Ardmore Shipping Corp. Q4 FY2024 earnings call

• Strong performance: Adjusted earnings for full year and Q4 were reported, with markets experiencing continued strength due to tight supply and demand fundamentals. • Financial strength focus: Low cash breakeven level of $11,500 per day achieved through cost control, lower debt, and access to credit facilities. • Market fundamentals: Strong long-term fundamentals in products and chemicals, geopolitical disruptions, sanctions, and regulatory shifts impacting ton mile demand. • Strategy: Focus on product and chemical tankers via globally integrated platform, performance-based culture, and innovation. • Capital allocation: Repurchased 4% of shares in Q4 at average price $11.49 and declared quarterly cash dividend. • Operational highlights: Examples of ship repositioning, upgrades like tank coatings on chemical fleet, use of AI and digitalization tools (e.g., Starlink across fleet) to enhance performance.

For the full year, adjusted earnings were $120 million or $2.84 per share. For the fourth quarter, adjusted earnings were $10.3 million or $0.25 per share. MRs earned $22,700 per day in the fourth quarter and $23,400 per day so far in the first quarter with 55% booked. The six chemical tankers earned $21,400 per day in the fourth quarter and $14,000 per day in the first quarter with 40% booked so far. Revenue contribution details were not explicitly broken down by percentage in the provided transcript but focus was on product and chemical tanker segments' financial performance.

• Q1 guidance in appendix. • Focus on optimizing performance, closely managing cost, and preserving strong balance sheet. • 2025 CapEx forecasted at approximately $30 to $35 million, including routine dry dock maintenance and performance upgrades.

• Sanctions impacting supply: Approximately a quarter of the product tanker fleet sanctioned or involved in Russia trade, reducing effective supply. • Geopolitical disruptions: Uncertainties in markets, such as in the Middle East, affecting trading activity and market sentiment. • Regulatory shifts: Potential impacts on supply and trading patterns, though Ardmore positioned to manage effectively.

Q: What are the triggers causing market improvement after the quiet fourth quarter?

A: Shift in trade patterns due to sanctions, tariffs, and arbitrage flows, along with normalization of some seasonal factors and strong long-term demand drivers.

Q: How are sanctions impacting the market in terms of their impact inning?

A: It's considered early innings with potential for continued expansion, and the absolute impact of sanctioned tankers taking them out of the market is significant and watching closely for trading pattern changes.

Q: What is the TC spread between best and worst performing ships in the fleet and considerations for adding a ship?

A: Spread moves depending on timing, positions, etc., and considerations include normalizing for ship characteristics, performance track record, and ensuring accretive capital deployment and meeting high technical/operational standards when adding a ship.