Ardmore Shipping Corporation Announces Financial Results For The Three And Six Months Ended June 30, 2021
Ardmore Shipping Corporation (NYSE: ASC) reported a net loss of $8.1 million for Q2 2021, a significant decline from a net income of $13.6 million in Q2 2020. The loss amounted to $0.24 per share, and adjusted losses reached $7.6 million. EBITDA dropped to $5.4 million, down from $27.9 million year-over-year. Revenue fell 30.3% to $47.3 million. Despite these challenges, Ardmore completed strategic investments, including a joint venture in methanol-to-hydrogen technology, aiming at energy transition and financial flexibility.
- Strategic investment in Element 1 Corp. for methanol-to-hydrogen technology.
- Completed refinancing of vessels, generating $15.5 million in cash.
- Fleet remains operational with 27 vessels, exploring growth in fuel efficiency.
- Net loss of $16.6 million for the first half of 2021.
- Average TCE rates dropped significantly to $11,796 per day, down 41.2% from Q2 2020.
- Decline in revenue of $20.6 million or 30.3% year-over-year.
HAMILTON, Bermuda, July 27, 2021 /PRNewswire/ -- Ardmore Shipping Corporation (NYSE: ASC) ("Ardmore", the "Company" or "we") today announced results for the three and six months ended June 30, 2021.
Highlights and Recent Activity
- Reported a net loss of
$8.1 million for the three months ended June 30, 2021, or$0.24 loss per basic and diluted share, which includes deferred finance fees written off and unrealized losses on derivatives; losses adjusted for these items (see Adjusted (loss) / earnings in the Non-GAAP Measures section) are$7.6 million , or$0.23 Adjusted loss per basic and diluted share. This compares to net income of$13.6 million , or$0.41 earnings per basic and diluted share, for the three months ended June 30, 2020. Adjusted earnings were$13.7 million or$0.41 Adjusted earnings per basic and diluted share for the three months ended June 30, 2020. Reported EBITDA (see Non-GAAP Measures section) of$5.4 million for the three months ended June 30, 2021 as compared to$27.9 million for the three months ended June 30, 2020.
- Reported a net loss of
$16.6 million for the six months ended June 30, 2021 or$0.50 loss per basic and diluted share, which includes deferred finance fees written off and unrealized gains on derivatives; losses adjusted for these items (see Adjusted (loss) / earnings in the Non-GAAP Measures section) are$16.1 million , or$0.48 Adjusted loss per basic and diluted share. This compares to net income of$20.1 million or$0.61 basic and$0.60 diluted earnings per share for the six months ended June 30, 2020. Adjusted earnings were$20.2 million or$0.61 Adjusted earnings per basic and diluted share for the six months ended June 30, 2020.
- Reported EBITDA (see Non-GAAP Measures section) of
$9.9 million for the six months ended June 30, 2021, as compared to$48.9 million for the six months ended June 30, 2020.
- MR tankers earned
$11,640 per day overall for the three months ended June 30, 2021 and$11,406 per day for the six months ended June 30, 2021. Chemical tankers earned$12,308 per day for the three months ended June 30, 2021 and$12,127 per day for the six months ended June 30, 2021.
- On June 17, 2021, Ardmore completed its previously-announced strategic investment in Element 1 Corp.'s methanol-to-hydrogen technology through the establishment of the e1 Marine joint venture with affiliates of Element 1 Corp and Maritime Partners, LLC and Ardmore's purchase of a
10% equity stake in Element 1 Corp. In a related transaction, the affiliate of Maritime Partners, LLC also invested$25.0 million in the Company's newly created Series A8.5% Cumulative Redeemable Perpetual Preferred Shares.
- On June 25, 2021, Ardmore completed the refinancing of two vessels, the Ardmore Seawolf and Ardmore Seahawk, which were refinanced with an existing lender. The net cash proceeds to the Company of these transactions, after prepayment of existing debt, were
$15.5 million in the aggregate.
- On June 4, 2021, Ardmore entered into an agreement to charter-in a 2009 Japanese-built MR product tanker for a period of eight months at a net rate of approximately
$11,850 per day, plus a four-month extension option. Delivery occurred in mid-June 2021.
- As part of its Energy Transition Plan, on May 18, 2021, Ardmore announced that it plans to install Lean Marine's FuelOpt™ propulsion optimization technology across its entire fleet following the successful trial of this technology on the MR tanker, Ardmore Sealion.
