Ardmore Shipping Corporation Announces Financial Results For The Three And Six Months Ended June 30, 2019

Source Company Press Release
Company Ardmore Shipping Corporation
Tags Country: Ireland, M&A: Asset Deal, Deals, Midstream: Pipeline
Date July 31, 2019

Ardmore Shipping Corporation (NYSE: ASC) ("Ardmore", the "Company" or "we") today announced results for the three and six months ended June 30, 2019.

Highlights and Recent Activity

  • Reported a net loss from continuing operations (see Non-GAAP Measures section) of $3.4 million for the three months ended June 30, 2019, or $0.10 net loss from continuing operations per basic and diluted share, as compared to a net loss from continuing operations of $8.2 million, or $0.25 net loss from continuing operations per basic and diluted share, for the three months ended June 30, 2018. Reported a GAAP net loss of $9.9 million for the three months ended June 30, 2019 or $0.30 loss per basic and diluted share, as compared to a GAAP net loss of $8.6 million, or $0.26 loss per basic and diluted share, for the three months ended June 30, 2018. GAAP net loss for the three months ended June 30, 2019 includes the loss on the sale of the Ardmore Seafarer. The Company reported adjusted EBITDA (see Non-GAAP Measures section) of $12.3 million for the three months ended June 30, 2019, as compared to $8.0 million for the three months ended June 30, 2018.
  • Reported a net loss from continuing operations (see Non-GAAP Measures section) of $5.9 million for the six months ended June 30, 2019, or $0.18 net loss from continuing operations per basic and diluted share, as compared to a net loss from continuing operations of $13.3 million, or $0.41 net loss from continuing operations per basic and diluted share, for the six months ended June 30, 2018. Reported a GAAP net loss of $19.1 million for the six months ended June 30, 2019 or $0.58 loss per basic and diluted share, as compared to a GAAP net loss of $13.7 million, or $0.42 loss per basic and diluted share, for the six months ended June 30, 2018. GAAP net loss for the six months ended June 30, 2019 includes the loss on the sales of the Ardmore Seatrader, Ardmore Seamaster and Ardmore Seafarer. The Company reported adjusted EBITDA (see Non-GAAP Measures section) of $25.9 million for the six months ended June 30, 2019, as compared to $17.9 million for the six months ended June 30, 2018.
  • MR tankers earned an average TCE rate of $14,892 per day for the three months ended June 30, 2019 and $15,306 per day for the six months ended June 30, 2019. Chemical tankers earned an average TCE rate of $12,830 per day for the three months ended June 30, 2019, and an average of $12,529 per day for the six months ended June 30, 2019.
  • Completed the sale of a vessel, the Ardmore Seafarer, a 2004-built 45,744 Dwt Eco-mod MR tanker, which the Company sold for $9.1 million and delivered to the buyer on May 24, 2019. Ardmore recognized a loss of $6.6 million on the sale in the second quarter of 2019.
  • Commenced reporting of CO2 emissions for the Company's fleet in line with the framework set out with the IMO's Data Collection System initiated in January 2019. Ardmore is committed to transparency and contributing to the reduction of greenhouse gas ("GHG") emissions from the shipping industry.
  • The Company is maintaining its dividend policy of paying 60% of earnings from continuing operations. Consistent with this policy, the Company is not declaring a dividend for the second quarter of 2019.

Anthony Gurnee, the Company's Chief Executive Officer, commented:

"We are pleased with our performance in the second quarter during what was expected to be a softer period as compared to the prior period's winter market conditions. The second quarter reflected a typical seasonal decline marked by notably high refinery maintenance levels, with refineries frontloading maintenance in preparation for increased throughput during the second half of 2019 to meet demand for IMO 2020-compliant low sulfur fuels.

"Industry-wide preparations for IMO 2020 implementation are unfolding as expected; marine fuel providers are commencing clean-up of their logistics infrastructure and are preparing to stockpile low sulfur fuels in large quantities ahead of the switch-over, which so far is very limited in quantity but is expected to be in full-swing in September.  One consequence of IMO 2020 preparations already is pricing and availability of HSFO, which is being impacted by reduced storage and barging capacity, as some capacity is already being taken out of service for the switchover to VLSFO.  Overall, we estimate that the increases in refinery throughput and heightened oil trading activity will result in a roughly 5% additional layer of product tanker demand commencing in the next few months with the potential to last up to two years before markets reach equilibrium."

In keeping with our ongoing commitment to environmental stewardship, we are commencing reporting our CO2 emissions this quarter. Beyond owning and operating a modern "eco" fleet, we have maintained a strict focus on fuel efficiency and environmental best practices throughout the Company's history. We believe that a commitment to increased transparency by companies such as Ardmore will play an important role in encouraging positive and sensible legislative change toward reducing greenhouse gas ("GHG") emissions from the shipping industry."

