Ardmore Shipping Corporation Announces Financial Results For The Twelve And Three Months Ended December 31, 2020
Ardmore Shipping Corporation (ASC) reported a net loss of $6.0 million for the year ended December 31, 2020, equating to $0.18 per share, a notable improvement from a $22.9 million loss in 2019. Adjusted EBITDA rose to $57.0 million, up from $53.3 million. For Q4 2020, the company incurred a net loss of $19.5 million, down from a profit of $1.9 million the previous year. Average daily earnings for MR tankers decreased to $9,436 in Q4 2020. Ardmore anticipates improved market conditions in the latter half of 2021, contingent on economic recovery and appropriate tanker supply adjustments.
- Adjusted EBITDA increased to $57.0 million for 2020, up from $53.3 million in 2019.
- Net loss narrowed significantly from $22.9 million in 2019 to $6.0 million in 2020.
- Cash reserves improved to $58.4 million year-over-year.
- Reported a substantial net loss of $19.5 million for Q4 2020.
- Average daily earnings for MR tankers fell to $9,436 in Q4 2020, down from higher historical rates.
- Revenue for Q4 2020 decreased to $41.7 million, down from $60.7 million in Q4 2019.
HAMILTON, Bermuda, Feb. 10, 2021 /PRNewswire/ -- Ardmore Shipping Corporation (NYSE: ASC) ("Ardmore", the "Company" or "we") today announced results for the twelve months and three months ended December 31, 2020.
Highlights and Recent Activity
- Reported a net loss of
$6.0 million for the twelve months ended December 31, 2020 or$0.18 loss per basic and diluted share, which includes$6.5 million in respect of loss on the sale of the Ardmore Seamariner and unrealized losses on derivatives; earnings adjusted for these costs (see Adjusted earnings in the Non-GAAP Measures section) are$0.5 million , or$0.02 Adjusted earnings per basic and diluted share. This compares to a net loss of$22.9 million , or$0.69 loss per basic and diluted share for the twelve months ended December 31, 2019.
- Reported Adjusted EBITDA (see Non-GAAP Measures section) of
$57.0 million for the twelve months ended December 31, 2020, as compared to$53.3 million for the twelve months ended December 31, 2019.
- Reported a net loss of
$19.5 million for the three months ended December 31, 2020 or$0.59 loss per basic and diluted share, which includes$6.4 million in respect of loss on the sale of the Ardmore Seamariner; loss adjusted for these costs (see Adjusted loss in Non-GAAP Measures section) of$13.0 million for the three months ended December 31, 2020 or$0.39 Adjusted loss per basic and diluted share. This compares to a net income of$1.9 million , or$0.06 earnings per basic and diluted share for the three months ended December 31, 2019.
- Reported Adjusted EBITDA (see Non-GAAP Measures section) of
$0.9 million for the three months ended December 31, 2020, as compared to$17.8 million for the three months ended December 31, 2019.
- MR tankers earned
$15,650 per day overall and$15,993 for Eco-design MRs for the twelve months ended December 31, 2020 while chemical tankers earned$14,332 per day for the period. MR tankers earned$9,436 per day overall and$9,603 for Eco-design MRs for the three months ended December 31, 2020 while chemical tankers earned$10,916 per day for the period.
- In December 2020, Ardmore agreed to terms for the sale of the Ardmore Seamariner, a 2006-built 45,726 Dwt Eco-mod MR Tanker, which was sold for
$10.0 million and delivered to the buyer on January 14, 2021.
- Repurchased 98,652 shares under Ardmore's new share repurchase plan in the fourth quarter of 2020, at a weighted-average price of
$2.91 per share.
- Completed the previously announced
$10.0 million loan facility for the Ardmore Seafarer with Iyo Bank, Japan. The facility has a duration of five years and is priced at LIBOR plus a margin of2.25% .
- Ardmore expects to publish its first annual Progress Report on February 15, 2021, presenting what Ardmore has accomplished over the past year on matters relating to environment, social progress and governance and setting out its approach to supporting the global energy transition and the decarbonization of the shipping industry.
Anthony Gurnee, the Company's Chief Executive Officer, commented:
During 2020, the product tanker market experienced its most extreme period of volatility in many years. During the first half, MR charter rates rose to record highs, peaking at
MR charter rates so far in the first quarter have risen noticeably from fourth quarter lows, from
Beyond the immediate post-pandemic recovery, we believe product tankers will experience continued overall demand growth to the end of the decade, with global economic growth and refinery developments away from points of consumption more than offsetting the initial impact of the energy transition; however, we expect the energy transition to put a significant damper on tanker supply as new regulations such as EEXI accelerate the phase-out of inefficient vessels, resulting in a tight market.
As we look forward to a brighter future for the tanker market and opportunities in the energy transition, we must not forget the challenges and hardships the ongoing pandemic presents, most of all for our seafarers, but also our shore staff in lockdown and in travel-related quarantine on our behalf. We acknowledge their sacrifices and want to thank them sincerely for their perseverance and professionalism.
Summary of Recent and Fourth Quarter 2020 Events
Fleet
Fleet Operations and Employment
As at December 31, 2020, the Company had 27 vessels in operation, including 21 MR tankers ranging from 45,000 deadweight tonnes (Dwt) to 49,999 Dwt (15 Eco-Design and six Eco-Mod) and six Eco-Design IMO 2 product / chemical tankers ranging from 25,000 Dwt to 37,800 Dwt.
