Ardmore Shipping Corporation Announces Financial Results For The Three and Six Months Ended June 30, 2024
Ardmore Shipping (NYSE: ASC) announced its financial results for Q2 and H1 of 2024.
For Q2 2024, the company reported a net income of $61.8 million, or $1.48 per basic share, compared to $23.7 million or $0.57 per basic share in Q2 2023. Adjusted earnings were $47.6 million or $1.14 per basic share, up from $23.7 million or $0.57 in Q2 2023.
H1 2024 net income was $100.2 million, or $2.41 per basic share, compared to $66.9 million or $1.63 in H1 2023. Adjusted earnings were $86.0 million or $2.07 per basic share, up from $66.9 million or $1.63 in H1 2023.
The Board declared a dividend of $0.38 per share for Q2 2024, payable on September 13, 2024.
MR Eco-Design tankers earned an average spot TCE of $41,385 per day, and chemical tankers earned $30,330 per day in Q2 2024.
Notably, CEO Anthony Gurnee announced his retirement, with Gernot Ruppelt taking over as CEO and Bart Kelleher expanding his role to President, effective September 16, 2024.
The company exercised purchase options for Ardmore Seawolf and Ardmore Seahawk and sold its stake in e1 Marine for $1.65 million.
- Reported net income increased to $61.8 million for Q2 2024, up from $23.7 million in Q2 2023.
- Adjusted earnings for Q2 2024 rose to $47.6 million, up from $23.7 million in Q2 2023.
- H1 2024 net income increased to $100.2 million, up from $66.9 million in H1 2023.
- Declared dividend of $0.38 per share for Q2 2024, payable on September 13, 2024.
- MR Eco-Design tankers earned an average spot TCE of $41,385 per day in Q2 2024.
- Chemical tankers earned an average TCE of $30,330 per day in Q2 2024.
- Voyage expenses increased to $34.7 million in Q2 2024, up from $31.5 million in Q2 2023.
- Vessel operating expenses rose to $16.2 million in Q2 2024, up from $15.3 million in Q2 2023.
- Depreciation expenses increased to $7.6 million in Q2 2024, up from $6.8 million in Q2 2023.
- Increased charter hire costs to $5.6 million in Q2 2024, up from $4.3 million in Q2 2023.
Insights
Ardmore Shipping 's Q2 2024 financial results demonstrate strong performance and significant growth compared to the previous year. Key highlights include:
- Net income of
$61.8 million ($1.48 per basic share), up from$23.7 million ($0.57 per share) in Q2 2023. - Adjusted earnings of
$47.6 million ($1.14 per basic share), compared to$23.7 million ($0.57 per share) in Q2 2023. - MR Eco-Design tankers earned an average spot TCE rate of
$41,385 per day, while chemical tankers earned$30,330 per day. - Declared a cash dividend of
$0.38 per common share for Q2 2024.
The company's performance is driven by robust market conditions, including newbuildings, an aging fleet and steady oil demand growth. Geopolitical factors, particularly the Russia-Ukraine conflict, are further supporting strong charter rates.
Ardmore's strategic initiatives, including fleet upgrades and proactive balance sheet management, have enhanced earnings potential and reduced breakeven costs. The company's high-quality, spot-exposed fleet is well-positioned to capitalize on current market conditions.
The announced leadership transition, with Gernot Ruppelt appointed as the new CEO and Bart Kelleher as President and CFO, suggests continuity in strategy and operations.
Overall, Ardmore's Q2 results and market outlook indicate a positive trajectory for the company, with potential for continued strong performance in the near term.
The tanker market is experiencing exceptionally robust conditions, even during a typically slow season. This strength is driven by several factors:
- newbuilding deliveries constraining supply growth
- An aging global fleet reducing effective capacity
- Steady oil demand growth providing a solid baseline for tanker demand
- Geopolitical factors, particularly the Russia-Ukraine conflict, causing trade route disruptions and longer voyages
The ongoing Israel-Hamas conflict and Houthi attacks in the Red Sea are also impacting shipping routes and potentially extending ton-mile demand. These factors have contributed to significantly higher spot tanker rates.
Looking ahead,
The company's strategic positioning with a high-quality, recently upgraded fleet that is largely spot-exposed allows it to fully capitalize on current market strength. This approach, combined with reduced breakeven costs, enhances Ardmore's earnings potential and cash flow generation.