Summary of Recent and Second Quarter 2019 Events

Fleet

Fleet Operations and Employment

As at June 30, 2019, the Company had 25 vessels in operation, including 19 Eco MR tankers ranging from 45,000 deadweight tonnes (Dwt) to 49,999 Dwt (15 Eco-Design and four Eco-Mod) and six Eco-Design IMO 2 product / chemical tankers ranging from 25,000 Dwt to 37,800 Dwt. On May 24, 2019, the Company completed the sale of the Ardmore Seafarer.

MR Tankers (45,000 Dwt – 49,999 Dwt)

At the end of the second quarter of 2019, the Company had 19 Eco MR tankers trading in the spot market. The Eco MR tankers earned an average TCE rate of $14,892 per day in the second quarter of 2019. The Company's 15 Eco-Design MR tankers earned an average TCE rate of $14,945 per day, and the Company's four Eco-Mod MR tankers earned an average TCE rate of $14,681 per day.

In the third quarter of 2019, the Company expects to have all revenue days for its MR Eco-Design and MR Eco-Mod tankers employed in the spot market. As of July 31, 2019, the Company has fixed approximately 40% of its total MR spot revenue days for the third quarter of 2019 at an average TCE rate of approximately $14,000 per day.

Product / Chemical Tankers (IMO 2: 25,000 Dwt – 37,800 Dwt)

At the end of the second quarter of 2019, the Company had six Eco-Design IMO 2 product / chemical tankers in operation, all of which were trading in the spot market. During the second quarter of 2019, the Company's six Eco-Design product / chemical vessels earned an average TCE rate of $12,830 per day.

In the third quarter of 2019, the Company expects to have all revenue days for its Eco-Design IMO 2 product / chemical tankers employed in the spot market. As of July 31, 2019, the Company has fixed approximately 40% of its Eco-Design IMO 2 product / chemical tankers spot revenue days for the third quarter of 2019 at an average TCE rate of approximately $12,000 per day.

Vessel Sales

In May 2019, Ardmore agreed terms for the sale of the Ardmore Seafarer. The sale price for the vessel was $9.1 million and the vessel delivered to the buyer on May 24, 2019. Ardmore recognized a loss of $6.6 million on the sale in the second quarter of 2019.

Drydocking

The Company had 42 drydock days, including repositioning days, in the second quarter of 2019 in respect of two drydockings. Ardmore expects it will have 15 drydock days, including repositioning days, in the third quarter of 2019.

Dividend

Based on the Company's policy of paying dividends equal to 60% of earnings from continuing operations, the Company's Board of Directors has not declared a dividend for the quarter ended June 30, 2019, in which the Company reported a loss from continuing operations. Earnings from continuing operations is defined as earnings per share reported under U.S. GAAP, as adjusted for unrealized and realized gains and losses and extraordinary items.

Results for the Three Months Ended June 30, 2019 and 2018

The Company reported a GAAP net loss of $9.9 million for the three months ended June 30, 2019, or $0.30 loss per basic and diluted share, as compared to a GAAP net loss of $8.6 million, or $0.26 loss per basic and diluted share, for the three months ended June 30, 2018. The Company reported EBITDA (see Non-GAAP Measures section) of $5.7 million for the three months ended June 30, 2019, as compared to $7.6 million for the three months ended June 30, 2018.

The Company reported a net loss from continuing operations (see Non–GAAP Measures section) of $3.4 million for the three months ended June 30, 2019, or $0.10 net loss from continuing operations per basic and diluted share, as compared to a net loss from continuing operations of $8.2 million, or $0.25 net loss from continuing operations per basic and diluted share, for the three months ended June 30, 2018. The Company reported adjusted EBITDA (see Non-GAAP Measures section) of $12.3 million for the three months ended June 30, 2019, as compared to $8.0 million for the three months ended June 30, 2018. 

Results for the Six Months Ended June 30, 2019 and 2018

The Company reported a GAAP net loss of $19.1 million for the six months ended June 30, 2019, or $0.58 loss per basic and diluted share, as compared to a GAAP net loss of $13.7 million, or $0.42 loss per basic and diluted share, for the six months ended June 30, 2018. The Company reported EBITDA (see Non-GAAP Measures section) of $12.7 million for the six months ended June 30, 2019, as compared to $17.5 million for the six months ended June 30, 2018.

The Company reported a net loss from continuing operations (see Non–GAAP Measures section) of $5.9 million for the six months ended June 30, 2019, or $0.18 net loss from continuing operations per basic and diluted share, as compared to a net loss from continuing operations of $13.3 million, or $0.41 net loss from continuing operations per basic and diluted share, for the six months ended June 30, 2018. The Company reported adjusted EBITDA (see Non-GAAP Measures section) of $25.9 million for the six months ended June 30, 2019, as compared to $17.9 million for the six months ended June 30, 2018.

Management's Discussion and Analysis of Financial Results for the Three Months Ended June 30, 2019 and 2018

Revenue. Revenue for the three months ended June 30, 2019 was $55.0 million, an increase of $2.6 million from $52.4 million for the three months ended June 30, 2018.

The Company's average number of owned vessels decreased to 25.6 for the three months ended June 30, 2019 from 28.0 for the three months ended June 30, 2018, resulting in revenue days of 2,285 for the three months ended June 30, 2019 as compared to 2,505 for the three months ended June 30, 2018. 

