Ardmore Shipping delivered a bigger-than-expected quarterly profit as it revealed the signs that second-quarter earnings will be even stronger.
The Cork, Ireland-based, New York-listed product and chemical tanker owner reported $38.4m in net income attributable to common shareholders in the first quarter, a dip from $43.3m in the same period of 2023.
But earnings per share of $0.92 beat estimates of all five analysts polled by Yahoo Finance, with the average Wall Street forecaster expecting $0.83 per share.
“Product and chemical tanker markets have continued to build momentum into 2024 from an already strong base of earnings in 2023, partially reflecting typical seasonal strength, but also the continued positive tonne-mile factors relating to geopolitical events along with underlying global economic activity,” chief executive Anthony Gurnee said in the earnings statement.
“Given current conditions, we remain vigilant regarding security, with the safety and wellbeing of our seafarers remaining our highest priority.”
Ardmore delivered $106m in revenue in the first three months, down from $118m a year earlier.
Voyage expenses fell to $30.5m from $36.6m, while vessel operating expenses remained flat at $14.9m.
It declared a dividend of $0.31 per share — its biggest payout since May last year.
“Against the market backdrop of strong demand and constrained supply, Ardmore continues to produce strong results driven by our spot market strategy, low cash flow breakeven levels and the consistent performance of our teams at sea and ashore,” Gurnee said.
| Q1 2024 | Q1 2023 | |
| Revenue | $106m | $118m |
| Voyage expenses | $30.5m | $36.6m |
| Vessel operating expenses | $14.9m | $14.9m |
| Net income attributable to common shareholders | $38.4m | $43.3m |
| Diluted earnings per share | $0.92 | $1.04 |
“We have now largely completed our scheduled dry-dockings and concurrent maintenance and upgrade investments for 2024.
“As a result, we anticipate higher revenue days as well as greater potential earnings power for our fleet through the end of the year.”
With 60% of product tankers booked in the second quarter, the next earnings report could show stronger numbers.
Ardmore said its MR product tankers earned $38,400 per day in the spot market during the first quarter, while chemical tankers made $24,800 per day.
The company expects product tanker spot earnings of $40,500 per day in the second quarter, while chemical tanker time charter equivalent earnings should hit $32,500 per day.
“Our robust financial position allows us to pursue all our capital allocation priorities simultaneously, including further strengthening of our balance sheet, returning capital to shareholders and gradually investing in fleet modernisation over time,” Gurnee said.
“We believe that the highly favourable vessel demand/supply conditions will support an extended strong market, and that Ardmore is well positioned to extract maximum benefit.”
