Taylor Maritim Regulatory News (TMI)

9 December 2022

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

Unaudited Interim Results for the period 1 April 2022 to 30 September 2022

Healthy earnings through the period despite mixed market conditions

Offer to acquire up to 100% of Grindrod Shipping

Vessel sales completed leading to $20m repayment of RCF

First biofuel trial onboard a TMI vessel

Taylor Maritime Investments Limited, the specialist dry bulk shipping investment company, announces its interim results for the six month period ended 30 September 2022.

The Interim Report of the current financial year is also now available on the Company's website, www.taylormaritimeinvestments.com and on the National Storage Mechanism, https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Key Highlights (1 April 2022 to 30 September 2022)

· The Company's Total Net Asset Value ("NAV") return per Ordinary Share was +1.41% for the six month period ended 30 September 2022

· During the period, the Company completed a total of three previously announced vessel sales and agreed and completed the sale of a 2009 built Handysize vessel for net proceeds of US$17.2 million which delivered to its buyer in August. The vessel was an IPO seed asset and the sale generated an IRR of 80% and MOIC of 1.9x, crystallising the rise in asset values early in the period

· The Company's fleet consisted of 27 vessels at the end of the period (including one vessel sold in November) with a total market value of US$445 million, a decrease of c.6% or c.US$30m versus the 31 March 2022 Market Value of c.US$476m for the same portfolio of vessels. Of the 27 vessels, 26 are Handysize and 1 is a Supramax. The average age of the fleet is 11.10 years

· At 30 September 2022, the Company's c.26% stake in Grindrod Shipping was valued at a share price of US$23.93 per share amounting to US$118 million in total

· The Company received total dividends of US$1.31 per share during the period from its stake in Grindrod Shipping representing a total of c.US$6.4 million. Since the initial investment, the Company has received an annualized yield of c.16% with c.US$10 million in dividends received to date through to the end of September

· During the period, the Company announced a possible cash offer to acquire all of the issued ordinary shares of Grindrod Shipping not already owned by the Company for an aggregate value of US$26.00 per share (US$21 in cash plus a special dividend of US$5 per share payable by Grindrod Shipping)

· The Company's fleet's average net time charter rate for the period was US$18,858 per day ending the period at US$17,418 per day, a decrease of c.6.5% from 31 March 2022, with an average duration of six months (31 March 2022: six months) and an average annualised unlevered gross yield of c.24% (31 March 2022: 24%)

· The Company declared total dividends of 6.97 US cents per Ordinary Share in the period to 30 September 2022. Dividend cover for the financial period to 30 September 2022 was 3.6x (inclusive of last financial year final quarter dividend of 1.75 cents paid in May 2022 but excluding the special dividend of 3.22 US cents paid in June 2022)

· During the period, the Company announced a new annualised dividend target for financial year 2023 of 8% on the IPO price and increased the interim dividend from 1.75 US cents per Ordinary Share to 2 US cents per Ordinary Share

· In accordance with this, the Company declared an interim dividend on 27 October 2022 of 2 US cents per Ordinary Share in respect of the quarter ended 30 September 2022, which was paid on 25 November 2022

· The first biofuel trial onboard a TMI vessel took place generating a lifecycle CO2 emissions saving of over 25% and a further five vessels were fitted with energy saving devices including boss-cap fins, high performance paints, pre-swirl ducts and fuel efficiency monitoring systems

Post-Period Trading Update (since 30 September 2022)

· Post period, on 11 October 2022, the Company entered into a Transaction Implementation Agreement with Grindrod Shipping and on 12 October 2022 announced an offer, structured as a voluntary conditional cash offer to acquire all of the issued ordinary shares of Grindrod Shipping not already owned by the Company, for an aggregate transaction value of US$26.00 per share including US$5 per share special dividend payable by Grindrod Shipping. Documentation relating to the offer was published on 28 October 2022, commencing the initial offer period

· A resolution to amend the Company's investment policy to facilitate the proposed acquisition notably for an exceptional increase in debt for a maximum of 18 months was passed at an EGM held on 28 October 2022

· On 29 November 2022, the Company announced that the offer had become unconditional in all respects. At expiry of the initial offer period, 47.20% of Grindrod Shipping shareholders had tendered their shares bringing the Company's ownership to 73.78% after accounting for outstanding awards of forfeitable shares which became issuable. Following the expiry of the initial offer, a subsequent offer period commenced which is due to expire on 19 December 2022

· The Company completed the sale of a 2012 built Supramax vessel for net proceeds of $20.1 million. The vessel was an IPO seed asset and the sale generated an IRR of 25% and MOIC of 1.3x. The proceeds were used to repay $20m of the RCF, reducing the drawn amount to $140m

· The Company has covered 59% of remaining fleet days for the financial year ending 31 March 2023 at an average net time charter rate of $18,135 per day

Commenting on the interim results, Nicholas Lykiardopulo, Independent Chair, said:

"After a successful first year since listing during which we were able to capitalise on the post-lockdown rebound in seaborne trade, TMI continues to deliver attractive yields despite the emergence of considerable economic headwinds. We increased the annualised dividend target at the beginning of the period, reflecting our confidence in market fundamentals and defensive attributes of the geared dry bulk segment. The offer for Grindrod Shipping results in an enlarged group enabling the Company to take further advantage of the strong earnings environment we anticipate in the medium term."

