Ardmore Shipping Q2 2025 Earnings Report

Ardmore Shipping EPS Results

• Actual EPS: $0.22
• Consensus EPS: $0.18
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: $1.14

Ardmore Shipping Revenue Results

• Actual Revenue: $72.05 million
• Expected Revenue: $44.92 million
• Beat/Miss: Beat by +$27.13 million
• YoY Revenue Growth: -40.60%

Ardmore Shipping Announcement Details

• Quarter: Q2 2025
• Date: 7/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, July 30, 2025
• Conference Call Time: 10:00AM ET

Ardmore Shipping (NYSE:ASC) is a Bermuda-based provider of seaborne transportation services for refined petroleum products. The company owns and operates a modern fleet of product tankers, including medium-range (MR), long-range 2 (LR2) and Aframax vessels. Ardmore Shipping focuses on the ocean carriage of clean and dirty petroleum products under time charters, bareboat charters and spot voyages, serving a diverse customer base that includes major oil companies and trading houses.

Since its founding in 2005, Ardmore Shipping has grown its fleet through newbuilding contracts, second-hand acquisitions and fleet renewals, aiming to maintain a high quality, fuel-efficient profile. The company’s vessels typically range from 45,000 to 115,000 deadweight tons, and are equipped to carry a broad slate of petroleum cargoes. With offices in Bermuda and Dublin, Ardmore Shipping positions its fleet to serve key global trade lanes, including the U.S. Gulf Coast, Europe, the Mediterranean, the Middle East and Asia.

Ardmore Shipping completed its initial public offering on the New York Stock Exchange in late 2014, raising capital to support fleet expansion and diversification. The company’s management team brings extensive experience in marine operations, chartering, finance and risk management. Ardmore Shipping maintains a focus on operational excellence, safety and environmental compliance, seeking to meet evolving regulatory standards and customer expectations in the tanker market.

Ardmore Shipping Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Adjusted Q2 earnings of €9 million (US$0.22 per share) with MR and chemical tanker TCE rates at roughly double cash breakeven, and strong momentum continuing into Q3 with higher rates and solid booking coverage.
• Positive Sentiment: Agreed to acquire three high-quality MR tankers at attractive second-hand prices and closed a comprehensive refinancing into a single fully revolving credit facility at favorable terms, boosting financial flexibility and maintaining a low cash breakeven.
• Positive Sentiment: Market fundamentals remain robust—driven by stronger refining margins, OPEC+ supply increases, low diesel inventories and geopolitical factors—supporting heightened trading activity and ton‐mile growth.
• Positive Sentiment: Product tanker supply dynamics are tightening as the MR and Aframax fleets age, newbuild orderbooks remain slim (just 14% of the MR fleet), and Western refinery closures drive longer haul voyages.
• Positive Sentiment: Declared the eleventh consecutive dividend, nearly completed a six‐vessel chemical tanker recoating program to access premium cargoes, and maintained a balanced capital allocation across growth, reinvestment and shareholder returns.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to Ardmore Shipping's Second Quarter twenty twenty five Earnings Conference Call. Today's call is being recorded and an audio webcast and presentation are available in the Investor Relations section of the company's website, ardmoreshipping.com. We will conduct a question and answer session after the opening remarks. Instructions will follow at that time. A replay of the conference call will be accessible through August 6 by dialing 88345 or 40150 and entering passcode twenty four thousand five hundred twenty eight.

[Operator]

At this time, I will turn the call over to Garnard Ruppelt, Chief Executive Officer of Ardmore Shipping.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

Good morning, and welcome to Ardmore Shipping's second quarter twenty twenty five earnings call. First, let me ask our President, Bart Kelleher, to discuss forward looking statements.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

Thanks, Gernot. Turning to Slide two. Please allow me to remind you that our discussion today contains forward looking statements. Actual results may differ materially from those projected in the forward looking statements. Additional information concerning factors that could cause the actual results to differ materially from those in the forward looking statements is contained in the second quarter twenty twenty five earnings release, which is available on our website.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

And now I'll turn the call back over to Gernot.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