The tanker market outlook remains positive in the near term, supported by ongoing geopolitical tensions and supply-demand fundamentals. However, investors should monitor potential risks such as changes in oil demand patterns or resolution of geopolitical conflicts that could impact the current favorable market dynamics.
From a legal perspective, Ardmore Shipping 's Q2 2024 report highlights several key points:
- Leadership Transition: The announced CEO succession, with Gernot Ruppelt replacing Anthony Gurnee, appears to be well-planned and in line with good corporate governance practices. The Board's involvement in the succession process and the appointment of internal candidates suggest continuity and stability.
- Dividend Policy: The company's variable dividend policy, paying out one-third of Adjusted earnings, is clearly stated and consistently applied. This transparency helps mitigate potential shareholder disputes regarding dividend distributions.
- Fleet Management: The exercise of purchase options for vessels under sale-leaseback arrangements (Ardmore Seawolf and Ardmore Seahawk) demonstrates active fleet management. These transactions should be reviewed to ensure compliance with any relevant financial covenants or regulatory requirements.
- Geopolitical Risk Disclosure: The company appropriately discloses potential risks related to geopolitical conflicts, including the Russia-Ukraine war and tensions in the Red Sea. This transparency is important for investor information and potential risk mitigation strategies.
- Non-GAAP Measures: Ardmore provides reconciliations between GAAP and non-GAAP financial measures, which is important for regulatory compliance and investor transparency.
Overall, the report suggests that Ardmore is maintaining good corporate governance practices and providing appropriate disclosures. However, ongoing monitoring of geopolitical risks and their potential legal implications will be crucial.
Highlights and Recent Activity
- Reported net income of
$61.8 million $1.48 $1.47 $23.7 million $0.57 $47.6 million $1.14 $1.13 $23.7 million $0.57 $12.3 million - Reported net income of
$100.2 million $2.41 $2.39 $66.9 million $1.63 $1.60 $86.0 million $2.07 $2.05 $66.9 million $1.63 $1.60 $12.3 million - Consistent with the Company's variable dividend policy of paying out dividends on its shares of common stock equal to one-third of Adjusted earnings, the Board of Directors declared a cash dividend on July 31, 2024, of
$0.38 - MR Eco-Design tankers earned an average spot TCE rate of
$41,385 $30,330 45% total revenue days currently fixed for the third quarter of 2024, the average spot TCE rate is approximately$33,700 50% of revenue days fixed for the third quarter of 2024, the average TCE rate for chemical tankers is approximately$26,400 - On July 8, 2024, the Company announced that Founder and CEO Anthony Gurnee has informed the Board of Directors (the "Board") of his intention to retire from his executive and board positions later this year. Following a comprehensive succession process, the Board appointed current executive and Chief Commercial Officer Gernot Ruppelt as the Company's new CEO, and expanded current CFO Bart Kelleher's position to take on the additional role of President, with the leadership transition to take effect from September 16, 2024 at the Company's upcoming quarterly Board meeting. This transition represents the culmination of leadership succession planning that has been long-established and extensively discussed at the board and management levels. Following his retirement from the Company, current CEO Anthony Gurnee will remain available to Ardmore as an advisor during the transition period. In connection with their promotions, both Ruppelt and Kelleher will be joining the Board of Directors of the Company.
- In June 2024, the Company exercised its purchase options for both the Ardmore Seawolf and Ardmore Seahawk, which were under sale-leaseback arrangements.
Anthony Gurnee, the Company's Chief Executive Officer, commented:
"Market conditions and charter rates continue to be exceptionally robust during an otherwise seasonally slow point in the year, a result of limited newbuildings delivering, an aging fleet, and steady oil demand growth providing a robust baseline. In addition, a number of geopolitical factors, most notably the re-routing related to the
Ardmore's high-quality, recently upgraded, and spot-exposed fleet is enabling the Company to fully exploit these conditions. Following our significant drydocking and upgrade program last year and early this year, our fleet is now enjoying increased revenue days and enhanced earnings potential. In addition to which, our proactive balance sheet management and comprehensive cost controls have reduced our breakevens, thus further enhancing cash flow, earnings and our dividend payout.
