Ardmore Shipping has reported a smaller than expected first quarter loss on the back of higher than forecast revenue.
New York-listed Ardmore booked a loss of $2.2m in the three months to the end of March, compared with a profit of $6.7m at the same stage in 2016.
Its loss per share of $0.06 was five cents better than the consensus among analysts.
Tony Gurnee, chief executive of Ardmore, said in a statement: "We are satisfied with our performance in the first quarter, as our fleet continued to perform well under soft charter market conditions.”
The shipowner took delivery of the last in a series of six new MRs late last year and Gurnne noted the sextet had a positive impact on the owner’s numbers.
Revenue of $49.67m in the quarter was ahead of the $43.54m analysts had projected.
“MR charter rates increased modestly from the prior quarter, driven by increased activity in the Atlantic basin, while high refined product inventory levels have continued to put downward pressure on tonne mile demand,” Gurnee said.
“Looking beyond the near-term spot market, we remain confident that the underlying fundamentals and outlook for the MR tanker sector are very positive.”
Ardmore expects demand growth to remain in the 4% to 5% range. At the same time supply growth is slowing, with newbuilding deliveries expected to show further deceleration this year as the orderbook thins.
“Taken together, these trends should result in net fleet growth well below projected demand growth,” Gurnee said.
Mike Webber of Wells Fargo notes that Ardmore finished the quarter with $45.2m in cash.
He says the owner is likely to use the funds to cut debt or buy two or three ships at a time when MR tankers are attractively priced.
