Ardmore Shipping Corporation · NYSE:ASC
Ardmore Shipping — Q3 2024 Earnings Presentation
25 slides from Ardmore Shipping's earnings presentation, Nov 6, 2024
Slide 1: Ardmore Shipping Third Quarter 2024
Ardmore Shipping Third Quarter 2024
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: Contents
Contents 3 I. Earnings Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendix 3
Slide 4: Highlights
Highlights 4 Ardmore is reporting adjusted earnings(1) of $23.3 million or TCE Rates Up YoY During Seasonally Slower 3Q(2) $0.55 per share for 3Q 2024 +10% o MRs earned $28,500 / day for 3Q24, with 50% of the fourth $28,500 quarter booked at $25,000 / day(2) $25,900 +8% o Chemical tankers earned $
Slide 5: Near-Term Product and Chemical Tanker Outlook
Near-Term Product and Chemical Tanker Outlook 5 Supportive near-term demand drivers approaching the seasonally stronger winter months As the winter market commences into November, increased MR TCE Rates Historically Stronger During Winter Months(1) refinery runs following completion of fall mainte
Slide 6: Capital Allocation Policy
Capital Allocation Policy 6 Ardmore continuing to execute on all priorities under its Capital Allocation Policy Priority Description Recent Highlights Investing in fleet to improve Opportunistic vessel pair trade in 2Q 2024 Maintain fleet over time performance and reduce Numerous high-return ves
Slide 7: Contents
Contents 7 I. Earnings Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendix 7
Slide 8: Fleet Age & Orderbook
Fleet Age & Orderbook 8 Aging MR fleet, with need for replacement outweighing current orderbook MR Fleet Age at Historical High(1) Global MR Tanker Fleet Aging Rapidly(1) 60% 8 50% of fleet > 20 2007 years old within 5 7 years MR orderbook: 50% 2006 15% of fleet 6 2008 Fleet (million Dwt) Orderbook
Slide 9: Solid Long-Term Market Drivers
Solid Long-Term Market Drivers 9 Strong underlying demand growth in product and chemical tanker markets Sectoral trend of oil refinery and petrochemical production Ongoing Refinery Shift from East to West(2) capacity expansion in the East, along with closures in the 10.0 +9.0 West, leading to incr
Slide 10: Product Tonne-Miles vs. Net Fleet Growth
Product Tonne-Miles vs. Net Fleet Growth 10 Market fundamentals remain supportive of sustained strength Refined Product Tonne-Mile Demand vs. Net Fleet Growth(1)(2)(3) 10.0% 8.1% 7.9% 8.0% 7.0% 6.0% 5.0% 5.2% 2.0 - 4.0% 4.0% 3.2% 3.0% 3.3% 2.5% 2.3% 2.4% 2.3% 2.5% 1.8% 1.9% 1.6% 1.8% 2.0% 1.0% 0.5%
Slide 11: Contents
Contents 11 I. Earnings Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendix 11
Slide 12: Continued Focus on Financial Strength
Continued Focus on Financial Strength 12 Robust balance sheet and conservative capital structure, driving lower cash breakeven Continuing to Build Financial Strength Continuing to drive cash breakeven lower to $11,500 per day(1), through effective cost control, debt reduction, and US$ millions, un
Slide 13: Financial Highlights
Financial Highlights Resilient TCE performance and effective cost control further strengthening financial performance Adjusted earnings of $23.3 million, or $0.55 per share, for 3Q Continued Focus on Cost Control & Efficiency Improvements 2024 Three Months Ended Adjusted EBITDAR(1) (i.e., EBITDA
Slide 14: Fleet and Operational Highlights
Fleet and Operational Highlights Continuing to enhance the fleet to optimize operating performance and earnings Capital expenditure payments in 2024 forecasted at $26m, Upcoming Drydockings including $15m of capex relating to efficiency enhancing technologies and scrubber installations 4 o Over 50
Slide 15: Significant Operating Leverage
Significant Operating Leverage For every $10,000 / day increase in TCE rates, EPS expected to increase by ~$2.25 / share annually(1) $10.92 $8.68 $6.44 $4.21 $1.97 $25,000 $35,000 $45,000 $55,000 $65,000 Fleet Average TCE Additional $10,000 / day in TCE equates to annual free cash flow of $95m(1) 1.
Slide 16: Contents
Contents 16 I. Earnings Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendix 16
Slide 17: Summary
Summary 17 Market: Our chartering performance remained elevated during the typically slower third quarter and is beginning to accelerate into the seasonally stronger winter market Some short-term headwinds and geopolitical uncertainty driving increased volatility Long-term fundamentals remain
Slide 18: Contents
Contents 18 I. Earnings Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendix 18
Slide 19: Dividend Payment
Dividend Payment 19 In line with our consistent Dividend Policy, Ardmore is pleased to declare Dividend Calculation a quarterly cash dividend for 3Q 2024 of $0.18 per share Three Months Ended September o Quarterly dividend calculated as one-third of adjusted earnings(1) 30, 2024 Adjusted Earnings
Slide 20: Refinery Summary and Seaborne Product Trade
Refinery Summary and Seaborne Product Trade 20 Regional Refinery Shift(1)(2) Region Closures 2020 - 2026 Openings 2023 - 2026 Europe 1.3 0.1 Australia 0.4 - Middle East - 0.5 Africa 0.2 1.0 America 1.8 0.6 China 1.1 1.8 Asia (excl. China) 1.4 6.0 Total (mbd) 6.3 9.9 Seaborne Product Trade Balances(3
Slide 21: Refinery Dislocation Boosting Tonne-Mile Demand
Refinery Dislocation Boosting Tonne-Mile Demand(1) 21 (1) 1. Closures based on announcement periods 21
Slide 22: Ardmore Product and Chemical Tanker Rates
Ardmore Product and Chemical Tanker Rates 22 MR Eco-Des(1) Chemical Fleet Average $41,385 $38,430 $37,762 $34,720 $30,330 $28,481 $26,471 $25,000 $24,831 $25,150 $24,100 $21,604 1Q24 2Q24 3Q24 4Q24 TD 1Q24 2Q24 3Q24 4Q24 TD 1Q24 2Q24 3Q24 4Q24 TD 1. Basis MR Eco-Design spot TCE rates 22
Slide 23: Fleet Profile
Fleet Profile High Quality Vessels Vessel Name Ownership Type Dwt Tonnes IMO Built Country Flag Specification Ardmore Gibraltor Owned Product/Chemical 49,999 2/3 Apr-17 Korea SG Eco-design Modern, highly fuel-efficient Ardmore Seahawk Leased Product/Chemical 49,999 2/3 Nov-15 Korea MI Eco-design f
Slide 24: EBITDA + vessel lease expense component (i.e. EBITDAR)
EBITDA + vessel lease expense component (i.e. EBITDAR) 24 Three months ended Twelve months ended Reconciliation of net income / (loss) to EBITDAR(1) September 30, 2024 September 30, 2024 In thousands of U.S. Dollars Net income 24,144 153,080 Interest income (226) (1,937) Interest expense and finance
Slide 25: Ardmore Indicative Guidance 4Q 2024
Ardmore Indicative Guidance 4Q 2024(1) 25 MR Eco-Design Spot TCE: $25,000 (50% fixed) Chemical Tanker Fleet TCE: $25,150 (55% fixed) Revenue Days: 2,385 Operating Expenses: $15.5 million Charter-In Expenses: $6.0 million Depreciation and Amortization: $9.0 million Overhead (Commercial and Corporate)