Anthony Gurnee, the Company's Chief Executive Officer, commented:
"Product tanker charter rates improved in the second quarter on the back of increasing global economic activity driving an ongoing recovery in oil demand. While oil demand remains well below pre-COVID levels, it is currently recovering rapidly, with the IEA forecasting a further 4 million barrels per day by the end of the year. We are now in a seasonally slow charter market which we believe will persist through August, but thereafter we expect charter rates to improve markedly through the autumn and into the winter months. Increasing refinery dislocation, which has accelerated as a result of the pandemic, is boosting tonne-mile demand for product tankers, and we believe this positive impact will be more evident as aggregate oil demand returns to pre-COVID levels this winter.
Meanwhile, operating performance and financial strength remain our top priorities. Our fleet continues to perform very well relative to our peers under challenging market conditions, and, as a consequence of the recent financing transactions, we have a substantial amount of cash and undrawn lines affording considerable financial flexibility. In terms of our Energy Transition Plan, we closed the Element 1 transactions in June and are looking ahead to further progress in our other initiatives focused on fuel efficiency, emissions reduction, and future fuels including e1 Marine.
This continues to be a difficult period most of all for our seafarers, and we are working hard to ensure the continued health and welfare of our crew and their families. We want to sincerely thank them and acknowledge the contribution they have made to keeping the global economy moving over the past 16 months."
Summary of Recent and Second Quarter 2021 Events
Fleet
Fleet Operations and Employment
As at June 30, 2021, 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)
At the end of the second quarter of 2021, the Company had 21 MR tankers trading in the spot market or on time charters. The MR tankers earned an average TCE rate of
In the third quarter of 2021, the Company expects to have
Product / Chemical Tankers (IMO 2: 25,000 Dwt – 37,800 Dwt)
At the end of the second quarter of 2021, the Company had six Eco-Design IMO 2 product / chemical tankers in operation, all of which were trading in the spot market. During the second quarter of 2021, the Company's six Eco-Design product / chemical vessels earned an average TCE rate of
In the third 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 July 27, 2021, the Company had fixed approximately
Drydocking
The Company had no drydock or repositioning days in the second quarter of 2021. The Company expects to have 80 drydock days in the third quarter of 2021.
Capital Allocation Policy
Consistent with the Company's capital allocation policy, the Company is not declaring a dividend, in respect of its common shares, for the second quarter of 2021.
Element 1 Strategic Investments and Maritime Partners, LLC Preferred Stock Financing
On June 17, 2021, the Company completed its previously-announced strategic investment in Element 1 Corp.'s methanol-to-hydrogen technology through the establishment of the e1 Marine joint venture with affiliates of Element 1 Corp and Maritime Partners, LLC and the Company's purchase of a
Refinancing of Two Vessels
On June 25, 2021, the Company completed financing transactions for two vessels, the Ardmore Seawolf and Ardmore Seahawk, which were refinanced with an existing lender. The net cash proceeds to the Company of these transactions, after prepayment of existing debt, were
Vessel Addition
On June 4, 2021, the Company entered into an agreement to charter-in a 2009 Japanese-built MR product tanker for a period of eight months at a net rate of approximately
Fuel Optimization Technology
As part of its Energy Transition Plan, on May 18, 2021, the Company announced that it plans to install Lean Marine's FuelOpt™ propulsion optimization technology across its entire fleet following the successful trial of this technology on the MR tanker, Ardmore Sealion.
COVID-19
In response to the COVID-19 pandemic, many countries, ports and organizations, including those where Ardmore conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures have caused severe trade disruptions. In addition, the pandemic has resulted and may continue to result in a significant decline in global demand for refined oil products. As Ardmore's business is the transportation of refined oil products on behalf of oil majors, oil traders and other customers, any significant decrease in demand for the cargo Ardmore transports could adversely affect demand for its vessels and services. The extent to which the pandemic may impact Ardmore's results of operations and financial condition, including possible impairments, will depend on future developments, which are highly uncertain and cannot be predicted, including, among others, new information which may emerge concerning the virus and of its variants and the level of the effectiveness and delivery of vaccines and other actions to contain or treat its impact. Accordingly, an estimate of the impact on the Company cannot be made at this time.
