Ardmore Shipping Corporation announced results for the three and six months ended June 30, 2022.
Highlights and Recent Activity
- Reported a net profit of $28.8 million for the three months ended June 30, 2022, or $0.82 earnings per basic share and $0.81 earnings per diluted share, compared to a net loss of $8.2 million, or $0.24 loss per basic and diluted share, for the three months ended June 30, 2021. Adjusted for certain costs (see Adjusted earnings / (loss) in the Non-GAAP Measures section), we reported Adjusted earnings of $28.9 million, or $0.82 Adjusted earnings per basic share and $0.81 Adjusted earnings per diluted share, for the three months ended June 30, 2022, compared to an Adjusted loss of $7.7 million, or $0.23 Adjusted loss per basic and diluted share, for the three months ended June 30, 2021.
- Reported a net profit of $21.0 million for the six months ended June 30, 2022 or $0.60 earnings per basic and diluted share, compared to a net loss of $16.7 million, or $0.50 loss per basic and diluted share, for the six months ended June 30, 2021. Adjusted for certain costs (see Adjusted earnings / (loss) in the Non-GAAP Measures section), we reported Adjusted earnings of $28.0 million, or $0.81 Adjusted earnings per basic and $0.80 Adjusted earnings per diluted share for the six months ended June 30, 2022, compared to an Adjusted loss of $16.2 million or $0.48 Adjusted loss per basic and diluted share, for the six months ended June 30, 2021.
- MR tankers earned an average TCE rate of $30,480 per day for the three months ended June 30, 2022. Chemical tankers earned an average TCE rate of $20,254 per day for the three months ended June 30, 2022. With approximately 45% total revenue days fixed for the third quarter of 2022, the average TCE rate has increased to approximately $46,600 per day for MR tankers and $33,000 per day for Chemical tankers.
- Completed the previously announced sale of two out of three vessels to Leonhardt & Blumberg for an aggregate price of $26.4 million. Both vessels were subsequently time-chartered back from the buyer for a period of 24 months at an attractive hire rate, plus a one-year extension option. The remaining vessel is scheduled to be delivered to Leonhardt & Blumberg on July 29, 2022 and will subsequently be time-chartered back for a period of 24 months, plus a one-year extension option.
- Finalized terms for three new sustainability-linked senior loan facilities with our existing relationship banks for $308 million in the aggregate on improved terms and pricing. Aggregate proceeds of $293 million from two of the facilities will be used to refinance 19 vessels, including nine vessels currently financed under lease arrangements. The third loan is a sustainability-linked $15 million receivables facility which replaces Ardmore’s existing receivables facility scheduled to mature in July 2023. The three new financings will substantially reduce our interest cost, provide for significant flexibility and extend maturities through to mid-2027.
- We have also announced separately today the planned departure of our current Chief Financial Officer Paul Tivnan and appointment of our new Chief Financial Officer Bart Kelleher, effective September 28, 2022. Paul and Bart will overlap and work closely together from September 1, 2022 to achieve an orderly and well-planned transition, including a thorough handover of all internal and external relationships.
Anthony Gurnee, the Company’s Chief Executive Officer, commented:
“We are pleased to report record earnings for the second quarter with net income of $29 million or $0.82 earnings per share, reflecting improved market conditions and MR TCE performance of $31,000 per day. The product tanker market has continued to strengthen so far into the third quarter, with our MR’s earning $46,600 with 45% of days booked, setting the stage for an even better quarter and an anticipated strong finish for the year.
We believe the strong product tanker market is being driven primarily by two factors: firstly, a multi-faceted energy crisis likely to persist for some time, with extreme price swings and supply issues for virtually all energy classes, low global energy inventories, and physical supply-demand dislocation for oil products driving tonne-mile demand; and secondly, improving demand / supply fundamentals, most notably the ongoing recovery of oil demand – in particular jet fuel – and the combined effect of supply constraints at shipyards and ongoing scrapping.
In addition to achieving strong commercial performance, we have been working to convert this into durable financial strength by refinancing substantially all of our debt on improved terms including sustainability-linked pricing, prepaying 12 higher-cost capital leases so that we have just two still outstanding, extending our debt maturities to 2027, and providing Ardmore with improved financial flexibility through revolving credit facilities.
Also today, we are announcing that, after 12 great years at Ardmore, our CFO Paul Tivnan has decided to leave the Company to broaden his experience and pursue further ambitions. Paul has been instrumental to what Ardmore has accomplished and has been a core part of the senior management team, and it has been a privilege to work with him over these many years. We wish him the very best as he passes the torch and moves on to the next chapter of his career.
At the same time, we are pleased to announce that Bart Kelleher has agreed to join Ardmore as CFO. Bart brings to Ardmore a wealth of experience in shipping and related industries across many functions, including notable financial sector and CFO experience, as well as expertise in the chemical sector as CEO of Chembulk Tankers. We are confident that he will play a pivotal role in driving Ardmore strategically and financially toward even greater future success.”