Bulker owner Taylor Maritime Investments is bullish on the prospects for its slimmed-down fleet after slipping into the red for the last financial year.
The London-listed company has sold 21 older vessels since taking a controlling stake in Singapore rival Grindrod Shipping in December 2022.
Earlier this year, TMI received shareholder backing to take 100% control of Grindrod.
Chairman Henry Strutt said the group was making further progress towards the integration of the Nasdaq-listed bulker owner, as well as protecting the balance sheet through reductions in debt and finance costs.
“This necessitated the sale of a number of revenue-generating assets, leading to a drop in corresponding charter revenue income,” he added.
For the year to 31 March, TMI posted a net loss of $53.4m, against a profit of $26.2m in the previous year.
This was due to a revaluation of assets that knocked $73.6m off the bottom line.
The company’s net asset value stood at $485m, with Grindrod contributing $325m to this.
TMI is paying a dividend of $0.08 for the year.
Outstanding debt was reduced from $222m to $151m over the period.
The fleet stands at 39 Japanese-built vessels, with a total market value of $793m.
Beating the market
The combined handysize and supramax/ultramax fleets convincingly outperformed their benchmark indices by $1,416 per day, or 15%, and $2,549, or 21%, respectively.
Strutt said: “Persistent macro-economic headwinds, with interest rates remaining high, made for a challenging period with slower economic growth impacting freight markets.
“Despite this, the group delivered four quarterly dividends for shareholders, maintaining our dividend policy; a core commitment of the board,” he added.
Chief executive Edward Buttery said: “I was pleased that we considerably outperformed our benchmark indices during the period.”
“We executed an ambitious and successful vessel sales plan disposing of older, less efficient tonnage at close to carrying value, which allowed us to deleverage our balance sheet significantly,” he added.
Buttery said: “Overall, I’m enthusiastic about our next chapter, given our renewed fleet of larger, younger, high-quality Japanese-built vessels — thanks to the acquisition of Grindrod — and our positive view of the medium-term prospects for geared dry bulk.”
He said the market has been relatively stable since the end of March, albeit with asset values catching up with freight rates.
High newbuilding prices, buyer liquidity and positive forward sentiment continue to sustain firm asset values, the CEO explained.
In the medium term, TMI believes there could be a return of more steady demand and ongoing low supply growth.
“We expect our revenue to improve as supply and demand for dry bulk vessels remains tightly balanced,” Buttery added.
The CEO described the company as a “disciplined seller” of ships.
“The sizeable number of transactions is testament to the liquidity of the secondhand market,” he said.
Taking full control of Grindrod will also cut costs through simplifying the structure, the CEO added.
“This represents a logical conclusion to the acquisition of the controlling stake in Grindrod,” Buttery said.