The Company had 25 and 24 vessels employed directly in the spot market as at June 30, 2019 and June 30, 2018, respectively. For spot chartering arrangements, the Company had 2,285 revenue days for the three months ended June 30, 2019 as compared to 2,141 for the three months ended June 30, 2018. This increase in revenue days derived from spot chartering arrangements resulted in an increase in spot market revenue of $3.2 million, while changes in spot rates resulted in an increase in revenue of $3.7 million.

The Company had zero and four vessels employed under third-party pool arrangements as at June 30, 2019 and June 30, 2018, respectively. Revenue days derived from pool arrangements were zero for the three months ended June 30, 2019, as compared to 364 for the three months ended June 30, 2018. Removing all vessels from third-party pool arrangements during 2018 resulted in a decrease in pool revenue of $4.3 million for the three months ended June 30, 2019.

For vessels employed directly in the spot market, the Company typically pays all voyage expenses, and revenue is recognized on a gross freight basis, while under time chartering and pool arrangements, the charterer typically pays voyage expenses and revenue is recognized on a net basis.

Commissions and Voyage Expenses. Commissions and voyage expenses were $23.3 million for the three months ended June 30, 2019, a decrease of $0.9 million from $24.2 million for the three months ended June 30, 2018. Commissions and voyage expenses decreased due to the decrease in the average number of owned vessels of 25.6 for the three months ended June 30, 2019, compared to 28.0 for the three months ended June 30, 2018.

TCE Rate. The average TCE rate for the Company's fleet was $14,375 per day for the three months ended June 30, 2019, an increase of $2,872 per day from $11,503 per day for the three months ended June 30, 2018. The increase in average TCE rate was the result of higher spot rates and lower commissions and voyage expenses for the three months ended June 30, 2019. TCE rates represent net revenues (or revenues less commission and voyage expenses) divided by revenue days.

Vessel Operating Expenses. Vessel operating expenses were $14.9 million for the three months ended June 30, 2019, a decrease of $1.2 million from $16.1 million for the three months ended June 30, 2018. This decrease is due to a decrease in the average number of vessels in operation for the three months ended June 30, 2019, and the timing of vessel operating expenses between quarters. Vessel operating expenses, by their nature, are prone to fluctuations between periods. Average fleet operating expenses per day, including technical management fees, were $6,393 for the three months ended June 30, 2019 as compared to $6,328 for the three months ended June 30, 2018.

Depreciation. Depreciation expense for the three months ended June 30, 2019 was $8.0 million, a decrease of $0.8 million from $8.8 million for the three months ended June 30, 2018. This decrease is primarily due to a decrease in the average number of owned vessels to 25.6 for the three months ended June 30, 2019, from 28.0 for the three months ended June 30, 2018.

Amortization of Deferred Drydock Expenditure. Amortization of deferred drydock expenditure for the three months ended June 30, 2019 was $1.1 million, an increase of $0.3 million from $0.8 million for the three months ended June 30, 2018. The capitalized costs of drydockings for a given vessel are amortized on a straight-line basis to the next scheduled drydocking of the vessel.

General and Administrative Expenses: Corporate. Corporate-related general and administrative expenses for the three months ended June 30, 2019 were $3.9 million, an increase of $0.2 million from $3.7 million for the three months ended June 30, 2018. The increase is primarily due to the issuance of new awards of stock appreciation rights and restricted stock units in the first and second quarters of 2019.

General and Administrative Expenses: Commercial and Chartering. Commercial and chartering expenses are the expenses attributable to the Company's chartering and commercial operations departments in connection with the Company's spot trading activities. Commercial and chartering expenses for the three months ended June 30, 2019 were $0.6 million, a decrease of $0.2 million from $0.8 million for the three months ended June 30, 2018. This decrease is primarily due to a decrease in staff costs due to headcount reduction in the second quarter of 2019.

Loss on sale of vessel. Loss on sale of vessel for the three months ended June 30, 2019 was $6.6 million, compared to zero for the three months ended June 30, 2018. This relates to the sale of the Ardmore Seafarer.

Interest Expense and Finance Costs. Interest expense and finance costs include loan interest, finance lease interest, and amortization of deferred finance fees. Interest expense and finance costs for the three months ended June 30, 2019 were $6.8 million, as compared to $6.6 million for the three months ended June 30, 2018. Cash interest expense increased by $0.7 million to $6.3 million for the three months ended June 30, 2019, from $5.6 million for the three months ended June 30, 2018. These increases in interest expense and finance costs are attributable to an increased average LIBOR during the three months ended June 30, 2019 compared to the three months ended June 30, 2018, as well as to a change in the Company's debt structure due to new finance leases entered into as part of vessel financing transactions during 2018. Amortization of deferred finance fees for the three months ended June 30, 2019 was $0.5 million, a decrease of $0.5 million from $1.0 million for the three months ended June 30, 2018. Included in the $1.0 million for the three months ended June 30, 2018 is a write-off of deferred finance fees in relation to sale and leaseback transactions of $0.4 million.