As I work closely with my Board and Company colleagues to ensure a seamless leadership transition at Ardmore, I take great pride in the extraordinary quality of the team we have assembled at all levels of the organization, as well as a shared vision for the future and an unwavering commitment to performance and progress. It is a testament to the Board's dedication to good governance and professional development that we have within our ranks the best possible leaders for the years ahead. With Gernot and Bart providing proven leadership and continuity, I believe that Ardmore has never been better positioned to succeed than it is now."
Summary of Recent and Second Quarter 2024 Events
Fleet
Fleet Operations and Employment
As of June 30, 2024, the Company had 26 vessels in operation (including four chartered-in vessels), consisting of 20 MR tankers ranging from 45,000 deadweight tonnes ("dwt") to 49,999 dwt (16 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 2024, the Company had 20 MR tankers in operation, all of which were trading in either the spot market or on time charters. The MR tankers earned an average TCE rate of
In the third quarter of 2024, the Company expects to have
Product / Chemical Tankers (IMO 2: 25,000 dwt – 37,800 dwt)
At the end of the second quarter of 2024, 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 2024, the Company's six Eco-Design product / chemical vessels earned an average TCE rate of
In the third quarter of 2024, 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 31, 2024, the Company had fixed approximately
Drydocking
The Company had 54 drydocking days in the second quarter of 2024. The Company is currently scheduled to have no drydocking days in the third quarter of 2024.
Dividend on Common Shares
Consistent with the Company's variable dividend policy of paying out dividends on its shares of common stock equal to one-third of Adjusted earnings, as calculated for dividends (see Adjusted earnings (for purposes of dividend calculations) in the Non-GAAP Measures section), the Board of Directors declared a cash dividend on July 31, 2024 of
Leadership Transition
On July 8, 2024, Ardmore announced that Founder and CEO Anthony Gurnee had informed the Board of his intention to retire from his executive and board positions later this year. Following a comprehensive succession process, the Board appointed current executive and Chief Commercial Officer Gernot Ruppelt as the Company's new CEO, and expanded current CFO Bart Kelleher's position to take on the additional role of President, with the leadership transition to take effect from September 16, 2024 at the Company's upcoming quarterly Board meeting.
This transition represents the culmination of leadership succession planning that has been long-established and extensively discussed at the board and management levels. Following his retirement from the Company, current CEO Anthony Gurnee will remain available to Ardmore as an advisor during the transition period. In connection with their promotions, both Ruppelt and Kelleher will be joining the Board of Directors of the Company.
Sale of stake in e1 Marine
In May 2024, Ardmore sold its stake in e1 Marine for
Separately, as Ardmore remains an investor in Element 1 Corp., it continues to have exposure to any future growth of e1 Marine's business.
Fleet
In April 2024, Ardmore delivered the 2010-built Ardmore Seafarer to its buyer and, in a separate transaction, took delivery of the previously announced acquisition of a 2017 Korean-built MR product tanker, the Ardmore Gibraltar.
In June 2024, Ardmore exercised its purchase options for both the Ardmore Seawolf and Ardmore Seahawk, which were under sale-leaseback arrangements.
Publication of 2023 Sustainability Report
On June 13, 2024, the Company published its 2023 Sustainability Report, highlighting its progress towards a more sustainable future. In 2023, the Company reached new heights in both operating performance and sustainability. Ardmore continues to believe that consistent superior operating performance is a key driver of long-term value in its business, and Ardmore is committed to driving its sustainability agenda forward. The Sustainability Report is available on the Ardmore website at www.ardmoreshipping.com/about/progress/
Geopolitical Conflicts
The ongoing
Geopolitical tensions have increased since commencement of the Israel-Hamas war in October 2023. Since mid-December 2023, Houthi rebels in
Results for the Three Months Ended June 30, 2024 and 2023
The Company reported net income of
Results for the Six Months Ended June 30, 2024 and 2023
The Company reported net income of
Management's Discussion and Analysis of Financial Results for the Three Months Ended June 30, 2024 and 2023
Revenue. Revenue for the three months ended June 30, 2024 was
The Company's average number of operating vessels was 26.0 for the three months ended June 30, 2024, consistent with 26.0 for the three months ended June 30, 2023.