Results for the three months ended June 30, 2021 and 2020
The Company reported a net loss of
The Company reported an Adjusted loss (see Non–GAAP Measures section) of
Results for the six months ended June 30, 2021 and 2020
The Company reported a net loss of
The Company reported an Adjusted loss (see Non–GAAP Measures section) of
Management's Discussion and Analysis of Financial Results for the three months ended June 30, 2021 and 2020
Revenue. Revenue for the three months ended June 30, 2021 was
The Company's average number of operating vessels increased to 26.1 for the three months ended June 30, 2021.
The Company had four product tankers employed under time charters as at June 30, 2021 compared with none as at June 30, 2020. Revenue days derived from time charters were 361 for the three months ended June 30, 2021, as compared to none for the three months ended June 30, 2020. The increase in revenue days for time-chartered vessels resulted in an increase in revenue of
The Company had 2,004 spot revenue days for the three months ended June 30, 2021, as compared to 2,269 for the three months ended June 30, 2020. The Company had 23 and 25 vessels employed directly in the spot market as at June 30, 2021 and 2020, respectively. The decrease in spot revenue days resulted in a decrease in revenue of
Voyage Expenses. Voyage expenses were
TCE Rate. The average TCE rate for the Company's fleet was
Vessel Operating Expenses. Vessel operating expenses were
Charter Hire Costs. Charter hire costs were
Depreciation. Depreciation expense for the three months ended June 30, 2021 was
Amortization of Deferred Drydock Expenditures. Amortization of deferred drydock expenditures for the three months ended June 30, 2021 was
General and Administrative Expenses: Corporate. Corporate-related general and administrative expenses for the three months ended June 30, 2021 were
General and Administrative Expenses: Commercial and Chartering. Commercial and chartering expenses are the expenses attributable to Ardmore's chartering and commercial operations departments in connection with its spot trading activities. Commercial and chartering expenses for the three months ended June 30, 2021 were
Unrealized Losses on Derivatives. Unrealized losses on derivatives for the three months ended June 30, 2021 was
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 June 30, 2021 were
Liquidity
As at June 30, 2021, the Company had
As at | ||||||
June 30, 2021 | December 31, 2020 | |||||
Cash | $ | 55,421,015 | $ | 58,365,330 | ||
Finance leases (net of sellers' credit) | 233,699,699 | 194,824,384 | ||||
Senior Debt | 122,344,252 | 157,710,865 | ||||
Revolving Credit Facilities | 21,116,243 | 53,631,491 | ||||
Total debt | 377,160,194 | 406,166,740 | ||||
Total net debt | $ | 321,739,179 | $ | 347,801,410 | ||
Conference Call
The Company plans to have a conference call on July 27, 2021 at 10:00 a.m. Eastern Time to discuss its results for the quarter ended June 30, 2021. All interested parties are invited to listen to the live conference call and review the related 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 August 3, 2021 at 877–344–7529 or 412–317–0088. Enter the passcode 10158719 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 tankers.
Ardmore's core strategy is to continue to develop a modern, high-quality fleet of product and chemical tankers, build key long-term commercial relationships and maintain its cost advantage in assets, operations and overhead, while creating synergies and economies of scale as the company grows. Ardmore provides its services to customers through voyage charters, commercial pools, and time charters, and enjoys close working relationships with key commercial and technical management partners.
Ardmore's Energy Transition Plan ("ETP") focusses on three key areas: transition technologies, transition projects, and sustainable (non-fossil fuel) cargos. The ETP is an extension of Ardmore's strategy, building on its core strengths of tanker chartering, shipping operations, technical and operational fuel efficiency improvements, technical management, construction supervision, project management, investment analysis, and ship finance. Ardmore has established Ardmore Ventures as Ardmore's holding company for existing and future potential investments related to the Energy Transition Plan and completed its first projects under the ETP in June 2021.
