Ardmore Gets USD 12.3 Mn Boost
- Business & Finance
Bermuda-based tanker owner and operator Ardmore Shipping Corporation completed in 2Q 2017 a refinancing of two 47,000 dwt Eco-Mod product tankers under a Japanese sale and leaseback arrangement, releasing USD 12.3 million in cash.
The transaction including the two 2008-built vessels, Ardmore Sealeader and Ardmore Sealifter, is said to be “a new and attractive source of financing for the company”.
This was announced in Ardmore’s financial report which shows that the company suffered a net loss of USD 1.9 million during the three months ended June 30, 2017, as compared to a net income of USD 55 million in the same period a year earlier.
The company reported EBITDA of USD 12.9 million in 2Q 2017, against USD 17.3 million seen in the same quarter last year.
“As the oil market continues to work its way through elevated inventory levels, we are satisfied with our performance in the second quarter and encouraged that the highly compelling MR industry fundamentals remain firmly intact. Our fleet is performing well under soft market conditions and we continue to effectively manage our costs and execute on our strategy,” Anthony Gurnee, Ardmore’s Chief Executive Officer, commented.
During the quarter, Ardmore delivered a “satisfactory chartering performance” with spot and pool MR tankers earnings an average of USD 13,765 per day and Eco-Design chemical tankers an average of USD 10,736 per day.
“MR charter rates improved from the prior quarter, driven by increased activity in the Atlantic basin and product flows to Latin America. Meanwhile, despite refined product inventories declining in April and May, levels remain above historical averages and continue to curtail trading activity and tonne mile demand in the short term. Nonetheless, the underlying fundamentals for MR product tankers are very positive,” Gurnee added.
“Taken together, tonne mile demand growth is set to continue in the range of 4-5% annually. Meanwhile, supply growth for MR product tankers has declined significantly, with the MR orderbook at historical lows, scrapping continuing, and the pace of deliveries declining further over the remainder of 2017 and into 2018. As a result, we expect net fleet growth to be in the range of 1-2%, well below demand growth and creating a clear tension that should result in a sustained increase in charter rates,” Gurnee concluded.
Currently, Ardmore has 27 vessels in operation, comprising 21 Eco MR tankers ranging from 45,000 to 49,999 dwt and six Eco-Design IMO 2 product/chemical tankers ranging from 25,000 to 37,800 dwt.