Thank you, Bart. Please allow me to outline the format of today's call, which you can see here on Slide three. First, I'll give you the usual snapshot of second quarter highlights and then we will call out some transactions we executed since our last call. I will then hand over the call to Bart, who will cover the market outlook and provide an update on our financial and operating performance. Thereafter, I will conclude the presentation before opening up the call for questions.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

Turning first to Slide four. We're pleased to report adjusted earnings for the second quarter of EUR 9,000,000 or EUR $0.02 2 per share. TCE rates have been increasing over the course of the year. And in the third quarter, typically a softer period, we're seeing continued momentum with even higher bookings to date. Our MRs earned $23,500 per day for the second quarter and $25,500 so far in the third quarter with 50% booked.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

Meanwhile, our chemical tankers earned $20,400 per day for the second quarter and $21,700 for the third quarter with 65% booked. Overall, these rates reflect levels that are about double our cash breakeven. Market dynamics remained favorable, driven by stronger refining margins, OPEC plus production increases and heightened geopolitical factors. In addition, long term industry fundamentals remain robust, which we will cover in more detail later. Moving to Slide five.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

Since our last earnings call, we executed well timed transactions that enhance our strong performance and earnings power, while opportunistically cementing earnings quality. We agreed to acquire three high quality MR tankers in the second hand market. All vessels were built in Korea, and we expect to take delivery this quarter. We achieved prices that are attractive relative to applicable benchmarks, reflecting Artemore's disciplined and deliberate approach to fleet growth. We also closed on a comprehensive refinancing with leading banks at favorable terms.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

Through this refinancing, we consolidated our existing debt into a single fully revolving credit facility, million in total. This enhances our financial flexibility while supporting low cash breakeven. In addition, while our predominant trading strategy remains focused on the spot market, we dynamically executed on selected quality fixed rate opportunities. For one of our 25,000 ton chemical tankers, we secured a three year time charter at $19,250 per day. The counterparty is a top tier chemical producer.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

And to give you a bit of context, we achieved essentially what is a three year MR rate, which goes without saying is a vessel twice the size. On a more tactical level, we opportunistically increased our short term coverage, adding fixed rate charters on two additional MR tankers. This brings our MR fixed rate coverage to four vessels at an average rate of $22,500 per day over varying durations between six and twelve months. Turning to Slide six, where we highlight our capital allocation policy and how we are delivering across all strategic priorities. We continue to balance growth, reinvestment in our fleet and capital return to shareholders, while maintaining low debt levels.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

We declared our eleventh consecutive dividend since the re initiation of our dividend policy in 2022. We just mentioned our acquisition of three modern MR tankers, and we're almost done with our chemical tanker recoating project, which we discussed previously. Five of the six recoatings are completed, with the final vessel scheduled for completion this quarter. We are already seeing results for the ships on the water, accessing premium cargoes and boosting earnings power. With that, I'd like to hand it over to Bart.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

Thanks, Kurnat. Turning to Slide eight and the market outlook, starting with industry fundamentals. With OPEC plus ramping up supply, an additional 2,500,000 barrels of oil per day are forecast to hit the water by the September. And at present, low diesel inventories, particularly in Europe, have already driven up crack spreads, boosting trading activity and incentivizing increased refinery production. In addition, the EU has further ramped up sanctions, creating market inefficiencies and effectively reducing vessel supply.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

This quarter has also been marked by continued examples of geopolitical disruption. Furthermore, fresh Chinese export quotas for refined products are anticipated to be announced in the near term. Following a significant ramp up in exports in July, the current quotas are expected to be fully utilized earlier than normal. Turning to Slide nine, where we examine the ongoing evolution of the global refinery landscape and its positive impact on product tanker demand. The refinery base continues to shift.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

Refining and petrochemical capacity is increasingly concentrated in the East, while closures persist in the West, driving ton mile growth. As shown in the table on the upper right, new capacity additions in Asia, The Middle East and Africa sharply contrast with recent closures in The U. S. And Europe, adding to import volumes and long haul trade flows. A clear example is playing out in California.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

