Ardmore Shipping (ASC) Tops Q4 EPS by 41c, Revenues Beat

Ardmore Shipping (NYSE: ASC) reported Q4 EPS of $0.02, $0.41 better than the analyst estimate of ($0.39). Revenue for the quarter came in at $41.7 million versus the consensus estimate of $24.64 million.

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

During 2020, the product tanker market experienced its most extreme period of volatility in many years. During the first half, MR charter rates rose to record highs, peaking at $77,000 per day, while the second half saw charter rates reach new lows as the pandemic impacted oil demand and cargo volumes. Overall, despite the pronounced weakness in the fourth quarter, we are pleased to report a profitable year, with adjusted earnings of $0.5 million, eco-design spot MR performance of $15,990, and year-end cash at $58 million.

MR charter rates so far in the first quarter have risen noticeably from fourth quarter lows, from $9,600 / day to $11,700 / day, driven by modest economic recovery and winter market activity. Our chemical tankers performed well on a relative basis in the fourth quarter, earning $10,900 / day; we expect chemical tanker performance to improve over the course of 2021, given the high correlation of demand to global GDP growth. Overall, we remain cautious about the first half of 2021, but believe the second half will bring rapidly improving market conditions and set the stage for a full recovery driven by above-trend demand growth and constrained product tanker supply growth.

Beyond the immediate post-pandemic recovery, we believe product tankers will experience continued overall demand growth to the end of the decade, with global economic growth and refinery developments away from points of consumption more than offsetting the initial impact of the energy transition; however, we expect the energy transition to put a significant damper on tanker supply as new regulations such as EEXI accelerate the phase-out of inefficient vessels, resulting in a tight market.

As we look forward to a brighter future for the tanker market and opportunities in the energy transition, we must not forget the challenges and hardships the ongoing pandemic presents, most of all for our seafarers, but also our shore staff in lockdown and in travel-related quarantine on our behalf. We acknowledge their sacrifices and want to thank them sincerely for their perseverance and professionalism.

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

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