Ardmore Shipping Corporation · NYSE:ASC
Ardmore Shipping — Q4 2024 Earnings Presentation
45 slides from Ardmore Shipping's earnings presentation, Feb 14, 2025
Slide 1: Fourth Quarter and Full Year 2024 & Investor Day 2025
Ardmore Shipping Corporation Fourth Quarter and Full Year 2024 & Investor Day 2025
Slide 2: To Submit Questions for the Q&A Session
To Submit Questions for the Q&A Session Email us at: Ardmore@IGBIR.com
Slide 3: 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 4: Ardmore Team
Ardmore Team Name History Curtis McWilliams Appointed Chairman of the Board effective 2019 and Director of Ardmore since 2016 Co-Head of Global Transportation Group at Merrill Lynch Chair of the Board President, CEO, and Director of Trustreet Properties Inc. MBA Chicago Booth School of Busin
Slide 5: Ardmore Shipping: Leading Global Tanker Company
Ardmore Shipping: Leading Global Tanker Company (1) Product & Chemical Tankers Capital Allocation Policy Innovation Focus 1. 2.
Slide 6: Contents
Contents 6 I. Earnings: Fourth Quarter and Full Year 2024 II. Market Outlook III. Business Update IV. Summary V. Appendix 6
Slide 7: Highlights
Highlights 7 Full Year and 4Q 2024 results: Earnings Highlights FY 2024 4Q 2024 Adjusted Earnings(1) $119.5m $10.3m EPS(1) $2.84 $0.25 Capital Allocation highlights: o Declared consistent dividend of one-third of adjusted earnings o Repurchased 4% of outstanding shares at an average price of $11
Slide 8: Highlights
Highlights 8 Full Year and 4Q 2024 results: 4Q TCE was 2x Breakeven TCE Rates 4Q 2024 1Q 2025 $23,400 $22,700 MRs(1) $22,700 $21,400 (55% fixed) $14,000 Chemicals $21,400 (40% fixed) $17,500 $14,800 Cash breakeven of $11,500 / day MRs (50k dwt) Chemical Tankers (25k / 37k dwt) 10-Year Average 4Q 2
Slide 9: Continued Focus on Financial Strength
Continued Focus on Financial Strength 9 Strong balance sheet positions Ardmore to perform well through market cycles Ardmore continues to focus on optimizing TCE performance, Continuing to Build Financial Strength managing costs, and preserving a strong balance sheet US$ millions, unless otherwise
Slide 10: Financial Highlights
Financial Highlights Robust earnings and cash flow generation Adjusted EBITDAR(1) (i.e., EBITDA plus bareboat equivalent Continued Focus on Cost Control & Efficiency Improvements lease expense) of $23.0 million in 4Q 2024 (full bridge on slide 44) Three Months Ended 12 Months Ended US$ millions, u
Slide 11: Contents
Contents 11 I. Earnings: Fourth Quarter and Full Year 2024 II. Market Outlook III. Business Update IV. Summary V. Appendix 11
Slide 12: Current Market
Current Market 12 Positive fundamentals bolstered by continued geopolitical disruption Global oil demand accelerated +1.5mbd YoY in 4Q 2024. Steady Growth in Oil Demand(1) Further robust growth projected in 2025 106 Oil Demand forecast +1.1mbd in 2025 o US economy proving resilient, with solid GDP
Slide 13: Illustrative Case: Tariffs Increasing Complexity
Illustrative Case: Tariffs Increasing Complexity 13 Represents potential ton-mile demand kicker Potential US tariffs on Canada could boost longer Europe-US European Import Voyage Significantly Longer vs. Canada flows at the expense of short-haul Canadian imports 6x Voyage Distance for European CPP
Slide 14: Solid Long-Term Market Drivers
Solid Long-Term Market Drivers 14 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 West(1) 10.0 +9.0 8.0 6.0 Mill
Slide 15: Aging MR Fleet
Aging MR Fleet 15 Half of global fleet approaching scrapping age; 3.5x current orderbook MR Fleet Age at Historical High(1) Global MR Tanker Fleet Aging Rapidly(1) Scrapping Window in 5 yrs Orderbook 8 60% 7 2007 50% 2006 53m 15m 6 tons tons 2008 Fleet (million Dwt) Orderbook as % Fleet 40% 2005 5 3
Slide 16: Fleet Age and Utilization
Fleet Age and Utilization 16 Aging fleet to result in lower utilization levels, reducing effective supply Existing MR Fleet Aging Rapidly(1) Statistically Lower Utilization of Older Vessels(2) Current Fleet After 5 years 22% 64% 52% 47% 53% 78% 48% 36% 20+ Years 0-19 Years 0-19 Years 20+ Years Balla