Ardmore Shipping Corporation Unaudited Interim Condensed Consolidated Balance Sheets (Expressed in U.S. Dollars, except for shares) | ||||
As at | ||||
June 30, 2021 | December 31, 2020 | |||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | 55,421,015 | 58,365,330 | ||
Receivables, net of allowance for bad debts of | 16,633,765 | 17,808,496 | ||
Prepaid expenses and other assets | 3,618,459 | 3,683,910 | ||
Advances and deposits | 4,247,135 | 2,516,646 | ||
Inventories | 9,457,085 | 10,274,062 | ||
Vessel held for sale | — | 9,895,000 | ||
Total current assets | 89,377,459 | 102,543,444 | ||
Non-current assets | ||||
Investments and other assets, net | 10,906,384 | 678,632 | ||
Vessels and vessel equipment, net | 616,921,427 | 631,458,305 | ||
Deferred drydock expenditures, net | 8,449,824 | 10,216,090 | ||
Advances for ballast water treatment systems | 2,726,753 | 2,568,874 | ||
Amount receivable in respect of finance leases | 2,880,000 | 2,880,000 | ||
Non-current portion of derivative assets | 246,830 | — | ||
Operating lease, right-of-use asset | 1,471,226 | 1,662,510 | ||
Total non-current assets | 643,602,444 | 649,464,411 | ||
TOTAL ASSETS | 732,979,903 | 752,007,855 | ||
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Accounts payable | 6,017,704 | 9,125,321 | ||
Accrued expenses and other liabilities | 10,245,268 | 11,233,767 | ||
Charter revenue received in advance | 975,970 | — | ||
Accrued interest on debt and finance leases | 714,189 | 769,304 | ||
Current portion of long-term debt | 15,050,339 | 22,456,396 | ||
Current portion of finance lease obligations | 24,344,250 | 18,454,222 | ||
Current portion of derivative liabilities | 381,336 | 397,418 | ||
Current portion of operating lease obligations | 379,946 | 463,559 | ||
Total current liabilities | 58,109,002 | 62,899,987 | ||
Non-current liabilities | ||||
Non-current portion of long-term debt | 128,028,820 | 188,054,568 | ||
Non-current portion of finance lease obligations | 212,235,449 | 179,250,162 | ||
Non-current portion of derivative liabilities | — | 433,974 | ||
Non-current portion of operating lease obligations | 882,456 | 1,034,218 | ||
Total non-current liabilities | 341,146,725 | 368,772,922 | ||
TOTAL LIABILITIES | 399,255,727 | 431,672,909 | ||
Preferred Stock | ||||
Cumulative Series A | 23,047,291 | — | ||
Total preferred stock | 23,047,291 | — | ||
Stockholders' equity | ||||
Common stock | 363,839 | 352,067 | ||
Additional paid in capital | 424,629,576 | 418,180,983 | ||
Accumulated other comprehensive loss | (144,023) | (729,135) | ||
Treasury stock | (15,635,765) | (15,635,765) | ||
Accumulated deficit | (98,536,742) | (81,833,204) | ||
Total stockholders' equity | 310,676,885 | 320,334,946 | ||
Total stockholders' equity and preferred stock | 333,724,176 | 320,334,946 | ||
TOTAL LIABILITIES AND EQUITY | 732,979,903 | 752,007,855 | ||
Ardmore Shipping Corporation Unaudited Interim Condensed Consolidated Statements of Operations (Expressed in U.S. Dollars, except for shares) | |||||||||
Three months ended | Six months ended | ||||||||
June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||||
Revenue, net | 47,274,052 | 67,932,494 | 92,825,372 | 133,126,009 | |||||
Voyage expenses | (20,492,951) | (20,871,765) | (40,885,002) | (44,534,157) | |||||
Vessel operating expenses | (15,077,122) | (14,313,236) | (29,580,332) | (29,999,390) | |||||
Charter hire costs | (1,359,626) | — | (2,563,882) | — | |||||
Depreciation | (7,906,716) | (7,945,434) | (15,715,663) | (15,800,393) | |||||
Amortization of deferred drydock expenditures | (1,267,511) | (1,492,328) | (2,750,033) | (2,777,670) | |||||
General and administrative expenses | |||||||||
