Ardmore Shipping Corporation, an owner and operator of product and chemical tankers, reported a net loss of USD 13.7 million for the six months ended June 30, 2018, sinking further into the red.
Namely, the net loss more than tripled when compared to last year’s USD 4 million, mostly driven by challenging charter market conditions.
Spot and pool MR tankers earned an average of USD 12,086 per day, while chemical tankers earned an average of USD 12,816 per day for the six months ended June 30, 2018.
“While the fundamentals of the product tanker market remain sound, a number of unrelated short-term factors came together to put downward pressure on cargo volumes and charter rates, particularly in the Atlantic Basin.
“Cargo flows from the US Gulf to Brazil and Mexico declined in the latter half of the second quarter as a result of domestic issues and consequent increases in local refinery throughput. Simultaneously, a significant build-up of West African product inventories during the first quarter further reduced cargo volumes and freight rates from Europe and the US during the second quarter,” Anthony Gurnee, the Company’s Chief Executive Officer, said.
However, Gurnee is upbeat on the market outlook, especially in anticipation of the changing regulations for bunker fuels in 2020, bringing a significant increase in seaborne volumes of refined products from mid-2019, and providing a further boost to tonne mile demand.
On the supply side, ongoing scrapping and the record-low orderbook for MRs should result in net fleet growth of less than 1% in 2018 and 2019. This pairing of strong tonne mile demand growth and very limited supply growth creates the conditions for a rebound in charter rates, he added.
“Meanwhile, we are focused on maintaining financial strength to ensure that the company can take full advantage of opportunities that may arise,” he continued.
During the quarter, Ardmore completed refinancing of the Ardmore Endurance and Ardmore Enterprise, two 49,000 Dwt Eco-Design product tankers, with an undisclosed Asian financier. The agreement provides for the net proceeds of USD 10.3 million after prepayment of existing debt.
The company has 28 vessels currently in operation, comprising 22 Eco MR tankers and six Eco-Design IMO 2 product / chemical tankers.