MR Tankers (45,000 Dwt – 49,999 Dwt)
For the twelve months ended December 31, 2020, the MR tankers earned an average TCE rate of
At the end of the fourth quarter of 2020, the Company had 21 MR tankers trading in the spot market or on short-term time charters. The MR tankers earned an average TCE rate of
In the first quarter of 2021, the Company expects to have 120 revenue days for its MR Eco-Design tankers on time charter, with the remaining days for its MR Eco-Design and all of its MR Eco-Mod tankers employed in the spot market. As of February 10, 2021, the Company had fixed approximately
Product / Chemical Tankers (IMO 2: 25,000 Dwt – 37,800 Dwt)
For the twelve months ended December 31, 2020, the Company's six Eco-Design product / chemical vessels earned an average TCE rate of
At the end of the fourth quarter of 2020, the Company had six Eco-Design IMO 2 product / chemical tankers in operation, all of which were trading in the spot market. During the fourth quarter of 2020, the Company's six Eco-Design product / chemical vessels earned an average TCE rate of
In the first quarter of 2021, the Company expects to have all revenue days for its Eco-Design IMO 2 product / chemical tankers employed in the spot market. As of February 10, 2021, the Company had fixed approximately
Drydocking
The Company had 142 drydock days, including repositioning days, in the fourth quarter of 2020. The Company expects to have 40 drydock days, including repositioning days, in the first quarter of 2021.
Capital Allocation Policy
Consistent with the Company's capital allocation policy, the Company is not declaring a dividend for the fourth quarter of 2020.
Vessel Sale
In December 2020, Ardmore agreed to terms for the sale of the Ardmore Seamariner and repaid all amounts outstanding under the related term loan on January 7, 2021. The price for the subsequent sale of the vessel by Ardmore was
Share Repurchase Plan
During the three months ended December 31, 2020, the Company repurchased 98,652 shares under the new share repurchase plan the Company adopted in September 2020, at a weighted-average price of
Financing
On December 17, 2020, the Company completed the previously announced
Progress Report
The Company expects to publish its first annual Progress Report on February 15, 2021, presenting what has been accomplished over the past year on matters relating to environment, social progress and governance. The Report also discusses the philosophy and rationale behind our efforts in these areas, and importantly, lays out our approach to support the global energy transition and the decarbonization of the shipping industry.
COVID-19
On March 11, 2020, the World Health Organization declared the recent novel coronavirus (COVID 19) outbreak a pandemic. In response to the outbreak, many countries, ports and organizations, including those where the Company conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures have caused and will likely continue to cause severe trade disruptions. The extent to which COVID–19 will impact the Company's results of operations and financial condition, including possible impairments, will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the virus and the measures taken to contain or treat its impact, among others. Accordingly, an estimate of the impact cannot be made at this time.
Results for the Three Months Ended December 31, 2020 and 2019
The Company reported a net loss of
The Company reported an Adjusted loss (see Non–GAAP Measures section) of
Results for the Twelve Months Ended December 31, 2020 and 2019
The Company reported a net loss of
The Company reported Adjusted earnings (see Non-GAAP Measures section) of
Management's Discussion and Analysis of Financial Results for the Three Months Ended December 31, 2020 and 2019
Revenue. Revenue for the three months ended December 31, 2020 was
The Company's average number of owned vessels increased to 26 for the three months ended December 31, 2020, from 25 for the three months ended December 31, 2019. The Company had revenue days of 2,267 for the three months ended December 31, 2020, as compared to 2,280 for the three months ended December 31, 2019. The decrease in revenue days was due to an increase in drydocking days during the three months ended December 31, 2020, as compared to the three months ended December 31, 2019, partially offset by the increase in the Company's average number of owned vessels. The Company had 26 and 25 vessels employed directly in the spot market as at December 31, 2020 and 2019, respectively. The decrease in revenue days resulted in a decrease in revenue of
Voyage Expenses. Voyage expenses were
TCE Rate. The average TCE rate for our fleet was
Vessel Operating Expenses. Vessel operating expenses were
Charter Hire Costs. Charter hire costs were
Depreciation. Depreciation expense for the three months ended December 31, 2020 was
Amortization of Deferred Drydock Expenditures. Amortization of deferred drydock expenditures for the three months ended December 31, 2020 was
General and Administrative Expenses: Corporate. Corporate-related general and administrative expenses for the three months ended December 31, 2020 were
General and Administrative Expenses: Commercial and Chartering. Commercial and chartering expenses are the expenses attributable to the Company's chartering and commercial operations departments in connection with the Company's spot trading activities. Commercial and chartering expenses for the three months ended December 31, 2020 were
Interest Expense and Finance Costs. Interest expense and finance costs include loan interest, finance lease interest, and amortization of deferred finance fees. Interest expense and finance costs for the three months ended December 31, 2020 were
Liquidity
As at December 31, 2020, the Company had
As at | ||||||
December 31, 2020 | December 31, 2019 | |||||
Cash | $ | 58,365,330 | $ | 51,723,107 | ||
Finance leases (net of sellers' credit) | 194,824,384 | 212,799,694 | ||||
Senior Debt | 157,710,865 | 163,264,006 | ||||
Revolving Credit Facilities | 53,631,491 | 44,019,007 | ||||
Total debt | 406,166,740 | 420,082,707 | ||||
Total net debt | $ | 347,801,410 | $ | 368,359,600 | ||
Conference Call
The Company plans to have a conference call on February 10, 2021 at 10:00 a.m. Eastern Time to discuss its results for the quarter ended December 31, 2020. All interested parties are invited to listen to the live conference call and slide presentation by choosing from the following options:
- By dialing 844–492–3728 (U.S.) or 412–542–4189 (International) and referencing "Ardmore Shipping."