Local refinery shutdowns are leading to record high imports, in fact up 25% from prior peak levels. The chart on the lower right emphasizes the ton mile component. Refined product that would have been produced and consumed locally on the West Coast must now be imported on lengthy Transpacific voyages. This trend is anticipated to accelerate in the near term with additional refinery closures planned for The U. S.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

West Coast over the next twelve months. On Slide 10, we contrast the aging MR fleet with the decreasing order book, highlighting the favorable supply dynamics. Starting with our favorite chart on the left, the evolution of the MR fleet over time. As we have discussed on previous calls, the MR fleet is the oldest it's been this century. And with the lack of newbuild orders this year, the order book is now declining and currently represents just 14% of the overall MR fleet.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

Moving to the chart on the right, the aging fleet is three times larger than the current order book. Half the fleet will be older than twenty years by the end of the decade. Now moving to Slide 11. Looking at the broader product tanker sector, it's important to highlight the positive impact of the low Aframax order book. LR2s have been exiting the product trade, shifting into the crude trade as the Aframax fleet continues to shrink.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

This is not a temporary shift. More than 50% of the Aframax fleet is now over fifteen years old, and there are essentially no new orders for uncoated Aframaxes. The trend is already very evident today. Looking at the chart on the right, the percentage of LR2s in the clean trade has declined over the last several years. Now moving to Slide 13.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

Turning our attention to Ardmore's financial performance. We continue to maintain our strong financial position. We successfully refinanced our existing debt facilities into a single fully revolving credit facility, enhancing our financial flexibility and supporting our low cash breakeven. As highlighted in the table on the left, the terms are quite attractive, including a margin of 1.8% and tenor of six years. We're showing quarter ending figures as well as pro form a that include the three vessel acquisitions.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

As you'll see, given the notably lower margin and modest leverage level, we continue to maintain our low cash breakeven. Turning to slide 14 for financial highlights. For the second quarter, we reported EBITDAR of 22,400,000 and as mentioned earlier, earnings per share of $0.22 We continue to frame EBITDAR as an important comparable valuation metric against our IFRS reporting peers. Full reconciliation details can be found in the appendix on slide 24. As noted in the chart on the bottom left, we continue our downward trajectory on cash breakeven, achieving this in an elevated interest rate environment and when accounting for the recent vessel acquisitions.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

This cost discipline, in tandem with our significant operating leverage, strongly positions Ardmore to take advantage of market volatility. Also, please refer to Slide 25 in the appendix for our third quarter guidance numbers. Moving to slide 15 for fleet operations. The majority of this year's drydocking work is now behind us, and we have limited dockings in the years ahead. The company stands to benefit from increased revenue days and enhanced earnings power.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

Dry docking and the related capital expenditures for 2025 are now projected to be $35,000,000 to 38,000,000 As a reminder, approximately half of this capital outlay is related to tank coatings and efficiency upgrade projects. This also includes the first special survey for the 2020 builds vessel we are acquiring this quarter. In addition, we're continuing to invest in digitalization tools and AI and are seeing benefits across our fleet and shore side operations. Finally, our on hire availability was a strong 99% in the second quarter. Moving to Slide 16.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

Here we bring our nearly completed MarineLine project to life. As you can see in the shiny pictures on the bottom left, we've got some really fresh high spec tank coatings that are enhancing our trading flexibility and attracting premium cargoes. These vessels haven't been out of the yard for very long, and we've already secured some really exciting voyages, achieving strong TCE premiums. In fact, with our new coatings, our vessels are practically behaving close to stainless steel tankers, but at a lower capital cost based on current market values. In addition to this, we're benefiting from shorter tank cleaning times, improving asset utilization and reducing fuel consumption.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

With that, I'm happy to hand the call back to Gernot and look forward to answering any questions at the end.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

Great. Thank you, Bart. Moving to Slide 18, allow me to summarize three key points. Earnings have continued to strengthen through the 2025 and into the third quarter, reflecting favorable market conditions. We executed a range of well timed transactions and initiatives that further enhance our strong performance and earnings power, while maintaining our financial strength.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

And guided by our strong governance and consistent approach to capital allocation, Artemore continues to deliver on its strategy to create long term value through market cycles. And with that, we now welcome your questions.

