Ardmore Shipping (NYSE: ASC) reported Q3 EPS of ($0.17), $0.01 better than the analyst estimate of ($0.18). Revenue for the quarter came in at $52.1 million versus the consensus estimate of $29.53 million.

Highlights and Recent Activity

• Reported a GAAP net loss (and net loss from continuing operations – see Non-GAAP Measures Section) of $5.7 million for the three months ended September 30, 2019, or $0.17 loss per basic and diluted share, as compared to a GAAP net loss of $12.2 million, or $0.37 loss per basic and diluted share, for the three months ended September 30, 2018. The Company reported adjusted EBITDA (see Non-GAAP Measures section) of $9.6 million for the three months ended September 30, 2019, as compared to $3.9 million for the three months ended September 30, 2018.
• Reported a net loss from continuing operations (see Non-GAAP Measures section) of $11.6 million for the nine months ended September 30, 2019, or $0.35 net loss from continuing operations per basic and diluted share, as compared to a net loss from continuing operations of $25.6 million, or $0.78 net loss from continuing operations per basic and diluted share, for the nine months ended September 30, 2018.
• Reported a GAAP net loss of $24.8 million for the nine months ended September 30, 2019, or $0.75 loss per basic and diluted share, as compared to a GAAP net loss of $26.0 million, or $0.79 loss per basic and diluted share, for the nine months ended September 30, 2018. GAAP net loss for the nine months ended September 30, 2019 includes the loss on the sales of the Ardmore Seamaster and Ardmore Seafarer. GAAP net loss for the nine months ended September 30, 2018 includes the write-off of deferred finance fees in relation to refinancing. The Company reported adjusted EBITDA (see Non-GAAP Measures section) of $35.4 million for the nine months ended September 30, 2019, as compared to $21.3 million for the nine months ended September 30, 2018.
• MR tankers earned an average TCE rate of $13,784 per day for the three months ended September 30, 2019, and $14,601 per day for the nine months ended September 30, 2019. Chemical tankers earned an average TCE rate of $11,013 per day for the three months ended September 30, 2019, and an average of $11,784 per day for the nine months ended September 30, 2019.
• Charter rates rebounded in recent weeks with rates for MRs fixed since October 5, 2019 averaging approximately $20,085 per day. Taking account of voyages in progress from the third quarter, as of November 5, 2019, the Company has fixed approximately 45% of its total MR spot revenue days for the fourth quarter of 2019 at an average TCE rate of approximately $17,000 per day.
• Agreed terms for two credit facilities for $201.5 million, in the aggregate including a $40 million revolving component, with our close relationship banks to refinance twelve ships on improved terms and extending maturities until the end of 2024.
• 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 third quarter of 2019.

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

"After three difficult years for the tanker sector, we are very encouraged by the recent sharp upturn in the tanker market and the drivers behind. We believe that this is likely to be the beginning of a sustained upcycle, characterized by repetitive spikes with settling periods in between, but at levels well above the recent past.

We think that conditions are now in place for a strong rate environment in particular for product tankers. We believe that IMO 2020 is now having a significant impact on product tanker demand and rates; in particular, demand for gasoil is expected to surge as shipping companies transition to compliant fuels and concerns about VLSFO quality and compatibility issues prevail, resulting in elevated trading activity. At the same time, we expect that geopolitical tensions in the Middle East and an anticipated winter seasonal demand boost will further contribute to a strong rate environment in the near-term.

Looking beyond the near-term, the underlying fundamentals of product tanker supply and demand are solid and should get even better: oil consumption growth is expected to increase to 1.2mbd in 2020 and ongoing refinery expansion in export-oriented location should further amplify fundamental demand growth. Meanwhile, a record low orderbook, combined with ongoing scrapping should keep vessel supply growth well below demand growth for the foreseeable future. We also believe that regulatory uncertainty around the global maritime industry's targets for greenhouse gas ("GHG") emissions reductions will put a damper on newbuilding activity until rules and regulations become clear and new technologies emerge, which could take years.

We are pleased to present our CO2 emissions again this quarter. While the industry is continuing to refine reporting methodology for carbon emissions, 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 GHG emissions reductions from the shipping industry.

In the midst of these positive developments, we remain resolutely focused on operating performance and effective capital allocation to maximize returns. With a modern, fuel efficient fleet of MR product & chemical tankers and cost-efficient structure, we believe we are poised to take advantage of improved market conditions, to recommence dividend payments as per our policy, and to generate strong returns for our shareholders."

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