- By accessing the live webcast at Ardmore Shipping's website at www.ardmoreshipping.com.
Participants should dial into the call 10 minutes before the scheduled time.
If you are unable to participate at this time, an audio replay of the call will be available through February 17, 2021 at 877–344–7529 or 412–317–0088. Enter the passcode 10151864 to access the audio replay. A recording of the webcast, with associated slides, will also be available on the Company's website. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.
About Ardmore Shipping Corporation
Ardmore owns and operates a fleet of MR product and chemical tankers ranging from 25,000 to 50,000 deadweight tonnes. Ardmore provides seaborne transportation of petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies, with its modern, fuel-efficient fleet of mid-size product and chemical tankers.
We are strategically focused on modern, fuel-efficient, mid-size product and chemical tankers. We actively pursue opportunities to exploit the overlap we believe exists between the clean petroleum product ("CPP") and chemical sectors in order to enhance earnings, and also seek to engage in more complex CPP trades, such as multi-grade and multi-port loading and discharging operations, where our knowledge of chemical operations is beneficial to our CPP customers. Our fuel-efficient operations are designed to enhance our investment returns and provide value-added service to our customers. We believe we are at the forefront of fuel efficiency and emissions reduction trends and are well positioned to capitalize on these developments with our fleet of Eco-design and Eco-mod vessels. Our acquisition strategy is to continue to build our fleet with Eco-design newbuildings and modern second-hand vessels that can be upgraded to Eco-mod. We have a resolute focus on both high-quality service and efficient operations, and we believe that our corporate overhead and operating expenses are among the lowest of our peers.
Ardmore Shipping Corporation | ||||
Unaudited Condensed Consolidated Balance Sheets | ||||
Expressed in U.S. Dollars, except as indicated) | ||||
As at | ||||
December 31, 2020 | December 31, 2019 | |||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | 58,365,330 | 51,723,107 | ||
Receivables, net of allowance for bad debts of | 17,808,496 | 30,083,358 | ||
Prepaid expenses and other assets | 3,683,910 | 1,940,030 | ||
Advances and deposits | 2,516,646 | 4,114,065 | ||
Inventories | 10,274,062 | 10,158,735 | ||
Vessel held for sale | 9,895,000 | — | ||
Total current assets | 102,543,444 | 98,019,295 | ||
Non-current assets | ||||
Vessels and vessel equipment, net | 631,458,305 | 660,823,330 | ||
Deferred drydock expenditures, net | 10,216,090 | 7,668,711 | ||
Advances for Ballast water treatment systems | 2,568,874 | 384,408 | ||
Other non-current assets, net | 678,632 | 917,222 | ||
Amount receivable in respect of finance leases | 2,880,000 | 2,880,000 | ||
Operating lease, right-of-use asset | 1,662,510 | 1,745,464 | ||
Total non-current assets | 649,464,411 | 674,419,135 | ||
TOTAL ASSETS | 752,007,855 | 772,438,430 | ||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Accounts payable | 9,125,321 | 4,789,935 | ||
Accrued expenses and other liabilities | 11,233,767 | 16,278,084 | ||
Accrued interest on debt and finance leases | 769,304 | 880,183 | ||
Current portion of long-term debt | 22,456,396 | 20,216,171 | ||
Current portion of finance lease obligations | 18,454,222 | 17,975,322 | ||
Current portion of derivative liabilities | 397,418 | — | ||
Current portion of operating lease obligations | 463,559 | 289,231 | ||
Total current liabilities | 62,899,987 | 60,428,926 | ||
Non-current liabilities | ||||
Non-current portion of long-term debt | 188,054,568 | 187,066,842 | ||
Non-current portion of finance lease obligations | 179,250,162 | 197,704,372 | ||
Non-current portion of derivative liabilities | 433,974 | — | ||
Non-current portion of operating lease obligations | 1,034,218 | 1,182,522 | ||
Total non-current liabilities | 368,772,922 | 385,953,736 | ||
Stockholders' equity | ||||
Common stock | 352,067 | 350,192 | ||
Additional paid in capital | 418,180,983 | 416,841,494 | ||
Accumulated other comprehensive loss | (729,135) | — | ||
Treasury stock | (15,635,765) | (15,348,909) | ||
Accumulated deficit | (81,833,204) | (75,787,009) | ||
Total stockholders' equity | 320,334,946 | 326,055,768 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 752,007,855 | 772,438,430 | ||
Ardmore Shipping Corporation | ||||||||
Unaudited Interim and Annual Condensed Consolidated Statements of Operations | ||||||||
(Expressed in U.S. Dollars, except for shares) | ||||||||
