Ardmore Shipping Corporation Announces Financial Results For The Three And Six Months Ended June 30, 2020
Ardmore Shipping Corporation (ASC) reported a strong recovery in its financial results for Q2 2020, achieving a net income of $13.6 million or $0.41 per share, compared to a net loss of $9.9 million in Q2 2019. EBITDA for the quarter soared to $27.9 million, significantly up from $5.7 million year-over-year. The company also posted a total revenue of $68 million, an increase driven by higher spot rates despite reduced revenue days. Looking ahead, Ardmore has entered into favorable charters and acquisitions, maintaining a positive long-term outlook while navigating market volatility.
- Net income of $13.6 million for Q2 2020, a recovery from a net loss of $9.9 million in Q2 2019.
- EBITDA increased to $27.9 million for Q2 2020 compared to $5.7 million in Q2 2019.
- Total revenue rose to $68 million, up $13 million from the previous year.
- Acquisition of a Japanese MR product tanker for $16.7 million, enhancing fleet quality.
- Maintained strong liquidity with $82 million in cash and undrawn lines.
- COVID-19 related uncertainties continue to pose risks to operational performance and market conditions.
- Average TCE rates for MR tankers in Q3 are expected to decrease to $13,800 per day, below the prior quarter's rates.
HAMILTON, Bermuda, July 28, 2020 /PRNewswire/ -- Ardmore Shipping Corporation (NYSE: ASC) ("Ardmore", the "Company" or "we") today announced results for the three and six months ended June 30, 2020.
Highlights and Recent Activity
- Reported net income of
$13.6 million for the three months ended June 30, 2020, or$0.41 earnings per basic and diluted share, as compared to a net loss of$9.9 million , or$0.30 loss per basic and diluted share, for the three months ended June 30, 2019. Net loss for the three months ended June 30, 2019 includes the loss on sale of the Ardmore Seafarer of$6.6 million . Reported EBITDA (see Non-GAAP Measures section) of$27.9 million for the three months ended June 30, 2020 as compared to$5.7 million for the three months ended June 30, 2019.
- Reported Adjusted earnings (see Non-GAAP Measures section) of
$13.7 million for the three months ended June 30, 2020 or$0.41 Adjusted earnings per basic share and diluted share, as compared to Adjusted loss of$3.4 million , or$0.10 Adjusted loss per basic and diluted share, for the three months ended June 30, 2019. Reported Adjusted EBITDA (see Non-GAAP Measures section) of$27.9 million for the three months ended June 30, 2020, as compared to$12.3 million for the three months ended June 30, 2019.
- Reported net income of
$20.1 million for the six months ended June 30, 2020, or$0.61 earnings per basic and diluted share, as compared to a net loss of$19.1 million , or$0.58 loss per basic and diluted share, for the six months ended June 30, 2019. Net loss for the six months ended June 30, 2019 includes aggregate loss on the sales of the Ardmore Seamaster and Ardmore Seafarer of$13.2 million . Reported EBITDA (see Non-GAAP Measures section) of$48.9 million for the six months ended June 30, 2020, as compared to$12.7 million for the six months ended June 30, 2019.
- Reported Adjusted earnings (see Non-GAAP Measures section) of
$20.2 million for the six months ended June 30, 2020, or$0.61 Adjusted earnings per basic and diluted share, as compared to an Adjusted loss of$5.9 million , or$0.18 Adjusted loss per basic and diluted share, for the six months ended June 30, 2019. Reported adjusted EBITDA (see Non-GAAP Measures section) of$48.9 million for the six months ended June 30, 2020, as compared to$25.9 million for the six months ended June 30, 2019.
- MR tankers earned an average TCE rate of
$21,256 per day for the three months ended June 30, 2020 and$20,280 per day for the six months ended June 30, 2020. Chemical tankers earned an average TCE rate of$16,337 per day for the three months ended June 30, 2020, and an average of$17,864 per day for the six months ended June 30, 2020.
- In May 2020, the Company entered floating-to-fixed interest rate swaps with a total notional amount of
$324 million at an average fixed interest rate of0.32% for a term of three years.