The Company had 2,093 spot revenue days for the three months ended June 30, 2024, as compared to 2,295 for the three months ended June 30, 2023. The Company had 24 vessels employed directly in the spot market as of June 30, 2024 compared with 26 vessels as of June 30, 2023. Increases in spot rates during the three months ended June 30, 2024 resulted in an increase in revenue of
The Company had two product tankers employed under time charters as of June 30, 2024 as compared to none as of June 30, 2023. There were 186 revenue days derived from time charters for the three months ended June 30, 2024, as compared to none for the three months ended June 30, 2023. The increase in revenue days for time-chartered vessels resulted in an increase 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. Total charter hire expense was
Depreciation. Depreciation expense for the three months ended June 30, 2024 was
Amortization of Deferred Drydock Expenditures. Amortization of deferred drydock expenditures for the three months ended June 30, 2024 was
General and Administrative Expenses: Corporate. Corporate-related general and administrative expenses for the three months ended June 30, 2024 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, 2024 were
Gain on Vessel Sold. Gain on vessel sold for the three months ended June 30, 2024 was
Interest Expense and Finance Costs. Interest expense and finance costs for the three months ended June 30, 2024 were
Gain on Extinguishment. Gain on extinguishment for the three months ended June 30, 2024 was
Liquidity
As of June 30, 2024, the Company had
Conference Call
The Company plans to host a conference call on July 31, 2024, at 10:00 a.m. Eastern Time to discuss its financial results for the quarter ended June 30, 2024. 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 800‑836‑8184 (
U.S. ) or 646-357-8785 (International) and referencing "Ardmore Shipping." - By accessing the live webcast at Ardmore'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 7, 2024 at 888-660-6345 or 646-517-4150. Enter the passcode 88347 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 takes 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, through its modern, fuel-efficient fleet of mid-size tankers, seaborne transportation of petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies.
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 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 Shipping Corporation | ||||
As of | ||||
In thousands of | June 30, 2024 | December 31, 2023 | ||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | 47,396 | 46,805 | ||
Receivables, net of allowance for bad debts of | 75,168 | 56,234 | ||
Prepaid expenses and other assets | 4,576 | 4,348 | ||
Advances and deposits | 2,029 | 6,833 | ||
Inventories | 13,208 | 12,558 | ||
Total current assets | 142,377 | 126,778 | ||
Non-current assets | ||||
Investments and other assets, net | 9,950 | 11,186 | ||
Vessels and vessel equipment, net | 557,592 | 524,044 | ||
Deferred drydock expenditures, net | 15,130 | 12,022 | ||
Advances for ballast water treatment and scrubber systems | 4,187 | 9,587 | ||
Deferred finance fees, net | 3,280 | 2,835 | ||
Operating lease, right-of-use asset | 9,514 | 4,499 | ||
Total non-current assets | 599,653 | 564,173 | ||
TOTAL ASSETS | 742,030 | 690,951 | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY | ||||
Current liabilities | ||||
Accounts payable | 13,402 | 2,016 | ||
Accrued expenses and other liabilities | 18,745 | 18,265 | ||
Deferred revenue | — | 347 | ||
Accrued interest on debt and finance leases | 646 | 939 | ||
Current portion of long-term debt | — | 6,436 | ||
Current portion of finance lease obligations | — | 2,029 | ||
Current portion of operating lease obligations | 7,887 | 3,807 | ||
Total current liabilities | 40,680 | 33,839 | ||
Non-current liabilities | ||||
