 4.3% with charter rates and asset values
remaining firm
Interim
dividend of 2 cents per share declared
Taylor Maritime Investments
Limited, the specialist dry bulk shipping
investment company, today announces that as
at 30 June 2024 its unaudited NAV was $1.52
per Ordinary Share compared to $1.48 per Ordinary Share as
at 31 March 2024. The Company is pleased to
declare an interim dividend in respect of
the period to 30 June 2024 of 2 cents per Ordinary Share. The
NAV total return for the quarter was 4.3%.
The first quarterly factsheet of the
current financial year is also now available on the Company's
website, www.taylormaritimeinvestments.com.
Commenting on the trading update
Edward Buttery, Chief Executive Officer, said:
"We continue to take advantage of
robust conditions in freight and asset markets. We fixed
period charters at higher rates, including a one-year period
charter, and increased our coverage for the remainder of the
calendar year. We also agreed the sale of two more Handysize
vessels, generating strong average returns. TMI is set to
gain 100% ownership of Grindrod which will be a major
milestone. This effectively completes a fleet renewal
exercise that has delivered a larger, overall younger, more
efficient fleet (than pre-Grindrod acquisition) and unlocks a
further set of corporate synergies on top of those implemented
already or which are in progress."
Key
Highlights (to 30 June 2024)
Grindrod Selective Capital Reduction approved by
shareholders
· Grindrod participating shareholders approved the special
resolution to implement a Selective Capital Reduction ("SCR") at an
EGM held on 20 June 2024. The SCR is expected to take effect
on 16 August 2024. As a result, Grindrod will become a wholly
owned subsidiary of TMI through its subsidiary Good Falkirk (MI)
Limited. Once implemented, the SCR will be accretive to TMI
NAV per share with an estimated positive impact of 7 cents
resulting in a post-SCR TMI NAV per share of $1.60 based on 30 June
Fair Market Values
Strong chartering performance
· The
combined TMI and Grindrod fleet ("Combined Fleet") generated
average time charter equivalent ("TCE") earnings of $13,264 per day
for the quarter (versus $12,430 per day for the quarter ended 31
March 2024; an increase of c.7%). At quarter end, the
combined average TCE was $14,707 per day (versus $13,132 at 31
March 2024; an increase of c.12%)
· The
Combined Fleet, largely maintained on short period charters, was
well-positioned to take advantage of the improving market with a
sizeable portion fixed at higher market rates during the
period. Earnings improved quarter-on-quarter and the fleet
outperformed its benchmark indices by $835 per day (8%) for the
combined Handysize fleet and $937 per day (6%) for the
Supra/Ultramax fleet
· During
the period, Grindrod agreed a period charter of 11 to 13 months at
a net time charter rate of $17,100 per day on an Ultramax vessel
with a blue-chip counterparty, significantly above the prevailing
index rate
Fleet development and market value
· The
Company completed the previously announced sale of a 2008 built 33k
dwt Handysize vessel, the oldest in the Combined Fleet, for gross
proceeds of $12.3 million, a c.2.4% discount to Fair Market
Value
· The
Company agreed the sale of a 2012 built 28k dwt Handysize vessel,
one of the two smallest vessels in the Combined Fleet, for gross
proceeds of $11.95 million, a c.1.3% discount to Fair Market
Value
· Grindrod completed the previously announced sale of a
2014-built c.60k dwt Ultramax vessel for gross proceeds of $22.4
million, a c.2.0% discount to Fair Market Value, with a
charter-back and a purchase option[1]
· The
Market Value of the Combined Fleet increased by approximately 2.3%,
on a like for like basis, to $798.7 million (TMI $282.3 million and
Grindrod $516.4 million excluding chartered-in ships without
purchase options) reflecting an active market for second-hand
vessels underpinned by positive sentiment in the quarter
·
Following these strategic fleet divestments, the
combined owned fleet comprised 38[2]
Japanese-built vessels at quarter end (TMI 18 and Grindrod
20[3]) with an attractive average age of
10.4 years and a larger average carrying capacity of c.41k dwt,
with commensurate increased earnings capacity. The age of the
fleet has reduced by three years as a result of the Grindrod
acquisition (note the pre-acquisition fleet would now average 13.7
years with an average carrying capacity of c.34k dwt)
Progress with debt reduction
· The
Company's debt-to-gross assets ratio improved to 21.7% at 30 June
2024 (versus 23.5% at 31 March 2024) owing to stronger asset values
and ongoing debt reduction through repayments. The Company's
outstanding debt was $140.3 million at the quarter end
· TMI
and Grindrod ("Combined Group" or "Group") look-through
debt-to-gross assets was 35.4%[4] at 30
June 2024 (versus 35.8% at 31 March 2024). Outstanding debt
was $338.3 million on a look-through basis4
· The
Group continues to focus on strengthening its balance sheet
consistent with a long-term commitment to be free of significant
structural leverage. TMI will continue to reduce Company debt
from planned vessel sales, supported by a similar strategy at
Grindrod, with a look-through Group leverage target of 25-30% of
gross assets4
Post-Period Trading Update (since 30 June
2024)
· On 16
July 2024, the SCR was approved by the High
Court of the Republic of Singapore. The SCR will take effect
upon lodgement of the Court Order with the Singapore Registrar
expected on 16 August 2024. There are no other outstanding
conditions to the SCR. As a result,
Grindrod will become a wholly owned subsidiary of TMI through its
subsidiary Good Falkirk (MI) Limited "GF", (which will own 100% of
the shares in Grindrod Shipping - up from 82.33%).
