Ardmore Shipping Corporation · NYSE:ASC
Ardmore Shipping — Q2 2020 Earnings Presentation
21 slides from Ardmore Shipping's earnings presentation, Jul 29, 2020
Slide 1: Earnings Presentation | Second Quarter 2020
Earnings Presentation | Second Quarter 2020
Slide 2: Disclaimer
Disclaimer This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of applicable U.S. federal securities laws. All statements, other than statements of historical facts, that address activities, events or developments that Ardmore Shippi
Slide 3: Agenda
Earnings Release: Second Quarter 2020 3 Agenda ▪ Highlights ▪ Key Industry Developments ▪ Long-term Strategy ▪ Assessing Growth Opportunities ▪ Stewarding Shareholder Value ▪ Market Review ▪ Financial Review ▪ Summary 3
Slide 4: Highlights
Highlights 4 ▪ Reporting adjusted net profit(1) of $13.7 million, or $0.41 per share, for 2Q20 compared to profit of $6.5 million, or $0.20 per share, for 1Q20 ▪ Tanker market was very strong in the second quarter, with Ardmore performing well on a relative basis, thus producing excellent TCE result
Slide 5: Key Industry Developments
Key Industry Developments 5 ▪ Market being driven by a tug of war between volatility, disruption and dislocation vs. fundamental oil demand (sharp decline then recovery yet to be determined) ▪ Impact of COVID-19 is unfolding as expected; product tanker market volatile with spikes and dips, currently
Slide 6: Long-term Strategy
Long-term Strategy 6 ▪ Ardmore has a strong track record regarding long-term strategy execution (see slide 19 in appendix for more details) ▪ Ardmore’s strategy is based on the following principles: o Consistent focus on modern, fuel-efficient, high-quality product and chemical tankers o In-house co
Slide 7: Assessing Growth Opportunities
Assessing Growth Opportunities 7 Philosophy and Approach to Growth Ardmore Performance Metrics(1) ▪ We assess fleet growth opportunities based on prospects for ASC FY 2019 performance improvement, long-term value creation, and Actual + 8 Eco MRs + 25 Eco MRs protection of shareholders interests ▪ Re
Slide 8: Stewarding Shareholder Value
Stewarding Shareholder Value 8 ▪ Our independent board, full transparency and high-quality corporate governance represent significant value for shareholders through full alignment with Management and protection of shareholders interests ▪ Ardmore was recently recognized as #3 out of 52 public shippi
Slide 9: Tanker Market and Financial Update
Tanker Market and Financial Update 9 9
Slide 10: Industry Fundamentals
Industry Fundamentals ▪ Global economy is slowly emerging from the COVID-19 pandemic; expect Global GDP and Chemical Tanker Trade(3)(4) the global economy to grow by 5.4% in 2021 vs. -4.9% in 2020(1) 350 98% long-term 100 Seaborne Trade (Million Tonnes) correlation 90 o Oil consumption expected to g
Slide 11: Fleet and Operations
Fleet and Operations Revenue Days Profile(1) ▪ Revenue days estimated to be 9,130 for the full year 2020(1) 10,000 9,130 o Recently acquired Japanese MR is expected to deliver in late August / 9,000 early September 8,000 7,000 Revenue Days o Entered a time charter-in for a 2010-built Japanese MR for
Slide 12: Product and Chemical Tanker Charter Rates
Product and Chemical Tanker Charter Rates Time Charter Equivalent ($ / day)(1) Ardmore MR Spot Rates(2) MR ECO-DES MR ECO-MOD CHEMICAL(3) 21,256 21,539 22,010 20,280 20,551 20,192 19,564 19,816 19,307 19,266 18,149 18,341 19,707 18,003 17,725 16,133 17,864 15,531 16,337 14,284 4Q19 1Q20 2Q20 1H20 MR
Slide 13: Financial Performance
Financial Performance Financial Performance Data INCOME STATEMENT DATA Three Months Three Months US$ millions, unless otherwise stated June 30, 2020 June 30, 2019 Results EBITDA(1) $27.9 $5.7 GAAP net profit / (loss) $13.6 ($9.9) Adj. EBITDA(1) $27.9 $12.3 Adj. net profit / (loss)(2) $13.7 ($3.4) Ad
Slide 14: Financial Activity and Balance Sheet
Financial Activity and Balance Sheet Balance Sheet Summary ▪ Completed our first sustainability-linked financing with ABN AMRO in July in keeping with our commitment to progress US$ millions, unless otherwise stated Jun 30, 2020 Dec 31, 2019 Cash 72.9 51.7 o $15 million facility contains pricing adj
Slide 15: Capital Allocation Policy: Progress and Priorities
Capital Allocation Policy: Progress and Priorities Term Debt and Lease Amortisation(1)(2) ▪ Capital allocation policy working very well; initiated to maintain fleet and build financial strength to enable counter-cyclical investment $7.8 $9.3 ▪ Continuing to focus on financial strength and debt reduc
Slide 16: Summary
Summary 16 16
Slide 17: Summary
Summary ▪ 2Q20 was a very profitable quarter driven by exceptional market volatility, earning 41 cents per share, which provides an annualized earnings yield of 40% based on our current stock price. In addition, we have added two ships on highly attractive terms, which will add meaningfully to our e
Slide 18: Appendix
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Slide 19: Track Record of Timely Growth, Patience and Discipline
Track Record of Timely Growth, Patience and Discipline 19 Capital Markets and Transactions Strong Operating Performance Ardmore Milestones ▪ IPO in 2013 priced at premium to NAV with ▪ Completed commercial operations in-sourcing 2020: initiated Capital Allocation Policy; strong profitability in 2Q20
Slide 20: Key Performance Metrics and Scope for Accretive Growth
Key Performance Metrics and Scope for Accretive Growth 20 Scale Efficiency Illustration(1) ASC FY 2019 ASC 1H20 Actual + 8 Eco MRs + 25 Eco MRs Actual + 8 Eco MRs + 25 Eco MRs No. of MRs in Operation 20 28 45 19 27 44 Total No. of Owned Ships in Fleet(2) 26 34 51 25 33 50 Eco-design MR TCE $15,781 $
Slide 21: Current Market Activity
Current Market Activity OVX V. MR Charter Rates(1)(2) ▪ Product tankers have enjoyed unprecedented levels of disruption and volatility in the second quarter 350 80 OVX 300 MR TCE Rates 70 o MR rates surged April / May on the back of record oil price volatility and MR TCE (Thousand $ / Day) market di