Taylor Maritime reports solid quarterly NAV return

26th Jul 2024 11:11

(Sharecast News) - Taylor Maritime Investments reported an unaudited net asset value of $1.52 per share as of 30 June in its quarterly update on Friday, up from $1.48 at the end of March, representing a total return of 4.3% for the quarter.

The London-listed firm declared an interim dividend of two cents per share for the period.

It said highlights in the period included the approval of the selective capital reduction (SCR) by Grindrod Shipping's shareholders, effective 16 August, resulting in Grindrod becoming a wholly-owned subsidiary of TMI.

The SCR was expected to positively impact TMI's net asset value by about seven cents per share, bringing it to $1.60 based on 30 June fair market values.

Taylor said the combined fleet of TMI and Grindrod demonstrated strong chartering performance, with average time charter equivalent (TCE) earnings of $13,264 per day for the quarter, a 7% increase from the prior period.

At the end of the quarter, the average TCE was $14,707 per day, a 12% increase, as the fleet, mainly on short period charters, capitalised on an improving market, with earnings outperforming benchmark indices.

During the period, TMI completed the sale of a 2008-built Handysize vessel for $12.3m and agreed to sell a 2012-built Handysize vessel for $11.95m.

Grindrod also completed the sale of a 2014-built Ultramax vessel for $22.4m.

Taylor said the strategic divestments contributed to a 2.3% increase in the market value of the combined fleet, which now comprised 38 Japanese-built vessels with an average age of 10.4 years and larger carrying capacity.

TMI's debt-to-gross assets ratio improved to 21.7% from 23.5% at the end of March, with outstanding debt reduced to $140.3m.

The combined group's look-through debt-to-gross assets ratio slightly decreased to 35.4%, with a focus on further debt reduction through planned vessel sales.

Post-period, the SCR was approved by the High Court of Singapore on 16 July, making Grindrod a wholly-owned subsidiary of TMI.

Additional sales of a 2009-built TMI Handysize vessel and a 2024-built Grindrod Handysize vessel were agreed, enhancing the fleet's market value.

The board said the dry bulk market remained strong, with charter rates elevated due to disruptions in the Red Sea and Panama Canal, supporting demand.

Taylor said the market outlook for the rest of 2024 was positive, driven by favourable supply-side dynamics, modest supply growth, and tightening environmental regulations.

On the ESG front, TMI said it had been trialling a sustainable graphene-based propeller coating to improve vessel efficiency, and continued its fleet efficiency program.

It added that crew wellbeing remained a priority, with a new digital platform introduced to support seafarers' health and mental wellbeing.

"We continue to take advantage of robust conditions in freight and asset markets," said chief executive officer Edward Buttery.

"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."

Buttery said TMI was set to gain 100% ownership of Grindrod, which he said would 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."

At 1107 BST, shares in Taylor Maritime Investments were up 1.73% at 82.4p.

Reporting by Josh White for Sharecast.com.