Non-current portion of long-term debt | 44,176 | 39,590 | ||
Non-current portion of finance lease obligations | — | 41,614 | ||
Non-current portion of operating lease obligations | 1,462 | 510 | ||
Other non-current liabilities | 954 | 954 | ||
Total non-current liabilities | 46,592 | 82,668 | ||
TOTAL LIABILITIES | 87,272 | 116,507 | ||
Redeemable Preferred Stock | ||||
Cumulative Series A | 37,043 | 37,043 | ||
Total redeemable preferred stock | 37,043 | 37,043 | ||
Stockholders' equity | ||||
Common stock | 439 | 433 | ||
Additional paid in capital | 472,910 | 471,216 | ||
Treasury stock | (15,636) | (15,636) | ||
Retained earnings | 160,002 | 81,388 | ||
Total stockholders' equity | 617,715 | 537,401 | ||
Total redeemable preferred stock and stockholders' equity | 654,758 | 574,444 | ||
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY | 742,030 | 690,951 | ||
Ardmore Shipping Corporation | ||||||||
Three Months Ended | Six Months Ended | |||||||
In thousands of | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||
Revenue, net | 121,325 | 91,927 | 227,626 | 210,160 | ||||
Voyage expenses | (34,720) | (31,532) | (65,267) | (68,095) | ||||
Vessel operating expenses | (16,223) | (15,258) | (31,143) | (30,195) | ||||
Time charter-in | ||||||||
Operating expense component | (2,895) | (2,249) | (5,731) | (5,114) | ||||
Vessel lease expense component | (2,664) | (2,070) | (5,274) | (4,706) | ||||
Depreciation | (7,605) | (6,814) | (14,581) | (13,756) | ||||
Amortization of deferred drydock expenditures | (939) | (895) | (1,694) | (1,902) | ||||
General and administrative expenses | ||||||||
Corporate | (5,307) | (4,760) | (10,374) | (9,820) | ||||
Commercial and chartering | (1,021) | (1,052) | (2,084) | (2,224) | ||||
Unrealized losses on derivatives | — | — | — | (31) | ||||
Interest expense and finance costs | (2,044) | (2,825) | (4,571) | (5,689) | ||||
Gain on extinguishment | 1,432 | — | 1,432 | — | ||||
Interest income | 612 | 606 | 1,156 | 845 | ||||
Gain on vessel sold | 12,322 | — | 12,322 | — | ||||
Income before taxes | 62,273 | 25,078 | 101,817 | 69,473 | ||||
Income tax | (49) | (240) | (128) | (297) | ||||
Gain / (loss) from equity method | 468 | (331) | 239 | (580) | ||||
Net Income | 62,692 | 24,507 | 101,928 | 68,596 | ||||
Preferred dividends | (848) | (848) | (1,695) | (1,686) | ||||
Net Income attributable to common | 61,844 | 23,659 | 100,233 | 66,910 | ||||
Earnings per share, basic | 1.48 | 0.57 | 2.41 | 1.63 | ||||
Earnings per share, diluted | 1.47 | 0.57 | 2.39 | 1.60 | ||||
Adjusted earnings (1) | 47,589 | 23,659 | 85,978 | 66,910 | ||||
Adjusted earnings per share, basic | 1.14 | 0.57 | 2.07 | 1.63 | ||||
Adjusted earnings per share, diluted | 1.13 | 0.57 | 2.05 | 1.60 | ||||
Weighted average number of shares | 41,747,977 | 41,192,894 | 41,559,932 | 40,959,113 | ||||
Weighted average number of shares | 42,010,724 | 41,706,251 | 41,981,667 | 41,692,820 | ||||
____________________ | |
(1) | Adjusted earnings is a non-GAAP measure and is defined and reconciled under the "Non-GAAP Measures" section. |
Ardmore Shipping Corporation | ||||
Six Months Ended | ||||
In thousands of | June 30, 2024 | June 30, 2023 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | 101,928 | 68,596 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation | 14,581 | 13,756 | ||
Amortization of deferred drydock expenditures | 1,694 | 1,902 | ||
Share-based compensation | 1,699 | 1,585 | ||
Gain on vessel sold | (12,322) | — | ||
Amortization of deferred finance fees | 585 | 589 | ||
Gain on extinguishment | (1,432) | — | ||
Unrealized losses on derivatives | — | 31 | ||
Operating lease ROU - lease liability, net | 17 | 5 | ||
(Profit) / loss from equity method investments | (239) | 580 | ||
Deferred drydock payments | (3,759) | (2,711) | ||
Changes in operating assets and liabilities: | ||||
Receivables | (18,936) | 16,783 | ||
Prepaid expenses and other assets | (229) | 71 | ||
