Tufton Oceanic Assets : 1Q23 Factsheet

Tufton Oceanic Assets Limited (SHIP)

1Q23 Factsheet

KEY STATISTICS

as at 31 March 2023

(unless otherwise stated)

No. of Shares in issue	305.868m
Share Price	$1.15 / £0.93
NAV*	$427.1m / £345.4m
NAV per share*	$1.396 / £1.129
Premium/(Discount) to NAV	(17.6%)
Target IRR (long-term)	12% p.a.
Target Dividend per Share	$0.085 p.a.

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 for 1Q23 was 1.1%. Strong operating profit and rising Bulker capital value outweighed a fall in Product Tanker capital value. The Bulker market started improving primarily due to China reopening. We expect further improvement due to normalised global demand growth combined with very low fleet growth. We have therefore focused on shorter- term charters in expectation of longer charters at higher rates later this year. The fall in Product Tanker capital value was mostly in January, ahead of the G7 price cap on Russian oil products. Demand for long-term Product Tanker charters remained strong during the quarter. Product Tanker values rose in March and have continued rising in April. We expect Product Tanker values to increase further as per Investment Outlook below. Our Chemical Tankers benefited from rising values and strong operating profit.

• 31 March 2023 closing mid-rate of USD/GBP 0.8808 Source: Morningstar

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: 45 years of experience in banking and shipping finance. Joined Tufton in 2001.
• Paulo Almeida: 28 years of experience in fund management, investment banking and the shipping industry. Joined Tufton in 2009.

Signatory of

DIVIDEND

The Company declared a 1Q23 dividend of $0.02125 per share, payable on 11 May. The Company targets a total annual dividend of $0.085 per share and is forecast to have a dividend cover of c.1.8x over the next 18 months.

SHARE BUYBACKS

During 1Q23, SHIP purchased 1,910,000 ordinary shares at an average price of $1.14 per share in line with its published discount management policy.

INVESTMENT OUTLOOK

The limited orderbooks in the Bulker, Product Tanker and Chemical Tanker segments will result in very low fleet growth. Further, new environmental regulations are expected to result in an effective supply reduction of 2-4% over the next 12-24 months.

The Product Tanker market outlook continues to be strong due to long-haul demand from the addition of new refining capacity in Asia and the Middle East and other factors reconfiguring trade flows. Demand for long-term charters remained strong over the quarter. Product Tanker values rose in March, have continued rising in April and should continue to rise as confidence builds in the duration of the market strength - or, if rates moderate, the negative charter value should unwind more than charter-free values drop ceteris paribus.

The Bulker market improvement over the quarter is expected to continue with Chinese economic growth and growing grain exports from South America. Our Handysize Bulkers, which are fuel-efficient compared to their global peer group, will especially benefit from the new environmental regulations.

Seaborne trade demand growth is expected to benefit as the reconfiguration of traditional trade flows adds to long-haul demand growth. Tufton expects asset value upside in Bulkers, Product Tankers, and Chemical Tankers and continues to seek investment opportunities in these and other segments.

All Rights Reserved. Published 20 April 2023

$1.75

Tufton Oceanic Assets Limited (SHIP)

1Q23 Factsheet

COMPANY INFORMATION

	1 Royal Plaza
Registered	Royal Avenue
Address	St Peter Port
	Guernsey, GY1 2HL
Listing	Specialist Fund Segment of the
London Stock Exchange
IPO Date	20th December 2017

PORTFOLIO PERFORMANCE

NAV total return for the quarter was 1.1%. Operating profit was $0.049/share. The charter-free value of the portfolio fell by $0.013/share as the fall in Product Tanker values outweighed the rise in Bulker values. Product Tanker charter-free values rose in March and have continued rising in April. Portfolio charter value fell by $0.022/share as the benchmark Product Tanker long-term charter rates increased and the Bulker market strengthened. The total negative charter value in the portfolio of $50.2m will

ISIN	GG00BDFC1649
SEDOL	BDFC164 / BMB3NJ1
Ticker	SHIP / SHPP
Dividend	Quarterly
Frequency
ISA / SIPP	Yes
eligible?
Website	www.tuftonoceanicassets.com
Email	[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) [e-mail]

CORPORATE CALENDAR
AGM		26 Oct 2023
Reporting period end	30 Jun 2023 (FY)
Dividend Calendar
	1Q	2Q	3Q	4Q
	23	23	23	23
Release	19	19	18	TBC
date	Apr	Jul	Oct
Ex-dividend	27	27	26	TBC
date	Apr	Jul	Oct
Record date	28	28	27	TBC
Apr	Jul	Oct
Payment	11	10	10	TBC
date	May	Aug	Nov

trend to zero (i.e. increase NAV) in the medium term, ceteris paribus. If market rates stay flat, the NAV impact will be +c.$6m (c.1.4% of NAV) in 2Q23 and c.$26m (c.6% of NAV) over the next 12 months.

				$0.049													$1.50
						($0.013)		($0.022)		($0.021)
	$1.402		$1.402		$1.438		$1.416		$1.395			$1.396	$1.25
																		$1.00
	NAV	Operating	Change in charter- Change in charter	Dividend		NAV
31 Dec 2022		profit	free values		values				31 Mar 2023

FLEET NET YIELDS

The run rate yield+ on the fleet is 11.6%. Average expected charter length (EBITDA-weighted) is 1.5 years for the portfolio.

	24.9%				30%
					25%
		16.1%			20%
9.0%			11.3%	11.6%	15%
				10%
					5%
					0%
Product Tankers Chemical Tankers	Gas	Bulkers	Fleet Avg
		Tanker
		+On market value and after capex accrual and fees, pro forma
PORTFOLIO OVERVIEW
Vessel Type	Charter Length	Vessel Age	Vessel Charterers

Bulkers	< 1 year	5-10 years	Ten charterers
Product Tankers
	10-15 years
Chem Tankers	1-3 years
Gas Tanker		15-20 years
Net current assets

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 20 April 2023