[Operator]

Thank you, gentlemen. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two.

[Operator]

If you are using a speakerphone, please lift the handset before pressing any keys. One moment for your first question. Our first question comes from Omar Nokta from Jefferies. Please go ahead.

[Omar Nokta, Managing Director at Jefferies]

Okay, thank you. Hi, Gernot and Bart. Good afternoon. Thank you for the update and congrats on the transaction to buy those MRs. You know, clearly the company has been in net cash position for the past several quarters.

[Omar Nokta, Managing Director at Jefferies]

You're buying these MRs, and it's not really going to stress your balance sheet. Obviously, you need to take these ships in, transition them in and get them going. But in general, is there a target leverage you want to get to in a perfect world given in this environment, nothing changes from here? Is there a certain net leverage ratio you'd like to get to?

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

I'll let Bart comment on that in a second. Omar, good morning and thanks for joining. But I think we're really focusing on value and being opportunistic on all the avenues of capital allocation. We saw great value in these three ships, quality built, top yard, attractive prices. And we demonstrated that we were able to be patient as we felt the markets were going through a notable correction over the past year.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

And now certainly, at an opportune time, we were able to be very decisive. And ultimately, that's what we're looking for. And for us, of course, having the financial flexibility to do so is important. We're not trying to optimize for a specific growth target. We're under no rush.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

We have an organization that's performing to a very high standard, is very scalable, but at the same time, it's ultimately value that we're looking for and that will determine our future capital allocation choices.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

And I'd just add in Omar, we really look at debt through the cycle. I'd say moderate debt levels are a guiding principle. I think to what you're hinting at certainly it is situational in terms of the market conditions and our view of forward market conditions, but maintaining some dry powder to be opportunistic and build value, all while maintaining the low breakeven are things that are really important that are in focus.

[Omar Nokta, Managing Director at Jefferies]

Thank you. That's helpful perspective. And maybe perhaps we're not just a bit more kind of like a market related question and obviously a lot of moving parts to this. But recently we've been seeing The U. S.

[Omar Nokta, Managing Director at Jefferies]

Stepping up pressure on Russia and using tariffs perhaps as a bit of a deterrent for say Chinese or Indian refiners to buy those barrels and refine it. How would you as you see this and things are still to develop, how do you see this kind of affecting the product market if things really start to take shape on that front?

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

Yes. Think there's a few different things in play. I think markets are definitely getting a stronger sense of direction. We have gone through a period of risk aversion at the earlier part of the year. And I think that's now overcome by sort of a snapback in activity.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

Inventories need to be rebuilt. There's this catch up phase in trading activity that's playing out now in the third quarter. And of course, we're not far from sort of a structurally stronger winter. I would say that without kind of trying to unpack the many layers of the geopolitical landscape, we continue to, of course, monitor very closely as long as we continue to see reshift in trade, reshift in regulation that creates constant reshift in trade flows as well. That sort of volatility is something that benefits the overall product tanker market.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

And the way we operate the business, I believe we're perfectly geared for that because it's always a question about how can we best position ourselves those shifting trade flows.

[Omar Nokta, Managing Director at Jefferies]

Thank you, Gernot, for that. And then Bart, thank you. I'll turn it over.

[Operator]

There are no further questions at this time. I will now turn the call over to management for closing remarks. Please continue.

[Bart Kelleher, President, CFO & Director at Ardmore Shipping]

Thank you, operator. We understand it's a busy reporting day for shipping in the broader general transportation sector. So we look forward to further Q and A in follow-up meetings. And thank you. All set for now on the call.

[Gernot Ruppelt, CEO & Director at Ardmore Shipping]

Thank you.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Gernot Ruppelt, CEO & Director
• Bart Kelleher, President, CFO & Director

Analysts

• Omar Nokta, Managing Director at Jefferies