Three months ended | Year ended | |||||||
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||
Revenue, net | 41,725,326 | 60,685,029 | 220,057,606 | 230,042,240 | ||||
Voyage expenses | (19,888,091) | (22,606,473) | (81,253,212) | (96,056,391) | ||||
Vessel operating expenses | (16,422,424) | (15,971,685) | (62,546,733) | (62,546,606) | ||||
Charter hire costs | (1,211,978) | — | (1,367,528) | — | ||||
Depreciation | (8,268,960) | (8,032,954) | (32,187,324) | (32,322,695) | ||||
Amortization of deferred drydock expenditures | (1,712,360) | (1,359,418) | (6,198,245) | (4,803,069) | ||||
General and administrative expenses | ||||||||
Corporate | (3,063,281) | (3,561,327) | (15,122,906) | (14,951,996) | ||||
Commercial and chartering | (239,660) | (700,846) | (2,780,970) | (3,194,218) | ||||
Unrealized losses on derivatives | (25,588) | — | (113,591) | — | ||||
Interest expense and finance costs | (3,915,885) | (6,651,968) | (18,168,155) | (26,759,754) | ||||
Interest income | 25,776 | 159,979 | 281,618 | 952,190 | ||||
Loss on vessel held for sale | (6,447,309) | — | (6,447,309) | — | ||||
Loss on sale of vessels | — | — | — | (13,162,192) | ||||
(Loss) / Income before taxes | (19,444,434) | 1,960,337 | (5,846,749) | (22,802,491) | ||||
Income tax | (70,968) | (12,092) | (199,446) | (58,766) | ||||
Net (Loss) / Income | (19,515,402) | 1,948,245 | (6,046,195) | (22,861,257) | ||||
(Loss) / Earnings per share, basic and diluted | (0.59) | 0.06 | (0.18) | (0.69) | ||||
Adjusted (loss) / earnings (1) | (13,042,505) | 2,485,146 | 514,705 | (9,162,164) | ||||
Adjusted (loss) / earnings per share, basic | (0.39) | 0.08 | 0.02 | (0.28) | ||||
Adjusted (loss) / earnings per share, diluted | (0.39) | 0.07 | 0.02 | (0.28) | ||||
Weighted average number of shares outstanding, basic | 33,237,297 | 33,097,831 | 33,241,936 | 33,097,831 | ||||
Weighted average number of shares outstanding, diluted | 33,237,297 | 33,409,296 | 33,443,250 | 33,097,831 | ||||
____________________ | |
(1) | Adjusted earnings / (loss) is a non-GAAP measure and is defined and reconciled under the "Non-GAAP Measures" section. Adjusted earnings / (loss) has been calculated as Earnings per share reported under US GAAP as adjusted for unrealized and realized gains and losses (see Non-GAAP Measures Section). |
Ardmore Shipping Corporation | ||||
Unaudited Condensed Consolidated Statements of Cash Flows | ||||
(Expressed in U.S. Dollars) | ||||
Year ended | ||||
December 31, 2020 | December 31, 2019 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net loss | (6,046,195) | (22,861,257) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation | 32,187,324 | 32,322,695 | ||
Amortization of deferred drydock expenditures | 6,198,245 | 4,803,069 | ||
Share-based compensation | 3,000,672 | 2,333,091 | ||
Loss on vessel held for sale | 6,447,309 | — | ||
Loss on sale of vessels | — | 13,162,192 | ||
Amortization of deferred finance fees | 1,765,271 | 2,560,180 | ||
Unrealized losses on derivatives | 113,591 | — | ||
Foreign exchange | 108,978 | (73,207) | ||
Deferred drydock expenditures | (7,003,305) | (5,387,875) | ||
Changes in operating assets and liabilities: | ||||
Receivables | 12,274,862 | (2,623,226) | ||
Prepaid expenses and other assets | (1,743,880) | 137,453 | ||
Advances and deposits | 1,597,419 | (1,981,261) | ||
Inventories | (115,327) | 2,653,304 | ||
Accounts payable | 2,543,080 | (3,672,559) | ||
Accrued expenses and other liabilities | (5,098,531) | (48,663) | ||
Accrued interest on debt and finance leases | (135,064) | (852,676) | ||
Net cash provided by operating activities | 46,094,449 | 20,471,260 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Proceeds from sale of vessels | — | 26,557,707 | ||
Payments for acquisition of vessels and vessel equipment | (18,720,337) | (2,599,827) | ||
Advances for Ballast water treatment systems | (2,184,466) | 114,235 | ||
Payments for other non-current assets | (88,630) | (177,950) | ||
Net cash (used in) / provided by investing activities | (20,993,433) | 23,894,165 | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from long-term debt | 20,375,243 | 201,462,500 | ||
Repayments of long-term debt | (18,017,863) | (222,198,713) | ||
Repayments of finance leases | (18,650,009) | (26,510,556) | ||
Payments for deferred finance fees | (220,000) | (2,298,587) | ||
Repurchase of common stock | (286,856) | — | ||
Payment of dividend | (1,659,308) | — | ||
Net cash (used in) financing activities | (18,458,793) | (49,545,356) | ||
Net increase / (decrease) in cash and cash equivalents | 6,642,223 | (5,179,931) | ||
Cash and cash equivalents at the beginning of the year | 51,723,107 | 56,903,038 | ||
