Ardmore Shipping Corporation Announces Financial Results For The Three and Twelve Months Ended December 31, 2023
- None.
- Decrease in net income for Q4 2023 compared to Q4 2022.
- Overall decrease in revenue for Q4 2023 compared to Q4 2022.
- Decrease in average TCE rate for Q4 2023 compared to Q4 2022.
- Increase in vessel operating expenses for Q4 2023.
- Increase in interest expense and finance costs for Q4 2023.
- Net debt decreased from $123.7 million in 2022 to $42.9 million in 2023.
Insights
The reported financial results for Ardmore Shipping Corporation show a year-over-year decrease in net income for both the quarterly and annual figures. This decline, from $53.1 million to $26.1 million for the quarter and from $135.1 million to $113.4 million for the year, suggests a contraction in profitability which could be indicative of broader market challenges or company-specific issues. The earnings per share (EPS) have also decreased, reflecting this reduced profitability.
From an investment perspective, the dividend payout, which is tied to one-third of Adjusted earnings, has declined in line with the fall in earnings. This could potentially impact investor sentiment and the stock's attractiveness to income-focused investors. However, the company's liquidity position appears robust, with a significant increase in available and undrawn revolving credit facilities from the previous year-end, which could provide flexibility for future growth or to weather economic downturns.
The Time Charter Equivalent (TCE) rates reported for both MR Eco-Design tankers and chemical tankers have shown a decrease in the most recent quarter compared to the same quarter of the previous year. This decline in rates may reflect market oversupply or reduced demand for tanker transportation services, potentially due to geopolitical tensions or market volatility. The sale of an older vessel and the purchase of a newer one is indicative of a fleet modernization strategy, which could improve operational efficiency and competitiveness.
The company's installation of carbon capture-ready scrubbers aligns with the increasing focus on environmental regulations within the shipping industry. This could position Ardmore favorably as it anticipates stricter emissions regulations. However, the capital expenditure associated with these installations and any potential downtime for the vessels could impact short-term financial performance.
Geopolitical conflicts, such as the Russia-Ukraine war and the Israel-Hamas war, have caused significant volatility in energy markets, which has a direct impact on the shipping industry. The reported increase in spot tanker rates due to these conflicts has likely contributed to Ardmore's earnings, albeit inconsistently. The reference to attacks by Houthi rebels indicates an increased risk to shipping routes, which could lead to higher insurance premiums and operational costs for companies like Ardmore.
It is important to note that while geopolitical tensions can lead to short-term rate spikes, they also introduce significant uncertainty into the market. This could affect long-term contracts and planning and companies must carefully manage these risks to maintain consistent performance.
Highlights and Recent Activity
- Reported net income of
$26.1 million $0.63 $53.1 million $1.31 $1.28 $26.1 million $0.63 $54.0 million $1.33 $1.30 - Reported net income of
$113.4 million $2.76 $2.71 $135.1 million $3.63 $3.52 $113.4 million $2.76 $2.71 $143.5 million $3.86 $3.74 - 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 February 15, 2024, of
$0.21 - MR Eco-Design tankers earned an average spot TCE rate of
$32,542 $26,107 60% total revenue days currently fixed for the first quarter of 2024, the average spot TCE rate is approximately$35,400 70% of revenue days fixed for the first quarter of 2024, the average TCE rate for chemical tankers is approximately$26,700 - In February 2024, as part of a gradual fleet modernization, the Company has agreed to acquire a 2017 Japanese-built MR product tanker for
$42.0 million $27.1 million - In February 2024, the Company time chartered-out one of its chartered-in MR tankers for the remainder of its charter-in period at a rate representing a
$2.7 million - In the fourth quarter of 2023, we completed the installation of modular, carbon capture-ready scrubbers on two additional vessels during scheduled drydockings.
Anthony Gurnee, the Company's Chief Executive Officer, commented:
"The product and chemical tanker markets remain strong as a result of tight supply / demand fundamentals further accentuated by large-scale geopolitical and weather-related trading restrictions. The simultaneous restrictions in the Panama Canal and Suez Canal are currently driving substantial incremental tonne-mile demand; while the ultimate duration of these canal restrictions remains to be seen, this is having a pronounced impact during the seasonally stronger winter season. At the same time, we must acknowledge the key role of our seafarers in this increasingly volatile world and we continue to place their security as our top priority.