Advances and deposits | 4,879 | 15 | ||
Inventories | (650) | 1,500 | ||
Accounts payable | 9,902 | (267) | ||
Accrued expenses and other liabilities | 509 | (2,390) | ||
Deferred revenue | (347) | (1,220) | ||
Accrued interest | (292) | 74 | ||
Net cash provided by operating activities | 97,588 | 98,899 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Proceeds from sale of vessels | 26,829 | — | ||
Payments for acquisition of vessels and vessel equipment, including deposits | (56,794) | (3,259) | ||
Advances for ballast water treatment and scrubber systems | — | (7,987) | ||
Payments for other non-current assets | (269) | (53) | ||
Payments for equity investments | 1,650 | (875) | ||
Net cash (used in) investing activities | (28,584) | (12,174) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from revolving facilities | 29,050 | 215 | ||
Repayments of long term debt | (1,678) | (51,170) | ||
Repayments on revolving facilities | (30,000) | — | ||
Repayments of finance leases | (42,262) | (960) | ||
Payments for deferred finance fees | (200) | — | ||
Payment of common share dividends | (21,618) | (32,700) | ||
Payment of preferred share dividends | (1,705) | (1,705) | ||
Net cash (used in) financing activities | (68,413) | (86,320) | ||
Net increase in cash and cash equivalents | 591 | 405 | ||
Cash and cash equivalents at the beginning of the year | 46,805 | 50,569 | ||
Cash and cash equivalents at the end of the period | 47,396 | 50,974 | ||
Ardmore Shipping Corporation | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||
In thousands of | ||||||||
Adjusted EBITDA (1) | 58,495 | 35,006 | 107,753 | 90,006 | ||||
Adjusted EBITDAR (1) | 61,158 | 37,076 | 113,026 | 94,712 | ||||
AVERAGE DAILY DATA | ||||||||
MR Eco-Design Tankers Spot TCE | 41,385 | 27,460 | 40,029 | 31,625 | ||||
Fleet TCE per day (2) | 37,762 | 26,541 | 36,295 | 30,372 | ||||
Fleet operating expenses per day (3) | 7,120 | 6,598 | 7,049 | 6,714 | ||||
Technical management fees per day (4) | 464 | 443 | 490 | 480 | ||||
7,584 | 7,041 | 7,539 | 7,194 | |||||
MR Eco-Design Tankers | ||||||||
TCE per day (2) | 41,385 | 27,460 | 40,029 | 32,550 | ||||
Vessel operating expenses per day (5) | 7,502 | 7,188 | 7,526 | 7,331 | ||||
MR Eco-Mod Tankers | ||||||||
TCE per day (2) | 36,987 | 26,240 | 37,689 | 21,914 | ||||
Vessel operating expenses per day | — | 6,788 | 6,691 | 6,946 | ||||
Prod/Chem Eco-Design Tankers (25k | ||||||||
TCE per day (2) | 30,330 | 24,555 | 27,580 | 26,256 | ||||
Vessel operating expenses per day (5) | 7,702 | 6,717 | 7,648 | 6,892 | ||||
FLEET | ||||||||
Average number of operating vessels | 26.0 | 26.0 | 26.0 | 26.3 | ||||
______________________ | |
(1) | Adjusted EBITDA and Adjusted EBITDAR are non-GAAP measures and are defined and reconciled to the most directly comparable |
(2) | Time Charter Equivalent ("TCE") rate, a non-GAAP measure, represents net revenues (a non-GAAP measure representing 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 the TCE rate is determined on a discharge to discharge basis, which is different from how the Company records revenue under |
(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 vessel upgrades 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. |
(6) | As a result of selling the Ardmore Seafarer, we no longer own MR Eco-Mod Tankers and hence we have |
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.
On January 1, 2023, the BIMCO CII Operations Clause for Time Charter Parties came into force. This clause outlines that the charterer should take responsibility for a ship's emissions. On this basis, Ardmore's GHG emissions analysis has been updated to exclude the impact of ships time-chartered out and to include the impact of ships time-chartered in. Previously all vessels were included in Ardmore's analysis from the fleet except for vessels commercially managed by Ardmore.