- In July 2020, the Company completed its first sustainability-linked finance facility with ABN AMRO; the new
$15 million receivables facility contains a pricing adjustment feature linked to Ardmore's performance on carbon emission reduction and other environmental and social initiatives. The facility's performance targets for carbon emission reduction align with International Maritime Organization's targets for GHG emissions reduction.
- On July 21, 2020, the Company agreed to acquire a 50,093 Dwt 2010 Japanese-built MR product tanker for a purchase price of
$16.7 million . The vessel completed second special survey and ballast water treatment installation in June and is expected to deliver to Ardmore in August 2020.
- On July 23, 2020, the Company entered into an agreement to charter-in a 47,981 Dwt 2010 Japanese-built MR product tanker for one year at a rate of approximately
$13,400 per day, plus a one-year extension option. Delivery is expected in September 2020.
- 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 sever 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 actions to contain or treat its impact, among others. Accordingly, an estimate of the impact cannot be made at this time.
Anthony Gurnee, the Company's Chief Executive Officer, commented:
"We are pleased to report a very profitable second quarter with 41 cents in earnings per share, reflecting solid Ardmore chartering performance on the back of strong trading conditions driven by volatility and market disruption. We have taken advantage of these conditions to build cash and strengthen our balance sheet: our leverage on a net debt basis is down to
The more recent market weakness has also presented attractive opportunities, and we are pleased to announce the acquisition of a high-quality Japanese MR built 2010 for
Meanwhile, the charter market is playing out as expected in reaction to underlying macroeconomic and oil market conditions, with the earlier spikes in rates followed by lows in recent weeks, and now with signals emerging that we are coming off a bottom. The oil market itself remains in turmoil; inventory levels remain high, global oil consumption is recovering to differing degrees across geographies and oil production is set to increase in August under the existing OPEC+ agreement.
Overall, we are very satisfied with the Company's performance throughout the first half of the year in which we have earned 61 cents per share. While the near-term outlook remains uncertain and market conditions are highly volatile, we maintain our long-term positive view and will continue with our capital allocation priorities while also sustaining our spot-market earnings power and seeking opportunities to build long-term value for our shareholders."
Summary of Recent and Second Quarter 2020 Events
Fleet
Fleet Operations and Employment
As at June 30, 2020, the Company had 25 vessels in operation, including 19 Eco MR tankers ranging from 45,000 deadweight tonnes (Dwt) to 49,999 Dwt (15 Eco-Design and four 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 2020, the Company had 19 Eco MR tankers trading in the spot market. The Eco MR tankers earned an average TCE rate of
In the third quarter of 2020, the Company expects to have all revenue days for its MR Eco-Design and MR Eco-Mod tankers employed in the spot market or on short-term time charter. As of July 28, 2020, the Company had fixed approximately
Product / Chemical Tankers (IMO 2: 25,000 Dwt – 37,800 Dwt)
At the end of the second 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 second quarter of 2020, the Company's six Eco-Design product / chemical vessels earned an average TCE rate of
In the third quarter of 2020, 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 28, 2020, the Company had fixed approximately
Drydocking
The Company had no drydock or repositioning days in the second quarter of 2020. The Company does not expect to have any drydock days in the third quarter of 2020.
Capital Allocation Policy
Consistent with the Company's capital allocation policy, the Company is not declaring a dividend for the second quarter of 2020.
