Tufton Oceanic Assets : 2Q22 Factsheet

Tufton Oceanic Assets Limited (SHIP)

2Q22 Factsheet

KEY STATISTICS

as at 30 June 2022

(unless otherwise stated)

No. of Shares outstanding	308.63m
Share Price	$1.23 / £1.01
NAV	$447.5m / £368.5m
NAV per share	$1.450 / £1.194
Premium/(Discount) to NAV	(15.2%)
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 OBJECTIVES AND STRATEGY

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 6.2%. The Company agreed to divest its penultimate Containership, Parrot, as well as the Handysize Bulker Lavender, and agreed to acquire a more fuel-efficient Handysize Bulker with a fixed rate time charter of four to six months producing a net yield of c.27%. The Company also agreed to acquire a fuel-efficient Product Tanker which is employed in a leading Product Tanker pool where the current net unlevered yield is >30%.

Upon completion of these transactions, the Company will have a fleet of twenty- one vessels with an average expected charter length of 0.9 years. None of the Company's vessels have been impacted by the war in Ukraine and all remain fully insured against war perils. 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.

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

DIVIDEND

The Company declared a 2Q22 dividend of $0.02 per share, payable on 12 Aug. The Company targets a total annual dividend of $0.08 per share and is forecast to have a dividend cover of 1.8x over the next 18 months.

INVESTMENT OUTLOOK

Tufton believes the shipping market is in a multi-year upcycle and offers investors inflation protection. The Clarksons newbuilding price index has risen c.29% since the end of 2020.

The Product Tanker market benefited from the increasing demand for long-haul cargoes with more Russian exports to Asia, notably India, and higher European imports from other suppliers including the Middle East, the US and Asia. SHIP's latest Product Tanker acquisition, Marvelous, is employed in a pool with current yield >30%. Beyond the near-term strength, Tufton believes the Product Tanker market has strong supply-side fundamentals with the orderbook at only c.5% of fleet. This will likely result in opportunities to charter several Product Tankers longer term at higher rates.

The Containership market remained strong during the quarter despite lower demand growth as supply chain bottlenecks continued to be influential. Tufton expects the Containership market to weaken over the next 12 months because the Containership orderbook has risen to c.27% of fleet which will result in increasing fleet growth. The Company has therefore re-allocated capital away from the Containership segment. With the divestment of the penultimate Containership, Parrot, the portfolio has only c.5% exposure to this segment. Bulkers continue to offer strong yield and have supportive supply fundamentals with the orderbook at only c.7% of fleet. The average yield of the Bulkers is c.17%.

The Company's recent acquisitions are in the top quartile of fuel efficiency in their segments. The emissions intensity of the Company's portfolio has improved by c.40% since 3Q21 but we continue to install Energy Saving Devices ("ESDs") on our vessels to further reduce emissions and will complete ESD retrofits on at least eight vessels by early 2023. The Company is fully invested but continues to evaluate opportunities for further upside in a strong market.

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All Rights Reserved. Published 19 Jul 2022

Tufton Oceanic Assets Limited (SHIP)

2Q22 Factsheet

COMPANY INFORMATION

	3rd Floor
Registered	1 Le Truchot
Address	St Peter Port
	Guernsey, GY1 1WD
Listing	Specialist Fund Segment of the
London Stock Exchange
IPO Date	20th December 2017
ISIN	GG00BDFC1649
SEDOL	BDFC164 / BMB3NJ1
Ticker	SHIP / SHPP
Dividend	Quarterly
Frequency
ISA / SIPP	Yes
eligible?

PORTFOLIO PERFORMANCE

NAV total return for the quarter was 6.2%. Operating profit was $0.044/share. The rise in charter-free values in Tankers and Bulkers was partially offset by the fall in Tanker charter value as benchmark time charter rates rose.

											$1.75
		$0.081									$1.50
	$0.044		($0.031)	($0.020)	($0.007)
		$1.428	$1.477	$1.457		$1.450		$1.450	$1.25
$1.384	$1.384
											$1.00
NAV	Operating	Change in	Change in	Dividend	Performance	NAV
31 Mar 2022	profit	charter-free	charter value				fee accrual	30 Jun 2022
		values

Website	www.tuftonoceanicassets.com
Email	[e-mail]	FLEET NET YIELDS
BOARD OF DIRECTORS

Robert King (Chairman)

Paul Barnes

Stephen Le Page

Christine Rødsæther

CORPORATE ADVISERS

Hudnall Capital LLP

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]

The run rate yield+ on the fleet is 13.5%. Average expected charter length (EBITDA-weighted) is 0.9 years.

		15.5%		17.1%		20%
					13.5%	15%
			11.5%
	10.6%
						10%
						5%
						0%
Product & Chemical	Gas Tanker	Riposte	Bulkers	Fleet Avg
	Tankers		Containership

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

CORPORATE CALENDAR			PORTFOLIO OVERVIEW+
AGM		27 Oct 2022
		Vessel Type	Charter Length	Vessel Age	Vessel Charterers
Reporting period end	30 Jun 2022 (FY)
Dividend Calendar
	1Q	2Q	3Q	4Q
	22	22	22	22
Release	27	19	18	TBC
date	Apr	Jul	Oct
Ex-dividend	5	28	27	TBC	Bulkers	< 1 year 1-3 years	5-10 years	Twelve charterers
date	May	Jul	Oct
Record date	6	29	28	TBC	Product & Chem Tankers	3-5 years	10-15 years
	May	Jul	Oct		Gas Tanker		15-20 years
Payment	20	12	11	TBC Net current assets
date	May	Aug	Nov		Containership		+ 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

All Rights Reserved. Published 19 Jul 2022