Tufton Oceanic Assets : 4Q21 Factsheet

Tufton Oceanic Assets Limited (SHIP)

4Q21 Factsheet

KEY STATISTICS	INVESTMENT OBJECTIVES AND STRATEGY
To provide investors with an attractive level of regular and growing income and
as at 31 Dec 2021
(unless otherwise stated)	capital returns through investing in a diversified portfolio of secondhand
No. of Shares outstanding	308.63m	commercial sea-going vessels.
Share Price	$1.37	PORTFOLIO HIGHLIGHTS
NAV	$424.67m	NAV total return for 2021 was 49.1%. During and shortly after the quarter, the
Company continued to re-allocate capital and grow, in line with its investment
NAV per share	$1.376	strategy and	commitment to	ESG. The Company divested the Containership
Swordfish and shortly after quarter end the Containership Patience. In November
Premium/(Discount) to NAV	(0.4%)	we raised gross proceeds of $39m via the issue of 28.06m shares at a price of
		$1.39 per share. The proceeds were promptly invested to acquire a Handysize
Target IRR (long-term)	12% p.a.	Bulker and a Product Tanker. After the end of quarter, the Company also agreed to
Target Dividend per Share	$0.08	acquire another Handysize Bulker. All these acquisitions are already fuel-efficient
relative to their peers but will be evaluated for further improvement. Upon
Management Fee: 0.85% of NAV below $250m	completion of these transactions, the Company will have a fleet of twenty-three
0.75% of NAV between $250m and $500m	vessels with an average expected charter cover of c.1.9 years and will have
0.65% of NAV above $500m (no fees on cash)	reduced the portfolio Price to Depreciated Replacement Cost ("P/DRC") ratio from
Performance Fee: 20% of excess return over	c.125% to c.105%. A lower P/DRC signifies a de-risked portfolio with higher upside
potential. The Company aims to reduce P/DRC further through additional capital
12% net hurdle, partially paid after 7 years	re-allocation.
INVESTMENT MANAGER	DIVIDEND
		The Company declared a 4Q21 dividend of $0.02 per share, payable on 11
		February 2022. The Company targets a total annual dividend of $0.08 per share
		and is forecast to have a dividend cover of c.1.7x over the next 18 months despite
Tufton Investment Management Ltd	not being fully invested. Tufton expects the forward cover will be at least 1.8x once
70 Pall Mall, 1st Floor	SHIP is again fully invested.
London SW1Y 5ES
The Investment Manager is Tufton Investment	INVESTMENT OUTLOOK
Management Ltd ("Tufton") The Tufton group	Tufton believes the shipping market is in a multi-year upcycle and offers investors
was founded in 1985 to provide financial
inflation protection. The Clarksons newbuilding price index rose c.22% in 2021.
services to the maritime and energy industries
and since 2000 has concentrated	The lack of new orders in Bulkers and Tankers is driven by a combination of
predominately on investment and asset	factors including uncertainty over environmental regulations and lack of access to
management. The Investment Manager is	capital from traditional sources. This has contributed to an ongoing supply side
authorised and regulated	by the Financial	adjustment which	could result	in	structurally higher profitability for the industry
Conduct Authority and has offices in London,
versus history.
Isle of Man, and Cyprus. Tufton is fully
dedicated to the maritime industry with an in-	The Tanker market has strong support from supply side fundamentals with the
house research team and	Asset Manager
orderbook ending the year at only c.7% of fleet, the lowest in more than two
providing operational and accounting services
decades. With the majority of the orderbook scheduled for delivery in 2022, fleet
to each vessel within the portfolio. The
Investment Manager is committed to	growth is expected to slow dramatically in the medium term. Further, the increase
Responsible Investment by integrating ESG	in recycling	seen	over 2021	could continue	and accelerate the supply	side
principles into its investment process and	adjustment.	The	combination	of	supportive	supply side fundamentals	and
since December 2018, has been a signatory
improving global oil demand results in the potential for strong capital appreciation
of the UN Principles for Responsible
over the medium term.
Investment
Fund Managers:		Bulkers continue to offer strong yield. The benchmark Baltic Dry Index hit a
▪ Andrew Hampson: 43 years of experience	thirteen-year high over the quarter as the Bulker market benefited from strong
in banking and shipping	finance. Joined	demand and supportive supply fundamentals with the orderbook at only c.7% of
Tufton in 2001.
	fleet.
▪ Paulo Almeida: 26 years of experience in
fund management, investment banking and	The Containership market ended the year with time charter rates and asset values
the shipping industry. Joined Tufton in 2009.
close to record highs. The increase in new orders over the past eighteen months
		supports the	Company's re-allocation of capital away from the segment	into

Signatory of

Tankers and Bulkers. The announced transactions reduce Containership exposure to c.19% of NAV and reduce the portfolio P/DRC as described above.

All Rights Reserved. Published 18 Jan 2022

Tufton Oceanic Assets Limited (SHIP)

4Q21 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 / SEDOL	GG00BDFC1649 / BDFC164
Ticker	SHIP
Dividend	Quarterly
Frequency
ISA / SIPP	Yes
eligible?
Website	www.tuftonoceanicassets.com

[e-mail]

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]

CORPORATE CALENDAR
AGM		27 Oct 2022
Reporting period end	30 Jun 2022 (FY)
Dividend Calendar
	4Q	1Q	2Q	3Q
	21	22	22	22
Release	18	20	19	18
date	Jan	Apr	Jul	Oct
Ex-dividend	27	28	28	27
date	Jan	Apr	Jul	Oct
Record date	28	29	29	28
	Jan	Apr	Jul	Oct
Payment	11	13	12	11
date	Feb	May	Aug	Nov

PORTFOLIO PERFORMANCE

NAV total return for the quarter was 2.1%. Operating profit was $0.034/share. The fall in charter-free values of Containerships and Bulkers was largely offset by the rise in charter value as our charters shortened with the passage of time and also benchmark time charter rates fell slightly. The total negative charter value in the portfolio decreased to $88.1m. The negative charter value will trend to zero (i.e., increase NAV) in the medium-termceteris paribus. If market rates stay flat, the NAV impact in 1Q22 will be +c.$7m (c.1.6% of NAV). NAV total return for 2021 was 49.1%.

$1.60

	$0.034			$0.127			$0.002	$1.40
					($0.020)
				($0.133)							$1.20
$1.368	$1.368		$1.268	$1.376	$1.374	$1.376
				$1.268						$1.00
												$0.80
NAV	Operating	Change in	Change in Dividend	Performance	NAV
30 Sep 2021	profit	charter-free	charter	fee accrual	31 Dec 2021
				values	value

FLEET NET YIELDS

The run rate yield+ on the fleet is 14.1%. Average expected charter length (EBITDA weighted) is c.1.9 years.

	16.1%		18.0%	20%
			14.1%
		13.1%
10.7%			15%
				10%
				5%
				0%
Product &	Gas	Containerships	Bulkers	Fleet Avg
Chemical	Tanker
Tankers
+On market value and after capex accrual and fees, pro forma for all transactions announced
PORTFOLIO OVERVIEW+
Vessel Type	Charter Length	Vessel Age	Vessel Charterers

Containerships	< 1 year	1-3 years	5-10 years	Eleven charterers
Product & Chem Tankers
		10-15 years
Gas Tanker	3-5 years
Bulkers			15-20 years
Net current assets			+ Proforma 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 18 Jan 2022