Gurnee bullish going forward despite losses

Feb 09 2018

Ardmore Shipping Corp suffered a net loss of $3.8 mill for the three months ended 31st December, 2017, compared to a net loss of $3.7 mill for 4Q16.

EBITDA for 4Q17was $11 mill, an increase of $0.1 mill from $10.9 mill recorded for 4Q16. 
For the full year, Ardmore reported a net loss of $12.5 mill, compared to a net profit of $3.7 mill for 2016. EBITDA was $45.7 mill for 2017, a decrease of $8.5 mill from $54.2 mill reported for 2016. 
Revenue for 4Q17 was $47.8 mill, an increase of $4.6 mill from $43.2 mill for 4Q16.
The average number of owned vessels remained at 27 for the quarter, resulting in revenue days of 2,438, compared to 2,417 for 4Q16. 
The company had 19 and 17 vessels employed directly in the spot market as the end of 4Q17 and 4Q16, respectively. Ardmore said it had 1,704 revenue days on spot charters for 4Q17, compared to 1,465 for 4Q16. This increase led to a rise in revenue of $5 mill, while changes in spot rates resulted in an increase in revenue of $2.7 mill.
Eight and 10 vessels were employed under timecharter and pool arrangements during the same periods, respectively. Revenue days derived from timecharter and pool arrangements were 734 for 4Q17, compared to 952 for 4Q16. This decrease resulted in a drop in revenue of $2.8 mill, while a decrease in pool earnings for the fourth quarter resulted in a decrease in revenue of $0.3 mill. 
CEO Anthony Gurnee, commented: "Ardmore continues to execute on its strategy in spite of soft charter market conditions. Throughout 2017, we achieved a number of key accomplishments that we believe position Ardmore to benefit from long-term trends driving the market for MR product and chemical tankers. 
“We completed an accretive share purchase of 1.4 mill shares in the fourth quarter at a steep discount to net asset value, thus improving per share earnings power. We remain intensely focused on operating performance, cost efficiency and building value through improvements to ROIC. 
“We are pleased to have taken delivery of the ‘Ardmore Sealancer’, a high-quality 2008 Japanese-built MR, in January’ 2018. With its low breakeven and attractive price equating to a 30% discount to age-adjusted newbuild, we expect the vessel to boost earnings growth in an improving charter market and build value for shareholders. 
“The charter market was soft overall for 2017, in spite of some strength during the summer months. Nevertheless, we believe that underlying fundamentals will prevail in 2018; oil demand growth remains firm as the global economy continues to strengthen and oil inventories have declined to more normalised levels, enabling trading activity to resume and re-introducing an additional layer of tonne/mile demand for MRs. Meanwhile, MR supply growth is less than 1%, setting the stage for a potential strong and sustained charter market recovery. 
“With a strong balance sheet, modern fleet, low cost structure and revenue days set to increase again in 2018, we believe Ardmore is well positioned to take advantage of the anticipated charter market recovery and thus generate strong returns and value accretion for our shareholders," he said.
The average TCE rate for the fleet was $12,583 per day for 4Q17, an increase of $276 per day from $12,307 per day for 4Q16. The increase in average TCE rate was the result of higher spot rates during 4Q17.
As of 31st December, 2017, Ardmore had $39.5 mill (31st December, 2016: $56 mill) available in cash and cash equivalents. 

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