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Ardmore Shipping(ASC) - 2024 Q3 - Quarterly Report
ASCArdmore Shipping(ASC)2024-11-06 13:07
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Fleet 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 96.1million,anincreaseof96.1 million, an increase of 9.2 million (11%) from 86.9millionforthesameperiodin2023[31].−NetincomeforthethreemonthsendedSeptember30,2024,was86.9 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 2.9million(142.9 million (14%) from 21.2 million for the same period in 2023 [31]. - Revenue for the nine months ended September 30, 2024, was 323.7million,anincreaseof323.7 million, an increase of 26.6 million (9%) from 297.1millionforthesameperiodin2023[46].−NetincomefortheninemonthsendedSeptember30,2024,was297.1 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 89.8millioninthesameperiodof2023[95].−Earningspershare(EPS)forthethreemonthsendedSeptember30,2024,was89.8 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 0.49inthesameperiodof2023,reflectinganincreaseof12.20.49 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 4.0million(134.0 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 5.9million,anincreaseof5.9 million, an increase of 1.8 million (44%) from 4.1millionforthesameperiodin2023[38].−DepreciationexpenseforthethreemonthsendedSeptember30,2024,was4.1 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 0.9million(130.9 million (13%) from 6.9 million for the same period in 2023 [39]. - Vessel operating expenses rose to 45.1millionfortheninemonthsendedSeptember30,2024,anincreaseof45.1 million for the nine months ended September 30, 2024, an increase of 0.5 million from 44.6millionforthesameperiodin2023[51].−Totalcharterhireexpensesincreasedto44.6 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 3.0millionfrom3.0 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 0.18percommonshareforthequarterendedSeptember30,2024,tobepaidonDecember13,2024[22].−Thecompanymaintainsavariabledividendpolicy,payingoutdividendsequaltoone−thirdofadjustedearnings[22].−Thecompanypaid0.18 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 40,546,000in2023[100].StrategicInitiatives−ArdmoreShippingCorporation′sEnergyTransitionPlanaimstocapitalizeonregulationsrelatedtoenergyefficiencyandemissionsreductionintheshippingindustry[17].−Thecompanyisfocusedonenhancingearningsbyexploitingoverlapsbetweenthecleanpetroleumproductandchemicalsectors[15].−Thecompanyemphasizescompetitiveoperatingexpensesandhigh−qualityservicethroughin−housecharteringandcommercialteams[18].−Thecompanyisactivelymonitoringinterestrateexposureandmayenterintoswaparrangementstohedgethisexposurewhendeemedeconomicallyadvantageous[82].MarketandEconomicConditions−TheongoingRussia−Ukrainewarhassignificantlyincreasedspottankerratesduetodisruptionsinenergysupplychainsandeconomicsanctions[23].−GeopoliticaltensionsfromtheIsrael−HamaswarandattacksonvesselsintheRedSeahaveaffectedtradingpatternsandexpensesforshippingcompanies[25].LeadershipandGovernance−ArdmoreShippingCorporation′sleadershiptransitionoccurredonSeptember16,2024,withGernotRuppeltappointedasCEOandBartKelleherexpandinghisroletoincludePresident[21].CashFlowandLiquidity−Netcashprovidedbyoperatingactivitieswas40,546,000 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 140.9millionforthesameperiodin2023[72].−Netcashusedininvestingactivitieswas140.9 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 18.6millionforthesameperiodin2023[73].−Netcashusedinfinancingactivitieswas18.6 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 122.0millionforthesameperiodin2023[74].−AsofSeptember30,2024,thecompanyhad122.0 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 47.6million[60].InvestmentsandJointVentures−TheCompanypurchaseda1047.6 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 4.0millionincashand4.0 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 9.0millioninElement1Corp.,includingtransactioncosts[113].DebtandFinancialObligations−TheCompany′stotaldebtasofSeptember30,2024,was9.0 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 46.8millionasofDecember31,2023[115].−TheCompanyhasa46.8 million as of December 31, 2023 [115]. - The Company has a 185 million sustainability-linked revolving credit facility with Nordea and SEB, of which 20millionwasdrawndownasofSeptember30,2024[116].−TheABN/CACIBJointBankFacility,totaling20 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 81.7millionundrawn[117].−TheCompanyrepaiditsremainingfinanceleasefacilityof81.7 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].−Thetotalcostrelatedtonon−vestedRSUawardsexpectedtoberecognizedthrough2027is13.73 [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 3,596,000fortheninemonthsendedSeptember30,2024,from3,596,000 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].