Cash and cash equivalents at the end of the year | 58,365,330 | 51,723,107 | ||
Ardmore Shipping Corporation | ||||||||
Unaudited Other Operating Data | ||||||||
(Expressed in U.S. Dollars, unless otherwise stated) | ||||||||
Three months ended | Year ended | |||||||
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||
ADJUSTED EBITDA (1) | 899,892 | 17,844,698 | 56,986,257 | 53,293,029 | ||||
AVERAGE DAILY DATA | ||||||||
MR Tankers Spot TCE per day (2) | 9,436 | 17,725 | 15,650 | 15,382 | ||||
Fleet TCE per day (2) | 9,764 | 16,899 | 15,355 | 14,686 | ||||
Fleet operating expenses per day (3) | 6,134 | 6,244 | 6,070 | 6,112 | ||||
Technical management fees per day (4) | 384 | 463 | 439 | 450 | ||||
6,518 | 6,707 | 6,509 | 6,562 | |||||
MR Tankers Eco-Design | ||||||||
TCE per day (2) | 9,603 | 18,149 | 15,993 | 15,781 | ||||
Vessel operating expenses per day (5) | 6,560 | 6,795 | 6,530 | 6,560 | ||||
MR Tankers Eco-Mod | ||||||||
TCE per day (2) | 9,052 | 16,133 | 14,284 | 14,062 | ||||
Vessel operating expenses per day (5) | 6,447 | 6,813 | 6,540 | 6,636 | ||||
Prod/Chem Tankers Eco-Design (25k - 38k Dwt) | ||||||||
TCE per day (2) | 10,916 | 14,284 | 14,332 | 12,420 | ||||
Vessel operating expenses per day (5) | 6,475 | 6,498 | 6,434 | 6,409 | ||||
FLEET | ||||||||
Average number of owned operating vessels | 26.0 | 25.0 | 25.4 | 25.6 | ||||
____________________ | |
(1) | Adjusted EBITDA is a non-GAAP measure and is defined and reconciled to the most directly comparable U.S. GAAP measure under the "Non-GAAP Measures" section. |
(2) | Time Charter Equivalent ("TCE") rate, a non-GAAP measure, represents net revenues (revenues less voyage expenses) divided by revenue days. Revenue days are the total number of calendar days the vessels are in the Company's possession less off-hire days generally associated with drydocking or repairs, and idle days associated with repositioning of vessels held for sale. Net revenue utilized to calculate TCE is determined on a discharge to discharge basis, which is different from how the Company records revenue under U.S. GAAP. Under discharge to discharge, revenues are recognized beginning from the discharge of cargo from the prior voyage to the anticipated discharge of cargo in the current voyage, and voyage expenses are recognized as incurred. |
(3) | Fleet operating expenses per day are routine operating expenses and comprise crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. These amounts do not include expenditures related to upgradings and enhancements or other non-routine expenditures which were expensed during the period. |
(4) | Technical management fees are fees paid to third-party technical managers. |
(5) | Vessel operating expenses per day include technical management fees. |
Ardmore Shipping Corporation | ||||||||||||||||||||||||
Fleet Details at December 31, 2020 | ||||||||||||||||||||||||
(Expressed in Millions of U.S. Dollars, other than per share amount) | ||||||||||||||||||||||||
Estimated Resale | Estimated | |||||||||||||||||||||||
Newbuilding | Depreciated | |||||||||||||||||||||||
Cargo | Cargo | Inerting | Eco | Price (1) | Replacement | |||||||||||||||||||
Vessel | IMO | Built | Country | DWT | Capacity (m3) | Engine Type | Segregations | System | Specification | December 31, 2020 | Value (2) | |||||||||||||
Seavaliant | IMO2/3 | Feb–13 | S. Korea | 49,998 | 53,361 | 6S50 ME-C8.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 24.68 | |||||||||||
Seaventure | IMO2/3 | Jun–13 | S. Korea | 49,998 | 53,375 | 6S50 ME-C8.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 25.03 | |||||||||||
Seavantage | IMO2/3 | Jan–14 | S. Korea | 49,997 | 53,288 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 25.80 | |||||||||||
Seavanguard | IMO2/3 | Feb–14 | S. Korea | 49,998 | 53,287 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 25.89 | |||||||||||
Sealion | IMO2/3 | May–15 | S. Korea | 49,999 | 52,928 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 27.49 | |||||||||||
Seafox | IMO2/3 | Jun–15 | S. Korea | 49,999 | 52,930 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 27.59 | |||||||||||
Seawolf | IMO2/3 | Aug–15 | S. Korea | 49,999 | 52,931 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 27.76 | |||||||||||
Seahawk | IMO2/3 | Nov–15 | S. Korea | 49,999 | 52,931 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 28.03 | |||||||||||
Endeavour | IMO2/3 | Jul–13 | S. Korea | 49,997 | 53,637 | 6S50 ME-C8.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 25.18 | |||||||||||
Enterprise | IMO2/3 | Sep–13 | S. Korea | 49,453 | 52,774 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 25.38 | |||||||||||