Grindrod will subsequently be delisted from each
of Nasdaq and the JSE. Further
details can be found in the announcement released by Grindrod on 19
July 2024
· Two
additional sales were agreed across the Combined Group; a 2009
built 32k dwt TMI Handysize vessel for gross proceeds of $13.0
million, representing a c.0.6% discount to Fair Market Value, and a
2024 built 40k dwt Grindrod Handysize vessel for gross proceeds of
$35.35 million, a c.0.3% premium to Fair Market Value
·
Overall, the 22 divestments since the Grindrod
transaction, including the two vessels agreed for sale post period,
have averaged a 3.1% discount to Fair Market Value[5]
· The
number of covered Combined Fleet ship days remaining for the 2024
calendar year stands at 42% with an average TCE rate of $14,010 per
day
Dry bulk market review and
outlook
Following the post-holiday
strengthening of market conditions late last quarter, charter rates
remained at elevated levels through the period, with the BSI
TCA[6] and BHSI TCA[7] at levels c.43% and c.27% higher, on average, when
compared to the same period last year. Red Sea and Panama
Canal disruptions continued to impact positively, with rerouting of
vessels on longer voyages reducing available supply while strong US
East Coast and Brazilian grain exports have supported long-haul
geared bulker demand.
Despite transit volumes beginning to
normalise in the Panama Canal, charter rates for the geared bulker
segment are expected to remain relatively healthy for the remainder
of 2024, excluding the summer holiday lull. Bulk carrier
transits through the Suez Canal remain at 50% of their December
2023 levels which, if sustained, will continue to support
tonne-mile demand and coincide with seasonal commodity demand
strength that is typical of calendar Q4. Slower bulk carrier
operating speeds (down c.1% year-on-year in 2024 so far) and a
gradual rise in port congestion from last year's lows are also
likely to lend support according to Clarksons.
Although risks remain, the market
remains buoyed by favourable supply-side dynamics, as indicated by
healthy S&P activity, firm secondhand values and high newbuild
prices. Several years of limited ordering and newbuilding
activity have resulted in modest supply growth in the geared bulker
segment; a trend which is set to continue over the medium-term,
despite a recent uptick in contracting activity, with newbuild
orders from top shipyards not available for delivery until end 2027
and early 2028 due to limited capacity. Tightening
environmental regulations are expected to lead to increased
recycling of older, less efficient units, particularly for the
aged, geared bulker segment (10% of the Handysize fleet is over 25
years old), while lower operating speeds and time taken to retrofit
energy saving devices are expected to restrict effective
supply.
ESG
The Combined Group's ESG agenda and
implementation are overseen by the ESG Steering Group.
The Group has begun to trial a
sustainable graphene-based propeller coating, XGIT-PROP, across a
number of vessels undergoing dry dockings during this financial
year, including one completed application on a Handysize vessel in
May. This innovative coating has the potential to improve
vessel efficiency by 3-5% and to make a positive impact on CII
(Carbon Intensity Indicator) ratings.
The fleet efficiency programme
continues to be rolled out with the fitting of energy saving
devices at scheduled maintenance events including boss-cap fins,
high performance paints, pre-swirl ducts and fuel efficiency
monitoring systems.
Crew wellbeing remains a key focus
area. A digital platform has recently been introduced across
all Group vessels acting as a preventative and supportive tool for
the wellbeing of seafarers, addressing diet, nutrition, and
lifestyle management, as well as direct access to mental health
support.
ENDS
For further
information, please contact:
Taylor Maritime Investments
Limited
Edward
Buttery
Camilla Pierrepont
|
IR@tminvestments.com
|
Jefferies International
Limited
Stuart
Klein
Gaudi Le
Roux
|
+44 20 7029
8000
|
Apex Group
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 18 vessels, including two vessels
held for sale, 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. Following the approval of a
Selective Capital Reduction ("SCR") by Grindrod shareholders and
the High Court of the Republic of Singapore, due to take effect on
16 August 2024, Grindrod is set to become a wholly owned subsidiary
of the Company through its subsidiary Good Falkirk (MI) Limited
"GF". Grindrod will subsequently be delisted from each
of Nasdaq and the JSE. Grindrod has an owned fleet of 17 dry
bulk vessels, including one vessel held for sale, complementary to
the Company's fleet. They are Japanese built, including 10
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 38 vessels (including vessels held
for sale and 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). 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 cargo 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