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Ardmore Shipping Corp announced Q3 result

Logistic News - Published on Fri, 08 Feb 2019

Image Source: Bunker Ports News Worldwide
Ardmore Shipping Corporation announced results for the three and twelve months ended December 31, 2018.

Highlights and Recent Activity
Reported a net loss from continuing operations of USD 8.8 million for the three months ended December 31, 2018, or USD 0.26 net loss from continuing operations per basic and diluted share, as compared to a net loss from continuing operations of USD 3.8 million, or USD 0.12 net loss from continuing operations per basic and diluted share, for the three months ended December 31, 2017. Reported a GAAP net loss of USD 17.0 million for the three months ended December 31, 2018 or USD 0.51 loss per basic and diluted share, as compared to a net loss of USD 3.8 million, or USD 0.12 loss per basic and diluted share, for the three months ended December 31, 2017. GAAP net loss includes USD 8.2 million related to a write-off of deferred finance fees and a loss on the sale of a vessel. The Company reported adjusted EBITDA (see Non-GAAP Measures section below) of USD 7.8 million for the three months ended December 31, 2018, as compared to USD 11.0 million for the three months ended December 31, 2017.

Reported a net loss from continuing operations (see Non-GAAP Measures section below) of USD 34.3 million for the twelve months ended December 31, 2018, or USD 1.04 net loss from continuing operations per basic and diluted share, as compared to a net loss from continuing operations of USD 12.0 million, or USD 0.36 net loss from continuing operations per basic and diluted share, for the twelve months ended December 31, 2017. Reported a GAAP net loss of USD 42.9 million for the twelve months ended December 31, 2018, or USD 1.31 loss per basic and diluted share, as compared to a net loss USD 12.5 million, or USD 0.37 loss per basic and diluted share, for the twelve months ended December 31, 2017. GAAP net loss includes USD 8.6 million related to write-off of deferred finance fees and loss on the sale of a vessel. The Company reported adjusted EBITDA (see Non-GAAP Measures section below) of USD 29.2 million for the twelve months ended December 31, 2018, as compared to USD 45.7 million for the twelve months ended December 31, 2017.

Spot MR tankers earned an average rate of USD 12,475 per day for the three months ended December 31, 2018, and USD 11,564 per day for the twelve months ended December 31, 2018. Chemical tankers earned an average rate of USD 10,779 per day for the three months ended December 31, 2018, and USD 11,406 per day for the twelve months ended December 31, 2018.

Completed financing transactions for seven vessels in the fourth quarter of 2018. The vessels included two 2015-built 37,000 Dwt Eco-design IMO 2 product and chemical tankers, and five 2014-built 50,000 Dwt Eco-design MR tankers, each of which were refinanced under finance lease arrangements. The net cash proceeds to the Company of these transactions, after prepayment of existing debt, were USD 32.7 million in the aggregate.

Agreed to terms for the sale of two vessels. The Ardmore Seatrader, a 2002-built 47,000 Dwt Eco-mod MR tanker, was sold for USD 8.3 million and delivered to the buyer on January 9, 2019. The Ardmore Seamaster, a 2004-built 45,840 Dwt Eco-mod MR tanker, is to be sold for USD 9.7 million and is expected to deliver to the buyer in February 2019.

The Company is maintaining its dividend policy of paying 60% of earnings from continuing operations. Consistent with this policy, the Company is not declaring a dividend for the fourth quarter of 2018.

Mr Anthony Gurnee Chief Executive Officer commented that “Ardmore successfully weathered very difficult market conditions in 2018 by maintaining its financial strength and keeping a clear focus on operational performance. We were pleased to see significant improvement in the market rate environment late in the year, with MR average TCE levels reaching a multi-year high of USD 17,500 / day in late December and with even better market conditions anticipated in 2019 as the impact of IMO 2020 begins to be felt.

The outlook for product demand is positive, supported by expected continued strong underlying oil consumption growth along with estimated global refinery capacity additions of 2.6 million barrels per day for 2019, the largest annual increase since the 1970s. In addition, a record-low orderbook combined with expected ongoing scrapping should result in MR net fleet growth of less than 1% per annum for the next few years, setting the stage for a sustained upturn.

Beyond these strong fundamentals, we expect a significant demand boost for product tankers commencing mid-2019 as the oil industry and shipping business respond to the IMO 2020 sulphur regulations. We expect this additional layer of product tanker demand, which some analysts expect to be 5% or more, to last up to two years until the market reaches a new equilibrium.

We remain intensely focused on operating performance, cost efficiency, and effective capital allocation. With a modern fleet, low-cost structure and strong balance sheet, we believe Ardmore is well positioned to take advantage of the anticipated charter market recovery and generate strong returns on investment for our shareholders.”

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Posted By : Rabi Wangkhem on Fri, 08 Feb 2019
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