Corporate | (4,259,967) | (3,987,796) | (8,436,867) | (7,973,474) | |||||
Commercial and chartering | (686,922) | (852,364) | (1,446,717) | (1,719,751) | |||||
Unrealized (losses) / gains on derivatives | (21,523) | (99,292) | 80,049 | (99,292) | |||||
Interest expense and finance costs | (4,311,306) | (4,782,484) | (8,087,733) | (10,229,105) | |||||
Interest income | 17,397 | 73,988 | 29,991 | 218,190 | |||||
(Loss) / income before taxes | (8,092,195) | 13,661,783 | (16,530,817) | 20,210,967 | |||||
Income tax | (33,373) | (78,260) | (91,214) | (108,763) | |||||
Net (loss) / income | (8,125,568) | 13,583,523 | (16,622,031) | 20,102,204 | |||||
Preferred dividend | (81,507) | — | (81,507) | — | |||||
Net (loss) / income attributable to common stockholders | (8,207,075) | 13,583,523 | (16,703,538) | 20,102,204 | |||||
(Loss) / earnings per share, basic | (0.24) | 0.41 | (0.50) | 0.61 | |||||
(Loss) / earnings per share, diluted | (0.24) | 0.41 | (0.50) | 0.60 | |||||
Adjusted (loss) / earnings (1) | (7,551,867) | 13,682,815 | (16,133,242) | 20,201,496 | |||||
Adjusted (loss) / earnings per share, basic | (0.23) | 0.41 | (0.48) | 0.61 | |||||
Adjusted (loss) / earnings per share, diluted | (0.23) | 0.41 | (0.48) | 0.61 | |||||
Weighted average number of shares outstanding, basic | 33,500,030 | 33,247,848 | 33,394,008 | 33,222,383 | |||||
Weighted average number of shares outstanding, diluted | 33,500,030 | 33,356,978 | 33,394,008 | 33,357,635 | |||||
(1) | Adjusted (loss) / earnings is a non-GAAP measure and is defined and reconciled under the "Non-GAAP Measures" section. Adjusted (loss) / earnings 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 Interim Condensed Consolidated Statements of Cash Flows (Expressed in U.S. Dollars) | ||||
Six months ended | ||||
June 30, 2021 | June 30, 2020 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net (loss) / income | (16,622,031) | 20,102,204 | ||
Adjustments to reconcile net (loss) / income to net cash provided by operating activities: | ||||
Depreciation | 15,715,663 | 15,800,393 | ||
Amortization of deferred drydock expenditures | 2,750,033 | 2,777,670 | ||
Share-based compensation | 1,140,365 | 1,630,702 | ||
Amortization of deferred finance fees | 1,401,083 | 867,309 | ||
Unrealized (gains) / losses on derivatives | (80,049) | 99,292 | ||
Foreign exchange | (44,091) | (19,971) | ||
Deferred drydock expenditures | (3,329,971) | (3,566,595) | ||
Changes in operating assets and liabilities: | ||||
Receivables | 1,174,731 | (3,164,624) | ||
Prepaid expenses and other assets | 65,451 | 284,417 | ||
Advances and deposits | (1,730,489) | (643,816) | ||
Inventories | 816,977 | 3,587,431 | ||
Accounts payable | (1,114,311) | (1,902,923) | ||
Accrued expenses and other liabilities | (713,097) | (4,536,813) | ||
Charter revenue received in advance | 975,970 | — | ||
Accrued interest on debt and finance leases | (88,868) | (189,254) | ||
Net cash provided by operating activities | 317,366 | 31,125,422 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Proceeds from sale of vessels | 9,895,000 | — | ||
Payments for acquisition of vessels and vessel equipment | (1,056,926) | (860,418) | ||
Advances for ballast water treatment systems | (157,879) | (365,712) | ||
Payments for other non-current assets | (33,792) | (61,836) | ||
Payments for equity investments | (4,997,802) | — | ||
Net cash provided by / (used in) investing activities | 3,648,601 | (1,287,966) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from long-term debt | — | 10,178,101 | ||
Repayments of long-term debt | (68,511,781) | (7,904,486) | ||
Proceeds from finance leases | 49,000,000 | — | ||