Consolidated Statement of Operations: Presentation Amendment

Pursuant to Accounting Standards Codification 360-10, Property, plant, and equipment, if a subtotal for Income from Operations is included in a statement of operations, gains or losses on the sale of long-lived assets that are not discontinued operations should be included in Income from Operations.  In the past, the Company has voluntarily included in its Consolidated Statements of Operations a subtotal for Income from Operations. The Company has amended the presentation of its Consolidated Statement of Operations, commencing with the period ended June 30, 2019, to remove this subtotal. In the Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016, and for the quarterly period ended March 31, 2019, the Company had reflected gains and losses on vessel dispositions below Income from Operations subtotal, which was technically not the proper order of presentation as part of Income from Operations in accordance with U.S. GAAP. The Company is planning to restate its Consolidated Statements of Operations for these periods to remove the subtotal for Income from Operations. Ardmore considers gains and losses from vessel sales to be fundamentally different in nature from income derived from the chartering and operations of vessels and thus believes that removal of the subtotal for Income from Operations is a better representation of the financial performance of the Company.

Liquidity

As of June 30, 2019, the Company had $54.8 million (December 31, 2018: $56.9 million) available in cash and cash equivalents. The following debt and lease liabilities (net of deferred finance fees) were outstanding as of the dates indicated:

  As of 
  Jun 30, 2019  Dec 31, 2018 
Debt  $ 208,045,943  $ 228,354,248 
Finance leases  224,502,499  241,476,098 
Operating leases  1,719,178  1,968,654 
Total  $ 434,267,620  $ 471,799,000 

Conference Call

The Company plans to have a conference call on July 31, 2019 at 10:00 a.m. Eastern Time to discuss its results for the quarter ended June 30, 2019. All interested parties are invited to listen to the live conference call and slide presentation by choosing from the following options:

  1. By dialing 844-492-3728 (U.S.) or 412-542-4189 (International) and referencing "Ardmore Shipping."
  2. By accessing the live webcast at Ardmore Shipping's website at ardmoreshipping.com.

Participants should dial into the call 10 minutes before the scheduled time.

If you are unable to participate at this time, an audio replay of the call will be available through August 7, 2019 at 877-344-7529 or 412-317-0088. Enter the passcode 10133853 to access the audio replay. A recording of the webcast, with associated slides, will also be available on the Company's website. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.

About Ardmore Shipping Corporation

Ardmore owns and operates a fleet of MR product and chemical tankers ranging from 25,000 to 50,000 deadweight tonnes. Ardmore provides seaborne transportation of petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies, with its modern, fuel-efficient fleet of mid-size product and chemical tankers.

We are strategically focused on modern, fuel-efficient, mid-size product and chemical tankers. We actively pursue opportunities to exploit the overlap we believe exists between the clean petroleum product ("CPP") and chemical sectors in order to enhance earnings, and also seek to engage in more complex CPP trades, such as multi-grade and multi-port loading and discharging operations, where our knowledge of chemical operations is beneficial to our CPP customers. Our fuel-efficient operations are designed to enhance our investment returns and provide value-added service to our customers. We believe we are at the forefront of fuel efficiency and emissions reduction trends and are well positioned to capitalize on these developments with our fleet of Eco-design and Eco-mod vessels. Our acquisition strategy is to continue to build our fleet with Eco-design newbuildings and modern second-hand vessels that can be upgraded to Eco-mod. We have a resolute focus on both high-quality service and efficient operations, and we believe that our corporate overhead and operating expenses are among the lowest of our peers.

Ardmore Shipping Corporation 
Unaudited Condensed Consolidated Balance Sheet 
(Expressed in U.S. dollars, unless otherwise stated) 
 
  As at 
ASSETS  Jun 30, 2019    Dec 31, 2018 
Current assets       
Cash and cash equivalents  54,842,012    56,903,038 
Vessel held for sale    8,083,405 
Receivables, trade  24,202,268    27,460,132 
Prepayments  1,354,454    1,291,399 
Advances and deposits  2,813,756    2,132,804 
Other receivables  198,778    786,084 
Inventories  9,748,034    12,812,039 
Total current assets  93,159,302    109,468,901 
       
Non-current assets       
Vessels and vessel equipment, net  674,153,681    721,492,473 
Deferred drydock expenditure, net  8,127,177    7,127,364 
Ballast water treatment systems, net  1,917,976    528,774 
Leasehold improvements, net  387,846    423,620 
Other non-current assets, net  3,553,101    3,549,511 
Operating lease, right of use asset  1,958,062    2,169,158 
Total non-current assets  690,097,843    735,290,900 
       
TOTAL ASSETS  783,257,145    844,759,801 
       
LIABILITIES AND EQUITY       
Current liabilities       
Payables, trade  18,453,053    24,608,108 
Other payables  83,918    35,900 
Accrued interest on debt and finance leases  1,957,778    1,732,859 
Current portion of long-term debt  19,771,824    22,834,543 
Current portion of finance lease obligations   17,743,185    25,849,200 
Current portion of operating lease obligations  416,278    477,147 
Total current liabilities  58,426,036    75,537,757 
       