Endurance | IMO2/3 | Dec–13 | S. Korea | 49,466 | 52,770 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 25.67 | |||||||||||
Encounter | IMO2/3 | Jan–14 | S. Korea | 49,494 | 52,776 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 25.73 | |||||||||||
Explorer | IMO2/3 | Jan–14 | S. Korea | 49,478 | 52,775 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 25.82 | |||||||||||
Exporter | IMO2/3 | Feb–14 | S. Korea | 49,466 | 52,770 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 25.91 | |||||||||||
Engineer | IMO2/3 | Mar–14 | S. Korea | 49,420 | 52,789 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | $ | 34.50 | $ | 26.00 | |||||||||||
Seamariner | IMO3 | Oct–06 | Japan | 45,726 | 52,280 | 6S50MC–6.1 | 3 | Flue Gas | Eco-Mod | $ | 34.50 | $ | 10.00(3) | |||||||||||
Sealeader | IMO3 | Jun–08 | Japan | 47,451 | 52,527 | 6S50MC–6.1 | 3 | Flue Gas | Eco-Mod | $ | 34.50 | $ | 18.48 | |||||||||||
Sealifter | IMO3 | Aug–08 | Japan | 47,463 | 52,534 | 6S50MC–6.1 | 3 | Flue Gas | Eco-Mod | $ | 34.50 | $ | 18.74 | |||||||||||
Sealancer | IMO3 | Jul–08 | Japan | 47,472 | 52,467 | 6S50MC–6.1 | 3 | Flue Gas | Eco-Mod | $ | 34.50 | $ | 18.59 | |||||||||||
Seafarer | IMO3 | Jun–10 | Japan | 49,999 | 52,111 | 6S50MC-6.1 | 3 | Flue Gas | Eco-Mod | $ | 34.50 | $ | 21.08 | |||||||||||
Dauntless | IMO2 | Feb–15 | S. Korea | 37,764 | 41,620 | 6S50 ME-B9.2 | 14 | Nitrogen | Eco-Design | $ | 33.00 | $ | 25.87 | |||||||||||
Defender | IMO2 | Feb–15 | S. Korea | 37,791 | 41,620 | 6S50 ME-B9.2 | 14 | Nitrogen | Eco-Design | $ | 33.00 | $ | 25.91 | |||||||||||
Cherokee | IMO2 | Jan–15 | Japan | 25,215 | 28,475 | 6S46 ME-B8.3 | 12 | Nitrogen | Eco-Design | $ | 28.50 | $ | 22.13 | |||||||||||
Cheyenne | IMO2 | Mar–15 | Japan | 25,217 | 28,490 | 6S46 ME-B8.3 | 12 | Nitrogen | Eco-Design | $ | 28.50 | $ | 22.37 | |||||||||||
Chinook | IMO2 | Jul–15 | Japan | 25,217 | 28,483 | 6S46 ME-B8.3 | 12 | Nitrogen | Eco-Design | $ | 28.50 | $ | 22.69 | |||||||||||
Chippewa | IMO2 | Nov–15 | Japan | 25,217 | 28,493 | 6S46 ME-B8.3 | 12 | Nitrogen | Eco-Design | $ | 28.50 | $ | 23.01 | |||||||||||
$ | 620.85 | |||||||||||||||||||||||
Cash / Debt / Working Capital / Other Assets | $ | (339.14) | ||||||||||||||||||||||
Total Asset Value (Assets) (4) | $ | 281.71 | ||||||||||||||||||||||
DRV / Share (4)(5) | $ | 8.49 | ||||||||||||||||||||||
Ardmore Commercial Management (6) | $ | 20.61 | ||||||||||||||||||||||
Total Asset Value (Assets & Commercial Mgt.) (4) | $ | 302.32 | ||||||||||||||||||||||
DRV / Share (4)(5) | $ | 9.11 | ||||||||||||||||||||||
____________________ | |
1. | Based on the average of two broker estimates of prompt resale for a newbuild vessel of equivalent deadweight tonne at a yard in South Korea as at December 31, 2020. |
2. | Depreciated Replacement Value ("DRV") is based on estimated resale price for a newbuild vessel depreciated for the age of each vessel (assuming an estimated useful life of 25 years on a straight-line basis and assuming a residual scrap value of |
3. | Ardmore Seamariner recognized as held for sale as at December 31, 2020 and subsequently delivered to the buyer on January 14, 2021. |
4. | Depreciated Asset Value ("DRV") and DRV per share are non-GAAP measures. Management believes that many investors use DRV as a reference point in assessing valuation of fleets of ships and similar assets. |
5. | DRV / Share calculated using 33,186,603 shares outstanding as at December 31, 2020. |
6. | Ardmore Commercial Management is management's estimate of the value of Ardmore's commercial management and pooling business. The estimate is based on industry standard commercial management and pooling fees in determining revenue less Ardmore's commercial and chartering overhead (as stated in Ardmore's Statement of Operations) and applying an illustrative multiple to the resulting net earnings of 7x. The multiple is illustrative only and may not be indicative of the valuation multiple the Company could achieve if it were to sell its commercial management and pooling business. Revenue of this business is comprised of (i) commission ( |
CO2 Emissions Reporting (1)
In April 2018, the International Maritime Organization's ("IMO") Marine Environment Protection Committee ("MEPC") adopted an initial strategy for the reduction of greenhouse gas ("GHG") emissions from ships, setting out a vision to reduce GHG emissions from international shipping and phase them out as soon as possible. Ardmore is committed to transparency and contributing to the reduction of CO2 emissions in the Company's industry. Ardmore's reporting methodology is in line with the framework set out within the IMO's Data Collection System ("DCS") initiated in 2019.