After another successful year of delivering strong results for our shareholders in 2023, Ardmore is navigating this supportive market with financial discipline and a constant focus on performance optimization. We continue to utilize the strong earnings environment to pursue all of our capital allocation priorities simultaneously, further strengthening our balance sheet, investing in a gradual fleet modernization along with vessel optimization and emissions reduction for our existing fleet, and returning capital to shareholders via an attractive quarterly dividend."
Summary of Recent and Fourth Quarter 2023 Events
Fleet
Fleet Operations and Employment
As of December 31, 2023, 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 (15 Eco-Design and five Eco-Mod) and six Eco-Design IMO 2 product/chemical tankers ranging from 25,000 dwt to 37,800 dwt. The Company also commercially manages one of Carl Büttner's 24,000 dwt chemical tankers.
MR Tankers (45,000 dwt – 49,999 dwt)
At the end of the fourth quarter of 2023, the Company had 20 MR tankers in operation, all of which were trading in the spot market. The MR tankers earned an average TCE rate of
In the first quarter of 2024, the Company expects to have all revenue days for its MR tankers employed in the spot market. As of February 15, 2024, the Company had fixed approximately
Product / Chemical Tankers (IMO 2: 25,000 dwt – 37,800 dwt)
At the end of the fourth quarter of 2023, the Company had six Eco-Design IMO 2 product / chemical tankers in operation, all of which were trading in the spot market. During the fourth quarter of 2023, the Company's six Eco-Design product / chemical vessels earned an average TCE rate of
In the first 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 February 15, 2024, the Company had fixed approximately
Drydocking
The Company had 82 drydocking days in the fourth quarter of 2023. The Company is currently scheduled to have 93 drydocking days in the first 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 February 15, 2024 of
Subsequent Fleet Development
In February 2024, as part of a gradual fleet modernization, Ardmore has agreed to acquire a 2017 Japanese-built MR product tanker for
In February 2024, Ardmore time chartered-out one of its chartered-in MR tankers for the remainder of its charter-in period at a rate representing a
Scrubber Installations
In the fourth quarter of 2023, the Company completed the installation of modular, carbon capture-ready scrubbers on two additional vessels during their scheduled drydockings. Prior to the end of 2024, the Company intends to install scrubber systems on an additional five vessels during their scheduled drydockings.
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 December 31, 2023 and 2022
The Company reported net income of
Results for the Years Ended December 31, 2023 and 2022
The Company reported net income of
Management's Discussion and Analysis of Financial Results for the Three Months Ended December 31, 2023 and 2022
Revenue. Revenue for the three months ended December 31, 2023 was
The Company's average number of operating vessels was 26.0 for the three months ended December 31, 2023, compared to 27.0 for the three months ended December 31, 2022.
The Company had 2,293 spot revenue days for the three months ended December 31, 2023, as compared to 2,399 for the three months ended December 31, 2022. The Company had 26 vessels employed directly in the spot market as of December 31, 2023, as compared to 27 vessels as of December 31, 2022. Changes in spot rates resulted in a decrease in revenue of
The Company had no product tankers employed under time charter as of December 31, 2023 and as of December 31, 2022. There were no revenue days derived from time charters for the three months ended December 31, 2023, as compared to 47 for the three months ended December 31, 2022. The decrease in revenue days for time-chartered vessels 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. Total charter hire expense was
Depreciation. Depreciation expense for the three months ended December 31, 2023 was
Amortization of Deferred Drydock Expenditures. Amortization of deferred drydock expenditures for the three months ended December 31, 2023 was
General and Administrative Expenses: Corporate. Corporate-related general and administrative expenses for the three months ended December 31, 2023 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 December 31, 2023 were
Unrealized (Loss) on Derivatives. Unrealized loss on derivatives was
Interest Expense and Finance Costs. Interest expense and finance costs for the three months ended December 31, 2023 were
Liquidity
As of December 31, 2023, the Company had
As of | ||||||
In thousands of | December 31, 2023 | December 31, 2022 | ||||
Cash and cash equivalents | $ | 46,805 | $ | 50,569 | ||
Finance leases | 43,643 | 45,500 | ||||
Senior Debt | 45,094 | 103,112 | ||||
Revolving Credit Facilities | 932 | 25,684 | ||||
Total debt | 89,669 | 174,296 | ||||
Total net debt | $ | 42,864 | $ | 123,727 | ||
Conference Call
The Company plans to host an Investor Day and conference call on February 15, 2024, at 12:00 p.m. Eastern Time during which the financial results for the quarter ended December 31, 2023 will be discussed. 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.