Non-current liabilities       
Non-current portion of long-term debt  188,274,119    205,519,705 
Non-current portion of finance lease obligations  206,759,314    215,626,898 
Non-current portion of operating lease obligations  1,302,900    1,491,507 
Total non-current liabilities  396,336,333    422,638,110 
       
Equity       
Share capital  350,192    350,192 
Additional paid in capital  415,516,029    414,508,403 
Treasury stock  (15,348,909)    (15,348,909) 
Accumulated deficit  (72,022,536)    (52,925,752) 
Total equity  328,494,776    346,583,934 
       
TOTAL LIABILITIES AND EQUITY  783,257,145    844,759,801 
       
     The accompanying notes are an integral part of these condensed interim consolidated financial statements. 
           

Ardmore Shipping Corporation 
Unaudited Condensed Statement of Operations 
(Expressed in U.S. dollars, unless otherwise stated) 
 
  Three months ended    Six months ended 
  Jun 30, 2019    Jun 30, 2018    Jun 30, 2019    Jun 30, 2018 
               
Revenue  54,992,101    52,363,407    117,258,488    102,834,931 
               
Commissions and voyage expenses  (23,279,177)    (24,165,305)    (50,529,301)    (43,688,124) 
Vessel operating expenses  (14,878,738)    (16,144,409)    (31,717,026)    (33,411,868) 
Depreciation  (8,032,393)    (8,771,091)    (16,262,885)    (17,432,566) 
Amortization of deferred drydock expenditure  (1,114,880)    (818,506)    (2,253,643)    (1,651,150) 
General and administrative expenses               
Corporate  (3,909,557)    (3,729,573)    (7,492,730)    (6,666,022) 
Commercial and chartering  (593,059)    (772,135)    (1,649,680)    (1,582,128) 
Loss on sale of vessels  (6,592,429)      (13,162,192)   
Interest expense and finance costs  (6,805,234)    (6,640,097)    (13,762,894)    (12,342,088) 
Interest income  318,661    152,224    556,999    266,989 
               
Loss before taxes  (9,894,705)    (8,525,485)    (19,014,864)    (13,672,026) 
               
Income tax  (48,300)    (51,646)    (81,920)    (77,726) 
               
Net loss  (9,943,005)    (8,577,131)    (19,096,784)    (13,749,752) 
               
Net loss per share, basic and diluted  (0.30)    (0.26)    (0.58)    (0.42) 
               
RESULTS FROM CONTINUING OPERATIONS (1)             
               
Net loss from continuing operations  (3,350,576)    (8,162,234)    (5,934,592)    (13,334,855) 
               
Net loss per share from continuing operations  (0.10)    (0.25)    (0.18)    (0.41) 
               
Weighted average number of shares outstanding, basic and diluted  33,097,831    32,703,717    33,097,831    32,574,192 
 
(1)     Net loss from continuing operations is a non-GAAP measure and is defined and reconciled under the "Non-GAAP Measures" section. 

Ardmore Shipping Corporation 
Unaudited Condensed Statement of Cash Flows 
(Expressed in U.S. dollars, unless otherwise stated) 
 
  Six months ended 
  Jun 30, 2019    Jun 30, 2018 
OPERATING ACTIVITIES       
Net loss  (19,096,784)    (13,749,752) 
Adjustment to reconcile net loss to net cash flow provided by operating activities:       
Depreciation  16,262,885    17,432,566 
Amortization of deferred drydock expenditure  2,253,643    1,651,150 
Share-based compensation  1,007,626    670,141 
Loss on sale of vessels  13,162,192   
Amortization of deferred finance fees  1,022,394    1,611,099 
Foreign exchange on operating leases  (38,379)   
Changes in operating assets and liabilities:       
Receivables, trade  3,257,864    2,716,457 
Working capital advances    1,100,000 
Prepayments  (63,055)    100,869 
Advances and deposits  (680,954)    446,866 
Other receivables  587,306    (1,464,218) 
Inventories  3,064,005    (2,855,794) 
Payables, trade  (5,821,457)    3,789,738 
Accruals for capital items  (349,473)   
Other payables  50,000    39,234 
Accrued interest on debt and finance leases  224,919    212,715 
Deferred drydock expenditure  (3,664,595)    (1,818,991) 
Net cash provided by operating activities  11,178,137    9,882,080 
       
INVESTING ACTIVITIES       
Net proceeds from sale of vessels  26,557,707   
Payments for acquisition of vessels and equipment  (151,831)    (15,267,380) 
Payments for acquisition of ballast water treatment systems  (1,082,569)   
Payments for leasehold improvements  (13,030)    (52,384) 
Payments for other non-current assets  (127,605)    (88,843) 
Net cash provided by / (used in) investing activities  25,182,672    (15,408,607) 
       
