Ardmore Shipping stands to pay a shareholder dividend for the first time since 2016 based on fairly robust rates guidance for fourth-quarter bookings to date.
That projection topped a busy earnings report in which the Ireland-based product tanker owner also became the first New York-listed company to reports its carbon emissions, and announced a $201.5m refinancing of its debt near completion.
Ardmore said today that it had booked 45% of days for its medium-range (MR) tankers at average $17,000 per day and 40% of its handysize fleet at $13,000.
“Based on current charter rates, we anticipate Ardmore’s fleet average can come in at $17,800 per day in [the fourth quarter], leading to a dividend payout of $0.08 based on its 60% earnings payout policy,” said Clarksons Platou analyst Omar Nokta in a client note today.
This would represent an improvement on a relatively weak third quarter that nonetheless saw Ardmore beat the consensus earnings expectations of Wall Street analysts while turning a loss.
Ardmore today reported a third-quarter loss of $5.7m, or $0.17 per share, against street expectations of a $0.20 loss.
The owner had lost $12.2m, or $0.37 per share, a year ago.
Ardmore’s MRs earned $13,784 per day in the past quarter while handysizes took in $11,013. The blended average exceeded Clarksons expectations, leading to earnings before interest, taxes, depreciation and amortisation of $9.6m – ahead of Nokta’s $8.4m projection.
"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,” said Ardmore CEO Anthony Gurnee in the earnings release.
“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.”
With eyes toward a dividend return, Ardmore also has been taking steps to set its financial and environmental affairs in order.
On the debt side, Ardmore is close to sealing two new debt facilities. The first comprising a $140m term loan and $40m revolving credit facility would be secured by eight ships. The second, a $61.5m term loan, is to be secured by four ships.
Ardmore said the refinancing is expected to “unlock” $15.8m in cash while extending maturities, currently at 2020 to 2022, into the end of 2024.
On the environmental front, Ardmore reported that its carbon emissions totaled 324,334 tonnes across its 25 vessels thus far in 2019, or 47 tonnes per ship per day.
As Nokta notes, the figures alone are not especially meaningful, but set a baseline for the company to record improvements going forward.
“We applaud management for its disclosure and expect other companies will gradually take a similar approach,” Nokta wrote.
Analyst Michael Webber of Webber Research & Advisory has incorporated owners' public disclosure of carbon emissions into his “corporate governance scorecard” beginning next spring.
Webber has urged owners to reveal the figures in their annual reports. By reporting now in its third-quarter earnings statement, Ardmore has seemingly done the watchdog analyst one better.