Institutional investors who wish to attend the event in person, as well as remote participants who wish to submit a question for the Q&A portion of the event, are advised to contact The IGB Group at Ardmore@igbir.com
If you are unable to participate at this time, an audio replay of the call will be available through February 22, 2024 at 888-660-6345 or 646-517-4150. Enter the passcode 24425 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 Unaudited Condensed Consolidated Balance Sheets | ||||
As of | ||||
In thousands of | December 31, 2023 | December 31, 2022 | ||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | 46,805 | 50,569 | ||
Receivables, net of allowance for bad debts of | 56,234 | 79,843 | ||
Prepaid expenses and other assets | 4,348 | 4,521 | ||
Advances and deposits | 6,833 | 2,160 | ||
Inventories | 12,558 | 15,718 | ||
Current portion of derivative assets | — | 4,927 | ||
Total current assets | 126,778 | 157,738 | ||
Non-current assets | ||||
Investments and other assets, net | 11,186 | 11,219 | ||
Vessels and vessel equipment, net | 524,044 | 531,378 | ||
Deferred drydock expenditures, net | 12,022 | 4,716 | ||
Advances for ballast water treatment and scrubber systems | 9,587 | 5,530 | ||
Deferred finance fees, net | 2,835 | 2,717 | ||
Operating lease, right-of-use asset | 4,499 | 10,561 | ||
Total non-current assets | 564,173 | 566,121 | ||
TOTAL ASSETS | 690,951 | 723,859 | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY | ||||
Current liabilities | ||||
Accounts payable | 2,016 | 8,814 | ||
Accrued expenses and other liabilities | 18,265 | 20,890 | ||
Deferred revenue | 347 | 1,220 | ||
Accrued interest on debt and finance leases | 939 | 863 | ||
Current portion of long-term debt | 6,436 | 12,927 | ||
Current portion of finance lease obligations | 2,029 | 1,857 | ||
Current portion of operating lease obligations | 3,807 | 6,358 | ||
Total current liabilities | 33,839 | 52,929 | ||
Non-current liabilities | ||||
Non-current portion of long-term debt | 39,590 | 115,869 | ||
Non-current portion of finance lease obligations | 41,614 | 43,643 | ||
Non-current portion of operating lease obligations | 510 | 3,969 | ||
Other non-current liabilities | 954 | 1,007 | ||
Total non-current liabilities | 82,668 | 164,488 | ||
TOTAL LIABILITIES | 116,507 | 217,417 | ||
Redeemable Preferred Stock | ||||
Cumulative Series A | 37,043 | 37,043 | ||
Total redeemable preferred stock | 37,043 | 37,043 | ||
Stockholders' equity | ||||
Common stock | 433 | 426 | ||
Additional paid in capital | 471,216 | 468,006 | ||
Accumulated other comprehensive income | — | 1,468 | ||
Treasury stock | (15,636) | (15,636) | ||
Retained earnings | 81,388 | 15,135 | ||
Total stockholders' equity | 537,401 | 469,399 | ||
Total redeemable preferred stock and stockholders' equity | 574,444 | 506,442 | ||
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY | 690,951 | 723,859 | ||
Ardmore Shipping Corporation Unaudited Condensed Consolidated Statements of Operations | ||||||||
Three Months Ended | Year Ended | |||||||
In thousands of | December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||
Revenue, net | 98,878 | 132,831 | 395,978 | 445,741 | ||||
Voyage expenses | (33,169) | (39,506) | (131,904) | (153,729) | ||||
Vessel operating expenses | (15,149) | (14,174) | (59,770) | (60,020) | ||||
Time charter-in | ||||||||
Operating expense component | (2,964) | (3,145) | (10,194) | (7,809) | ||||
Vessel lease expense component | (2,728) | (2,894) | (9,380) | (7,185) | ||||