Three months ended | Twelve months ended | ||||||||
December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | ||||||
Number of Owned Vessels in Operation (at period end) | 27 | 25 | 27 | 25 | |||||
Fleet Average Age | 7.7 | 6.4 | 7.7 | 6.4 | |||||
CO2 Emissions Generated in Metric Tonnes | 99,479 | 98,650 | 389,721 | 422,984 | |||||
Distance Travelled (Miles) | 359,556 | 343,784 | 1,441,703 | 1,467,784 | |||||
Fuel Consumed in Metric Tonnes | 31,355 | 31,526 | 122,899 | 133,761 | |||||
Annual Efficiency Ratio (AER) for the period (2) | |||||||||
Fleet | 6.18 g / tm | 6.46 g / tm | 6.04 g / tm | 6.41 g / tm | |||||
MR Eco-Design | 5.87 g / tm | 6.20 g / tm | 5.71 g / tm | 6.11 g / tm | |||||
MR Eco-Mod | 6.58 g / tm | 6.05 g / tm | 6.36 g / tm | 6.30 g / tm | |||||
Chemical | 7.22 g / tm | 8.08 g / tm | 7.40 g / tm | 8.14 g / tm | |||||
Energy Efficiency Operational Indicator (EEOI) for the period (3) | |||||||||
Fleet | 14.53 g / ctm | 12.92 g / ctm | 12.37 g / ctm | 12.84 g / ctm | |||||
MR Eco-Design | 14.90 g / ctm | 13.33 g / ctm | 12.01 g / ctm | 12.54 g / ctm | |||||
MR Eco-Mod | 16.46 g / ctm | 12.96 g / ctm | 12.82 g / ctm | 12.98 g / ctm | |||||
Chemical | 12.12 g / ctm | 11.84 g / ctm | 13.20 g / ctm | 13.66 g / ctm | |||||
Wind Force (% greater than 4 on Beaufort Scale) | |||||||||
tm = tonne-mile | |||||||||
ctm = cargo tonne-mile | |||||||||
Ardmore Performance
Ardmore is continuing to perform well, on an annual basis on both AER and EEOI. Notably results vary quarter to quarter depending on ship activity, ballast / laden ratio, cargo carried, weather, waiting time and time in port, however analysis is presented on a trailing 12-month basis to provide an accurate assessment of Ardmore's progress and to mitigate any seasonality.
The impact of weather was higher in the quarter ended December 31, 2020 compared to prior periods (based on Beaufort Scale wind force rating being greater than 4), which adversely affects the ability to optimize fuel consumption.
Ardmore's carbon emissions for 2020 are 389,721 metric tonnes of CO2, a decrease of
While the EEOI shows a decrease of a
Continued improvements are being achieved through a combination of technological advancements and operational optimization.
____________________ |
1 Ardmore's emissions data is based on the reporting tools and information reasonably available to Ardmore and its applicable third-party technical managers for Ardmore's owned fleet. Management assesses such data and may adjust and restate the data to reflect latest information. It is expected that the shipping industry will continue to refine the performance measures for emissions and efficiency over time. AER and EEOI metrics are impacted by external factors such as charter speed, vessel orders and weather, in conjunction with overall market factors such as cargo load sizes and fleet utilization rate. As such, variance in performance can be found in the reported emissions between two periods for the same vessel and between vessels of a similar size and type. Furthermore, other companies may report slight variations (e.g. some shipping companies report CO2 in tonnes per kilometre as opposed to CO2 in tonnes per nautical mile) and consequently it is not always practical to directly compare emissions from different companies. The figures reported above represent Ardmore's initial findings; the Company is committed to improving the methodology and transparency of its emissions reporting in line with industry best practices. Accordingly, the above results may vary as the methodology and performance measures set out by the industry evolve. |
2 Annual Efficiency Ratio ("AER") is a measure of carbon efficiency using the parameters of fuel consumption, distance travelled, and design deadweight tonnage ("DWT"). AER is reported in unit grams of CO2 per ton-mile (gCO2/dwt-nm). It is calculated by dividing (i) mass of fuel consumed by type converted to metric tonnes of CO2 by (ii) DWT multiplied by distance travelled in nautical miles |
3 Energy Efficiency Operational Indicator ("EEOI") is a tool for measuring CO2 gas emissions in a given time period per unit of transport work performed. It is calculated by dividing (i) mass of fuel consumed by type converted to metric tonnes of CO2 by (ii) cargo carried in tonnes multiplied by laden voyage distance in nautical miles. This calculation is performed as per IMO MEPC.1/Circ684 |
Non-GAAP Measures
This press release describes EBITDA, Adjusted EBITDA and Adjusted earnings / (loss), which are not measures prepared in accordance with U.S. GAAP and are defined and reconciled below. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before certain items that Ardmore believes are not representative of its operating performance, including gain or loss on sale of vessels. Adjusted earnings / (loss) excludes certain items from net income / (loss), including gain or loss on sale of vessels and write-off of deferred finance fees, because they are considered to be not representative of its operating performance.
These non-GAAP measures are presented in this press release as the Company believes that they provide investors with a means of evaluating and understanding how Ardmore's management evaluates operating performance. EBITDA and Adjusted EBITDA increases the comparability of the Company's fundamental performance from period to period. This increased comparability is achieved by excluding the potentially disparate effects between periods of interest expense, taxes, depreciation or amortization, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. The Company believes that including EBITDA, Adjusted EBITDA and Adjusted earnings / (loss) as financial and operating measures assists investors in making investment decisions regarding the Company and its common stock.
These non-GAAP measures should not be considered in isolation from, as a substitute for, or superior to, financial measures prepared in accordance with U.S. GAAP. In addition, these non-GAAP measures may not have a standardized meaning and therefore may not be comparable to similar measures presented by other companies. All amounts in the tables below are expressed in U.S. dollars, unless otherwise stated.
