Ardmore Shipping Corporation · NYSE:ASC
Ardmore Shipping — Q1 2023 Earnings Presentation
26 slides from Ardmore Shipping's earnings presentation, May 9, 2023
Slide 1: Ardmore Shipping First Quarter 2023
Ardmore Shipping First Quarter 2023
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. Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendices 3
Slide 4: Highlights
Highlights 4 ▪ Strong momentum and positive volatility sustained in 1Q 2023. TCE MR TCE Rates: Continued Strength Well Above Historic Norms(3) rates remain extremely elevated compared with historical norms 2Q 2023 remaining at robust levels $37,506 ▪ The continued strong market has driven adjusted e
Slide 5: Product and Chemical Tanker Outlook
Product and Chemical Tanker Outlook 5 ▪ Outlook for product and chemical tankers remains very positive: Russian Trade Flows Further Decreasing Global Efficiency o EU Refined Product Embargo has resulted in a bifurcation of the 11% of product tanker fleet currently global fleet driving route ineffici
Slide 6: EU Refined Product Embargo
EU Refined Product Embargo 6 Full impact of EU Embargo still to play out with EU Imports ▪ Russian export tonne-miles have increased significantly since EU 2. European Inventories Declining from Pre-Embargo Build(2) Embargo 20 Inventories down 18 10% since Feb ▪ Tonne-mile increase relating to EU im
Slide 7: Capital Allocation Policy
Capital Allocation Policy 7 Ardmore continues to return cash to shareholders; attractive dividend yield of 10% Maintain fleet over time Continue to invest in fleet to optimize performance Sustain leverage below 40% Net leverage of 21% Ardmore will continue to develop and evaluate potential Well-time
Slide 8: Contents
Contents 8 I. Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendices 8
Slide 9: Widening Supply-Demand Gap
Widening Supply-Demand Gap 9 Negligible net fleet growth combined with increasing tonne-miles supports market strength Product and Chemical Tanker Demand vs. Net Fleet Growth(1)(2)(3)(4) 12.0% 10.9% 10.0% 8.8% 8.0% 7.4% 6.0% 5.2% 3.9% 4.0% 3.5% 3.1% 2.6% 2.5% 1.7% 2.0% 2.1% 2.0% 0.8% 0.7% 0.7% 0.4%
Slide 10: Robust Long-Term Demand Drivers
Robust Long-Term Demand Drivers 10 Favorable structural shifts converging in product and chemical tanker markets Refinery Dislocation Boosting Tonne-Mile Demand(2)(3) ▪ The Russia-Ukraine conflict and EU Refined Products Embargo have resulted in a persistent re-ordering of global product trade, addi
Slide 11: Aging Fleet & Generationally Low Orderbook
Aging Fleet & Generationally Low Orderbook 11 Orderbook pointing to product tanker fleet replenishment gap Orderbook for Product Tankers at Historical Lows(1)(2) Global Product Tanker Fleet Aging Rapidly(1) 200 Orderbook at 6% of fleet 70% 16 180 60% 14 38% of fleet > 20 160 years old in 5 years 12
Slide 12: Contents
Contents 12 I. Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendices 12
Slide 13: Continued Focus on Financial Strength
Continued Focus on Financial Strength 13 Robust balance sheet and conservative capital structure ▪ Net leverage reduction from 55.4% in 1Q 2022 to 20.7% in 1Q Meaningful De-levering of Balance Sheet Continues 2023, with total net debt of $129.4 million at the end of March US$ millions, unless otherw
Slide 14: Financial Highlights
Financial Highlights Continued strong TCE performance and effective cost control ▪ Adjusted earnings of $43.3 million, or $1.04 per share, for 1Q Fleet TCE(3) 2023(1) 1Q 2023 1Q 2022 MR(4) $37,506 $16,513 ▪ Adjusted EBITDAR(2) (i.e., EBITDA plus bareboat equivalent Chemical Tankers $27,984 $13,645 l