Financing
In May 2020, the Company entered floating-to-fixed interest rate swaps with a total notional amount of
In July 2020, the Company completed its first sustainability-linked finance facility with ABN AMRO; the new
Vessel Additions
On July 21, 2020, Ardmore agreed to acquire a 50,093 Dwt, 2010 Japanese-built MR product tanker for a purchase price of
On July 23, 2020, the Company entered into an agreement to charter-in a 47,981 Dwt 2010 Japanese-built MR product tanker for one year at a rate of approximately
Results for the Three Months Ended June 30, 2020 and 2019
The Company reported net income of
The Company reported Adjusted earnings (see Non-GAAP Measures section) of
Results for the Six Months Ended June 30, 2020 and 2019
The Company reported net income 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 June 30, 2020 and 2019
Revenue. Revenue for the three months ended June 30, 2020 was
The Company's average number of owned vessels decreased to 25.0 for the three months ended June 30, 2020, from 25.6 for the three months ended June 30, 2019, resulting in revenue days of 2,269 for the three months ended June 30, 2020, as compared to 2,285 for the three months ended June 30, 2019. The Company had 25 vessels employed directly in the spot market as at June 30, 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
Depreciation. Depreciation expense for the three months ended June 30, 2020 was
Amortization of Deferred Drydock Expenditures. Amortization of deferred drydock expenditures for the three months ended June 30, 2020 was
General and Administrative Expenses: Corporate. Corporate-related general and administrative expenses for the three months ended June 30, 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 June 30, 2020 were
Unrealized losses on derivatives. Unrealized losses on derivatives for the three months ended June 30, 2020 was
Loss on Sale of Vessel. No loss on sale of vessel was recognized for the three months ended June 30, 2020 compared to
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, 2020 were
Liquidity
As at June 30, 2020, the Company had
As at | |||
June 30, 2020 | December 31, 2019 | ||
Cash | |||
Finance leases | 203,879,326 | 212,799,694 | |
Senior Debt | 156,758,389 | 163,264,006 | |
Revolving Credit Facilities | 54,197,108 | 44,019,007 | |
Total gross debt | 414,843,823 | 420,082,707 | |
Total net debt | |||
Conference Call
The Company plans to have a conference call on July 28, 2020 at 10:00 a.m. Eastern Time to discuss its results for the quarter ended June 30, 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 August 4, 2020 at 877-344-7529 or 412-317-0088. Enter the passcode 10145250 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 Interim Condensed Consolidated Balance Sheets (Expressed in U.S. Dollars) | |||
As at | |||
ASSETS | June 30, 2020 | December 31, 2019 | |
Current assets | |||
Cash and cash equivalents | 72,913,274 | 51,723,107 | |
Receivables, net of allowance for bad debts of | 33,247,982 | 30,083,358 | |
Prepaid expenses and other assets | 1,655,611 | 1,940,030 | |
Advances and deposits | 4,757,881 | 4,114,065 | |
Inventories | 6,571,304 | 10,158,735 | |
Total current assets | 119,146,052 | 98,019,295 | |
Non-current assets | |||
Vessels and vessel equipment, net | 645,937,320 | 660,823,330 | |
Deferred drydock expenditures, net | 8,773,038 | 7,668,711 | |
Ballast water treatment systems, installation in progress | 750,120 | 384,408 | |
Other non-current assets, net | 812,447 | 917,222 | |
Amount receivable in respect of finance leases | 2,880,000 | 2,880,000 | |
Operating lease, right of use asset | 1,859,284 | 1,745,464 | |
Total non-current assets | 661,012,209 | 674,419,135 | |
TOTAL ASSETS | 780,158,261 | 772,438,430 | |
LIABILITIES AND EQUITY | |||
Current liabilities | |||
Accounts payable | 3,373,587 | 4,789,935 | |
Accrued expenses | 11,462,985 | 16,278,084 | |
Accrued interest on debt and finance leases | 685,316 | 880,183 | |
Current portion of long-term debt | 17,695,140 | 20,216,171 | |
Current portion of finance lease obligations | 18,189,498 | 17,975,322 | |