Slide 17: Sanctions Update
Sanctions Update 17 Step-up in sanctions benefiting compliant fleet Additional 155 tankers sanctioned by OFAC on January 10th, bringing total sanctioned fleet to over 500 vessels o 1,500+ tankers part of overall dark fleet Aframax segment most impacted, with 20% of fleet now under sanctions, whi
Slide 18: Uplift From Increasing Regulations
Uplift From Increasing Regulations 18 Creating new opportunities and increasing returns on fuel-efficiency upgrades Regulation Description Ardmore Execution EU ETS EU cap-and-trade system aiming to reduce GHG emissions Optimizing fleet deployment to Covers 40% of emissions in 2024, 70% in 2025,
Slide 19: Market Volatility = Operating Leverage Opportunity
Market Volatility = Operating Leverage Opportunity Every $10,000 / day increase in rates increases EPS by ~$2.30 / share annually(1) $5.20 $4.06 $2.92 $1.78 $0.64 $20,000 $25,000 $30,000 $35,000 $40,000 Fleet Average TCE Additional $10,000 / day equates to annual free cash flow of $95m(1)(2) 1. Illu
Slide 20: Contents
Contents 20 I. Earnings: Fourth Quarter and Full Year 2024 II. Market Outlook III. Business Update IV. Summary V. Appendix 20
Slide 21: Strategy Overview
Strategy Overview Refined Products and Chemicals Integrated Trading Strategy Performance Through Constant Innovation 21
Slide 22: Our Philosophy: Enhancing Performance Through Progress
Our Philosophy: Enhancing Performance Through Progress 22 Performance FY 2024 TCE Cash Breakeven Capital Returned $30,300 $11,500 23% of market (1) cap (2) Strong cash generation Cost focus and low leverage Recent share buybacks and of 10% 9% dividend yield Progress #1 Governance Innovation One Team
Slide 23: Best-In-Class Governance
Best-In-Class Governance 23 No.1 Ranked Tanker Company for ESG Ardmore recognizes strong corporate governance is essential 2024 Webber ESG Scorecard(1) for improving business performance and ensuring long-term success: Up / Company 2024 2023 (Down) o Webber ESG Scorecard highlights shipping compan
Slide 24: Capital Allocation Policy
Capital Allocation Policy 24 Dynamically executing on all priorities under our Capital Allocation Policy Priority Description Ardmore Updates Investing in fleet to boost Upgrading tank coatings on full chemical fleet Maintain fleet over time performance and reduce emissions Scrubbers installed o
Slide 25: Case Study I: Substantial Drydock Savings
Case Study I: Substantial Drydock Savings 25 Creative voyage strategies to reposition for drydocking savings in China Deliberate voyage combinations over five-month period Resulted in only two-day ballast to Chengxi for drydocking 25
Slide 26: Case Study II: A Year Without Ballast
Case Study II: A Year Without Ballast 26 Innovative voyage combinations resulted in significant TCE premium $34,500 / day TCE over 14 months Near ballast-free (95% laden) Efficient fixing of backhaul cargos to reposition for subsequent voyage 26
Slide 27: Case Study III: Cargo Capabilities
Case Study III: Cargo Capabilities 27 Ability to carry a wide range of cargos increases trading options and boosts earnings $35,700 / day TCE over five months Cargos included edible and recycled oils Repositioned West to take advantage of stronger market 27
Slide 28: Operational Highlights
Operational Highlights Global trading organization with a high-performance culture Fully integrated and global platform providing seamless coverage across time zones Premium earnings delivered through creative voyage combinations Leveraging AI and digitalization to support commercial and opera
Slide 29: Maximizing Global Trading Options
Maximizing Global Trading Options Performing for large, diversified base of high-quality customers 29
Slide 30: Innovation: Energy Transition Plan (ETP)
Innovation: Energy Transition Plan (“ETP”) ETP enhances current performance and positions Ardmore for long-term success Energy Efficiency Emerging Cargo Energy Transition Technologies Flows Projects Deploying cutting-edge Focused on increasing Collaborating with commercial solutions to drive onboard
