Ardmore Shipping Corp is back in the black for the first time in two years as tanker markets continue to strengthen.
The Irish product tanker owner announced on Wednesday a $28.8m profit for the three months ended 30 June, reversing an $8.2m loss reported for the same period last year and the company's first profit since the second quarter of 2020.
The performance came as rates for its MR tanker fleet nearly doubled and its chemical tankers rallied by roughly 50%.
Chief executive Anthony Gurnee said the rally was being driven by multiple factors: “Firstly, a multi-faceted energy crisis likely to persist for some time, with extreme price swings and supply issues for virtually all energy classes, low global energy inventories, and physical supply-demand dislocation for oil products driving tonne-mile demand.”
Then, improving fundamentals, especially for jet fuel, and a small orderbook were driving things further, he said.
The second quarter performance was good for $0.82 on a per share basis, easily besting the analyst expectation of $0.68 per share.
It saw revenue for the quarter shoot up to $107m from $47.3m year-over-year.
For the quarter, Ardmore’s 21 MR tankers earned an average time charter equivalent rate of $30,480 per day, up from $15,592 per day in the first quarter, and its six chemical tankers earned an average TCE of $20,254 per day, up from $13,645 per day.
In the second quarter of 2021, its MRs earned $11,640 per day and its chemical tankers $12,308 per day.
So far in the third quarter of 2022, the company has 45% of its days booked at an average of $46,600 per day for its MRs and $33,000 per day for its chemical tankers.
New financing deals
Ardmore also announced it has finalised terms for three sustainability-linked loans for a total of $308m that push back maturities two years.
Gurnee said the moves would provide “durable financial strength” as markets strengthen, as the new deals come with improved terms.
Two refinance a total of 19 vessels, with one $185m revolving credit facility from Nordea Bank and Skandinaviska Enskilda Banken refinances 12 while a $108m term loan with ABN Amro and Credit Agricole refinances seven.
Both are priced at an adjusted secured overnight financing rate plus 2.25% and mature in 2027, replacing facilities priced at Libor plus 2.4% and scheduled to mature in 2025.
They are expected to close in October.
The third is a $15m receivables facility with ABN Amro, set to mature in 2025 and replaces the current receivables facility scheduled to mature in July 2023.
All three have a pricing adjustment component tied to Ardmore's carbon emissions reductions and other environmental and social initiatives.
Tivnan stepping away
The company also confirmed a TradeWinds report that long-time chief financial officer Paul Tivnan was departing the company.
Tivnan, who was with Ardmore for 12 years, declined to comment when reached by the newspaper on Tuesday.
He will be replaced by Bart Kelleher.
“Bart brings to Ardmore a wealth of experience in shipping and related industries across many functions, including notable financial sector and CFO experience, as well as expertise in the chemical sector as CEO of Chembulk Tankers,” Gurnee said.
“We are confident that he will play a pivotal role in driving Ardmore strategically and financially toward even greater future success.”
