Ardmore Shipping NYSE: ASC reported second-quarter adjusted earnings of $48.3 million, or $1.18 per share, as product tanker market conditions remained strong. The company declared a quarterly dividend of $0.79 per share, consistent with its policy of distributing two-thirds of adjusted earnings.
Chief Executive Officer Gernot Ruppelt said Ardmore’s tanker fleet benefited from favorable market conditions during the quarter and that rates remained above seasonal levels into the third quarter. The company also exercised options for two additional Handysize tanker newbuildings, bringing its total order to four vessels, with deliveries expected to begin in late 2028.
Strong TCE Rates Continue Into Third Quarter
Ardmore’s medium-range, or MR, tankers earned time charter equivalent, or TCE, rates of $51,900 per day in the second quarter. Chemical tankers earned $26,900 per day. For the third quarter to date, with 45% of MR days booked, the vessels earned $29,600 per day, a 20% year-over-year increase, according to the company. Chemical tankers, with 50% booked, earned $25,000 per day, up 10% from a year earlier.
Ruppelt said current MR rates were nearly three times Ardmore’s operating cash breakeven level of $10,800 per day. The company’s operating cash breakeven, including pro rata dry-dock capital expenditures, was $11,700 per day.
President Bart Kelleher said product tanker markets were “exceptionally strong” in the second quarter and remained firm into the third quarter. He attributed the market environment to positive underlying supply-and-demand conditions as well as continued Middle East disruption, which he said had supported refining margins, long-haul volumes and tanker TCE rates.
Kelleher said benchmark crack spreads approached $70 per barrel during the period, which he described as a record level. Atlantic refinery utilization was running at multi-year highs, while U.S. Gulf clean-product exports were at historical highs and cargoes were moving over longer distances.
Inventory Restocking and Supply Constraints
Refined-product inventories have declined by nearly 100 million barrels since March, Kelleher said, creating the potential for a restocking cycle that could add demand beyond end-user consumption. He added that the International Energy Agency projects significant oil-supply expansion in 2027 as non-OPEC production grows.
Russia’s diesel export ban, imposed earlier in the month following domestic refinery outages and fuel shortages, has also reduced Russian clean-product exports, according to Kelleher. He said displaced buyers have been sourcing replacement cargoes elsewhere, supporting demand for compliant tankers. Brazilian importers, for example, have been replacing Russian supply and reducing reliance on sanctioned vessels, he said.
On longer-term trends, Kelleher pointed to energy-security priorities, diversification of import sources and the geographic shift in refining capacity. Refinery expansion has been concentrated in Asia and the Middle East, while closures have continued in Europe and the United States, increasing the distance between refining centers and consumption markets, he said.
Ardmore also highlighted an aging tanker fleet and a limited orderbook. The average age of the MR fleet is nearly 14 years, the highest level this century, while the MR orderbook equals 16% of the existing fleet, Kelleher said. The Handysize orderbook stands at 6% of the existing fleet, with an average fleet age of 18 years. Within five years, half of MR vessels will be more than 20 years old and approaching the typical scrapping window, he added.
Newbuilding Investments and Balance Sheet
The four Handysize product and chemical tanker newbuildings ordered by Ardmore are designed to carry mainstream oil and refined products, advanced chemical cargoes, edible oils and other liquid cargoes. The company retains options for two additional vessels.
During the question-and-answer session, Ruppelt said the company would continue assessing the economic rationale for exercising those options, which are declarable later in the summer. He said Ardmore sees value in the vessel design, agreed pricing and commercial versatility of the assets, while emphasizing that options remain subject to review.
Ruppelt said the investment fits Ardmore’s approach of balancing selective growth, shareholder distributions and responsible debt levels. He also noted that vessels purchased in the secondhand market around the same time last year had appreciated by approximately 30% to 35% in value and were operating in the fleet.
Ardmore reported second-quarter EBITDAR of $61.1 million. Its effective leverage was 24%, including forward capital expenditures for its newbuildings, and it had nearly $300 million of undrawn revolving debt capacity. The company expects only $3 million of capital expenditures for its existing fleet during the remainder of 2026 and said it has no planned dry dockings this year, with limited activity expected through 2027.
Ruppelt said the company intends to continue returning capital under its dividend policy while pursuing “targeted and measured growth.” Ardmore’s latest dividend marks its 15th consecutive quarterly payment, and the company said the payout reflects the higher distribution level introduced earlier this year.
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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