Tufton Oceanic Assets : 1Q22 Factsheet

INVESTMENT OBJECTIVES AND STRATEGY

KEY STATISTICS
as at 31 Mar 2022
(unless otherwise stated)
No. of Shares outstanding	308.63m
Share Price	$1.35
NAV	$427.1m
NAV per share	$1.384
Premium/(Discount) to NAV	(2.4%)
Target IRR (long-term)	12% p.a.
Target Dividend per Share	$0.08

Management Fee: 0.85% of NAV below $250m 0.75% of NAV between $250m and $500m 0.65% of NAV above $500m (no fees on cash)

Performance Fee: 20% of excess return over 12% net hurdle, partially paid after 7 years

INVESTMENT MANAGER

Tufton Investment Management Ltd

70 Pall Mall, 1st Floor London SW1Y 5ES

The Investment Manager is Tufton Investment Management Ltd ("Tufton") The Tufton group was founded in 1985 to provide financial services to the maritime and energy industries and since 2000 has concentrated predominately on investment and asset management. The Investment Manager is authorised and regulated by the Financial Conduct Authority and has offices in London, Isle of Man, and Cyprus. Tufton is fully dedicated to the maritime industry with an in-house research team and Asset Manager providing operational and accounting services to each vessel within the portfolio. The Investment Manager is committed to Responsible Investment by integrating ESG principles into its investment process and since December 2018, has been a signatory of the UN Principles for Responsible Investment

Fund Managers:

• ▪ Andrew Hampson: 44 years of experience in banking and shipping finance. Joined Tufton in 2001.

• ▪ Paulo Almeida: 27 years of experience in fund management, investment banking and the shipping industry. Joined Tufton in 2009.

Signatory of

To provide investors with an attractive level of regular and growing income and capital returns through investing in a diversified portfolio of secondhand commercial sea-going vessels.

PORTFOLIO HIGHLIGHTS

NAV total return was 2.0%. The Company divested four Containerships with returns materially exceeding targets and agreed to acquire two Handysize Bulkers. Both Bulkers are on fixed-rate time charters, one for eighteen to twenty-four months producing a net yield over 15% and the other for nine to twelve months producing a net yield of 25%. Upon completion of these transactions, the Company will have a fleet of twenty-one vessels with an average expected charter cover of 1.4 years and will have reduced the portfolio Price to Depreciated Replacement Cost ("P/DRC") ratio to below 100%. A lower P/DRC signifies a de-risked portfolio with higher upside potential. The capital re-allocation to fuel-efficient Bulkers and a fuel-efficient Tanker also improves the emissions intensity of the portfolio by c.30% since 3Q21.

None of the Company's vessels have been impacted by the war in Ukraine and all of them remain fully insured against war-like events. As a matter of policy, we will exercise our right to prohibit portfolio vessels from trading in areas assessed as "perilous" where there is heightened physical risk to the vessel or its crew. Tufton continues to prioritise crew welfare on all the Company's vessels.

DIVIDEND

The Company declared a 1Q22 dividend of $0.02 per share, payable on 20 May. The Company targets a total annual dividend of $0.08 per share and is forecast to have a dividend cover of 1.7x over the next 18 months despite not being fully invested. Tufton expects the forward cover to be at least 1.8x once SHIP is again fully invested.

INVESTMENT OUTLOOK

Initial assessments by Clarksons Research suggest limited impact from the Russian invasion of Ukraine on the overall demand for seaborne trade (in ton-miles) despite the limited potential negative impact on cargoes (tons) as disruptions generally tend to have a positive effect on shipping demand by increasing average trade distances.

The Containership market remained strong over the quarter with record time charter rates and asset values. However, there were fewer transactions in the asset market in February and March. The Containership orderbook has risen to c.25% of the fleet which will result in increasing fleet growth from 2023. The Company has therefore re-allocated capital away from the Containership segment. The Tanker market is expected to improve over the year. Clarksons Research forecasts higher tanker demand growth due to shifts in trade to increasing average trade distances. The Product Tanker spot market strengthened significantly over the quarter and several transactions in April show rising asset values. Bulkers continue to offer strong yield and have supportive supply fundamentals with the orderbook at only c.7% of fleet.

Tufton believes the shipping market is in a multi-year upcycle as the lack of new orders in most segments results in supportive supply-side fundamentals and offers investors inflation protection. The Clarksons newbuilding price index has risen c.25% since the end of 2020.