Repayments of finance leases | (9,465,792) | (9,261,596) | ||
Payments for deferred finance fees | (980,000) | — | ||
Payment of dividend | — | (1,659,308) | ||
Issuance of preferred stock, net | 23,047,291 | — | ||
Net cash (used in) financing activities | (6,910,282) | (8,647,289) | ||
Net (decrease) / increase in cash and cash equivalents | (2,944,315) | 21,190,167 | ||
Cash and cash equivalents at the beginning of the year | 58,365,330 | 51,723,107 | ||
Cash and cash equivalents at the end of the period | 55,421,015 | 72,913,274 | ||
Ardmore Shipping Corporation Unaudited Other Operating Data (Expressed in U.S. Dollars, unless otherwise stated) | ||||||||
Three months ended | Six months ended | |||||||
June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||
EBITDA (1) | 5,397,464 | 27,907,333 | 9,912,572 | 48,899,237 | ||||
AVERAGE DAILY DATA | ||||||||
MR Tankers Eco-Design Spot TCE per day (2) | 11,255 | 21,539 | 11,197 | 20,551 | ||||
Fleet TCE per day (2) | 11,796 | 20,072 | 11,576 | 19,738 | ||||
Fleet operating expenses per day (3) | 5,942 | 5,864 | 5,903 | 5,946 | ||||
Technical management fees per day (4) | 456 | 461 | 466 | 459 | ||||
6,398 | 6,325 | 6,369 | 6,405 | |||||
MR Tankers Eco-Design | ||||||||
TCE per day (2) | 11,805 | 21,539 | 11,676 | 20,551 | ||||
Vessel operating expenses per day (5) | 6,530 | 6,293 | 6,397 | 6,327 | ||||
MR Tankers Eco-Mod | ||||||||
TCE per day (2) | 11,130 | 20,192 | 10,606 | 19,266 | ||||
Vessel operating expenses per day (5) | 6,201 | 6,463 | 6,419 | 6,511 | ||||
Prod/Chem Tankers Eco-Design (25k - 38k Dwt) | ||||||||
TCE per day (2) | 12,308 | 16,337 | 12,127 | 17,864 | ||||
Vessel operating expenses per day (5) | 6,200 | 6,313 | 6,265 | 6,528 | ||||
FLEET | ||||||||
Average number of owned operating vessels | 25.0 | 25.0 | 25.1 | 25.0 | ||||
(1) | 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 June 30, 2021 (Expressed in Millions of U.S. Dollars, other than per share amount) | ||||||||||||||||
Estimated Resale | Estimated | |||||||||||||||
Newbuilding | Depreciated | |||||||||||||||
Eco | Price (1) | Replacement | ||||||||||||||
Vessel | IMO | Built | Country | DWT | Specification | June 30, 2021 | Value (2) | |||||||||
Seavaliant | IMO2/3 | Feb–13 | S. Korea | 49,998 | Eco-Design | $ | 38.00 | $ | 26.40 | |||||||
Seaventure | IMO2/3 | Jun–13 | S. Korea | 49,998 | Eco-Design | $ | 38.00 | $ | 26.78 | |||||||
Seavantage | IMO2/3 | Jan–14 | S. Korea | 49,997 | Eco-Design | $ | 38.00 | $ | 27.63 | |||||||
Seavanguard | IMO2/3 | Feb–14 | S. Korea | 49,998 | Eco-Design | $ | 38.00 | $ | 27.74 | |||||||
Sealion | IMO2/3 | May–15 | S. Korea | 49,999 | Eco-Design | $ | 38.00 | $ | 29.52 | |||||||
Seafox | IMO2/3 | Jun–15 | S. Korea | 49,999 | Eco-Design | $ | 38.00 | $ | 29.63 | |||||||
Seawolf | IMO2/3 | Aug–15 | S. Korea | 49,999 | Eco-Design | $ | 38.00 | $ | 29.82 | |||||||
Seahawk | IMO2/3 | Nov–15 | S. Korea | 49,999 | Eco-Design | $ | 38.00 | $ | 30.12 | |||||||
Endeavour | IMO2/3 | Jul–13 | S. Korea | 49,997 | Eco-Design | $ | 38.00 | $ | 26.95 | |||||||
Enterprise | IMO2/3 | Sep–13 | S. Korea | 49,453 | Eco-Design | $ | 38.00 | $ | 27.17 | |||||||
Endurance | IMO2/3 | Dec–13 | S. Korea | 49,466 | Eco-Design | $ | 38.00 | $ | 27.49 | |||||||
Encounter | IMO2/3 | Jan–14 | S. Korea | 49,494 | Eco-Design | $ | 38.00 | $ | 27.56 | |||||||
Explorer | IMO2/3 | Jan–14 | S. Korea | 49,478 | Eco-Design | $ | 38.00 | $ | 27.66 | |||||||
Exporter | IMO2/3 | Feb–14 | S. Korea | 49,466 | Eco-Design | $ | 38.00 | $ | 27.76 | |||||||
Engineer | IMO2/3 | Mar–14 | S. Korea | 49,420 | Eco-Design | $ | 38.00 | $ | 27.86 | |||||||