Current portion of derivative liabilities | 169,473 | - | |
Current portion of operating lease obligations | 430,272 | 289,231 | |
Total current liabilities | 52,006,271 | 60,428,926 | |
Non-current liabilities | |||
Non-current portion of long-term debt | 192,387,568 | 187,066,842 | |
Non-current portion of finance lease obligations | 188,569,828 | 197,704,372 | |
Non-current portion of derivative liabilities | 703,316 | - | |
Non-current portion of operating lease obligations | 1,135,330 | 1,182,522 | |
Total non-current liabilities | 382,796,042 | 385,953,736 | |
Stockholders' equity | |||
Common stock | 352,067 | 350,192 | |
Additional paid in capital | 416,811,014 | 416,841,494 | |
Accumulated other comprehensive loss | (773,419) | - | |
Treasury stock | (15,348,909) | (15,348,909) | |
Accumulated deficit | (55,684,805) | (75,787,009) | |
Total stockholders' equity | 345,355,948 | 326,055,768 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 780,158,261 | 772,438,430 | |
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, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | ||||
Revenue, net | 67,932,494 | 54,992,101 | 133,126,009 | 117,258,488 | |||
Commissions and voyage expenses | (20,871,765) | (23,279,177) | (44,534,157) | (50,529,301) | |||
Vessel operating expenses | (14,313,236) | (14,878,738) | (29,999,390) | (31,717,026) | |||
Depreciation | (7,945,434) | (8,032,393) | (15,800,393) | (16,262,885) | |||
Amortization of deferred drydock expenditure | (1,492,328) | (1,114,880) | (2,777,670) | (2,253,643) | |||
General and administrative expenses | |||||||
Corporate | (3,987,796) | (3,909,557) | (7,973,474) | (7,492,730) | |||
Commercial and chartering | (852,364) | (593,059) | (1,719,751) | (1,649,680) | |||
Unrealized losses on derivatives | (99,292) | - | (99,292) | - | |||
Loss on sale of vessels | - | (6,592,429) | - | (13,162,192) | |||
Interest expense and finance costs | (4,782,484) | (6,805,234) | (10,229,105) | (13,762,894) | |||
Interest income | 73,988 | 318,661 | 218,190 | 556,999 | |||
Income / (loss) before taxes | 13,661,783 | (9,894,705) | 20,210,967 | (19,014,864) | |||
Income tax | (78,260) | (48,300) | (108,763) | (81,920) | |||
Net income / (loss) | 13,583,523 | (9,943,005) | 20,102,204 | (19,096,784) | |||
Earnings / (loss) per share, basic | 0.41 | (0.30) | 0.61 | (0.58) | |||
Earnings / (loss) per share, diluted | 0.41 | (0.30) | 0.61 | (0.58) | |||
ADJUSTED EARNINGS / LOSS (1) | |||||||
Adjusted earnings / (loss) | 13,682,815 | (3,350,576) | 20,201,496 | (5,934,592) | |||
Adjusted earnings / (loss) per share, basic | 0.41 | (0.10) | 0.61 | (0.18) | |||
Adjusted earnings / (loss) per share, diluted | 0.41 | (0.10) | 0.61 | (0.18) | |||
Weighted average number of shares outstanding, basic | 33,247,848 | 33,097,831 | 33,222,383 | 33,097,831 | |||
Weighted average number of shares outstanding, diluted | 33,356,978 | 33,097,831 | 33,357,635 | 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 and extraordinary items. |
Ardmore Shipping Corporation Unaudited Interim Condensed Consolidated Statements of Cash Flows (Expressed in U.S. Dollars) | |||
Six months ended | |||
June 30, 2020 | June 30, 2019 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income / (loss) | 20,102,204 | (19,096,784) | |
Adjustments to reconcile net income / (loss) to net cash provided by operating activities: | |||
Depreciation | 15,800,393 | 16,262,885 | |
Amortization of deferred drydock expenditures | 2,777,670 | 2,253,643 | |
Share-based compensation | 1,630,702 | 1,007,626 | |
Loss on sale of vessel | - | 13,162,192 | |
Amortization of deferred finance fees | 867,309 | 1,022,394 | |
Unrealized losses on derivatives | 99,292 | ||
Foreign exchange | (19,971) | (38,379) | |
Deferred drydock expenditures | (3,566,595) | (3,664,595) | |
Changes in operating assets and liabilities: | |||
Receivables | (3,164,624) | 3,257,864 | |
Prepaid expenses and other assets | 284,417 | 524,251 | |
Advances and deposits | (643,816) | (680,954) | |
Inventories | 3,587,431 | 3,064,005 | |