Three months ended | Year ended | |||||||
Reconciliation of net (loss) / income to EBITDA and | December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | ||||
Net (loss) / Income | (19,515,402) | 1,948,245 | (6,046,195) | (22,861,257) | ||||
Interest income | (25,776) | (159,979) | (281,618) | (952,190) | ||||
Interest expense and finance costs | 3,915,885 | 6,651,968 | 18,168,155 | 26,759,754 | ||||
Income tax | 70,968 | 12,092 | 199,446 | 58,766 | ||||
Unrealized losses on derivatives | 25,588 | — | 113,591 | — | ||||
Depreciation | 8,268,960 | 8,032,954 | 32,187,324 | 32,322,695 | ||||
Amortization of deferred drydock | 1,712,360 | 1,359,418 | 6,198,245 | 4,803,069 | ||||
EBITDA | (5,547,417) | 17,844,698 | 50,538,948 | 40,130,837 | ||||
Loss on vessel held for sale | 6,447,309 | — | 6,447,309 | — | ||||
Loss on sale of vessels | — | — | — | 13,162,192 | ||||
ADJUSTED EBITDA | 899,892 | 17,844,698 | 56,986,257 | 53,293,029 | ||||
Three months ended | Year ended | |||||||
Reconciliation of net (loss) / income to Adjusted (loss) / | December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | ||||
Net (loss) / Income | (19,515,402) | 1,948,245 | (6,046,195) | (22,861,257) | ||||
Loss on vessel held for sale | 6,447,309 | — | 6,447,309 | — | ||||
Loss on sale of vessels | — | — | — | 13,162,192 | ||||
Write-off of deferred finance fees | — | 536,901 | — | 536,901 | ||||
Unrealized losses on derivatives | 25,588 | — | 113,591 | — | ||||
Adjusted (loss)/ earnings (1) | (13,042,505) | 2,485,146 | 514,705 | (9,162,164) | ||||
Adjusted (loss) / earnings per share, basic | (0.39) | 0.08 | 0.02 | (0.28) | ||||
Adjusted (loss) / earnings per share, diluted | (0.39) | 0.07 | 0.02 | (0.28) | ||||
Weighted average number of shares outstanding, basic | 33,237,297 | 33,097,831 | 33,241,936 | 33,097,831 | ||||
Weighted average number of shares outstanding, diluted | 33,237,297 | 33,409,296 | 33,443,250 | 33,097,831 | ||||
____________________ |
1 Adjusted (loss) / earnings has been calculated as Earnings per share reported under US GAAP as adjusted for realized and unrealized gains and losses |
Forward Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. In some cases, you can identify the forward-looking statements by the use of words such as "believe", "anticipate", "intends", "estimate", "forecast", "plan", "potential", "may", "expect", and similar expressions.
Forward looking statements in this press release include, among others, the following statements: future operating or financial results; global and regional economic conditions and trends; shipping market trends and market fundamentals, including tanker demand and future growth rates; the effect of the novel coronavirus pandemic on the Company's business, financial condition and the results of operation; the Company's expectations regarding the timing and impact of economic recovery from the novel coronavirus pandemic; expected employment of the Company's vessels during the first quarter of 2021; expected drydocking days in the first quarter of 2021; management's estimates of the Depreciated Replacement Value (DRV) of its vessels; management's estimate of the value of the Company's commercial management and pooling business; and trends in the Company's performance as measured by energy efficiency and emission-reduction metrics; regarding emissions; the impact of energy transition on the Company and the markets in which the Company operates; expected timing of publication of Progress Report on Ardmore's ESG goals; and expected continuation of refinement by the shipping industry of performance measures for emissions and efficiency. The forward-looking statements in this press release are based upon various assumptions, including, without limitation, Ardmore management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. The Company cautions readers of this release not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to update or revise any forward-looking statements. These forward-looking statements are not guarantees of the Company's future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements.
In addition to these important factors, other important factors that, in the Company's view, could cause actual results to differ materially from those discussed in the forward-looking statements include: the amount of the world tanker fleet used for storage purposes; current expected spot rates compared with current and expected charter rates; the failure of counterparties to fully perform their contracts with the Company; the strength of world economies and currencies; general market conditions, including fluctuations in charter rates and vessel values; changes in demand for and the supply of tanker vessel capacity; changes in the projections of spot and time charter or pool trading of the Company's vessels; the effect of the novel coronavirus pandemic on, among others, oil demand, the Company's business, financial condition and results of operation, including our liquidity; fluctuations in oil prices; changes in the Company's operating expenses, including bunker prices, drydocking and insurance costs; general domestic and international political conditions; potential disruption of shipping routes due to accidents, piracy or political events; the market for the Company's vessels; competition in the tanker industry; availability of financing and refinancing; charter counterparty performance; changes in governmental rules and regulations or actions taken by regulatory authorities; the Company's ability to charter vessels for all remaining revenue days during the first quarter of 2021 in the spot market; vessels breakdowns and instances of off-hire; and other factors. Please see the Company's filings with the U.S. Securities and Exchange Commission, including the Company's Form 20–F for the year ended December 31, 2020, for a more complete discussion of these and other risks and uncertainties.
Investor Relations Enquiries:
Mr. Leon Berman | Mr. Bryan Degnan |
The IGB Group | The IGB Group |
45 Broadway, Suite 1150 | 45 Broadway, Suite 1150 |
New York, NY 10006 | New York, NY 10006 |
Tel: 212–477–8438 | Tel: 646–673–9701 |
Fax: 212–477–8636 | Fax: 212–477–8636 |
Email: lberman@igbir.com | Email: bdegnan@igbir.com |
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SOURCE Ardmore Shipping Corporation
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