Taylor Maritim Regulatory News (TMI)

27 October 2022

Taylor Maritime Investments Limited (the "Company")

Quarterly NAV Announcement, Trading Update and Publication of Factsheet

Continued healthy earnings through the quarter despite a softer market environment

Firming of charter rates since September with positive outlook

Offer to acquire up to 100% of Grindrod Shipping

· Firm charter rates and cash yields in excess of 24%

· Unaudited NAV per share c.5% lower since 30 June 2022 but up c.73% since IPO

· Conditional cash offer of $26.00 per share aggregate value for Grindrod Shipping

· Interim dividend of 2 cents per share declared

Taylor Maritime Investments Limited, the specialist dry bulk shipping company, today announces that as at 30 September 2022 its unaudited NAV was $1.70 per ordinary share, a decrease of c.5% since 30 June 2022 but up c.73% since IPO in May 2021.

The Company is also pleased to declare an interim dividend in respect of the period to 30 September 2022 of 2 cents per Ordinary Share, reflecting the annualised dividend target for financial year 2022 of 8% on the IPO price.

The second quarterly factsheet of the current financial year is also now available on the Company's website, www.taylormaritimeinvestments.com.

Quarter Key Highlights (to 30 September 2022)

· The Company announced its proposal to acquire all of the issued ordinary shares of Grindrod Shipping not already owned by the Company by way of a cash offer for an aggregate value of $26.00 per share ($21 in cash plus a dividend of $5 per share)

· At quarter end, the fleet's average net time charter rate was $17,670 per day, with an average duration of six months and an average annualized unlevered gross cash yield of 24% based on 30 September 2022 Fair Market Values, generating an operating profit for the period of c.$28 million covering the interim dividend by more than four times

· The Company completed a previously announced vessel sale for $17.2 million, generating an IRR of 80% and MOIC of 1.9x

· At quarter end, the Company's fleet comprised 27 vessels of which 26 were Handysize and one Supramax. The Market Value of the vessel portfolio at the quarter end was $447 million, down c.15% on a like-for-like basis over the quarter, as softer charter rates and typical seasonal weakness affected asset values

· Combined with dividends paid during the quarter of 2.00 cents and a c.39% increase in Grindrod Shipping's share price over the period (from $17.15 to $23.93), the net effect was a decrease in unaudited NAV of c.5% over the quarter

· Two vessels in the fleet were fixed on time charters of approximately 12 months at the start of the quarter, before the onset of the expected summer slowdown. This was in line with the Company's intention to secure more earnings cover by fixing a greater portion of the fleet on longer-term charters (increased to 32% of the fleet)

· The Company received a further dividend of $0.84 per share from Grindrod Shipping (a total of $4.1 million). c.$10 million in dividends has been received in aggregate to date in relation to TMI's existing Grindrod Shipping shares representing a c.16% yield on the investment

· The first biofuel trial onboard a TMI vessel took place generating a CO2 saving of 25.74% on a well-to-wake basis

Post-Period Trading Update (since 30 September 2022)

· Post period, on 12 October the Company entered into a Transaction Implementation Agreement with Grindrod Shipping, announcing a Firm Offer structured as a voluntary conditional cash offer for an aggregate transaction value of $26.00 per share including $5 per share special dividend paid by Grindrod Shipping

· The Company agreed to sell a 2012 built Supramax vessel for net proceeds of $20.1 million. The vessel was an IPO seed asset and the sale is expected to complete before the end of November 2022, generating an IRR of 25% and MOIC of 1.3x

· Six vessels commenced new short-term time charter fixtures taking the portion of the fleet on charters of 6 months or less to 58%, creating an opportunity to capture an expected rising charter market this quarter which is growing steadily from recent lows

· The Company has covered 55% of remaining fleet days for the Financial Year ending 31 March 2023 at an average net time charter rate of $18,638 per day

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

"Our offer to acquire the remaining shares in Grindrod Shipping represents the logical next move to consolidate TMI's existing 26% minority stake and take control of an enlarged, high-quality fleet to realise significant efficiency gains and generate enhanced returns for our shareholders. With the improved age profile, greater carrying capacity and reduced carbon intensity of the combined fleet, TMI will be even better positioned to take advantage of the favourable market conditions expected to continue to the end of 2024 and possibly beyond."

Handysize bulk market outlook

The softening of the charter market was triggered mainly by port de-congestion which released previously constrained supply and coincided with the seasonal summer holiday lull. The market has since shown signs of recovery with the Baltic Handysize Index up c.16% at quarter end since its early September lows, despite the demand-limiting factors of slowing global GDP growth, China's construction slowdown and the ongoing conflict in Ukraine. Driven by GDP oriented demand and the supply of necessity goods, we expect a potential for improvement towards the end of the year once the US Gulf grains start moving, despite broader economic headwinds.

Asset values decreased during the quarter with Clarksons benchmark for a ten year old 32k dwt built Handysize falling to $18.0 million at quarter end, still up c.6% when compared to the same period last year and well above the long term historical average of $15.0 million. Asset values appear to be gradually improving. We remain confident there is further upside to second-hand asset values with the Handysize orderbook at multi-decade lows, a tightening supply outlook and steady minor bulk demand growth.

Financing

The RCF was $160 million drawn at the end of the quarter. The Company has arranged an Acquisition Facility to partly fund the proposed acquisition of Grindrod Shipping dependent on level of ownership achieved. The current intention is to repay drawn funds from both the RCF and Acquisition Facility, if required, from pending and future vessel sales and operating cashflow.

ESG

Sustainability is at the heart of the way the Company is managed, and the profile and management of the fleet is integral to this. Post period, the Company released its inaugural ESG report for the financial year 2022. The report highlights progress to date and actions taken to meet near-term carbon intensity targets. ESG disclosure is in line with the Task Force on Climate-related Disclosure and the Sustainability Accounting Standard Board. The report can be viewed on the company's website.

This quarter TMI completed its first biofuel trial onboard a TMI vessel in collaboration with a key customer. The trial of B30 biofuel (containing primarily cooking and other waste oils) on a voyage, generated a CO2 saving of 25.74% on a well-to-wake basis, compared to consuming purely VLSFO (Very Low Sulphur Fuel Oil). Use of biofuel onboard is one of the interim steps identified by TMI in achieving a long-term target of operating a net-zero fleet by 2050.

Improving fleet efficiency is another key element of the Company's ESG strategy. TMI has an ongoing, comprehensive programme to improve vessel energy efficiency and lower carbon intensity across the fleet. During the period, a further two vessels were fitted with energy saving devices including boss-cap fins, high performance paints, pre-swirl ducts and fuel efficiency monitoring systems.

Seafarer welfare and training remain a key pillar of TMI's ESG approach. In collaboration with the Company's technical manager, TMI is sponsoring trainee cadets onboard company vessels as part of their cadet training programmes, giving junior seafarers the opportunity to gain valuable experience and training onboard.

The ESG & Engagement Committee of TMI's Board continues to oversee the Group's ESG approach.

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 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 8% p.a. (on the Initial Issue Price). The current portfolio numbers 27 vessels in the geared dry bulk segment (Handysize and Supramax types) (including one ship held for sale). The ships are employed utilising a variety of employment/charter strategies.

The Company announced an increased interim dividend of 2 cents per Ordinary Share paid on a quarterly basis on 28 July 2022, 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.

About Geared Vessels

Geared vessels are characterised by their own loading equipment. The Handysize market segment is 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.