Ardmore Shipping(ASC) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Adjusted earnings for the full year were $38.8 million or $0.95 per share, and for the fourth quarter, they were $11.6 million or $0.28 per share [11] - EBITDA for the quarter was $27 million and for the year was $95 million, highlighting strong operating leverage [13] - The cash break-even rate was reported at $11,700 per day, or $10,800 per day excluding CapEx, indicating effective cost management [10][22] Business Line Data and Key Metrics Changes - MR tankers earned $25,300 per day in Q4 and $29,100 per day in Q1 2026, while chemical tankers earned $19,900 per day in Q4 and $20,800 per day in Q1 2026 [10] - The company maintained a strong spot market exposure of 82% while also securing high-quality fixed-rate time charters [11][29] Market Data and Key Metrics Changes - The dislocation of oil refineries is a continuing trend, with refining capacity shifting east and tightening regional supply in the West, leading to increased voyage lengths and ton miles [14] - The global tanker fleet is facing sanctions, with over 16% currently subjected to them, tightening supply and benefiting compliant fleets like Ardmore's [15] Company Strategy and Development Direction - Ardmore's strategy focuses on capturing opportunities in refined oil products and complex chemical cargoes, supported by a fully integrated trading platform [19] - The company emphasizes asset flexibility, allowing it to adapt quickly to changing market conditions and capture value across cycles [21] - Ardmore's capital allocation policy remains aligned with its long-term strategy, focusing on performance and innovation [24] Management's Comments on Operating Environment and Future Outlook - Management highlighted that geopolitical risks and supply chain disruptions are reshaping trade flows, reinforcing the importance of flexibility in operations [53] - The company is committed to maintaining financial flexibility to navigate uncertainties and capitalize on opportunities [54] Other Important Information - Ardmore completed a major dry docking cycle, enhancing fleet performance and reducing future CapEx significantly [25] - The company has been recognized for its strong corporate governance, ranking as the top tanker company in Weber's Corporate Governance Scorecard [38] Q&A Session Summary Question: Future capital allocation considering rising asset values - Management indicated a non-binary approach to capital allocation, balancing between growth and maintaining a strong fleet, while observing market conditions closely [58] Question: Thoughts on the new building market for MRs - Management has not participated in the new building market since 2013, finding better value in the second-hand market, and remains vigilant about market opportunities [60] Question: Clarification on AI returns - The response clarified that the focus is on ensuring that AI investments meet ambitious return expectations, emphasizing a strategy of adopting rather than developing AI [66]