Ardmore Shipping has taken the unusual step of publicly valuing itself alongside its second-quarter earnings.
As its stock price languished despite expectations of a tanker sector rally this autumn, the Irish tanker owner pegged the gross value of its fleet at $685m, roughly in line with analysts but a bit higher than fleet valuation services.
The figure — calculated using depreciated replacement value, which takes the value of an equivalent newbuilding for each ship and discounts it using straight line depreciation — equates to a net asset value (NAV) of $9.74 per share, or $10.15 per share if the company's shipmanagement is taken into consideration.
Chief executive Anthony Gurnee told TradeWinds that the disclosure is aimed as "an effort at full transparency".
"We came across calculations of our net asset value," he said. "We go ship by ship, and they have some things that are just wrong."
Valuation drops
The company's New York-listed shares were worth $6.36 at the time of writing, meaning its shares trade at a discount of one-third or more from Ardmore's NAV calculation. They are also well below its 52-week high of $8.65 in mid-July.
Discounts aside, Ardmore's own valuation has fallen in line with figures from both Jefferies analyst Randy Giveans and Deutsche Bank's shipping and logistics outfit.
Giveans had Ardmore's NAV at $660m, or $9.14 per share, which Deutsche Bank analyst Chris Snyder said his bank's per-share figure was around $10.
Giveans attributed the discrepancy to methodology. While Ardmore used depreciated replacement value, he calculated the NAV by looking at secondhand ship values and expectations for future cash.
Snyder said he expected Ardmore's method to lead to lower values.
"I would have guessed the market has underperformed the normal depreciation," he said. "But, in general, it was really no surprise."
Differences in value did arise when comparing Ardmore's figures against valuation services such as VesselsValue and Maritime Strategies International (MSI).
'Big discount'
VesselsValue estimates Ardmore's fleet is worth about $620m, while MSI's figure comes in at a gross asset value of $610m.
Gurnee said the decision to disclose Ardmore's valuation was not in response to the estimates of either service.
Under normal circumstances, asset values are kept close to the chest and, when companies do publish their internal figures, it is often to get everyone on the same page.
"When you're trading at a big discount, it makes sense to say 'this is where we value ourselves'," Giveans said.
"If they came out and said their NAV was $12, I think there would be a lot of pushback. But high $9s ... no one is going to baulk and say that's ridiculous."
