Ardmore Shipping NYSE: ASC reported higher first-quarter adjusted earnings and raised its dividend payout ratio, while management said disruption in the Middle East is tightening an already firm product tanker market and accelerating momentum into the second quarter.
Chief Executive Officer Gernot Ruppelt said the company reported adjusted earnings of $23.6 million, or $0.58 per share, for the first quarter of 2026. Ardmore declared a dividend of $0.39 per share, reflecting its updated policy of paying out two-thirds of adjusted earnings beginning with the quarter.
Ruppelt said the company has not had ships in the Middle East region since the start of the conflict, but acknowledged the disruption’s impact on the maritime industry and seafarers. He said Ardmore continues to support organizations including The Mission to Seafarers and INTERTANKO.
Rates Strengthen Into the Second Quarter
Ardmore’s first-quarter time charter equivalent, or TCE, performance reflected stronger market conditions, with further gains in bookings so far in the second quarter. Ruppelt said the company’s MR tankers earned $33,700 per day in the first quarter and $52,100 per day so far in the second quarter, with 55% booked. Chemical tankers earned $22,300 per day in the first quarter and $32,500 per day so far in the second quarter, with 65% booked.
Ruppelt said MR spot rates are nearly five times Ardmore’s operating cash breakeven of $10,800 per day. President Bart Kelleher later said the company’s cash breakeven is $11,700 per day, or $10,800 per day excluding drydock capital expenditures.
Kelleher said the effective closure of the Strait of Hormuz is disrupting approximately 15% of global oil product flows and 30% of crude flows. He said shortages in the East are being supplied from the Atlantic Basin, with cargoes from the U.S., Europe and West Africa replacing lost Middle East volumes and voyage lengths “roughly doubling.”
Management said about 130 product tankers are currently trapped in the Middle East Gulf, limiting available vessel supply. Kelleher also noted that a recent Jones Act waiver is supporting U.S. bi-coastal trade flows.
Kelleher said Atlantic refining margins have reached their highest level since the pandemic recovery, creating arbitrage opportunities, while Asian refineries have reduced throughput and sourced replacement products through long-haul imports. He said vessels ballasting back to the Atlantic Basin are adding fleet inefficiency, further tightening supply.
Company Orders Two Handysize Tankers
Ruppelt said Ardmore ordered two handysize product and chemical tankers from Wuhu Shipyard at $44.9 million per vessel. The price includes a $3 million upgrade package to make the ships fully IMO2 capable, along with advanced MarineLine tank coatings. Deliveries are scheduled from late 2028, and Ardmore has options to acquire two additional vessels on the same terms.
The new vessels will be designed to trade across a broad range of cargoes, including mainstream oil products, edible oils, renewable fuels and complex commodity chemicals. Ruppelt said Ardmore upgraded its existing chemical fleet last year with MarineLine coatings and is seeing benefits from access to premium cargoes and shorter cleaning times.
Ruppelt said the company reviewed shipyards in China, Korea and Japan and concluded that Wuhu offered “a compelling combination of high construction quality and value.” He said Ardmore has capacity under existing revolving credit facilities and access to alternative funding sources for the newbuild program.
Dividend Payout Doubled as Capex Falls
Ruppelt framed the dividend increase as part of a broader capital allocation strategy. He said 2025 was a heavy capital expenditure year because of extensive drydock work and vessel efficiency and commercial upgrades, but that work is now behind the company.
He said Ardmore also invested more than $100 million in three vessel acquisitions that management believes have since increased in value by about 30% to 35% on a like-for-like basis. Ardmore has also agreed to sell a 2014-built MR tanker for $35.5 million, with delivery to the buyer expected in June 2026.
During the question-and-answer session, Evercore analyst Jon Chappell asked whether the dividend increase reflected a view that investing at current asset values offers less attractive returns than returning capital to shareholders. Ruppelt said the dividend policy should be viewed as part of the company’s broader capital allocation approach, which includes dividends, buybacks, reinvestment in the fleet and debt management.
Ruppelt said the company is “reshifting and rebalancing” while continuing to combine measured fleet reinvestment with capital returns and healthy debt levels.
Supply Outlook Remains Supportive
Kelleher said long-term fundamentals remain favorable as energy security supports demand forecasts and refining capacity continues to shift eastward, with closures in Europe and the U.S. adding to ton-mile demand.
On the supply side, he said the MR fleet has continued to age, while the current orderbook equals about 15% of the fleet. He said the handysize orderbook is about 5% of that fleet, against an average fleet age of 18 years. Within five years, Kelleher said, half of the global MR fleet will be more than 20 years old and approaching the scrapping window, with utilization likely to decline even if ships remain in service.
For the first quarter, Ardmore reported adjusted EBITDA of $37.3 million. Kelleher said the company has strong operating leverage, with every $10,000 per day increase in TCE rates translating to nearly $2 per share in additional annual earnings. He also said existing fleet capital expenditures are expected to fall to about $8 million this year from $30 million last year, with limited drydock activity through 2027.
Management Says Fleet Optionality Is Key
In response to a question from Clarksons Securities analyst Omar Nokta about Ardmore’s MR and chemical tanker segments, Ruppelt said the company views its handysize tankers as assets that provide trading flexibility rather than a shift deeper into chemicals. He said the ships can carry oil products such as jet fuel and naphtha, as well as alternative and emerging cargoes.
Ruppelt said Ardmore’s 25,000-deadweight-ton chemical tankers would typically trade mostly in non-clean petroleum product cargoes under normalized conditions, but are now trading “almost exclusively” in clean petroleum products because that is where returns are strongest.
He said Ardmore manages its product and chemical operations in an integrated way, using relationships, cargo flows and market insight across both areas. Ruppelt said the company will continue to follow opportunities in both secondhand and newbuild markets, noting that last year’s secondhand MR acquisitions were made after values fell and have since appreciated.
Ruppelt concluded that Ardmore’s current strategy is focused on disciplined capital allocation, targeted fleet investment, increased shareholder returns and responsible debt levels while taking advantage of strong tanker market conditions.
About Ardmore Shipping NYSE: ASC
Ardmore Shipping Corporation 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.
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