Last checked at 
6 Jul 2021 07:00
6 July 2021
Tufton Oceanic Assets Limited (The "Company")
2Q21 Estimated Net Asset Value, Market Update & Sale of Containership
Tufton Oceanic Assets Limited announces that as at 30 June 2021, the estimated unaudited net asset value ("NAV") was $312.6 million and the estimated unaudited NAV per ordinary share was $1.158. The estimated NAV total return for the quarter was 11.7% despite the adverse movement in charter values discussed below. The estimated NAV total return was 33.3% for the financial year ended 30 June 2021. The final NAV and 2Q21 Dividend will be announced, and the 2Q21 Factsheet released, on 22 July.
As discussed further below in the Market Update, the containership and bulker markets continued to strengthen. Because of this, the portfolio negative charter value increased from minus $44.6m to minus $71.7 million during the quarter. Despite the recent increase, this figure will trend to zero (i.e. increase NAV) in the medium term ceteris paribus. The value of the Company's fleet if it were charter-free would be $391.7 million while its with-charter value reflected in the estimated NAV is $320.0 million.
Market Update
Since the market update provided by Tufton Investment Management Ltd (the "Investment Manager") for 1Q21, the containership and bulker markets have continued to strengthen. The Investment Manager believes this strength is because of the continued global economic recovery in the wake of the pandemic coupled with the continued supply side correction in shipping. While the tanker market remains weak, the Company is insulated by its strong contractual coverage. Tanker asset values have started to increase in anticipation of a recovery in demand for transport fuels and the continued supply side correction.
During the quarter, the charter for the bulker Lavender was extended for 14-17 months through early 2023. The charter extension will produce an annual net yield of approximately 17% and, as previously announced, the new bulker investments Mayflower and Laurel have forecast annual net yields of 16-20%.
Sale of Containership Kale
The Company has agreed to divest the Containership Kale for $21.5m. The realised IRR is 31%. Kale was acquired in February 2018 for $10.25m. This will be the Company's fourth divestment. Whilst the Company aims to hold its investments over the longer term, we will sell investments where this generates additional value for shareholders. Kale was acquired for 70% of depreciated replacement cost ("DRC") in 2018. It is being divested at over 170% of DRC.
The Investment Manager continues to identify an attractive pipeline of opportunities across a range of the Company's target sectors and expects to redeploy the proceeds promptly. Prospective investments include a bulker that will be chartered out for 2 years, a chemical tanker and a larger containership with a 4-7 year charter already in place. The Company will announce a further update in due course.
For further information, please contact:
Tufton Investment Management Ltd (Investment Manager) Andrew Hampson Paulo Almeida | +44 (0) 20 7518 6700 |
Singer Capital Markets James Maxwell, Alex Bond (Corporate Finance) Alan Geeves, James Waterlow, Sam Greatrex (Sales) | +44 (0) 20 7496 3000 |
Hudnall Capital LLP Andrew Cade | +44 (0) 20 7520 9085 |
About the Company
Tufton Oceanic Assets Limited invests in a diversified portfolio of secondhand commercial sea-going vessels with the objective of delivering strong cash flow and capital gains to investors. The Company's investment manager is Tufton Investment Management Ltd. The Company has raised a total of approximately $265m (gross) through its Initial Public Offering on the Specialist Fund Segment of the London Stock Exchange, on 20 December 2017, a subsequent placing and offer in October 2018, a placing in March 2019, a placing in September 2019 and a tap issue in March 2021.