Ardmore Shipping posted another strong quarter while making two additions to its fleet.
The New York-listed, Ireland-based tanker owner reported $13.6m in profit for the quarter, turning around a $9.9m loss posted for the same period in 2019.
That also marked growth from $6.5m profit posted in the first quarter of 2020.
The quarterly result was good for $0.41 in earnings per share, beating Wall Street consensus by roughly five cents.
Ardmore recorded $67.9m in revenue for the quarter, up from $54.9m for the second quarter last year.
Chief executive Anthony Gurnee attributed the performance to "strong trading conditions driven by volatility and market disruption".
"We have taken advantage of these conditions to build cash and strengthen our balance sheet: our leverage on a net debt basis is down to 48.5% and cash and undrawn lines as of now is $82m, therefore our capital allocation policy and priorities are working as intended," he said in a statement.
Meanwhile, the company said it had come to an agreement to buy a 2010-built MR tanker for $16.7m while chartering in another for up to two years at $13,400 per day.
The purchased tanker is set to be delivered in August and, having completed its special survey, is able to trade continuously until 2023.
The chartered-in vessels will be delivered in September and will remain in Ardmore's employ for a year, with an option for another.
Ardmore did not divulge the name of either ship.
The company also secured a $15m loan from ABN Amro, tied to a pricing adjustment feature linked to the company's efforts to reduce its greenhouse gas emissions.
In early trading on Tuesday, Ardmore shares were down $0.03 — or 0.71% — to $4.19.
A look ahead
During the quarter, Ardmore's 19 MR tankers earned an average time-charter equivalent rate of $21,500 per day and its smaller duo of product/chemical tankers earned $16,300 per day.
All traded in the spot market.
The company said its MRs were fixed at approximately 50% of all revenue days at $13,800 per day for the third quarter. Its smaller tankers had been fixed for around 45% of all revenue days at $11,200 per day.
Ardmore said both rates were in line with market conditions, but added that the back half of the third quarter could see rates strengthen.
Gurnee said the market was playing out as expected after the spike in rates in the first half of the year.
He said there were signals that the market was coming off a bottom.
"While the near-term outlook remains uncertain and market conditions are highly volatile, we maintain our long-term positive view and will continue with our capital allocation priorities while also sustaining our spot-market earnings power and seeking opportunities to build long-term value for our shareholders," Gurnee said.
