RE: Results15 May 2025 11:31
Reply received, Part 1:
"One of our roles as managers is to anticipate market conditions and trade vessels accordingly; attempting to capture potential upside and provide downside protection for shareholders. We have been typically able to achieve this by taking advantage of the highly liquid market for our assets and crystalising profits through well-timed ship sales. As you know, following the Grindrod acquisition, we began selling vessels in a disciplined manner and at profitable levels. Partly, to enhance the profile of the fleet by selling older, smaller and less efficient tonnage but predominantly because we saw opportunity to lock in value to support our focus on deleveraging and strengthening the balance sheet consistent with Taylor Maritime’s long-term commitment to a prudent capital structure.
In anticipation of heightened levels of geopolitical and trade uncertainty stemming from dynamic US trade policy, we accelerated divestments over the last few months, capitalising on the seasonal improvement in market conditions and positive sentiment relating to Japanese-built vessels, to crystalise asset values and help ensure resilience through a potentially volatile 2025. These vessels sales will see us almost eliminate bank debt, reducing interest repayments by c.$12.4 million on an annualised basis.
It is important to note, however, that we retain a positive outlook for the market over the medium to long-term, given a favourable supply-side picture. We remain ‘long’ on the geared dry bulk segment and the Grindrod acquisition has helped us renew our fleet with high quality, Japanese built vessels that are, on average, younger (9.9 years vs 14.3 years) and larger (44.5k dwt vs 33.5k dwt) than the fleet we owned before the acquisition, with commensurate increased earnings power and capital appreciation potential. We hope to continue to sell ships profitably when the time is right and want to be ready to grow again and capitalise on opportunities as and when we see fit; deleveraging and strengthening the balance sheet creates optionality and puts us in a stronger position to be able to do so."
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