Ardmore Shipping (ASC) Tops Q1 EPS by 6c, Revenues Beat

Ardmore Shipping (NYSE: ASC) reported Q1 EPS of ($0.26), $0.06 better than the analyst estimate of ($0.32). Revenue for the quarter came in at $45.55 million versus the consensus estimate of $24.74 million.

Highlights and Recent Activity

• Reported a net loss of $8.5 million for the three months ended March 31, 2021, or $0.26 loss per basic and diluted share, which includes unrealized gains on derivatives; losses adjusted for these gains (see Adjusted (loss) / earnings in the Non-GAAP Measures section) are $8.6 million, or $0.26 Adjusted loss per basic and diluted share. This compares to net income and adjusted earnings of $6.5 million, or $0.20 earnings per basic and diluted share for the three months ended March 31, 2020.
• Reported EBITDA (see Non-GAAP Measures section) of $4.5 million for the three months ended March 31, 2021, as compared to $21.0 million for the three months ended March 31, 2020.
• Eco-design MR tankers earned $11,540 per day overall for the three months ended March 31, 2021, while chemical tankers earned $11,944 per day for the period.
• As part of its Energy Transition Plan, on March 15, 2021, Ardmore announced that it signed a letter of intent for: the establishment of e1 Marine, a joint venture to apply the technology of Element 1 Corp., a leading developer of advanced hydrogen generation systems used to power fuel cells, to the marine industry; an investment in Ardmore preferred stock by Maritime Partners of up to $40 million; and a strategic investment of 10% in Element 1 Corp. The transactions are expected to close in the second quarter of 2021.
• On March 1, 2021, Ardmore announced a new partnership with shipping company Carl Büttner GmbH & Co. KG by taking on the commercial management of four of Carl Büttner's chemical tankers which doubles the number of similar sized chemical tankers under Ardmore's management.
• On January 14, 2021, Ardmore completed the previously announced sale of the Ardmore Seamariner, a 2006-built 45,726 Dwt Eco-mod MR tanker, which was sold for $10.0 million.

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

"The product tanker market in the opening months of 2021 has moved up from trough levels seen late in the fourth quarter; the rate improvements are modest and only the first step toward a full recovery, but the increased market activity is significant and reflects a return of consumer spending and continued global economic growth. Oil demand remains below pre-pandemic levels, largely due to reduced air travel, and given that the timing of a full oil demand recovery is uncertain, we remain focused on risk management and financial strength.

Looking beyond the pandemic, we believe the prospects for the product and chemical tanker markets are very positive. While oil demand growth eventually will slow in the coming years, the transition away from fossil fuels will take time and, meanwhile, product tanker tonne-mile demand growth will be supported by new routes and more complex trading patterns.

The current product and chemical tanker supply outlook is bullish, with the orderbook near historical lows and the recent ordering boom by other sectors such as containers, gas and dry bulk taking up available newbuilding berths and driving up pricing. This means that tanker orders will likely be increasingly more expensive and delivering further into the future, thus further curtailing supply growth.

Even while looking forward to a full recovery from the pandemic, as an industry we continue to grapple with the operational and human impact of COVID-19, illustrated most recently and distressingly by the spike in cases in India. Our thoughts are with our Indian colleagues and their families, and our efforts both collectively as an industry and at the individual company level are focused on what we can do to offer assistance and support."

For earnings history and earnings-related data on Ardmore Shipping (ASC) click here.

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