Depreciation | (7,134) | (7,250) | (27,817) | (29,276) | ||||
Amortization of deferred drydock expenditures | (908) | (1,000) | (3,542) | (4,161) | ||||
General and administrative expenses | ||||||||
Corporate | (5,663) | (5,347) | (20,565) | (19,936) | ||||
Commercial and chartering | (1,366) | (1,308) | (4,676) | (4,171) | ||||
Unrealized (losses) / gains on derivatives | (231) | (1,303) | (262) | 2,961 | ||||
Interest expense and finance costs | (2,722) | (2,035) | (11,408) | (15,537) | ||||
Loss on extinguishment | — | (888) | — | (1,576) | ||||
Interest income | 555 | 251 | 1,818 | 471 | ||||
Loss on vessels sold | — | — | — | (6,917) | ||||
Income before taxes | 27,399 | 54,232 | 118,278 | 138,856 | ||||
Income tax | (88) | (136) | (435) | (207) | ||||
Loss from equity method investments | (305) | (159) | (1,035) | (195) | ||||
Net Income | 27,006 | 53,937 | 116,808 | 138,454 | ||||
Preferred dividend | (857) | (857) | (3,400) | (3,400) | ||||
Net Income attributable to common stockholders | 26,149 | 53,080 | 113,408 | 135,054 | ||||
Earnings per share, basic | 0.63 | 1.31 | 2.76 | 3.63 | ||||
Earnings per share, diluted | 0.63 | 1.28 | 2.71 | 3.52 | ||||
Adjusted earnings (1) | 26,149 | 53,968 | 113,408 | 143,547 | ||||
Adjusted earnings per share, basic | 0.63 | 1.33 | 2.76 | 3.86 | ||||
Adjusted earnings per share, diluted | 0.63 | 1.30 | 2.71 | 3.74 | ||||
Weighted average number of shares outstanding, basic | 41,300,425 | 40,591,137 | 41,130,089 | 37,235,599 | ||||
Weighted average number of shares outstanding, diluted | 41,811,455 | 41,493,367 | 41,789,149 | 38,359,985 | ||||
(1) | Adjusted earnings is a non-GAAP measure and is defined and reconciled under the "Non-GAAP Measures" section. | |||||
Ardmore Shipping Corporation Unaudited Condensed Consolidated Statements of Cash Flows | ||||
Year Ended | ||||
In thousands of | December 31, 2023 | December 31, 2022 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | 116,808 | 138,454 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation | 27,817 | 29,276 | ||
Amortization of deferred drydock expenditures | 3,542 | 4,161 | ||
Share-based compensation | 3,217 | 3,057 | ||
Loss on vessels sold | — | 6,917 | ||
Amortization of deferred finance fees | 1,237 | 1,461 | ||
Loss on extinguishment | — | 1,576 | ||
Unrealized losses / (gains) on derivatives | 262 | (2,961) | ||
Operating lease ROU - lease liability, net | 52 | 2 | ||
Loss from equity method investments | 1,035 | 195 | ||
Deferred drydock payments | (12,280) | (1,913) | ||
Changes in operating assets and liabilities: | ||||
Receivables | 23,610 | (59,559) | ||
Prepaid expenses and other assets | 174 | (1,010) | ||
Advances and deposits | (4,673) | 1,391 | ||
Inventories | 3,160 | (4,623) | ||
Accounts payable | (4,410) | (1,612) | ||
Accrued expenses and other liabilities | 855 | 10,033 | ||
Deferred revenue | (873) | (850) | ||
Accrued interest | 76 | 212 | ||
Net cash provided by operating activities | 159,609 | 124,207 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Proceeds from sale of vessels | — | 39,912 | ||
Payments for acquisition of vessels and vessel equipment | (20,562) | (1,335) | ||
Advances for ballast water treatment and scrubber systems | (4,822) | (2,473) | ||
Payments for other non-current assets | (208) | (106) | ||
Payments for equity investments | (1,244) | (588) | ||
Net cash (used in) / provided by investing activities | (26,836) | 35,410 | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Prepayment of finance lease obligation | — | (166,580) | ||
