Taylor Maritime Investments (TMI) has revealed an eye-catching deal to have a new bulker delivered in the first quarter of 2024.
The London-listed owner said it has contracted a 40,000-dwt handysize at an unnamed shipyard in Japan, taking advantage of a “rare early delivery window”.
It said that new Japanese vessels ordered can now only be handed over in the second half of 2025.
The deal is also its first newbuilding contract since the London initial public offering in 2021.
“This is part of a limited renewal strategy and is in conjunction with disposals of older vessels,” TMI said.
The new ship will be ammonia-ready, built by a “top-tier” Japanese yard.
Three older vessels are being sold from the fleet of 57 ships: two by TMI and one by Singapore’s Grindrod Shipping, which TMI took over in December.
TMI said asset values for 10-year-old 32,000-dwt bulkers fell from $18m to $16m over the last three months of 2022 but have since gained $500,000.
The level of ownership in Grindrod Shipping stands at 83.23%.
The combined fleet includes six chartered-in vessels, with purchase options on four of these.
The owned fleet is worth $1bn.
Payout from Grindrod
As part of the takeover, TMI received a $24.6m special interim dividend from Grindrod, representing a yield of 28% on its initial investment.
“Since the tender offer closed, the company and Grindrod have been making good progress in jointly evaluating the next steps to capitalise on available synergies from the combined fleet across insurance, commercial management, technical management and corporate activities,” TMI added.
In its third quarter ending 31 December, TMI achieved firm charter rates and cash yields of about 22% despite muted Chinese economic performance, the company said.
Net time charter equivalent rates averaged $15,830 during the quarter, contributing to an operating profit of $29.5m.
The Baltic Exchange average for handysizes was $9,983 at quarter-end.
“The company’s chartering strategy mitigated the impact of market fluctuations and volatility relating to weaker-than-expected demand from China and drought in the Mississippi River Basin in the first half of the period,” TMI said.
In the financial year ending 31 March, TMI has secured an average net time charter rate of $17,161 per day for 62% of remaining fleet days, and $17,384 for 20% of fleet days in the following year.
Solid returns from sales
Chief executive Ed Buttery said: “The combined fleet allows both companies to achieve enhanced scale and synergies, increasing TMI’s exposure to the geared dry bulk segment, which continues to demonstrate favourable long-term fundamentals.
“The secondary market is active and we’ve realised solid returns, with three sales agreed across the combined fleet and having completed one previously announced sale in line with our commitment to deleverage our balance sheet.”
Chinese New Year fell two weeks earlier than on average over the past 15 years, contributing to especially soft rates for January.
In a “normal” year, the market can be expected to improve by early March, TMI argued.
But the shipowner said it could be earlier than this in 2023, depending on how China adjusts to its new Covid policy.
