Ardmore Shipping(US:ASC)2023-11-07 13:05Fleet and Operations - As of September 30, 2023, Ardmore Shipping Corporation operated a fleet of 26 vessels, including 20 Medium Range (MR) tankers and 6 Eco-Design chemical tankers[9]. - Ardmore's fleet consists of 22 owned vessels, with a total deadweight tonnage of approximately 973,181 dwt[14]. - The company has 26 vessels in operation, employed with 19 different charterers as of September 30, 2023[72]. - The company had 22 owned vessels and four chartered-in vessels in operation as of September 30, 2023, with an average fleet age of 9 years[94]. - The company plans to stagger drydockings across its fleet, with an increasing number of vessels scheduled for drydock in the coming years[58]. Financial Performance - Revenue for the three months ended September 30, 2023, was $86.9 million, a decrease of $55.5 million (39%) from $142.4 million for the same period in 2022[24]. - Net income for the three months ended September 30, 2023, was $21.2 million, a decrease of $40.6 million (66%) from $61.8 million for the same period in 2022[24]. - Revenue for the nine months ended September 30, 2023, was $297.1 million, a decrease of $15.8 million (5%) from $312.9 million for the same period in 2022[34]. - Net income attributable to common stockholders for the nine months ended September 30, 2023, was $87.3 million, an increase of $5.3 million (6%) from $82.0 million for the same period in 2022[34]. - Net income for the nine months ended September 30, 2023, was $89.8 million, an increase from $84.5 million in the same period of 2022, representing a growth of approximately 3.0%[91]. Dividends and Shareholder Returns - The company declared a cash dividend of $0.16 per common share for the quarter ended September 30, 2023, to be paid on December 15, 2023[15]. - Ardmore's variable dividend policy is based on paying out one-third of Adjusted Earnings, reflecting a commitment to returning value to shareholders[15]. - The company paid $40.5 million in common share dividends during the nine months ended September 30, 2023[91]. - A cash dividend of $0.16 per common share was declared on November 7, 2023, totaling approximately $6.8 million, to be paid on December 15, 2023[144]. Costs and Expenses - Average TCE rate for the fleet was $26,347 per day for the three months ended September 30, 2023, a decrease of $13,961 per day (34.6%) from $40,308 per day for the same period in 2022[28]. - Voyage expenses were $30.6 million for the three months ended September 30, 2023, a decrease of $15.4 million (33%) from $46.0 million for the same period in 2022[26]. - Vessel operating expenses were $14.4 million for the three months ended September 30, 2023, an increase of $1.1 million (8%) from $13.3 million for the same period in 2022[29]. - Total charter hire expenses were $4.1 million for the three months ended September 30, 2023, a decrease of $0.4 million (9%) from $4.5 million for the same period in 2022[30]. - Interest expense and finance costs for the three months ended September 30, 2023, were $3.0 million, a decrease of $1.5 million (34%) from $4.5 million for the same period in 2022[33]. Cash Flow and Liquidity - Net cash provided by operating activities was $140.9 million for the nine months ended September 30, 2023, compared to $63.5 million in the same period of 2022, primarily due to a decrease in receivables[54]. - Net cash used in investing activities was $18.6 million for the nine months ended September 30, 2023, driven by advances for ballast water and scrubber systems[55]. - Net cash used in financing activities was $122.0 million for the nine months ended September 30, 2023, with debt repayments totaling $77.5 million and cash dividends of $40.6 million[56]. - As of September 30, 2023, the company had $273.7 million in liquidity, including cash and cash equivalents of $50.8 million and undrawn credit facilities of $222.9 million[47]. Market and Economic Conditions - The ongoing geopolitical conflicts, including the Israel-Hamas conflict, have contributed to increased volatility in global energy supply chains and spot tanker rates[17]. - Ardmore's Energy Transition Plan aims to capitalize on the global energy transition, viewing it as an opportunity rather than a compliance challenge[11]. - Inflation has resulted in increased operating and administrative costs, which could adversely affect operating results if spot charter rates do not cover increased costs[73]. Risk Management - The company is exposed to operational risks including drydocking, repair costs, and fluctuating fuel prices, which increased significantly in 2022 but have decreased in 2023[65]. - The company has established countermeasures to minimize the risk of piracy attacks during voyages, particularly in high-risk regions[65]. - The company has not entered into any derivative contracts to manage foreign exchange risk during the three and nine months ended September 30, 2023[66]. Investments and Financing - The company’s investment in Element 1 Corp. amounted to $9.2 million, which includes a 10% equity stake and warrants for additional shares[101]. - The company entered into a $108 million sustainability-linked long-term loan facility with ABN AMRO and CACIB, with $49.2 million continuing as a term loan facility and the remainder converted into a revolving credit facility[110]. - The outstanding principal balance on the finance lease facility was $55.7 million as of September 30, 2023, down from $59.9 million as of December 31, 2022[116]. - The company was in full compliance with all financial covenants related to its long-term debt and finance lease facilities as of September 30, 2023[113][120]. Stock and Equity - The total stockholders' equity as of September 30, 2023, was $517,042,000, an increase from $416,285,000 as of September 30, 2022[87]. - The company has a corporate net worth requirement of not less than $200 million, which it has maintained[112]. - The Series A Preferred Stock has a cumulative dividend rate of 8.5% per $1,000 liquidation preference, with dividends payable quarterly[141].