FINANCING ACTIVITIES       
Proceeds from long-term debt    2,685,730 
Repayments of long-term debt  (21,087,685)    (49,706,706) 
Proceeds from finance leases    56,600,000 
Repayments of finance leases  (17,334,150)    (2,366,668) 
Payments for deferred finance fees    (646,000) 
Net proceeds from equity offering    7,393,297 
Net cash (used in) / provided by financing activities  (38,421,835)    13,959,653 
       
Net (decrease) / increase in cash and cash equivalents  (2,061,026)    8,433,126 
       
Cash and cash equivalents at the beginning of the year  56,903,038    39,457,407 
       
Cash and cash equivalents at the end of the period  54,842,012    47,890,533 

Ardmore Shipping Corporation 
Unaudited Other Operating Data 
(Expressed in U.S. dollars, unless otherwise stated) 
 
  Three months ended    Six months ended 
  Jun 30, 2019    Jun 30, 2018    Jun 30, 2019    Jun 30, 2018 
               
ADJUSTED EBITDA (1)  12,331,570    7,966,882    25,869,751    17,901,686 
               
AVERAGE DAILY DATA               
               
MR Tankers Spot & Pool TCE per day (2)  14,892    11,510    15,306    12,086 
               
Fleet TCE per day (2)  14,375    11,503    14,663    12,057 
               
Fleet operating expenses per day (3)  5,936    5,900    6,213    6,125 
Technical management fees per day (4)  457    428    458    431 
  6,393    6,328    6,671    6,556 
               
MR Tankers Eco-Design               
TCE per day (2)  14,945    10,600    15,418    11,826 
Vessel operating expenses per day (5)  6,306    6,360    6,593    6,636 
               
MR Tankers Eco-Mod               
TCE per day (2)  14,681    12,579    14,916    11,893 
Vessel operating expenses per day (5)  6,872    6,615    6,879    6,623 
               
Prod/Chem Tankers Eco-Design (25k - 38k Dwt)               
TCE per day (2)  12,830    12,527    12,529    12,816 
Vessel operating expenses per day (5)  6,143    5,923    6,437    6,277 
               
FLEET               
Upgrades and enhancements expensed  30,121    52,265    162,259    397,489 
               
Average number of owned operating vessels  25.6    28.0    26.1    27.9 
                   

   
(1)  Adjusted EBITDA is a non-GAAP measure and is defined and reconciled to the most directly comparable U.S. GAAP measure under the "Non-GAAP Measures" section. 
(2)  Time Charter Equivalent ("TCE") rate represents net revenues divided by revenue days. Revenue days are the total number of calendar days the vessels are in our possession less off-hire days generally associated with drydocking or repairs, idle days or repositioning associated with vessels held for sale. For vessels employed on voyage charters, TCE is the net rate after deducting voyage expenses incurred, divided by revenue days, including among other expenses, all commissions and pool administration fees. TCE is reported on a discharge to discharge basis. 
(3)  Fleet operating expenses per day are routine operating expenses and comprise crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. They do not include additional expenses related to the upgrading or enhancement of the vessels that are not capitalized. 
(4)  Technical management fees are fees paid to third-party technical managers. 
(5)  Vessel operating expenses per day include technical management fees. 

Ardmore Shipping Corporation 
Fleet Details at June 30, 2019 
(Expressed in U.S. dollars, unless otherwise stated) 
 
