Ardmore bullish going forward

Feb 11 2019


Ardmore Shipping Corp reported a net loss from continuing operations of $8.8 mill for the three months ended 31st December, 2018, compared to a net loss of $3.8 mill for 3Q17.

The GAAP net loss was $17 mill for 4Q18, compared to a net loss of $3.8 mill for 3Q17. GAAP net loss included $8.2 mill related to a write-off of deferred finance fees and a loss on the sale of a vessel.

Ardmore reported adjusted EBITDA of $7.8 mill for 4Q18, compared to $11 mill for 3Q17.

For the full year, the company reported a net loss from continuing operations of $34.3 mill, compared with $12 mill for 2017. GAAP net loss was $42.9 mill, compared to a net loss $12.5 mill for 2017. GAAP net loss included $8.6 mill related to write-off of deferred finance fees and loss on the sale of a vessel.

Ardmore reported adjusted EBITDA of $29.2 mill for the 12 month period, compared to $45.7 mill for 2017.

Spot MRs earned an average rate of $12,475 per day for 4Q18, and $11,564 per day for the 12 month period. Chemical tankers earned an average rate of $10,779 per day for 4Q18, and $11,406 per day for the full year. 

During 4Q18, Ardmore completed financing transactions for seven vessels including two 2015-built 37,000 dwt Eco-design IMO II product and chemical tankers, and five 2014-built 50,000 dwt  Eco-design MRs, 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 $32.7 mill in total.

At the same time, the company agreed to sell two vessels. The ‘Ardmore Seatrader’, a 2002-built 47,000 dwt Eco-mod MR, was sold for $8.3 mill and delivered to the buyer on 9th January, 2019, while the ‘Ardmore Seamaster’, a 2004-built 45,840 dwt Eco-mod MR, is to be sold for $9.7 mill and is expected to deliver to the buyer this month.

Anthony Gurnee, Ardmore's CEO, commented: "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 $17,500 per 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 mill 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 sulfur 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," he said.

As of 31st December, 2018, the company had $56.9 mill (31st December, 2017: $39.5 mill) available in cash and cash equivalents.



Previous: Navios Maritime acquisition sees improved tanker rates

Next: DHT sees better days


May 2019

Nor-Shipping - ballast - remote surveys