Sealeader | IMO3 | Jun–08 | Japan | 47,451 | Eco-Mod | $ | 38.00 | $ | 19.52 | |||||||
Sealifter | IMO3 | Aug–08 | Japan | 47,463 | Eco-Mod | $ | 38.00 | $ | 19.81 | |||||||
Sealancer | IMO3 | Jul–08 | Japan | 47,472 | Eco-Mod | $ | 38.00 | $ | 19.64 | |||||||
Seafarer | IMO3 | Jun–10 | Japan | 49,999 | Eco-Mod | $ | 38.00 | $ | 22.41 | |||||||
Dauntless | IMO2 | Feb–15 | S. Korea | 37,764 | Eco-Design | $ | 35.00 | $ | 26.76 | |||||||
Defender | IMO2 | Feb–15 | S. Korea | 37,791 | Eco-Design | $ | 35.00 | $ | 26.80 | |||||||
Cherokee | IMO2 | Jan–15 | Japan | 25,215 | Eco-Design | $ | 31.50 | $ | 23.83 | |||||||
Cheyenne | IMO2 | Mar–15 | Japan | 25,217 | Eco-Design | $ | 31.50 | $ | 24.09 | |||||||
Chinook | IMO2 | Jul–15 | Japan | 25,217 | Eco-Design | $ | 31.50 | $ | 24.45 | |||||||
Chippewa | IMO2 | Nov–15 | Japan | 25,217 | Eco-Design | $ | 31.50 | $ | 24.80 | |||||||
$ | 652.18 | |||||||||||||||
Cash / Debt / Work. Cap / Other Assets | $ | (310.35) | ||||||||||||||
Total Asset Value (Assets) (3) | $ | 341.83 | ||||||||||||||
DRV / Share (3)(4) | $ | 9.95 | ||||||||||||||
Ardmore Commercial Management (5) | $ | 21.59 | ||||||||||||||
Total Asset Value (Assets & Commercial Management) (3) | $ | 363.42 | ||||||||||||||
DRV / Share (3)(4) | $ | 10.58 | ||||||||||||||
Investment in Element 1 Corp. / e1 Marine (6) | $ | 10.32 | ||||||||||||||
Total Asset Value (Assets, Commercial Management & Investments) (3) | $ | 373.74 | ||||||||||||||
DRV / Share (3)(4)(6) | $ | 10.88 | ||||||||||||||
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 June 30, 2021. | |||
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. | 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. | |||
4. | DRV / Share calculated using 34,363,884 shares outstanding as at June 30, 2021. | |||
5. | 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 ( | |||
6. | Valuation of investment in E1 Corp. and e1 Marine (a JV with E1 Corp and Maritime Partners, of which ASC owns | |||
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 | ||||||||
June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||||
Number of Owned & TC-In Vessels in Operation (at period end) | 27 | 25 | 27 | 25 | |||||
Fleet Average Age | 8.1 | 6.9 | 8.1 | 6.9 | |||||
CO2 Emissions Generated in Metric Tonnes | 101,217 | 96,825 | 386,125 | 405,655 | |||||
Distance Travelled (Miles) | 394,987 | 369,932 | 1,439,074 | 1,480,913 | |||||
Fuel Consumed in Metric Tonnes | 31,922 | 30,484 | 121,798 | 128,782 | |||||
Cargo Heating and Tank Cleaning Fuel Consumption | |||||||||
Fuel Consumed in Metric Tonnes | 796 | 604 | 4,563 | N/A | |||||
% of Total Fuel Consumed | N/A | ||||||||
Annual Efficiency Ratio (AER) for the period (2) | |||||||||
Fleet | 5.72g / tm | 5.89g / tm | 5.99g / tm | 6.16g / tm | |||||
MR Eco-Design | 5.59g / tm | 5.67g / tm | 5.76g / tm | 5.76g / tm | |||||
MR Eco-Mod | 5.64g / tm | 6.00g / tm | 6.16g / tm | 6.34g / tm | |||||
Chemical | 6.84g / tm | 6.95g / tm | 7.18g / tm | 7.92g / tm | |||||
Energy Efficiency Operational Indicator (EEOI) for the period (3) | |||||||||
Fleet | 12.23g / ctm | 10.82g / ctm | 12.95g / tm | 12.00g / ctm | |||||
MR Eco-Design | 13.25g / ctm | 10.73g / ctm | 13.09g / tm | 11.55g / ctm | |||||
MR Eco-Mod | 9.86g / ctm | 10.08g / ctm | 12.83g / tm | 11.76g / ctm | |||||
Chemical | 12.47g / ctm | 11.91g / ctm | 12.66g / tm | 13.86g / ctm | |||||
Wind Force (% greater than 4 on BF) | |||||||||
% Idle Time (4) | |||||||||
tm = tonne-mile | |||||||||
ctm = cargo tonne-mile | |||||||||
Ardmore Performance
Note: 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 a more accurate assessment of Ardmore's progress and to mitigate any seasonality.