Vessel  IMO  Built  Country  DWT  Cargo  Engine Type  Cargo  Inerting  Eco  Newbuilding    Depreciated 
          Capacity (m3)    Segregations  System  Specification  Price (1)    Replacement 
                    June 30, 2019    Value (2) 
Seavaliant  IMO2/3  Feb-13  S. Korea  49,998  53,361  6S50 ME-C8.2  IG Plant  Eco-Design  $36.00    $27.69 
Seaventure  IMO2/3  Jun-13  S. Korea  49,998  53,375  6S50 ME-C8.2  IG Plant  Eco-Design  $36.00    $28.05 
Seavantage  IMO2/3  Jan-14  S. Korea  49,997  53,288  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $28.85 
Seavanguard  IMO2/3  Feb-14  S. Korea  49,998  53,287  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $28.95 
Sealion  IMO2/3  May-15  S. Korea  49,999  52,928  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $30.63 
Seafox  IMO2/3  Jun-15  S. Korea  49,999  52,930  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $30.74 
Seawolf  IMO2/3  Aug-15  S. Korea  49,999  52,931  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $30.91 
Seahawk  IMO2/3  Nov-15  S. Korea  49,999  52,931  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $31.20 
Endeavour  IMO2/3  Jul-13  S. Korea  49,997  53,637  6S50 ME-C8.2  IG Plant  Eco-Design  $36.00    $28.21 
Enterprise  IMO2/3  Sep-13  S. Korea  49,453  52,774  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $28.41 
Endurance  IMO2/3  Dec-13  S. Korea  49,466  52,770  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $28.72 
Encounter  IMO2/3  Jan-14  S. Korea  49,494  52,776  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $28.79 
Explorer  IMO2/3  Jan-14  S. Korea  49,478  52,775  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $28.87 
Exporter  IMO2/3  Feb-14  S. Korea  49,466  52,770  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $28.97 
Engineer  IMO2/3  Mar-14  S. Korea  49,420  52,789  6S50 ME-B9.2  IG Plant  Eco-Design  $36.00    $29.06 
Seamariner  IMO3  Oct-06  Japan  45,726  52,280  6S50MC-6.1  Flue Gas  Eco-Mod  $36.00    $19.11 
Sealeader  IMO3  Jun-08  Japan  47,451  52,527  6S50MC-6.1  Flue Gas  Eco-Mod  $36.00    $21.24 
Sealifter  IMO3  Aug-08  Japan  47,463  52,534  6S50MC-6.1  Flue Gas  Eco-Mod  $36.00    $21.51 
Sealancer  IMO3  Jul-08  Japan  47,472  52,467  6S50MC-6.1  Flue Gas  Eco-Mod  $36.00    $21.35 
Dauntless  IMO2  Feb-15  S. Korea  37,764  41,620  6S50 ME-B9.2  14  Nitrogen  Eco-Design  $35.00    $29.34 
Defender  IMO2  Feb-15  S. Korea  37,791  41,620  6S50 ME-B9.2  14  Nitrogen  Eco-Design  $35.00    $29.38 
Cherokee  IMO2  Jan-15  Japan  25,215  28,475  6S46 ME-B8.3  12  Nitrogen  Eco-Design  $31.00    $25.79 
Cheyenne  IMO2  Mar-15  Japan  25,217  28,490  6S46 ME-B8.3  12  Nitrogen  Eco-Design  $31.00    $26.04 
Chinook  IMO2  Jul-15  Japan  25,217  28,483  6S46 ME-B8.3  12  Nitrogen  Eco-Design  $31.00    $26.40 
Chippewa  IMO2  Nov-15  Japan  25,217  28,493  6S46 ME-B8.3  12  Nitrogen  Eco-Design  $31.00    $26.74 
                        $684.96 
                         
                Cash / Debt / Working Capital / Other Assets    ($362.73) 
                Net Asset Value (Assets) (5)    $322.23 
                NAV / Share (3)(5) (based on DRV)    $9.74 
                         
                Ardmore Commercial Management (4)    $13.83 
                Net Asset Value (Assets & Commercial Mgt.) (5)    $336.06 
                NAV / Share (3)(5) (based on DRV)    $10.15 
                         
                         

   
1.  Based on broker estimates of contract price for newbuild vessel of equivalent deadweight tonne at a yard in South Korea as at June 30, 2019. 
2.  Depreciated Replacement Value ("DRV") is based on estimated contract price for newbuild vessel as indicated above depreciated for the age of each vessel (assuming an estimated useful life of 25 years on a straight-line basis and assuming a residual scrap value of $300 per tonne which is in line with Ardmore's depreciation policy). The Company's estimates of DRV assume that its vessels are all in good and seaworthy condition without the need for repair and, if inspected, that they would be certified in class without notations of any kind. Vessel values are highly volatile and, as such, the Company's estimates of DRV may not be indicative of the current or future value of its vessels, or prices that the Company could achieve if it were to sell them. 
3.  NAV / Share calculated using 33,097,831 shares outstanding as at June 30, 2019. 
4.  Ardmore Commercial Management is management's estimates value of Ardmore's commercial management and pooling business. It is based on industry standard commercial management and pooling fees in determining revenue less Ardmore's commercial and chartering overhead (as stated in Ardmore's Statement of Operations) and applying an illustrative multiple to the resulting net earnings of 7x. The multiple is illustrative only and may not be indicative of the valuation multiple the Company could achieve if it were to sell its commercial management and pooling business. Revenue of this business is comprised of (i) commission (1.25% for standard product tankers and 2.5% for chemical tankers) on gross freight based on estimated current TCE rates grossed up for fuel and voyage costs and (ii) administration fee of $300 per vessel per day. These rates may vary over time. 
5.  Net Asset Value ("NAV") and NAV per share are non-GAAP measures. Management believes that many investors use NAV as a reference point in assessing valuation of fleets of ships and similar assets. 

CO2 Emissions Reporting

In April 2018, the International Maritime Organization's ("IMO") Marine Environment Protection Committee ("MEPC") adopted an initial strategy for the reduction of greenhouse gas ("GHG") emissions from ships, setting out a vision to reduce GHG emissions from international shipping and phase them out as soon as possible.

Ardmore is committed to transparency and contributing to the reduction of CO2 emissions in the Company's industry.  With effect from July 1, 2019, the Company will commence reporting of carbon emissions data for its fleet. Ardmore's reporting methodology is in line with the framework set out within the IMO's Data Collection System ("DCS") initiated in January 2019.

