Tufton Assets (SHIP) has locked in high charter rates on three more of its vessels in a further sign of the strong market conditions that boosted its annual results last week.
The investment company, which has a fleet of 21 ships, said the Mia Grace, a chemical and oil products tanker, had been fixed on a new long-term charter starting tomorrow for 12-14 months at $39,000 per day. That’s an 81% increase from its current charter rate of $21,500 per day and offers an annualised yield of around 29% based on the ship’s June 2026 value.
The Amilyn, a Handysize bulker, had been fixed on a 9-11-month time charter starting today at a day rate of over $15,000. This is around 20% more than Amilyn‘s sister ship, the Whitby, achieved in February when it was fixed at $12,750 per day.
Lastly, Tufton has exercised its option with the charterer of the Staithes to convert the vessel’s index-linked, or floating rate, charter to a fixed rate of $19,000 per day for the fourth quarter of this year. The fixed rate was at a premium to both spot rates and the Q4 forward freight agreement (FFA)[3] curve. At the end of the year the ship will revert to its floating-rate charter although Tufton again has the option to convert to a fixed rate in the first quarter of 2027.
“These fixtures show we will move decisively when market conditions create opportunity. Tightening sanctions and the closure of the Strait of Hormuz have further reduced the pool of compliant tankers, increasing demand for ships to transport crude oil, which is also tightening the market for product tankers,” said Nicolas Tirogalas, group CEO of Tufton Investment Management and SHIP’s portfolio manager.
Last week the £366m dollar-based shipping fund reported a 28.3% total investment return in the year to 30 June. This morning the 7%-yielding shares rose 0.7% to $1.38 at an estimated discount of around 13% to net asset value. They have rallied 32% in the past year. The company will publish its third quarter NAV on 22 October.
Our view
Richard Williams, senior analyst at QuotedData, said: “This provides some early evidence of the earnings upside we highlighted in SHIP’s annual results from vessels coming up for charter renewal into stronger markets. The standout is Mia Grace, where the new charter is 81% above its previous rate. The 20% higher rate secured for Amilyn compared with its sister ship’s February fixture also points to strengthening dry bulk markets, while fixing Staithes above both spot and forward rates shows SHIP making good use of the flexibility built into its charter arrangements.”