From a weather perspective the second quarter had much rougher weather than the same period last year (based on Beaufort Scale wind force rating being greater than 4), and this would have had a mitigating impact on efficiency. It is also evident that heated cargoes were higher in the quarter, which means there were emissions unrelated to the efficiency of our ships, while the variance in idle time over the quarter is negligible.
On a trailing 12-month basis Ardmore Shipping's carbon emissions were 386,125 metric tonnes of CO2, a decrease of
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 | ||||
4 Idle time is the amount of time a vessel is waiting in port or awaiting the laycan or waiting in port/at sea unfixed | ||||
Non-GAAP Measures
This press release describes EBITDA and Adjusted (loss) / earnings, which are not measures prepared in accordance with U.S. GAAP and are defined and reconciled below. EBITDA is defined as earnings before interest, unrealized losses / (gains) on derivatives, taxes, depreciation and amortization. Adjusted (loss) / earnings excludes certain items from net (loss) / income, including gain or loss on sale of vessels, write-off of deferred finance fees and unrealized gains (losses) on derivatives 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 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 and Adjusted (loss) / earnings 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 substitutes 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 | Six months ended | |||||||
Reconciliation of net (loss) / income to EBITDA | June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||
Net (loss) / income | (8,125,568) | 13,583,523 | (16,622,031) | 20,102,204 | ||||
Interest income | (17,397) | (73,988) | (29,991) | (218,190) | ||||
Interest expense and finance costs | 4,311,306 | 4,782,484 | 8,087,733 | 10,229,105 | ||||
Income tax | 33,373 | 78,260 | 91,214 | 108,763 | ||||
Unrealized losses / (gains) on derivatives | 21,523 | 99,292 | (80,049) | 99,292 | ||||
Depreciation | 7,906,716 | 7,945,434 | 15,715,663 | 15,800,393 | ||||
Amortization of deferred drydock expenditures | 1,267,511 | 1,492,328 | 2,750,033 | 2,777,670 | ||||
EBITDA | 5,397,464 | 27,907,333 | 9,912,572 | 48,899,237 | ||||
Three months ended | Six months ended | |||||||
Reconciliation of net (loss) / income to Adjusted (loss) / earnings | June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||
Net (loss) / income | (8,125,568) | 13,583,523 | (16,622,031) | 20,102,204 | ||||
Write-off of deferred finance fees | 552,178 | — | 568,838 | — | ||||
Unrealized losses / (gains) on derivatives | 21,523 | 99,292 | (80,049) | 99,292 | ||||
Adjusted (loss)/ earnings | (7,551,867) | 13,682,815 | (16,133,242) | 20,201,496 | ||||
Adjusted (loss) / earnings per share, basic | (0.23) | 0.41 | (0.48) | 0.61 | ||||
Adjusted (loss) / earnings per share, diluted | (0.23) | 0.41 | (0.48) | 0.61 | ||||
Weighted average number of shares outstanding, basic | 33,500,030 | 33,247,848 | 33,394,008 | 33,222,383 | ||||
Weighted average number of shares outstanding, diluted | 33,500,030 | 33,356,978 | 33,394,008 | 33,357,635 | ||||
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 supply and future growth rates; the effect of the COVID-19 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 pandemic; expected employment of the Company's vessels during the third quarter of 2021; expected drydocking days in the third quarter of 2021; implementation of the Company's Energy Transition Plan; management's estimates of the Depreciated Replacement Value (DRV) of its vessels and of the value of the Company's commercial management and pooling business; trends in the Company's performance as measured by energy efficiency and emission-reduction metrics; the impact of energy transition on the Company and the markets in which the Company operates; expected continuation of refinement by the shipping industry of performance measures for emissions and efficiency; and the anticipated results of the Company's joint venture and investment transactions involving affiliates of Element 1 Corp and Maritime Partners, LLC. 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 COVID-19 pandemic on, among others, oil demand, the Company's business, financial condition and results of operation, including its 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 third quarter of 2021 in the spot market; vessels breakdowns and instances of off-hire; actual performance of Element 1's technology and systems, particularly in the marine environment; the level and timing of adoption of the technology by participants in the marine industry; 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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