Product tanker owner Ardmore Shipping on Tuesday reported a year-on-year decline in second-quarter profits but said rates were holding up despite some concerns over the state of the global economy.
Ardmore reported net profits of $23.7m for the second quarter, down 18% from the same period last year when product tanker rates spiked in the aftermath of Russia’s invasion of Ukraine.
Despite a drop-off since the first quarter of this year, rates remain inflated in part because of the war and contributed to a trebling of net profits in the first half of the year to $66.9m compared to $21m in 2022, the company said.
The Ireland-based owner announced a dividend of $0.19 per share for the second quarter.
CEO Anthony Gurnee said: “While rates have moderated over the past quarter consistent with a well-established seasonal pattern and some incremental weakness in the global economy, we are very pleased with the resilience of the MR and chemical tanker markets.”
Time charter equivalent (TCE) rates for the company’s 26-strong fleet of MR and chemical tankers averaged $26,541 per day for the second quarter, down $1,265 from the previous year.
A decline in tanker rates had been partially offset by lower bunker prices that had saved the company nearly $10m in voyage expenses.
The company has fixed some 45% of revenue days for the third quarter with average spot TCE rates of approximately $26,100 for the fleet’s 20 MR tankers. The average TCE rate for chemical tankers is about $20,400.
Gurnee said that rates in the mid $20,000s were roughly $10,000 above break even and supported continued strong earnings. He said that key regional markets were also seeing short-term spikes that benefitted the company.
He said the strong earnings had allowed the company to drive down debt and use “innovative technologies” to improve fleet efficiency and cut emissions.
Private Scorpio Holdings on Monday revealed a 5.33% holding in Ardmore, worth more than $32m, amassed over the last couple of weeks.
Scorpio Tankers president Robert Bugbee told TradeWinds that he believed the market had reached an inflection point and was looking to benefit from strong rates.
