Ardmore Shipping is kick-starting dividend payments in buoyant product markets.
The US-listed, Ireland-based company announced record net profit of $62m on Wednesday for the third quarter, up from a loss of $12.2m a year ago.
The board has approved dividends, starting with the fourth quarter.
The quarterly payments will see 33% of adjusted earnings being handed over to shareholders.
Chief executive Anthony Gurnee said the company had made important progress in maintaining the fleet and optimising earnings, materially reducing leverage.
It has also been positioned to “selectively evaluate accretive growth opportunities”, he added.
Gurnee said: “Now, supported by increasingly favourable supply and demand fundamentals for our modern MR product and chemical tanker fleet, we are pleased to begin providing a significant portion of our earnings to Ardmore shareholders in the form of a quarterly cash dividend.”
The first pay-out amount will be announced in early February.
Chief financial officer Bart Kelleher said the company’s financial foundation is greatly improved in a sustained period of rate strength.
“Even as we benefit from increased charter rates, we are committed to maintaining a sharp focus on operational performance, controlling costs and optimising our balance sheet, thereby maximising shareholder value in a disciplined, sustainable manner,” he added.
Bookings remain strong
Revenue soared to $142m in the third quarter, against $47m in 2021.
The eco MR tankers earned an average spot time charter equivalent rate of $47,026 per day, while chemical tankers achieved $31,536 per day.
Based on 40% of revenue days currently fixed for the fourth quarter, the average spot TCE rate is $45,000 per day for MRs.
The figure for the chemical carriers is $31,500 per day, based on 50% of days booked.
The owner has also completed the refinancing of 19 tankers through new sustainability-linked senior loan facilities.
This includes five vessels previously financed under lease arrangements for which it exercised purchase options in October. The tankers were not named.
“We expect this will substantially reduce our interest cost [and] provide for significant flexibility, and it has extended maturities through to mid-2027,” Ardmore said.
Two of the 22 owned ships remain under lease financing.
Board changes
Ardmore said Carisbrooke Shipping CEO Helen Tveitan de Jong has been appointed audit committee chair.
Another director, Mats Berglund, former CEO of Pacific Basin Shipping, is also joining the committee, as a replacement for Brian Dunne, who has stepped down from the board for personal reasons.
“After several tough years in which we have worked hard to preserve liquidity, control costs and maintain and even increase earnings upside for shareholders, we are very pleased to now deliver significant value through our operating results, a return of capital in the form of dividends and strong total returns from a rising share price reflecting current and anticipated future performance,” Ardmore said.