Proceeds from long-term debt | — | 131,884 | ||
Repayments of long-term debt | (84,007) | (148,245) | ||
Repayments of finance leases | (1,976) | (13,675) | ||
Payments for deferred finance fees | — | (3,505) | ||
Payment of common share dividend | (47,154) | — | ||
Issuance of common stock, net | — | 38,909 | ||
Payment of preferred share dividend | (3,400) | (3,285) | ||
Net cash (used in) financing activities | (136,537) | (164,497) | ||
Net (decrease) in cash and cash equivalents | (3,764) | (4,880) | ||
Cash and cash equivalents at the beginning of the year | 50,569 | 55,449 | ||
Cash and cash equivalents at the end of the year | 46,805 | 50,569 | ||
Ardmore Shipping Corporation Unaudited Other Operating Data | ||||||||
Three Months Ended | Year Ended | |||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||
In thousands of | ||||||||
Adjusted EBITDA (1) | 37,839 | 66,457 | 159,489 | 192,891 | ||||
Adjusted EBITDAR (1) | 40,567 | 69,351 | 168,869 | 200,076 | ||||
AVERAGE DAILY DATA | ||||||||
MR Eco-Design Tankers Spot TCE per day (2) | 32,542 | 43,174 | 31,005 | 35,150 | ||||
Fleet TCE per day (2) | 29,702 | 38,861 | 29,262 | 30,618 | ||||
Fleet operating expenses per day (3) | 6,747 | 6,499 | 6,635 | 6,372 | ||||
Technical management fees per day (4) | 445 | 428 | 480 | 451 | ||||
7,192 | 6,927 | 7,115 | 6,823 | |||||
MR Eco-Design Tankers | ||||||||
TCE per day (2) | 32,542 | 42,301 | 31,005 | 33,447 | ||||
Vessel operating expenses per day (5) | 7,118 | 6,959 | 7,170 | 6,822 | ||||
MR Eco-Mod Tankers | ||||||||
TCE per day (2) | 26,282 | 40,990 | 29,864 | 30,727 | ||||
Vessel operating expenses per day (5) | 7,225 | 8,010 | 7,014 | 6,905 | ||||
Prod/Chem Eco-Design Tankers (25k - 38k dwt) | ||||||||
TCE per day (2) | 26,107 | 28,544 | 24,683 | 23,567 | ||||
Vessel operating expenses per day (5) | 7,370 | 6,690 | 6,996 | 6,876 | ||||
FLEET | ||||||||
Average number of operating vessels | 26.0 | 27.0 | 26.2 | 27.0 | ||||
(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. | ||||
Ardmore Shipping Corporation Fleet Details at December 31, 2023 (Expressed in Millions of | ||||||||||||||||
Estimated Resale | Estimated | |||||||||||||||
Newbuilding | Depreciated | |||||||||||||||
Eco | Price (1) | Replacement | ||||||||||||||
Vessel | IMO | Built | Country | Dwt | Specification | December 31, 2023 | Value (2) | |||||||||
Seahawk | IMO2/3 | Nov-15 | S. | 49,999 | Eco-Design | $ | 51.50 | $ | 36.08 | |||||||
Seawolf | IMO2/3 | Aug-15 | S. | 49,999 | Eco-Design | $ | 51.50 | $ | 35.67 | |||||||
Seafox | IMO2/3 | Jun-15 | S. | 49,999 | Eco-Design | $ | 51.50 | $ | 35.42 | |||||||
Sealion | IMO2/3 | May-15 | S. | 49,999 | Eco-Design | $ | 51.50 | $ | 35.26 | |||||||
Engineer | IMO2/3 | Mar-14 | S. | 49,420 | Eco-Design | $ | 51.50 | $ | 33.03 | |||||||
Seavanguard | IMO2/3 | Feb-14 | S. | 49,998 | Eco-Design | $ | 51.50 | $ | 32.84 | |||||||
Exporter | IMO2/3 | Feb-14 | S. | 49,466 | Eco-Design | $ | 51.50 | $ | 32.89 | |||||||
Seavantage | IMO2/3 | Jan-14 | S. | 49,997 | Eco-Design | $ | 51.50 | $ | 32.70 | |||||||
Encounter | IMO2/3 | Jan-14 | S. | 49,478 | Eco-Design | $ | 51.50 | $ | 32.59 | |||||||
Explorer | IMO2/3 | Jan-14 | S. | 49,494 | Eco-Design | $ | 51.50 | $ | 32.75 | |||||||
Endurance | IMO2/3 | Dec-13 | S. | 49,466 | Eco-Design | $ | 51.50 | $ | 32.53 | |||||||
Enterprise | IMO2/3 | Sep-13 | S. | 49,453 | Eco-Design | $ | 51.50 | $ | 32.08 | |||||||
Endeavour | IMO2/3 | Jul-13 | S. | 49,997 | Eco-Design | $ | 51.50 | $ | 31.77 | |||||||