Three Months Ended | Twelve months ended | ||||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||
Number of Vessels in Operation (at period end)(2) | 26 | 26 | 26 | 26 | |||||
Fleet Average Age | 10.6 | 9.9 | 10.6 | 9.9 | |||||
CO2 Emissions Generated in Metric Tonnes | 107,740 | 102,078 | 424,690 | 416,097 | |||||
Distance Travelled (Nautical Miles) | 394,261 | 378,476 | 1,560,006 | 1,501,018 | |||||
Fuel Consumed in Metric Tonnes | 34,318 | 32,269 | 134,857 | 131,707 | |||||
Cargo Heating and Tank Cleaning Emissions | |||||||||
Fuel Consumed in Metric Tonnes | 1,196 | 453 | 3,150 | 2,296 | |||||
% of Total Fuel Consumed | 3.49 % | 1.40 % | 2.34 % | 1.74 % | |||||
Annual Efficiency Ratio (AER) for the period(3) | |||||||||
Fleet | 6.08g / tm | 6.03g / tm | 6.07g / tm | 6.18g / tm | |||||
MR Eco-Design | 5.79g / tm | 5.52g / tm | 5.79g / tm | 5.73g / tm | |||||
MR Eco-Mod | 5.39g / tm | 6.39g / tm | 5.73g / tm | 6.37g / tm | |||||
Chemical | 8.37g / tm | 7.74g / tm | 8.05g / tm | 7.95g / tm | |||||
Chemical (Less Cargo Heating & Tank Cleaning)(4) | 7.74g / tm | 7.23g / tm | 7.48g / tm | 7.45g / tm | |||||
Energy Efficiency Operational Indicator (EEOI) for the | |||||||||
Fleet | 11.53g / ctm | 14.72g / ctm | 12.40g / ctm | 13.62g / ctm | |||||
MR Eco-Design | 10.95g / ctm | 14.82g / ctm | 11.89g / ctm | 13.34g / ctm | |||||
MR Eco-Mod | 11.55g / ctm | 15.24g / ctm | 12.64g / ctm | 13.97g / ctm | |||||
Chemical | 13.76g / ctm | 13.95g / ctm | 14.01g / ctm | 14.15g / ctm | |||||
Chemical (Less Cargo Heating & Tank Cleaning)(4) | 12.73g / ctm | 13.02g / ctm | 13.02g / ctm | 13.26g / ctm | |||||
Wind Strength (% greater than 4 on BF) | 43.41 % | 46.03 % | 47.10 % | 48.99 % | |||||
% Idle Time(6) | 1.43 % | 4.47 % | 2.80 % | 3.29 % | |||||
tm = tonne-mile | |||||||||
ctm = cargo tonne-mile | |||||||||
Ardmore Performance
It should be noted that results vary quarter to quarter depending on ship activity, ballast / laden ratio, cargo carried, weather, waiting time, time in port, and vessel speed. However, analysis is also presented on a trailing 12-month basis to provide a more accurate assessment of Ardmore's progress over a longer period and to mitigate seasonality. From a weather perspective rougher weather (based on Beaufort Scale wind force rating being greater than 4 BF) will generally have a mitigating impact on the ability to optimize fuel consumption, while idle time will impact ships metrics as they will still require power to run but will not be moving. Overall Ardmore Shipping's carbon emissions for the trailing 12-month period have increased by
______________________________ |
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 kilometer 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 Includes time-chartered out and time-chartered in vessels. |
3 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. A lower AER reflects better carbon efficiency. |
4 The AER and EEOI figures are presented including the impact of cargo heating and tank cleaning operations unless stated. |
5 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. A lower EEOI reflects lower CO2 gas emissions in a given time period per unit of transport work performed. |
6 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
EBITDA + vessel lease expense component (i.e., EBITDAR) and Adjusted EBITDAR
EBITDAR is defined as EBITDA (i.e., earnings before interest, unrealized gains/(losses) on interest rate derivatives, taxes, depreciation and amortization) plus the vessel lease expense component of total charter hire expense for chartered-in vessels. Adjusted EBITDAR is defined as EBITDAR before certain items that Ardmore believes are not representative of its operating performance, including gain or loss on sale of vessels.
For the three months ended June 30, 2024, we recognized total charter hire expense of
Many companies in our industry report under IFRS; we therefore use EBITDAR and Adjusted EBITDAR as tools to compare our valuation with the valuation of these other companies in our industry. We do not use EBITDAR and Adjusted EBITDAR as measures of performance or liquidity. We present below reconciliations of net income / (loss) attributable to common stockholders to EBITDAR (which includes an adjustment for vessel lease operating expenses) and Adjusted EBITDAR.
EBITDAR and Adjusted EBITDAR, as presented, may not be directly comparable to similarly titled measures presented by other companies. In addition, EBITDAR and Adjusted EBITDAR should not be viewed as measures of overall performance since they exclude vessel rent, which is a normal, recurring cash operating expense related to our in-chartering of vessels that is necessary to operate our business. Accordingly, you are cautioned not to place undue reliance on this information.
