London-listed shipping fund Tufton Oceanic Assets has handed out a higher dividend payment for the second quarter of 2024.
The owner of tankers, bulkers and LPG carriers issued a dividend of $0.025 per ordinary share for the quarter ending 30 June 2024, compared with $0.021 this time last year.
“Operating profit was slightly higher quarter on quarter as our bulkers and chemical tankers benefited from strong markets,” Tufton said.
As the bulker market strengthened the company signed fresh deals on a number of vessels.
Charters on four bulkers were extended and new charters were fixed on two different ships, it told investors in a trading update today.
Meanwhile the charter-free value of Tufton’s portfolio rose by $0.051 per share as both bulker and tanker values rose, it explained.
Supply-driven upcycle
In terms of its investment outlook, Tufton said that shipping was in the middle of a “supply-driven up cycle” as disruptions are adding to tonne-mile demand and have the potential to persist.
Tufton added: “The product tanker and bulker markets continued to improve with increasing asset prices and earnings.
“Despite the normalisation of transits through the Panama Canal, the medium-term thesis of a supply-driven up cycle remains intact with ageing fleets and tightening environmental restrictions.”
The company believes this is currently a period of opportunity for shipping segments where investment has been below levels required for fleet renewal.
“While demand growth for bulkers remains more dependent on macroeconomic developments in Asia, rates continued to improve during the quarter, albeit at a slower pace,” Tufton added.
Tufton also attributes recent strength in the container ship market to the disruption in Suez Canal transits.
“The current market highlights pockets of value. Much of the uptick in container ship orders are expected to be delivered by 2026 and have been concentrated in the larger segments,” it said.
“The supply side in smaller container ships continues to be supportive in the medium term with an ageing fleet versus an orderbook of only -7% of fleet.”