Seaventure | IMO2/3 | Jun-13 | S. | 49,998 | Eco-Design | $ | 51.50 | $ | 31.54 | |||||||
Seavaliant | IMO2/3 | Feb-13 | S. | 49,998 | Eco-Design | $ | 51.50 | $ | 31.02 | |||||||
Seafarer | - | Jun-10 | 49,999 | Eco-Mod | $ | 51.50 | $ | 25.54 | ||||||||
Defender | IMO2 | Feb-15 | S. | 37,791 | Eco-Design | $ | 43.50 | $ | 29.37 | |||||||
Dauntless | IMO2 | Feb-15 | S. | 37,764 | Eco-Design | $ | 43.50 | $ | 29.32 | |||||||
Chippewa | IMO2 | Nov-15 | 25,217 | Eco-Design | $ | 38.00 | $ | 26.42 | ||||||||
Chinook | IMO2 | Jul-15 | 25,217 | Eco-Design | $ | 38.00 | $ | 26.00 | ||||||||
Cheyenne | IMO2 | Mar-15 | 25,217 | Eco-Design | $ | 38.00 | $ | 25.57 | ||||||||
Cherokee | IMO2 | Jan-15 | 25,215 | Eco-Design | $ | 38.00 | $ | 25.26 | ||||||||
$ | 685.65 | |||||||||||||||
Cash / Debt / Work. Cap / Other Assets | $ | 14.51 | ||||||||||||||
Total Asset Value (Assets) (3) | $ | 700.15 | ||||||||||||||
DRV / Share (3)(4) | $ | 16.95 | ||||||||||||||
Ardmore Commercial Management (5) | $ | 21.47 | ||||||||||||||
Total Asset Value (Assets & Commercial Management) (3) | $ | 721.62 | ||||||||||||||
DRV / Share (3)(4) | $ | 17.47 | ||||||||||||||
Investment in Element 1 Corp. / e1 Marine (6) | $ | 10.76 | ||||||||||||||
Total Asset Value (Assets, Commercial Management & Investments) (3) | $ | 732.38 | ||||||||||||||
DRV / Share (3)(4)(6) | $ | 17.73 | ||||||||||||||
1. | Based on the average of two broker estimates of prompt resale for a newbuild vessel of equivalent deadweight tonne at a yard in | |||||||
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 Replacement 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 41,304,649 shares outstanding as of December 31, 2023. | |||||||
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 joint venture with E1 Corp and Maritime Partners, LLC, 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.
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 | ||||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||
Number of Vessels in Operation (at period end)(2) | 26 | 27 | 26 | 27 | |||||
Fleet Average Age | 10.4 | 9.6 | 10.4 | 9.6 | |||||
CO2 Emissions Generated in Metric Tonnes | 103,348 | 105,625 | 418,022 | 397,592 | |||||
Distance Travelled (Nautical Miles) | 373,628 | 371,267 | 1,540,433 | 1,454,362 | |||||
Fuel Consumed in Metric Tonnes | 32,704 | 33,437 | 132,276 | 125,865 | |||||
Cargo Heating and Tank Cleaning Emissions | |||||||||
Fuel Consumed in Metric Tonnes | 564 | 520 | 1,816 | 3,591 | |||||
% of Total Fuel Consumed | 1.73 % | 1.56 % | 1.37 % | 2.85 % | |||||
Annual Efficiency Ratio (AER) for the period(3) | |||||||||
Fleet | 6.18g / tm | 6.35g / tm | 6.05g / tm | 6.10g / tm | |||||
MR Eco-Design | 5.94g / tm | 5.88g / tm | 5.70g / tm | 5.79g / tm | |||||
MR Eco-Mod | 5.92g / tm | 6.58g / tm | 6.05g / tm | 6.16g / tm | |||||
Chemical | 8.10g / tm | 8.07g / tm | 7.78g / tm | 7.63g / tm | |||||
Chemical (Less Cargo Heating & Tank Cleaning)(4) | 7.52g / tm | 7.58g / tm | 7.32g / tm | 6.33g / tm | |||||
Energy Efficiency Operational Indicator (EEOI) for | |||||||||
Fleet | 13.23g / ctm | 13.33g / ctm | 13.34g / ctm | 12.53g / ctm | |||||
MR Eco-Design | 12.30g / ctm | 12.74g / ctm | 13.15g / ctm | 12.17g / ctm | |||||
MR Eco-Mod | 14.18g / ctm | 13.59g / ctm | 13.14g / ctm | 13.05g / ctm | |||||
Chemical | 15.55g / ctm | 15.23g / ctm | 14.23g / ctm | 12.96g / ctm | |||||
Chemical (Less Cargo Heating & Tank Cleaning)(4) | 14.45g / ctm | 14.30g / ctm | 13.39g / ctm | 10.74g / ctm | |||||
Wind Strength (% greater than 4 on BF) | 49.34 % | 48.88 % | 49.20 % | 47.64 % | |||||
