Ardmore Shipping Corporation (NYSE: ASC) (Ardmore) Thursday (Nov 3) announced results for the three and nine months ended September 30, 2016.
Highlights:
- Reported a loss from continuing operations of $1.8 million for the three months ended September 30, 2016, or $0.05 basic and diluted loss per share, as compared to a profit from continuing operations of $13.6 million, or $0.52 basic and diluted earnings per share, for the three months ended September 30, 2015. The Company reported adjusted EBITDA (see Non-GAAP Measures section below) of $10.2 million for the three months ended September 30, 2016, as compared to $24.5 million for the three months ended September 30, 2015.
- Reported a net loss of $4.8 million for the three months ended September 30, 2016, or $0.14 basic and diluted loss per share, as compared to a net profit of $13.6 million, or $0.52 basic and diluted earnings per share, for the three months ended September 30, 2015, reflecting a loss on sale of the Ardmore Centurion, as well as a loss from continuing operations. The Company reported EBITDA (see Non-GAAP Measures section below) of $7.2 million for the three months ended September 30, 2016, as compared to $24.5 million for the three months ended September 30, 2015.
- Delivered a solid chartering performance with spot and pool MR tankers earning an average of $15,944 per day year to date and $13,284 per day for the quarter ended September 30, 2016.
- Took delivery of five of the six vessels that the Company agreed to acquire in June 2016. The final vessel is expected to deliver in early November. All six vessels are 49,500 Dwt Eco-Design IMO 2/3 MR product / chemical tankers constructed by STX Offshore and Shipbuilding Co. Ltd. in Korea.
- Completed debt financing for the recent acquisition of six vessels. Four of the vessels are being financed through a new $71.3 million senior debt facility with ABN AMRO. The remaining two vessels have been added to the existing credit facility with ABN AMRO and DVB Bank, which was completed in early 2016; the facility has been upsized by $36.6 million and NIBC Bank has agreed to join as an additional lender under the facility.
- Agreed terms for the sale of the 29,000 Dwt product / chemical tanker the Ardmore Centurion for $15.7 million. The vessel subsequently delivered to the buyers on October 4, 2016.
- Maintaining a dividend policy of paying out 60% earnings from continuing operations. Consistent with this policy, the Company is not declaring a dividend for the third quarter 2016.
Chemical/Oil Products Tanker Ardmore Seaventure - Image: Ardmore Shipping ( for illustrative purposes only)
Anthony Gurnee, the Company's Chief Executive Officer, commented: "During the quarter, we continued to operate our fleet at a satisfactory level of performance in spite of a softer charter market. The current market conditions reflect below-average oil trading activity, driven by relative oil price stability and gradual de-stocking of global clean petroleum product inventories, which we expect will continue for the next two to three quarters. Nevertheless, we anticipate an improvement in MR and chemical charter market conditions through the winter months as a result of typical seasonal activity.
In spite of this short-term market action, the underlying fundamentals of the MR tanker sector remain very positive, with secular trends driving underlying tonne-mile demand growth at an estimated rate of 4-5%. According to the IEA, oil consumption continues to grow at 1.2 million bpd, and much of this incremental demand is being met by export-oriented refinery activity, which not only increases volumes of refined products shipped by sea, but also the distance over which those refined products are carried. Meanwhile, ordering activity is almost non-existent and, as a consequence, the orderbook for MR tankers has declined to 5.5% of the existing fleet, its lowest level in at least 20 years, which should result in net fleet growth well below projected demand growth until such time as newbuilding activity increases significantly.
During the third quarter, we completed deliveries for five of the six Eco-Design MR's acquired in July and committed to the opportunistic sale, at a strong relative price, of the Ardmore Centurion, a 2005-built 29,000 Dwt product / chemical tanker, in our ongoing efforts to streamline our fleet profile around core Eco MR product / chemical tanker vessel designs. Following the expected delivery of the final Eco-Design MR in early November, we will have a fleet of 27 Eco MR's with an average age of four years. This fleet expansion represents a 13% increase in revenue days for 2017 and positions Ardmore to take advantage of a strengthening charter market supported by the increasing tension between steady MR demand growth and a declining orderbook.”
Full report you can read here
Source: Ardmore Shipping