COMPANY INFORMATION

PORTFOLIO PERFORMANCE

Registered Address

3rd Floor 1 Le Truchot St Peter Port Guernsey, GY1 1WD

Specialist Fund Segment of theListing

London Stock Exchange

NAV total return for the quarter was 2.0%. Operating profit was $0.031/share. The rise in charter-free values in all segments was offset by the fall in charter value as benchmark time charter rates rose. The change in charter value is usually < 50% of the change in charter-free value which reduces NAV volatility. This quarter is unusual in that the change in charter value more than outweighed the change in charter-free value. We expect this to normalise in 2Q22.

IPO Date

20th December 2017

ISIN / SEDOL

GG00BDFC1649 / BDFC164

$1.75

Ticker

SHIP

$0.210

Dividend FrequencyQuarterly

$1.50

$0.031

$0.002

ISA / SIPP eligible?

Website

www.tuftonoceanicassets.com $1.00

$1.376

$1.384

Yes $1.25

$1.384

Email

[e-mail]

BOARD OF DIRECTORS

NAV	Operating	Change in	Change in	Dividend Performance NAV
31 Dec 2021	profit	charter-free	charter	fee accrual 31 Mar 2022
values	value

Robert King (Chairman)

Paul Barnes

Stephen Le Page Christine Rødsæther

FLEET NET YIELDS

CORPORATE ADVISERS

The run rate yield+ on the fleet is 14.0%. Average expected charter length (EBITDA weighted) is c.1.4 years.

Hudnall Capital LLP

18.0%

Adam House, 7-10 Adam Street London, WC2N 6AA

Andrew Cade: [phone]

Singer Capital Markets

1 Bartholomew Lane, London, EC2N 2AX Alan Geeves: [phone] James Waterlow: [phone] Sam Greatrex: [phone]

ADMINISTRATOR & SECRETARY

Maitland Administration (Guernsey) Limited

(per registered address above)

Wikus Van Schalkwyk: [phone]

Product & Chemical Tankers

20% 15% 10% 5% 0%

Gas TankerContainershipsBulkers

Fleet Avg

CORPORATE CALENDAR

+On market value and after capex accrual and fees, pro forma for announced transactions

AGM

27 Oct 2022

PORTFOLIO OVERVIEW+

Reporting period end Dividend Calendar

30 Jun 2022 (FY)

Vessel Type

Charter LengthVessel AgeVessel Charterers

1Q 22

2Q 22

• 3Q 4Q

• 22 22

Release date

Ex-dividend date

27 Apr 5 May

Record date

Payment date

6 May 20 May

19 Jul 28 Jul 29 Jul 12 Aug

18 Oct 27 Oct 28 Oct 11 Nov

TBC

TBC

Containerships

Eleven charterers

TBC

Product & Chem Tankers

Gas Tanker

< 1 year3-5 years

1-3 years

5-10 years10-15 years

TBC

Bulkers

15-20 years

Net current assets

+ Pro forma for announced transactions

Disclaimer: The information in this document has been prepared for information purposes only and does not constitute an offer or solicitation for the purchase or sale of any investment or financial instrument in Tufton Oceanic Assets Limited (the "Company") and should not be relied on by any person for the purpose of accounting, legal or tax advice or for making an investment decision. The payment of dividends and the repayment of capital are not guaranteed by the Company. Any forecast, projection or target is indicative only and not guaranteed in any way, and any opinions or views expressed in this document are those of Tufton Investment Management Ltd (the "Investment Manager"), and do not constitute investment advice and are subject to change without notice, and neither the Company nor the Investment Manager is under any obligation to update such opinions. Any potential investments identified by the Investment Manager are prospective only and there is no guarantee that the Company will proceed with any of them. Past performance is not a reliable indicator of future performance, and investors may not get back the original amount invested. Unless otherwise stated, the sources for all information contained in this document are the Investment Manager. Information contained in this document is believed to be accurate at the date of publication, but neither the Company nor the Investment Manager gives any representation or warranty as to the accuracy or completeness of the information in this document. This document does not contain and is not to be taken as containing any financial product advice or financial product recommendation. Neither the Company nor the Investment Manager accepts any liability whatsoever for any loss (whether direct or indirect) arising from any use of this document or its contents. Tufton Investment Management Ltd. is authorised and regulated by the FCA, registered in England & Wales (Registered Number: 01835984). Registered Office: 70 Pall Mall, 1st Floor, London SW1Y 5ES