% Idle Time(6) | 3.90 % | 3.32 % | 4.10 % | 2.91 % | |||||
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 from 397,592 metric tonnes to 418,022 metric tonnes of CO2, primarily due to an increase in distance travelled. Fleet EEOI for the period increased from 12.53 g / ctm to 13.34 g / ctm, primarily due to higher repositioning days on account of drydockings, while AER decreased from 6.10 g / tm to 6.05 g / tm. Ardmore seeks to achieve continued improvements 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 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)
EBITDAR is defined as EBITDA (i.e. earnings before interest, loss on extinguishment, unrealized gains/(losses) on interest rate derivatives, profit/(loss) on equity method investments, 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 December 31, 2023, 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 December 31, 2023, 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 | Year Ended | |||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||
In thousands of | ||||||||
Net income | 27,006 | 53,937 | 116,808 | 138,454 | ||||
Interest income | (555) | (251) | (1,818) | (471) | ||||
Interest expense and finance costs | 2,722 | 2,035 | 11,408 | 15,537 | ||||
Loss on extinguishment | — | 888 | — | 1,576 | ||||
Income tax | 88 | 136 | 435 | 207 | ||||
Unrealized losses / (gains) on derivatives | 231 | 1,303 | 262 | (2,961) | ||||
Depreciation | 7,134 | 7,250 | 27,817 | 29,276 | ||||
Amortization of deferred drydock | 908 | 1,000 | 3,542 | 4,161 | ||||
Loss from equity method investments | 305 | 159 | 1,035 | 195 | ||||
EBITDA | 37,839 | 66,457 | 159,489 | 185,974 | ||||
Loss on vessels sold | — | — | — | 6,917 | ||||
ADJUSTED EBITDA | 37,839 | 66,457 | 159,489 | 192,891 | ||||
Plus: Vessel lease expense component | 2,728 | 2,894 | 9,380 | 7,185 | ||||
ADJUSTED EBITDAR | 40,567 | 69,351 | 168,869 | 200,076 | ||||
Reconciliation of net income attributable to common stockholders to Adjusted earnings | ||||||||
Three Months Ended | Year Ended | |||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||
In thousands of | ||||||||
Net income attributable to common stockholders | 26,149 | 53,080 | 113,408 | 135,054 | ||||
Loss on vessels sold | — | — | — | 6,917 | ||||
Loss on extinguishment | — | 888 | — | 1,576 | ||||
Adjusted earnings | 26,149 | 53,968 | 113,408 | 143,547 | ||||
Adjusted earnings per share, basic | 0.63 | 1.33 | 2.76 | 3.86 | ||||
Adjusted earnings per share, diluted | 0.63 | 1.30 | 2.71 | 3.74 | ||||
Weighted average number of shares outstanding, | 41,300,425 | 40,591,137 | 41,130,089 | 37,235,599 | ||||
Weighted average number of shares outstanding, | 41,811,455 | 41,493,367 | 41,789,149 | 38,359,985 | ||||
Adjusted earnings for purposes of dividend calculation | ||||||||
Three Months Ended | ||||||||
December 31, 2023 | ||||||||
In thousands of | ||||||||
Adjusted earnings | 26,149 | |||||||
Unrealized losses | 231 | |||||||
Adjusted earnings for purposes of dividend | 26,380 | |||||||
Dividend to be paid | 8,793 | |||||||
Dividend Per Share (DPS) | 0.21 | |||||||
Number of shares outstanding as of February 15, 2024 | 41,304,649 | |||||||
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, 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; seasonaility; the Company's business strategies, initiatives and sustainability agenda, and related future outcomes; 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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