Edward Buttery, Chief Executive Officer, added:

"We generated healthy earnings and completed several vessel sales, crystallising solid returns on investments which allowed us to repay $20m of our RCF. This strengthened our balance sheet as we launched our bid to acquire the remaining shares of Grindrod Shipping. This acquisition will allow us to take further advantage of favourable market dynamics, while supporting TMI's strategy to own a larger, younger, more carbon efficient fleet. Despite macro uncertainties, we remain confident in the fundamentals of the geared dry bulk sector and are cautiously optimistic that slower operating speeds will have the effect of removing supply from the fleet as regulations come into force next year. Overall, therefore, the Group anticipates charter rates and dry bulk earnings should remain above historical averages into 2024 when supply growth is forecast to be at a historic low and with the potential for healthy demand as economic headwinds ease."

Outlook

October saw an improvement in the market post the typical summer holiday lull, but this was stalled by drought conditions in the Mississippi River Basin and zero-Covid policies in China. The non-seasonal softness in the Atlantic has begun to subside and we anticipate some strength to emerge before the end of the calendar year. In the Pacific, rates have shown signs of stabilising in recent weeks as cargo and tonnage become slightly more balanced. In the medium term, recently announced stimulus measures in China are expected to have a positive impact on dry bulk demand, targeting the property and construction sector and are expected to coincide with the supportive gradual easing of zero-Covid policies as the country reopens next year. In the meantime, the fleet is well positioned, with 73% of our vessels currently trading in the Atlantic and, of those trading in the Pacific, only three are exposed between now and the end of the calendar year. Our charters are also well positioned to straddle the usual Christmas and Chinese New Year softening.

From January 2023, gradual lowering of operating speeds to reduce fuel consumption and meet International Maritime Organisation emissions targets is expected to reduce effective supply. Over time, these new regulations and the IMO's fuel efficiency rules should accelerate scrapping of older, less efficient tonnage - particularly pronounced in the older trading Handysize fleet. This slow down, combined with limited new vessel additions given a historically low orderbook and lack of yard availability should keep earnings above historical averages over the medium term and in turn support firm asset values.

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 26 vessels in the geared dry bulk segment. The ships are employed utilising a variety of employment/charter strategies.

On 29 November, the Company announced it had acquired a controlling interest in Grindrod Shipping Holdings Ltd ("Grindrod") (NASDAQ:GRIN, JSE:GSH).  Grindrod is Singapore incorporated and dual listed on NASDAQ and the Johannesburg Stock Exchange. Grindrod owns 25 smaller, geared vessel categories complementary to those of the Company's fleet. They are mostly Japanese built, including 15 Handysize vessels and 10 Supramax and Ultramax vessels. Grindrod also has six vessels in its chartered in fleet with purchase options on four.

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.

Important Information

This communication is for informational purposes only, is not a recommendation and is neither an offer to purchase nor a solicitation of an offer to sell any shares of Grindrod or any other securities, nor is it a substitute for the Tender Offer Statement on Schedule TO and other necessary filings that the Company and Good Falkirk (MI) Limited (the "Offeror") filed, and the Solicitation/Recommendation Statement on Schedule 14D-9 and other necessary filings that Grindrod filed, with the SEC on 28 October 2022. Any solicitation and offer to buy shares of Grindrod is only being made pursuant to the Offer to Purchase and related tender offer materials. The Tender Offer Statement, including the offer to purchase, the related letter of transmittal and certain other offer documents (as they may be updated and amended from time to time), and the Solicitation/Recommendation Statement on Schedule 14d-9 contain important information. Any holders of shares of Grindrod are urged to read these documents carefully because they contain important information that holders of shares should consider before making any decision with respect to the tender offer. The offer to purchase, the related letter of transmittal and the solicitation/recommendation statement and other filings related to the offer are available for free at the SEC's website at www.sec.gov. Copies of all documents filed with the SEC by the Company and/or the Offeror with regards to the tender offer are available free of charge on the Company's website at www.taylormaritimeinvestments.com/investor-centre/shareholder-information/. Copies of the Offer to Purchase and the documents filed with the SEC by Grindrod are available free of charge on Grindrod's website at www.grinshipping.com/investorrelations. In addition, holders of shares of Grindrod may obtain free copies of the offer materials by contacting the information agent for the offer, Georgeson LLC, at 1290 Avenue of the Americas, 9th Floor New York, NY 10104 and by telephone at (866) 695-6078 (toll-free).