EBITDA, Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings (for purposes of dividend calculations)
EBITDA, Adjusted EBITDA and Adjusted earnings are not measures prepared in accordance with
EBITDA, Adjusted EBITDA and Adjusted earnings 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 as financial and operating measures assists investors in making investment decisions regarding the Company and its common stock.
For purposes solely of the quarterly common dividend calculation, Adjusted earnings represents the Company's Adjusted earnings for the quarter ended June 30, 2024, but excluding the impact of unrealized gains / (losses) and certain non-recurring items.
These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to, financial measures prepared in accordance with
Reconciliation of net income to EBITDA, Adjusted EBITDA and Adjusted EBITDAR | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||
In thousands of | ||||||||
Net income | 62,692 | 24,507 | 101,928 | 68,596 | ||||
Interest income | (612) | (606) | (1,156) | (845) | ||||
Interest expense and finance costs | 2,044 | 2,825 | 4,571 | 5,689 | ||||
Income tax | 49 | 240 | 128 | 297 | ||||
Unrealized losses on derivatives | — | — | — | 31 | ||||
Depreciation | 7,605 | 6,814 | 14,581 | 13,756 | ||||
Amortization of deferred drydock | 939 | 895 | 1,694 | 1,902 | ||||
EBITDA | 72,717 | 34,675 | 121,746 | 89,426 | ||||
Gain on vessel sold | (12,322) | — | (12,322) | — | ||||
Gain on extinguishment | (1,432) | — | (1,432) | — | ||||
Gain on sale of e1 Marine LLC | (501) | — | (501) | — | ||||
Loss from equity method investments | 33 | 331 | 262 | 580 | ||||
ADJUSTED EBITDA | 58,495 | 35,006 | 107,753 | 90,006 | ||||
Plus: Vessel lease expense component | 2,664 | 2,070 | 5,274 | 4,706 | ||||
ADJUSTED EBITDAR | 61,158 | 37,076 | 113,026 | 94,712 | ||||
Reconciliation of net income attributable to common stockholders to Adjusted earnings | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||
In thousands of | ||||||||
Net income attributable to common stockholders | 61,844 | 23,659 | 100,233 | 66,910 | ||||
Gain on vessel sold | (12,322) | — | (12,322) | — | ||||
Gain on extinguishment | (1,432) | — | (1,432) | — | ||||
Gain on sale of e1 Marine LLC | (501) | — | (501) | — | ||||
Adjusted earnings | 47,589 | 23,659 | 85,978 | 66,910 | ||||
Adjusted earnings per share, basic | 1.14 | 0.57 | 2.07 | 1.63 | ||||
Adjusted earnings per share, diluted | 1.13 | 0.57 | 2.05 | 1.60 | ||||
Weighted average number of shares outstanding, | 41,747,977 | 41,192,894 | 41,559,932 | 40,959,113 | ||||
Weighted average number of shares outstanding, | 42,010,724 | 41,706,251 | 41,981,667 | 41,692,820 | ||||
Adjusted earnings for purposes of dividend calculation | ||||||||
Three Months Ended | ||||||||
June 30, 2024 | ||||||||
In thousands of | ||||||||
Adjusted earnings | 47,589 | |||||||
Unrealized losses | — | |||||||
Adjusted earnings for purposes of dividend | 47,589 | |||||||
Dividend to be paid | 15,863 | |||||||
Dividend Per Share (DPS) | 0.38 | |||||||
Number of shares outstanding as of July 31, 2024 | 41,841,669 | |||||||
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, expectations, projections, strategies, beliefs about 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", "project", "plan", "potential", "may", "expect", and similar expressions.
Forward looking statements in this press release include, among others, statements regarding: future operating or financial results, including future earnings; global and regional economic conditions and trends; shipping market trends and market fundamentals, including tanker demand and supply and future spot and charter rates; fleet expansion and vessel and business acquisitions; seasonality; the Company's business strategies, initiatives and sustainability agenda, and related future outcomes; the impact of the Company's leadership management transition; the potential effect of the
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 strength of world economies and currencies; general market conditions, including fluctuations in spot and 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; geopolitical conflicts, including future developments relating to the
Investor Relations Enquiries:
Mr. Leon Berman | Mr. Bryan Degnan |
The IGB Group | The IGB Group |
45 Broadway, Suite 1150 | 45 Broadway, Suite 1150 |
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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