Slide 31: Fleet Upgrades
Fleet Upgrades Investing in fleet to optimize operating performance and boost earnings Invested $25m across five drydockings in 2024 o Included $14m of capex relating to efficiency enhancing technologies and scrubber installations Scheduled to complete ten drydockings in 2025 at an estimated cos
Slide 32: Efficiency Upgrades: Recent Examples
Efficiency Upgrades: Recent Examples Investing in vessel upgrades to drive enhanced performance and reduce emissions 1. DeepSea AI 2. Upgraded Tank 3. N2 Plant 4. Mewis Duct 5. 13 Mari 6. Graphene Coatings Propeller Coatings AI optimized tool to Increase cargo Enhances chemical Improves propeller Hu
Slide 33: Case Study: Tank Coating Upgrades
Case Study: Tank Coating Upgrades 33 Increasing cargo optionality and boosting earnings potential Recent Initiative: Tank Coating Upgrades MarineLine Coating Provides Greater Cargo Versatility Summary • Upgrading tank coating from standard phenolic epoxy to MarineLine Epoxy Coating • Increases tradi
Slide 34: Innovation: AI & Digitalization
Innovation: AI & Digitalization 34 34
Slide 35: Case Study: Fleet Connectivity Enhancement
Case Study: Fleet Connectivity Enhancement 35 Starlink Satellite Communication • Provide seafarers and our fleet with high- Purpose bandwidth internet connectivity • Enables use of fuel saving AI technology • Increases crew safety with real-time ship monitoring and better coordination • Improves ope
Slide 36: Case Study: Voyage Optimization
Case Study: Voyage Optimization 36 AI Enhanced Voyage Management Purpose • Optimization of fleet performance Savings • $5-7 million annually across fleet Estimated • 100%+ Returns • Improves: o Fuel savings o Speed optimization o Hull cleaning regime o Weather routing Other o Voyage execution Benefi
Slide 37: Contents
Contents 37 I. Earnings: Fourth Quarter and Full Year 2024 II. Market Outlook III. Business Update IV. Summary V. Appendix 37
Slide 38: Summary
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Slide 39: Contents
Contents 39 I. Earnings: Fourth Quarter and Full Year 2024 II. Market Outlook III. Business Update IV. Summary V. Appendix 39
Slide 40: Modern High-Quality Fleet
Modern High-Quality Fleet Vessel Name Ownership Type Dwt Tons IMO Built Country Specification Ardmore Gibraltar Owned Product/Chemical 49,999 2/3 Apr-2017 Korea Eco-design Ardmore Seahawk Owned Product/Chemical 49,999 2/3 Nov-2015 Korea Eco-design Ardmore Seawolf Owned Product/Chemical 49,999 2/3 Au
Slide 41: Dividend Payment
Dividend Payment 41 In line with our consistent Dividend Policy, Ardmore declared a quarterly Dividend Calculation cash dividend for 4Q 2024 of $0.08 per share Three Months Ended Dec 31, o Quarterly dividend calculated as one-third of Adjusted earnings(1) 2024 Adjusted earnings before exclusions $
Slide 42: Refinery Summary and Seaborne Product Trade
Refinery Summary and Seaborne Product Trade 42 Regional Refinery Shift(1)(2) Region Closures 2020 - 2026 Openings 2020 - 2026 Europe 1.3 0.1 Australia 0.4 - Middle East - 1.9 Africa 0.2 1.0 America 1.9 0.6 China 1.4 2.7 Asia (excl. China) 1.5 6.6 Total (mbd) 6.7 12.9 Seaborne Product Trade Balances(
Slide 43: Refinery Dislocation Boosting Ton-Mile Demand
Refinery Dislocation Boosting Ton-Mile Demand(1) 43 (1) 1. Closures based on announcement periods 43
Slide 44: EBITDA + vessel lease expense component (i.e. EBITDAR)
EBITDA + vessel lease expense component (i.e. EBITDAR) 44 Three months ended Twelve months ended Reconciliation of net income / (loss) to EBITDAR(1) December 31, 2024 December 31, 2024 In thousands of U.S. Dollars Net income 6,935 133,006 Interest income (435) (1,817) Interest expense and finance co
Slide 45: Ardmore Indicative Guidance 1Q 2025
Ardmore Indicative Guidance 1Q 2025(1) 45 MR Eco-Design Spot TCE: $23,400 (55% fixed) Chemical Tanker Fleet TCE: $14,000 (40% fixed) Revenue Days: 2,075 Operating Expenses: $15.2 million Charter-In Expenses: $5.5 million Depreciation and Amortization: $9.0 million Overhead (Commercial and Corporate)