Ardmore Shipping Corporation · NYSE:ASC
Ardmore Shipping — Q1 2024 Earnings Presentation
26 slides from Ardmore Shipping's earnings presentation, May 8, 2024
Slide 1: Ardmore Shipping First Quarter 2024
Ardmore Shipping First 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. Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendix 3
Slide 4: Highlights
Highlights 4 ▪ Strong momentum has continued into 2024, reflecting positive Strong 2Q TCE Rates Countering Typical Seasonality fundamentals as well as ongoing market dislocation o Impact of geopolitical events has added to product tanker tonne- $40,500 $39,000 $38,400 miles, bolstering already tight
Slide 5: Near-Term Product and Chemical Tanker Outlook
Near-Term Product and Chemical Tanker Outlook 5 Market driven by strong supply-demand fundamentals and reinforced by ongoing disruptions ▪ EU Refined Products Embargo continuing to impact market, EU Embargo Establishing Persistent Reordering of Global Trades with the bifurcation of the global fleet
Slide 6: Capital Allocation Policy
Capital Allocation Policy 6 Continuing to invest in fleet, while returning capital to shareholders through dividend payments Continue to invest in fleet to improve performance and reduce Maintain fleet over time carbon emissions; sold 2010-built Ardmore Seafarer and acquired 2017-built Ardmore Gibra
Slide 7: Contents
Contents 7 I. Highlights II. Product and Chemical Tanker Fundamentals III. Operating and Financial Performance IV. Summary V. Appendix 7
Slide 8: Significant Supply-Demand Gap
Significant Supply-Demand Gap 8 Projected tonne-mile increases continuing to outpace net fleet growth Product and Chemical Tanker Demand vs. Net Fleet Growth(1)(2)(3)(4) 8.8% 8.6% 2025 MR net fleet 7.3% growth = 2.2% 4.9% 3.9% 3.1% 3.5% 3.1% 2.6% 2.5% 1.7% 2.0% 2.1% 1.8% 1.4% 1.3% 1.2% 1.3% 0.8% -0.
Slide 9: Aging Fleet & Low Orderbook
Aging Fleet & Low Orderbook 9 Historically high average fleet age while MR orderbook remains low MR Fleet Age at Historical High(1)(2) Orderbook for MR Tankers Remains Low(1)(2) 50% MR Orderbook: 9.0% of fleet 120 Product Tanker Orderbook: 14.7% of fleet 50% 2008 2007 40% 2009 Impact mitigated 100 b
Slide 10: Robust Long-Term Demand Drivers
Robust Long-Term Demand Drivers 10 Strong underlying demand growth in product and chemical tanker markets Continued Growth in Oil Demand ▪ Russia-Ukraine conflict and EU Refined Products Embargo has led to a persistent re-ordering of global product trades, 108 boosting overall tonne-miles Million Ba
Slide 11: Contents
Contents 11 I. Highlights II. Product and Chemical Tankers 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 Continuing to Build Financial Strength ▪ Cash breakeven further reduced to $13,250 per day(1), through effective cost control, lower debt levels, and access to US$ millions, unless otherwise stated Mar 3
Slide 13: Financial Highlights
Financial Highlights Continued strong TCE performance and effective cost control ▪ Adjusted earnings of $38.4 million, or $0.92 per share, for 1Q Continued Focus on Cost Control & Efficiency Improvements 2024 Three Months Ended ▪ Adjusted EBITDAR(1) (i.e., EBITDA plus bareboat equivalent US$ million
Slide 14: Fleet and Operational Highlights
Fleet and Operational Highlights Continuing to invest in the fleet to improve performance and reduce emissions ▪ Four of five scheduled drydockings for 2024 already completed Increasing Revenue Days Following Completion of Drydockings ▪ Forecasted 2024 capital expenditure of $17mln, including 4,740
Slide 15: Significant Operating Leverage
Significant Operating Leverage For every $10,000 / day increase in TCE rates, EPS expected to increase by ~$2.30 / share annually(1) $12.27 ASC 2Q 2024 Fixed to Date: $10.01 $37,400 $7.75 $5.49 $3.22 $30,000 $40,000 $50,000 $60,000 $70,000 Fleet Average TCE Additional $10,000 / day in TCE equates to
Slide 16: Contents
Contents 16 I. Highlights II. Strategy Overview III. Market Outlook and Commercial Update IV. Summary V. Appendix 16
Slide 17: Summary
Summary 17 Market: ✓ TCE rates remained elevated through 1Q 2024 and have strengthened further into the second quarter, boding well for the full year ✓ Market strength is being driven by ongoing geopolitical events, in particular the persistent re-ordering of product tanker trade as a result of the
Slide 18: Contents
Contents 18 I. Highlights II. Strategy Overview III. Market and Commercial Update 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 1Q 2024 of $0.31 per share Three Months Ended March 31, o Quarterly dividend calculated as one-third of adjusted earnings(1) 2024 Adjusted Earnings befo
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 1.0 1.5 Asia (excl. China) 1.7 6.0 Total (mbd) 6.4 9.7 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: Product & MR Tankers: Fleet Age Distribution in 5 Years
Product & MR Tankers: Fleet Age Distribution in 5 Years(1)22 ~50% of fleet will be in Scrapping Zone in 5 Years Global Trading Restricted Trading Scrapping Zone 47% 45% 36% 34% 19% 19% <15 Years 15-19 20+ MR Tankers as a % of Fleet Product Tankers as a % of Fleet 1. Clarksons Shipping Intelligence N
Slide 23: Ardmore Product and Chemical Tanker Rates
Ardmore Product and Chemical Tanker Rates 23 MR Eco-Des(1) Chemical(2) Fleet Average $40,500 $38,400 $39,000 $37,400 $34,700 $32,500 $30,900 $29,100 $32,500 $29,700 $27,900 $26,400 $23,300 $26,100 $24,800 $20,000 3Q23 4Q23 1Q24 2Q24 TD 3Q23 4Q23 1Q24 2Q24 TD 3Q23 4Q23 1Q24 2Q24 TD 1. Basis MR Eco-De
Slide 24: Fleet Profile
Fleet Profile High Quality Vessels Vessel Name Ownership Type Dwt Tonnes IMO Built Country Flag Specification Ardmore Gibraltar 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 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, 2024 March 31, 2024 In thousands of U.S. Dollars Net income 39,237 111,955 Interest income (544) (2,123) Interest expense and finance costs 2
Slide 26: Ardmore Indicative Guidance 2Q 2024
Ardmore Indicative Guidance 2Q 2024(1) 26 MR Eco-Design Spot TCE: $40,500 (60% fixed) Chemical Tanker Fleet TCE: $32,500 (60% fixed) Revenue Days: 2,290 Operating Expenses: $15.0 million Charter-In Expenses: $5.5 million Depreciation and Amortization: $9.0 million Overhead (Commercial and Corporate)