Ardmore Shipping(US:ASC)2024-11-06 13:07Fleet and Operations - As of September 30, 2024, Ardmore Shipping Corporation operated a fleet of 26 vessels, including 20 Medium Range (MR) tankers and 6 Eco-Design product/chemical tankers, totaling 973,181 deadweight tonnes (dwt) [14]. - The company reported a total of 26 vessels in operation as of September 30, 2024, employed with 17 different charterers, indicating a diversified client base [86]. - The average age of the company's owned fleet as of September 30, 2024, was 10.0 years [102]. - The company had 22 owned vessels and four chartered-in vessels in operation as of September 30, 2024 [102]. Financial Performance - Revenue for the three months ended September 30, 2024, was $96.1 million, an increase of $9.2 million (11%) from $86.9 million for the same period in 2023 [31]. - Net income for the three months ended September 30, 2024, was $24.1 million, an increase of $2.9 million (14%) from $21.2 million for the same period in 2023 [31]. - Revenue for the nine months ended September 30, 2024, was $323.7 million, an increase of $26.6 million (9%) from $297.1 million for the same period in 2023 [46]. - Net income for the nine months ended September 30, 2024, was $126.1 million, representing a 40.5% increase from $89.8 million in the same period of 2023 [95]. - Earnings per share (EPS) for the three months ended September 30, 2024, was $0.55, up from $0.49 in the same period of 2023, reflecting an increase of 12.2% [95]. Expenses and Costs - Voyage expenses for the three months ended September 30, 2024, were $34.6 million, an increase of $4.0 million (13%) from $30.6 million for the same period in 2023 [34]. - Total charter hire expenses for the three months ended September 30, 2024, were $5.9 million, an increase of $1.8 million (44%) from $4.1 million for the same period in 2023 [38]. - Depreciation expense for the three months ended September 30, 2024, was $7.8 million, an increase of $0.9 million (13%) from $6.9 million for the same period in 2023 [39]. - Vessel operating expenses rose to $45.1 million for the nine months ended September 30, 2024, an increase of $0.5 million from $44.6 million for the same period in 2023 [51]. - Total charter hire expenses increased to $16.9 million for the nine months ended September 30, 2024, up $3.0 million from $13.9 million for the same period in 2023 [52]. Dividends and Shareholder Returns - The Board of Directors declared a cash dividend of $0.18 per common share for the quarter ended September 30, 2024, to be paid on December 13, 2024 [22]. - The company maintains a variable dividend policy, paying out dividends equal to one-third of adjusted earnings [22]. - The company paid $37,517,000 in common share dividends during the nine months ended September 30, 2024, down from $40,546,000 in 2023 [100]. Strategic Initiatives - Ardmore Shipping Corporation's Energy Transition Plan aims to capitalize on regulations related to energy efficiency and emissions reduction in the shipping industry [17]. - The company is focused on enhancing earnings by exploiting overlaps between the clean petroleum product and chemical sectors [15]. - The company emphasizes competitive operating expenses and high-quality service through in-house chartering and commercial teams [18]. - The company is actively monitoring interest rate exposure and may enter into swap arrangements to hedge this exposure when deemed economically advantageous [82]. Market and Economic Conditions - The ongoing Russia-Ukraine war has significantly increased spot tanker rates due to disruptions in energy supply chains and economic sanctions [23]. - Geopolitical tensions from the Israel-Hamas war and attacks on vessels in the Red Sea have affected trading patterns and expenses for shipping companies [25]. Leadership and Governance - Ardmore Shipping Corporation's leadership transition occurred on September 16, 2024, with Gernot Ruppelt appointed as CEO and Bart Kelleher expanding his role to include President [21]. Cash Flow and Liquidity - Net cash provided by operating activities was $137.5 million for the nine months ended September 30, 2024, compared to $140.9 million for the same period in 2023 [72]. - Net cash used in investing activities was $29.9 million for the nine months ended September 30, 2024, compared to $18.6 million for the same period in 2023 [73]. - Net cash used in financing activities was $106.8 million for the nine months ended September 30, 2024, down from $122.0 million for the same period in 2023 [74]. - As of September 30, 2024, the company had $268.5 million in liquidity available, including cash and cash equivalents of $47.6 million [60]. Investments and Joint Ventures - The Company purchased a 10% equity stake in Element 1 Corp. for a total investment of $9.2 million, consisting of $4.0 million in cash and $5.3 million in common shares [111]. - The Company established a joint venture, e1 Marine LLC, with a 33.33% ownership stake, which aims to deliver hydrogen delivery systems to the marine sector [112]. - As of September 30, 2024, the Company recorded an investment of $9.0 million in Element 1 Corp., including transaction costs [113]. Debt and Financial Obligations - The Company's total debt as of September 30, 2024, was $22.5 million, a decrease from $46.8 million as of December 31, 2023 [115]. - The Company has a $185 million sustainability-linked revolving credit facility with Nordea and SEB, of which $20 million was drawn down as of September 30, 2024 [116]. - The ABN/CACIB Joint Bank Facility, totaling $108 million, was converted entirely into a revolving credit facility as of March 14, 2024, with $81.7 million undrawn [117]. - The Company repaid its remaining finance lease facility of $41 million associated with two vessels on June 25, 2024, eliminating all financial liabilities under this lease [121]. Stock and Equity Compensation - The Company recorded a total of 366,768 restricted stock units (RSUs) as of September 30, 2024, with a weighted average fair value of $13.73 [129]. - The total cost related to non-vested RSU awards expected to be recognized through 2027 is $3.55 million [130]. - Share-based compensation increased to $3,596,000 for the nine months ended September 30, 2024, from $2,401,000 in 2023 [100]. Compliance and Liabilities - The Company was in compliance with all long-term debt financial covenants as of September 30, 2024 [120]. - The Company recorded a liability of $1.0 million related to a profits interest granted to Maritime Partners, included in non-current liabilities as of September 30, 2024 [133].