Accounts payable | (1,902,923) | (3,412,629) | |
Accrued expenses and other liabilities | (4,536,813) | (2,708,301) | |
Accrued interest on debt and finance leases | (189,254) | 224,919 | |
Net cash provided by operating activities | 31,125,422 | 11,178,137 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from sale of vessels | - | 26,557,707 | |
Payments for acquisition of vessels and vessel equipment | (860,418) | (948,732) | |
Ballast water treatment systems, installation in progress | (365,712) | (285,668) | |
Payments for other non-current assets | (61,836) | (140,635) | |
Net cash (used in) / provided by investing activities | (1,287,966) | 25,182,672 | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from long-term debt | 10,178,101 | - | |
Repayments of long-term debt | (7,904,486) | (21,087,685) | |
Repayments of finance leases | (9,261,596) | (17,334,150) | |
Payment of dividend | (1,659,308) | - | |
Net cash (used in) financing activities | (8,647,289) | (38,421,835) | |
Net increase / (decrease) in cash and cash equivalents | 21,190,167 | (2,061,026) | |
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 period | 72,913,274 | 54,842,012 | |
Ardmore Shipping Corporation Unaudited Other Operating Data (Expressed in U.S. Dollars, unless otherwise stated) | |||||||||
Three months ended | Six months ended | ||||||||
June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | ||||||
ADJUSTED EBITDA (1) | 27,907,333 | 12,331,570 | 48,899,237 | 25,869,751 | |||||
AVERAGE DAILY DATA | |||||||||
MR Tankers Spot & Pool TCE per day (2) | 21,256 | 14,892 | 20,280 | 15,306 | |||||
Fleet TCE per day (2) | 20,072 | 14,375 | 19,738 | 14,663 | |||||
Fleet operating expenses per day (3) | 5,864 | 5,936 | 5,946 | 6,213 | |||||
Technical management fees per day (4) | 461 | 457 | 459 | 458 | |||||
6,325 | 6,393 | 6,405 | 6,671 | ||||||
MR Tankers Eco-Design | |||||||||
TCE per day (2) | 21,539 | 14,945 | 20,551 | 15,418 | |||||
Vessel operating expenses per day (5) | 6,293 | 6,306 | 6,327 | 6,593 | |||||
MR Tankers Eco-Mod | |||||||||
TCE per day (2) | 20,192 | 14,681 | 19,266 | 14,916 | |||||
Vessel operating expenses per day (5) | 6,463 | 6,872 | 6,511 | 6,879 | |||||
Prod/Chem Tankers Eco-Design (25k - 38k Dwt) | |||||||||
TCE per day (2) | 16,337 | 12,830 | 17,864 | 12,529 | |||||
Vessel operating expenses per day (5) | 6,313 | 6,143 | 6,528 | 6,437 | |||||
FLEET | |||||||||
Average number of owned operating vessels | 25.0 | 25.6 | 25.0 | 26.1 | |||||
(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. Amounts do not relate to 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, 2020 (Expressed in Millions of U.S. Dollars, other than per share amount) | ||||||||||||
Vessel | IMO | Built | Country | DWT | Cargo | Engine Type | Cargo | Inerting | Eco | Estimated Resale | Estimated | |
Capacity (m3) | Segregations | System | Specification | Price (1) | Replacement | |||||||
June 30, 2020 | Value (2) | |||||||||||
Seavaliant | IMO2/3 | Feb-13 | S. Korea | 49,998 | 53,361 | 6S50 ME-C8.2 | 6 | IG Plant | Eco-Design | |||
Seaventure | IMO2/3 | Jun-13 | S. Korea | 49,998 | 53,375 | 6S50 ME-C8.2 | 6 | IG Plant | Eco-Design | |||
Seavantage | IMO2/3 | Jan-14 | S. Korea | 49,997 | 53,288 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Seavanguard | IMO2/3 | Feb-14 | S. Korea | 49,998 | 53,287 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Sealion | IMO2/3 | May-15 | S. Korea | 49,999 | 52,928 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Seafox | IMO2/3 | Jun-15 | S. Korea | 49,999 | 52,930 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Seawolf | IMO2/3 | Aug-15 | S. Korea | 49,999 | 52,931 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Seahawk | IMO2/3 | Nov-15 | S. Korea | 49,999 | 52,931 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Endeavour | IMO2/3 | Jul-13 | S. Korea | 49,997 | 53,637 | 6S50 ME-C8.2 | 6 | IG Plant | Eco-Design | |||
