Irish product tanker owner Ardmore Shipping beat analyst estimates with a profitable first quarter that nonetheless was down sequentially from the last three months of 2022.
The New York-listed company is guiding to slightly weaker rates for its MRs and stronger ones for its chemical carriers with about half of days booked in the current quarter.
Ardmore reported adjusted earnings of $43.3m or $1.04 per diluted share versus a $1.00 consensus estimate from Wall Street analysts. Ebitda of $54.7m topped the analysts’ estimate of $53.6m.
The result flipped a loss of $7.9 million, or $0.23, in the opening months of 2022. Revenue of $118.2m nearly doubled the $63.4m seen in that quarter.
But like other figures, it was down from Ardmore’s strong fourth-quarter 2022 take of $132.8m. Ardmore made a profit of $54m, or $1.33 per share, to close out last year.
Ardmore’s dividend dropped proportionately to $0.35 per share, from $0.45 for the prior three months.
“The very positive trends that drove product tanker strength in late 2022 have been sustained, with the charter market remaining very firm throughout the first quarter and up to the present,” said chief executive Anthony Gurnee.
“The combination of supportive underlying fundamentals and the substantial increase in tonne-mile demand resulting from the re-ordering of refined product trade flows has created pronounced market tightness and volatility that Ardmore continues to benefit from.”
Ardmore’s MRs earned an average time charter equivalent (TCE) rate of $37,506 in the quarter, while its chemical carriers fetched $27,984.
With about half of days booked in the current quarter, MRs are at $34,000 per day while the chemical vessels are at $33,600.
“The current spot market is lower than what has been booked thus far, and we expect the average for the quarter to drift down,” said Stifel analyst Ben Nolan in a client note.
But in a quarter without any major one-off developments, Gurnee remained upbeat in the earnings statement.
“With our robust balance sheet, low breakeven levels, and high operating leverage to this strong charter market, we are generating a materially heightened level of free cash flow, enabling us to simultaneously pursue all of our capital allocation priorities: continued investment in performance-enhancing technology across our fleet; ongoing debt reduction; maintaining our capacity for well-timed, accretive growth; and the payment of an attractive quarterly dividend with an annualized yield of approximately 10%,” he said.
