Company Announcements

26 January 2024

Taylor Maritime Investments Limited (the "Company" or "TMI")

Quarterly NAV Announcement, Trading Update and Publication of Factsheet

3.9% NAV total return due to end of year market improvement

Benchmark indices reached 13-month highs in December on tightening supply conditions

Company debt-to-gross assets at 24.9% due to $11.4 million repayment and slightly higher asset values

Interim dividend of 2 cents per share declared

Taylor Maritime Investments Limited, the specialist dry bulk shipping company, today announces that as at 31 December 2023 its unaudited NAV was $1.36 per Ordinary Share compared to $1.31 per Ordinary Share as at 30 September 2023.  The Company is pleased to declare an interim dividend in respect of the period to 31 December 2023 of 2 cents per Ordinary Share.  The NAV total return for the quarter was 3.9%.

The third 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 are harnessing the operating leverage of the Grindrod transaction which has delivered a younger, more efficient combined fleet, an increased carrying capacity and expected synergies and cost efficiencies to drive earnings power into a firming charter rate environment.  Reducing debt remains a strategic priority and further progress has seen debt to gross assets fall below 25% at quarter end.  We took advantage of strengthening market conditions towards the end of the period with 13 month index highs and locked in higher charter rates on a portion of the fleet.  Tight supply-demand fundamentals for the geared dry bulk segment continue to drive positive forward sentiment.  The management team remain closely aligned with shareholders and maintain strong conviction in the Company's prospects as reflected by a purchase by the Principals of the original Taylor Maritime group of a further 3.9 million shares during the period.  There remains plenty to do in 2024 and I am confident of achieving our goals."

Key Highlights (to 31 December 2023)

Opportunity to lock in higher charter rates as indices reached 13-month highs

·      The Company capitalised on the rapid strengthening of market conditions from mid-November through to mid-December, when the adjusted BHSI TCA (net) and the adjusted BSI TCA (net)[1] reached a peak of $13,660 per day and $17,006 per day respectively  

·      Charter income for the combined TMI and Grindrod Shipping Holdings Limited ("Grindrod") fleet increased c.15% to an average time charter equivalent ("TCE") rate of $11,977 per day for the quarter.  At quarter end, the combined average TCE was $11,996 per day (versus $10,695 at 30 September 2023)

·      As enquiry and rates for 3-5 month charters increased from November, several period charters were fixed on TMI vessels at rates in the range of $12,350 and $15,200 TCE per day to straddle Chinese New Year

·      Overall, the combined Handysize fleet and Supra/Ultramax fleet outperformed the Company's benchmark indices by c.US$1,896 per day (22%) and c.US$2,734 per day (24%), respectively, for the 2023 calendar year

Vessel sales and fleet market value

·      The Company completed the sale of the two oldest vessels in the TMI fleet; a 2004 built 34k dwt Handysize vessel for gross proceeds of $7.8 million, generating an IRR of 44.2% and MOIC of c.1.8x, and a 2007 built 33k dwt Handysize vessel for gross proceeds of $9.0 million, generating an IRR of c.19% and MOIC of c.1.4x (as announced on 5 December 2023)

·      Grindrod completed the sale of the last two Chinese built Handysize bulk carriers for aggregate gross proceeds of $23.2 million, resulting in a combined fleet of fully Japanese built vessels (as announced on 11 December 2023)

·      The Market Value of the combined fleet increased by approximately 3.7%, on a like for like basis, to $734.4 million (TMI $275.8 million and Grindrod $458.6 million excluding chartered-in ships without purchase options) with improving market conditions over the period

·    Following the selective fleet divestments, the combined owned fleet comprised 40 Japanese-built vessels at quarter end (TMI 19 and Grindrod 21[2]) with an attractive average age of 10.5 years and a larger average carrying capacity of c.40k dwt, with commensurate increased earnings capacity.  The fleet renewal, facilitated by Grindrod's fleet of younger and, on average, larger vessels, positions the portfolio well for expected medium-term improvement in the bulker market and in terms of rising capital values when it is anticipated that more modern tonnage will outperform older less efficient ships

·    Overall, the sixteen divestments since the Grindrod transaction have averaged a 3.7% discount to carrying value[3]

Progress with debt reduction

·      The Company's debt-to-gross assets ratio was 24.9% at the end of December (versus 26.9% at 30 September 2023) as a result of a repayment of $11.4 million of debt and a slight rise in asset values.   This is now below the 25% target set by management following the Grindrod acquisition.  The Company's outstanding debt was $156.2[4] million at the quarter end