Enterprise | IMO2/3 | Sep-13 | S. Korea | 49,453 | 52,774 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Endurance | IMO2/3 | Dec-13 | S. Korea | 49,466 | 52,770 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Encounter | IMO2/3 | Jan-14 | S. Korea | 49,494 | 52,776 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Explorer | IMO2/3 | Jan-14 | S. Korea | 49,478 | 52,775 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Exporter | IMO2/3 | Feb-14 | S. Korea | 49,466 | 52,770 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Engineer | IMO2/3 | Mar-14 | S. Korea | 49,420 | 52,789 | 6S50 ME-B9.2 | 6 | IG Plant | Eco-Design | |||
Seamariner | IMO3 | Oct-06 | Japan | 45,726 | 52,280 | 6S50MC-6.1 | 3 | Flue Gas | Eco-Mod | |||
Sealeader | IMO3 | Jun-08 | Japan | 47,451 | 52,527 | 6S50MC-6.1 | 3 | Flue Gas | Eco-Mod | |||
Sealifter | IMO3 | Aug-08 | Japan | 47,463 | 52,534 | 6S50MC-6.1 | 3 | Flue Gas | Eco-Mod | |||
Sealancer | IMO3 | Jul-08 | Japan | 47,472 | 52,467 | 6S50MC-6.1 | 3 | Flue Gas | Eco-Mod | |||
Dauntless | IMO2 | Feb-15 | S. Korea | 37,764 | 41,620 | 6S50 ME-B9.2 | 14 | Nitrogen | Eco-Design | |||
Defender | IMO2 | Feb-15 | S. Korea | 37,791 | 41,620 | 6S50 ME-B9.2 | 14 | Nitrogen | Eco-Design | |||
Cherokee | IMO2 | Jan-15 | Japan | 25,215 | 28,475 | 6S46 ME-B8.3 | 12 | Nitrogen | Eco-Design | |||
Cheyenne | IMO2 | Mar-15 | Japan | 25,217 | 28,490 | 6S46 ME-B8.3 | 12 | Nitrogen | Eco-Design | |||
Chinook | IMO2 | Jul-15 | Japan | 25,217 | 28,483 | 6S46 ME-B8.3 | 12 | Nitrogen | Eco-Design | |||
Chippewa | IMO2 | Nov-15 | Japan | 25,217 | 28,493 | 6S46 ME-B8.3 | 12 | Nitrogen | Eco-Design | |||
Cash / Debt / Working Capital / Other Assets | ( | |||||||||||
Total Asset Value (Assets) (5) | ||||||||||||
DRV / Share (3)(5) | ||||||||||||
Ardmore Commercial Management (4) | ||||||||||||
Total Asset Value (Assets & Commercial Mgt.) (5) | ||||||||||||
DRV / Share (3)(5) | ||||||||||||
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, 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. | DRV / Share calculated using 33,285,255 shares outstanding as at June 30, 2020. |
4. | 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 ( |
5. | 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. |
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, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2020 | |||
Number of Vessels in Operation (at period end) | 25 | 25 | 25 | 25 | 25 | ||
Fleet Average Age | 6.9 | 6.7 | 6.4 | 6.2 | 6.9 | ||
CO2 Emissions Generated in Metric Tonnes (Quarterly) | 96,825 | 96,940 | 98,650 | 115,169 | - | ||
CO2 Emissions Generated in Metric Tonnes (Annual) | - | - | - | - | 405,655 | ||
Annual Efficiency Ratio (AER) for the period (2) | |||||||
Fleet | 5.89 g / tm | 6.07 g / tm | 6.46 g / tm | 6.24 g / tm | 6.16 g / tm | ||
MR Eco-Design | 5.67 g / tm | 5.51 g / tm | 6.20 g / tm | 5.72 g / tm | 5.76 g / tm | ||
MR Eco-Mod | 6.00 g / tm | 6.56 g / tm | 6.05 g / tm | 6.90 g / tm | 6.34 g / tm | ||
Chemical | 6.95 g / tm | 8.25 g / tm | 8.08 g / tm | 8.46 g / tm | 7.92 g / tm | ||
Energy Efficiency Operational Indicator (EEOI) for the period (3) | |||||||
Fleet | 10.82 g / ctm | 12.03 g / ctm | 12.92 g / ctm | 12.57 g / ctm | 12.00 g / ctm | ||
MR Eco-Design | 10.73 g / ctm | 11.15 g / ctm | 13.33 g / ctm | 11.37 g / ctm | 11.55 g / ctm | ||
MR Eco-Mod | 10.08 g / ctm | 12.28 g / ctm | 12.96 g / ctm | 12.24 g / ctm | 11.76 g / ctm | ||
Chemical | 11.91 g / ctm | 16.26 g / ctm | 11.84 g / ctm | 16.48 g / ctm | 13.86 g / ctm | ||
tm = tonne-mile | |||||||
ctm = cargo tonne-mile | |||||||
Ardmore Performance
Ardmore is continuing to perform well both AER and EEOI. The results vary quarter to quarter depending on ship activity, ballast / laden ratio, cargo carried, waiting time and time in port; however, on a trailing four quarter basis the results are more stable and reflect a continued improved in Ardmore's performance in reducing carbon emissions. This is attributable to continued investment in fuel efficiency technologies for the fleet and focus on operating performance. Overall, Ardmore's AER result for the fleet is 6.16 g/tm for the last four quarters to June 30, 2020 which is meaningfully below the Poseidon Principles AER target for 2020 of 6.8 g / tm.