  Six months ended 
  June 30, 2019 
   
Number of vessels in operation at the end of the reporting period  25 
Fleet average age at end of reporting period  5.9 years 
   
CO2 emissions generated from vessels in metric tonnes  209,165 
Fleet Annual Efficiency Ratio (AER)(1) for the period  6.43 g / tonne-mile 
Fleet Energy Efficiency Operational Indicator (EEOI)(2) for the period  13.06 g / cargo tonne-mile 

It is expected that the shipping industry will continue to refine the performance measures for emissions and efficiency over time.  AER and EEOI metrics are impacted by external factors such as charter speed, vessel orders and weather, in conjunction with overall market factors such as cargo load sizes and fleet utilization rate. As such, variance in performance can be found in the reported emissions between two periods for the same vessel and between vessels of a similar size and type. Furthermore, other companies may report slight variations in methodology3 and consequently it is not always practical to directly compare emissions from different companies.

The figures reported above represent Ardmore's initial findings; the Company is committed to improving the methodology and transparency of its emissions reporting in line with industry best practices. Accordingly, the above results may vary as the methodology and performance measures set out by the industry evolve.

_______________________________ 
1 Annual Efficiency Ratio ("AER") is a measure of carbon efficiency using the parameters of fuel consumption, distance travelled, and design deadweight tonnage ("DWT"). AER is reported in unit grams of CO2 per ton-mile (gCO2/dwt-nm). It is calculated by (i) mass of fuel consumed by type converted to metric tonnes of CO2 divided by (ii) DWT multiplied by distance travelled in nautical miles 
2 Energy Efficiency Operational Indicator ("EEOI") is a tool for measuring the CO2 gas emissions in a given time period per unit transport work performed. It is calculated by (i) mass of fuel consumed by type converted to metric tonnes of CO2 divided by (ii) cargo carried in tonnes multiplied by laden voyage distance in nautical miles. This calculation is performed as per IMO MEPC.1/Circ684. Ardmore's EEOI data is measured based on the reporting tools and information reasonably available to the applicable third-party technical managers. Management assess such data from the third-party technical managers and may adjust and restate the data to reflect an appropriate fleet-wide assessment methodology 
3 Some shipping companies report CO2 in tonne per kilometre as opposed to CO2 in tonnes per nautical mile 

Non-GAAP Measures

This press release describes EBITDA, adjusted EBITDA and net loss from continuing operations, which are not measures prepared in accordance with U.S. GAAP and are defined and reconciled below. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before certain items that Ardmore believes are not representative of its operating performance, including gain or loss on sale of vessels. Net loss from continuing operations excludes certain items from GAAP net loss because they are considered to be unusual items, including gain or loss on sale of vessels.

These non-GAAP measures are presented in this press release as the Company believes that they provide investors with a means of evaluating and understanding how Ardmore's management evaluates operating performance. EBITDA and adjusted EBITDA increase the comparability of the Company's fundamental performance from period to period. This increased comparability is achieved by excluding the potentially disparate effects between periods of interest expense, taxes, depreciation or amortization, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods.  The Company believes that including EBITDA, adjusted EBITDA and net loss from continuing operations, as financial and operating measures, assist investors in selecting between investing in the Company and other investment alternatives and monitoring the Company's ongoing financial and operational strength and health in assessing whether to continue to hold the Company's common stock.

These non-GAAP measures should not be considered in isolation from, as a substitute for, or superior to financial measures prepared in accordance with U.S. GAAP. In addition, these non-GAAP measures may not have a standardized meaning and therefore may not be comparable to similar measures presented by other companies. All amounts in the tables below are expressed in U.S. dollars, unless otherwise stated.

Reconciliation of net loss to EBITDA and adjusted EBITDA  Three months ended    Six months ended 
  Jun 30, 2019    Jun 30, 2018    Jun 30, 2019    Jun 30, 2018 
               
Net loss  (9,943,005)    (8,577,131)    (19,096,784)    (13,749,752) 
Interest income  (318,661)    (152,224)    (556,999)    (266,989) 
Interest expense and finance costs  6,805,234    6,640,097    13,762,894    12,342,088 
Income tax  48,300    51,646    81,920    77,726 
Depreciation  8,032,393    8,771,091    16,262,885    17,432,566 
Amortization of deferred drydock expenditure  1,114,880    818,506    2,253,643    1,651,150 
EBITDA  5,739,141    7,551,985    12,707,559    17,486,789 
Loss on sale of vessel  6,592,429      13,162,192   
Deferred finance fees write-off    414,897      414,897 
ADJUSTED EBITDA  12,331,570    7,966,882    25,869,751    17,901,686 
 
Reconciliation of net loss to net loss from continuing operations   Three months ended    Six months ended 
  Jun 30, 2019    Jun 30, 2018    Jun 30, 2019    Jun 30, 2018 
               
Net loss  (9,943,005)    (8,577,131)    (19,096,784)    (13,749,752) 
Loss on sale of vessel  6,592,429      13,162,192   
Deferred finance fees write-off    414,897      414,897 
Net loss from continuing operations(1)  (3,350,576)    (8,162,234)    (5,934,592)    (13,334,855) 
               
Net loss from continuing operations per share  (0.10)    (0.25)    (0.18)    (0.41) 
Weighted average number of shares  33,097,831    32,703,717    33,097,831    32,574,192 
 
________________________ 
1 Net loss from continuing operations is defined in Ardmore dividend policy and above. 

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