·      Excluding lease liabilities and so taking interest bearing debt only, look-through debt-to-gross assets was 35% at 31 December 2023 with outstanding debt of $298.7 million on a look-through basis

·      In line with our strategy of being free of significant structural leverage, TMI will continue to reduce Company debt from agreed and planned vessel sales as well as reducing 'look through' leverage to 25-30% of gross assets

Grindrod capital reduction

·      Grindrod distributed $32.4 million of cash in two tranches per its previously announced capital reduction with TMI receiving $26.7 million in line with its 82.3% ownership with proceeds partly used to reduce debt and partly retained for general corporate purposes

Board changes

·      As previously announced, Charles Maltby was appointed as an independent non-executive Director of the Company with effect from 1 January 2024 bringing over 20 years of experience in the shipping industry.  Prior to his appointment, Charles was serving as a Director of Grindrod before his retirement from the Board and from Grindrod's Compensation and Nomination Committee on 31 December 2023

·      Also as previously announced, Helen Tveitan will retire as a non-executive Director and Chair of the Company's ESG & Engagement Committee on 31 March 2024, in order to devote greater time to her other business and personal commitments

Increased shareholder alignment

·      Principals of the original Taylor Maritime group acquired a total of 3,910,450 ordinary shares in the market during the period taking the total number of ordinary shares in the Company owned by such persons (directly or indirectly) to 26,493,914 ordinary shares (c.8% of issued share capital)

Post-Period Trading Update (since 31 December 2023)

·      Grindrod agreed to divest a Handysize vessel, expected to complete this quarter for gross proceeds of $10.4 million, a 1.5% premium to carrying value

·      There have been strong levels of charter enquiries and firm rates ahead of Chinese New Year

·      The number of ship days for the fleet which are covered for the 2024 calendar year stands at 42% at an average TCE rate of $12,387 per day

Dry bulk market review and outlook

Dry bulk charter rates surged from mid-November with the BHSI and BSI reaching 13-month highs in mid-December due to increased port congestion in Brazilian grain load ports and further tightening of drought-related transit restrictions at the Panama Canal (expected to continue through the first half of 2024).  Longer wait times and increased tonne-miles applied upward pressure on rates, as vessels re-routed via Cape Horn and the US and South America saw robust grain trading activity.

Spot market rates then softened over the holiday period.  However, rates have remained more stable than usual and are expected to remain so through Chinese New Year, reflecting positive forward sentiment.  Short-term period charter enquiry and rates remain firm as charterers seek to lock in tonnage before the typical rate recovery following Chinese New Year.

Looking further into 2024, restocking of global inventories of bulk commodities should ensure that charter rates and asset values remain relatively strong and demand may be bolstered if interest rates are considered to have peaked, with the possibility of cuts later in the year.  Specific to the geared dry bulk segment, improving industrial trends in China and firm forecasts for global grain exports are expected to result in significant growth in minor bulk and grain tonne-miles.  In addition to the Panama Canal, ongoing tensions in the Red Sea have begun to impact global shipping, causing further re-routing and increased voyage times, providing further potential upside given the resulting impact on effective supply.

Strong positive momentum in freight rates at the end of last quarter suggests demand and supply are finely balanced in our segment.  We maintain a favourable medium-term investment outlook for our defensive asset class transporting necessity goods with anticipated tightening in supply owing to sustained low new ordering activity.  Environmental regulatory pressures resulting in continued reductions in operating speeds and recycling of older less efficient units will also impact effective supply.  These factors are likely to contribute to strong market improvement and capital appreciation over the next two to three years.

ESG

The Company released its second annual ESG Report during the quarter, covering the financial year ended 31 March 2023. The report can be viewed on TMI's website.  The Report highlights progress made on TMI's sustainability priorities including decarbonisation, social and community impact, and responsible business practices.

The Company obtained independent assurance of its greenhouse gas emissions, as well as completing a more comprehensive Scope 3 emissions measurement.  TMI's ESG disclosure follows guidance from the Task Force on Climate-related Disclosure, the Global Reporting Initiative, and the Sustainability Accounting Standards Board.

TMI continues to work closely with Grindrod on ESG strategy and alignment.

ENDS

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 19 vessels 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.  Grindrod has an owned fleet of 18 dry bulk vessels complementary to the Company's fleet excluding vessels held for sale.  They are Japanese built, including 11 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 40 vessels (including 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) (listed in Oslo BWEK:NO).  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 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