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Tufton Oceanic largely insulated from shipping sell-off so far

Two new vessels for Tufton Oceanic Assets : SHIP

In light of the coronavirus (Covid-19) afflicted volatility across markets, Tufton Oceanic (SHIP) has provided an update. The company says its strategy of portfolio diversification and strong charter coverage has insulated SHIP from the recent market volatility caused primarily by Covid-19. The company’s update made the following points:

  • Year to date, fair value losses in containerships and bulkers have been largely offset by fair value gains in tankers. The fair value decrease in the portfolio of $0.020 per share was more than offset by operating profit of $0.021 per share over the period;
  • In line with SHIP’s investment objectives, the average charter length of the portfolio is three years which minimises spot market exposure and portfolio volatility. Vessels which have charters expiring in the next six months represent around 14% of NAV; and
  • Including the newly acquired product tanker, the manager recently fixed two tankers in the portfolio on time charters for a minimum of three years to a major commodity trading company at mid-teen yields. The manager also recently extended the employment of one containership (Kale) for 7 to 12 months, albeit at a lower yield than previously, without any void period between charters despite the vessel being positioned in Asia.

SHIP’s manager believe’s the company’s strategy will continue to result in low volatility of cash flow and NAV. With the transactions announced earlier this quarter, SHIP currently has approximately $20m of investible cash.

SHIP: Tufton Oceanic largely insulated from shipping sell-off so far

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