1 | Ardmore's emissions data is based on the reporting tools and information reasonably available to Ardmore and its applicable third-party technical managers. 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 increase 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.
Reconciliation of net loss to EBITDA and Adjusted EBITDA | Three months ended | Six months ended | |||||
June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | ||||
Net income/ loss | 13,583,523 | (9,943,005) | 20,102,204 | (19,096,784) | |||
Interest income | (73,988) | (318,661) | (218,190) | (556,999) | |||
Interest expense and finance costs | 4,782,484 | 6,805,234 | 10,229,105 | 13,762,894 | |||
Income tax | 78,260 | 48,300 | 108,763 | 81,920 | |||
Unrealized losses on derivatives | 99,292 | - | 99,292 | - | |||
Depreciation | 7,945,434 | 8,032,393 | 15,800,393 | 16,262,885 | |||
Amortization of deferred drydock expenditure | 1,492,328 | 1,114,880 | 2,777,670 | 2,253,643 | |||
EBITDA | 27,907,333 | 5,739,141 | 48,899,237 | 12,707,559 | |||
Loss on sale of vessel | - | 6,592,429 | - | 13,162,192 | |||
ADJUSTED EBITDA | 27,907,333 | 12,331,570 | 48,899,237 | 25,869,751 | |||
Reconciliation of net income / (loss) to Adjusted earnings / (loss) | Three months ended | Six months ended | |||||
June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | ||||
Net income/ loss | 13,583,523 | (9,943,005) | 20,102,204 | (19,096,784) | |||
Loss on sale of vessel | - | 6,592,429 | - | 13,162,192 | |||
Unrealized losses on derivatives | 99,292 | - | 99,292 | - | |||
Adjusted earnings / (loss) (1) | 13,682,815 | (3,350,576) | 20,201,496 | (5,934,592) | |||
Adjusted earnings / (loss) per share, basic | 0.41 | (0.10) | 0.61 | (0.18) | |||
Adjusted earnings / (loss) per share, diluted | 0.41 | (0.10) | 0.61 | (0.18) | |||
Weighted average number of shares, basic | 33,247,848 | 33,097,831 | 33,222,383 | 33,097,831 | |||
Weighted average number of shares, diluted | 33,356,978 | 33,097,831 | 33,357,635 | 33,097,831 | |||
1 | Adjusted earnings / (loss) has been calculated as Earnings per share reported under US GAAP as adjusted for realized and unrealized gains and losses and extraordinary items. | ||||
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 expected tanker demand and scrapping levels, the use of tankers for storage purposes and the sustainability of current market improvement; the Company's liquidity, financial flexibility and strength; the Company's capital allocation policy and intended actions; the effect of the novel coronavirus pandemic on the Company's business, financial condition and the results of operation; the effect on tanker demand of the IMO 2020 regulations; expected global oil consumption and refinery capacity growth; the effects and expected duration of regulatory uncertainty on the global maritime industry regarding greenhouse gas emissions; the time it will take for new technologies addressing greenhouse gas emissions to emerge; expected employment of the Company's vessels during the third quarter of 2020; expected drydocking days in the third quarter of 2020; management's estimate of the value of the Company's commercial management and pooling business; the benefits of the Company's commitment to transparency regarding emissions; 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; 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 2020 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, 2019, 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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