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Smooth sailing for Tufton

For the 12 months ended 30 June 2022, Tufton Oceanic Assets reported an NAV return of 32.5% and a profit of $107.3m, or $0.362 per share. It raised its dividend target from 7.5 cents to 8 cents. The manager thinks that this will be covered 1.8x up to the end of 2023.

Containership and bulker values rose strongly over the period as the market benefited from strong demand and inventory re-stocking in the second half of 2021. In 2022, in the face of a slower global economy, the containership market remained resilient due to port congestion and supply-side constraints while the bulker market benefited from short-haul demand for cargoes being partially replaced by long-haul demand.

The company’s fleet had no commercial idle time (voids) during the financial year. The manager had expected the product tanker market to improve in 2022 with global oil demand but the market has also benefited from short-haul demand for cargoes being partially replaced by long-haul demand.

As at 30 June 2022, the EBITDA-weighted average charter length was 0.9 years. The manager expects the portfolio charter length to increase as it shifts to chartering Tufton’s product tankers for longer terms at higher rates. Including the transactions announced on 20 September 2022 and the new charter for Marvelous, the pro forma portfolio average charter length is 1.4 years.

During the financial year, the company agreed to sell nine vessels and to buy nine vessels. Of the nine agreed acquisitions, eight vessels were delivered during the financial year and one after the end of the year. Following these transactions, the emissions intensity of the fleet as measured by the Energy Efficiency Existing Ship Index (EEXI) improved by more than 40% compared to the end of 2021. The manager expects further improvement in the portfolio emissions intensity as more of the vessels are retrofitted with energy saving devices (ESDs) and expects to complete ESD retrofits on at least eight vessels by early 2023.

SHIP : Smooth sailing for Tufton

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