Ardmore Shipping has chalked up a stronger than expected first quarter performance in a recovering product tanker market.
New York-listed Ardmore remained in the red for the period but chief executive Tony Gurnee believes the market is heading into a sustained up-cycle.
Gurnee says rates have been on an upward trend thanks to improving supply and demand fundamentals with refinery preparations for IMO 2020 presently "masking" the full strength of the sector.
“With the global refining industry preparing to meet a significant step-up in demand for low sulphur fuels, we expect an additional layer of MR demand, conservatively at 5%, commencing in the second half of 2019, with the potential to last two years before markets reach equilibrium,” Gurnee told investors today.
“In addition, an exceptionally low orderbook combined with ongoing scrapping should result in constrained MR net fleet growth for the next two years, setting the stage for a sustained upturn.”
His comments came as Ardmore reported a loss of $2.6m for the first three months of 2019, down from a $5.2m red figure at the same stage a year ago.
A loss of $0.08 per share was better than the $0.12 per share analysts on Wall Street had projected.
“We are pleased with the improvement in our earnings in the first quarter and remain focused on operating performance, cost efficiency, and effective capital allocation to maximize returns,” Gurnee said.
While the loss means no dividend will be paid for the first quarter, Ardmore stressed its policy of paying out 60% of earnings remained in place.