Slide 15: Fleet and Operational Highlights
Fleet and Operational Highlights Continued investment in performance enhancing technologies across our fleet ▪ Expect to complete eight drydockings and seven ballast water Eight Drydockings Scheduled for 2023 installations in 2023 4 4 o Represents total capex spend of approximately $20 million 3 ▪ M
Slide 16: Significant Operating Leverage
Significant Operating Leverage At current TCE rates EPS for 2023 would be higher than 2022(1)(2) $10.00 $9.00 $8.72 $8.00 $6.98 $7.00 $6.00 $5.23 EPS $5.00 $4.36 $4.00 $3.74 $3.00 $2.00 $1.00 $0.00 2022 $35,000 /day $40,000 /day $50,000 /day $60,000 /day Fleet Average TCE for Remainder of 2023 For e
Slide 17: Contents
Contents 17 I. Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendices 17
Slide 18: Summary
Summary 18 Market: ✓ TCE rates remain elevated and defying seasonal patterns ✓ Impact of Refined Product Embargo playing out, with increased tonne-miles ✓ Medium-term outlook remains positive for both product and chemical tankers based on widening supply-demand gap Company: ✓ Continued strong TCE pe
Slide 19: Contents
Contents 19 I. Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendices 19
Slide 20: Dividend Payment
Dividend Payment 20 ▪ In line with our recently announced Dividend Policy, Ardmore is pleased to Annualized Current Yield of 10% declare a quarterly cash dividend for 1Q 2022 of $0.35 per share Three Months Ended Mar 31, o Quarterly dividend calculated as one-third of adjusted earnings(1) 2023 Adjus
Slide 21: Refinery Summary and Seaborne Product Trade
Refinery Summary and Seaborne Product Trade 21 Regional Refinery Shift(1)(2) Region Closures 2020 - 2026 Openings 2023 - 2026 Europe 1.2 - Australia 0.5 - Middle East - 0.8 Africa 0.2 1.0 America 1.6 0.7 China 0.7 0.7 Asia (excl. China) 1.7 6.1 Total (mbd) 5.9 9.3 Seaborne Product Trade Balances(3)
Slide 22: Refinery Dislocation Boosting Tonne-Mile Demand
Refinery Dislocation Boosting Tonne-Mile Demand(1) 22 (1) 1. Closures based on announcement periods 22
Slide 23: Ardmore Product and Chemical Tanker Rates
Ardmore Product and Chemical Tanker Rates(1) 23 FLEET AVERAGE TCE MR ECO-DES(2) CHEMICAL(3) $47,026 $43,174 $40,308 $40,860 $37,506 $38,021 $38,000 $33,958 $34,000 $32,900 $32,956 $31,982 $30,739 $33,600 $27,806 $31,536 $28,544 $27,984 $21,970 $16,513 $14,801 $20,254 $15,155 $13,645 1Q22 2Q22 3Q22 4
Slide 24: Fleet Profile
Fleet Profile High Quality Vessels Vessel Name Ownership Type Dwt Tonnes IMO Built Country Flag Specification Ardmore Seahawk Leased Product/Chemical 49,999 2/3 Nov-15 Korea MI Eco-design ✓ Modern, highly fuel-efficient Ardmore Seawolf Leased Product/Chemical 49,999 2/3 Aug-15 Korea MI Eco-design fl
Slide 25: EBITDA + vessel lease expense component (i.e. EBITDAR)
EBITDA + vessel lease expense component (i.e. EBITDAR) 25 Three months ended Twelve months ended Reconciliation of net income / (loss) to EBITDAR(1) March 31, 2023 March 31, 2023 In thousands of U.S. Dollars Net Income / (Loss) 44,090 189,546 Interest income (239) (700) Interest expense and finance
Slide 26: Ardmore Indicative Guidance 2Q 2023
Ardmore Indicative Guidance 2Q 2023(1) 26 MR Eco-Design Spot TCE: $34,000 (50% fixed) Chemical Tanker Fleet TCE: $33,600 (50% fixed) Revenue Days: 2,242 Operating Expenses: $15 million Charter-In Expenses: $4.7 million Depreciation and Amortization: $8 million Overhead (Commercial and Corporate): $5