ARDMORE SHIPPING CORPORATION Second Quarter 2014 Earnings - - PowerPoint PPT Presentation

ARDMORE SHIPPING CORPORATION

Second Quarter 2014 Earnings Presentation July 29, 2014

2

Disclaimer

This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of applicable U.S. federal securities laws. All statements, other than statements of historical facts, that address activities, events or developments that Ardmore Shipping Corporation (“Ardmore” or the “Company”) expects, projects, believes or anticipates will or may occur in the future, including, without limitation, statements about future operating or financial results, global and regional economic conditions and trends, pending vessel acquisitions or possible upgrades to vessels, the Company’s business strategy and expected capital spending or

• perating expenses, competition in the tanker industry, shipping market trends, the Company’s financial condition

and liquidity, including ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities, the Company’s ability to enter into fixed-rate charters after the current charters expire and the Company’s ability to earn income in the spot market, and expectations of the availability of vessels to purchase, the time it may take to construct new vessels and vessels’ useful lives, are forward-looking statements. Although the Company believes that its expectations stated in this presentation are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, the risk factors described in the Company's filings with the Securities and Exchange Commission (the "SEC"). This presentation is for information purposes only and does not constitute an offer to buy or sell securities of the Company. For more complete information about the Company, the information in this presentation should be read together with the Company 's filings with the SEC which may be accessed on the SEC website at www.sec.gov.

3

Agenda

• Highlights
• Corporate Update
• Product and Chemical Markets
• Financial Performance
• Summary
• Appendix

4

Highlights

5

Highlights

Key Developments Financial Highlights (1) Fleet Update

1. EBITDA, adjusted EBITDA and adjusted net profit are non-GAAP measures. Reconciliations of such measures are included in the appendix of this presentation

• Acquired three MR product and chemical tankers - Ardmore Endeavour, Ardmore Sealifter

and Ardmore Sealeader

• Completed a $39 million credit facility with Credit Agricole for two Eco-design chemical

tankers under construction at Fukuoka Shipbuilding

• Increased the ABN AMRO, Nordea and SEB credit facility by $53 million to $225 million for

three recent acquisitions

• Renewed a time charter for one Eco-design MR for ~7 months and renewed time charters

for three Eco-mod MR’s ships for an average period of ~7 months

• Ardmore Endeavour and Ardmore Sealifter commenced trading in the spot market in June

2014 and July 2014 respectively

• Ardmore Seafarer completed scheduled drydock on June 23, 2014 and Ardmore Seamaster

completed scheduled drydock on July 25, 2014

• Reported EBITDA

(1) and net profit for 2Q 2014 of $5.0 million and $0.1 million respectively

• Adjusting for non-cash items adjusted EBITDA

(1) and adjusted net profit (1) amounted to

$5.3 million and $0.4 million respectively

• Declared a cash dividend of $0.10 per share for 2Q 2014

6

Corporate Update

7

Acquisitions

Acquired Three MR Product Tankers in 2Q14

MT Ardmore Endeavour MT Ardmore Sealifter TBN MT Ardmore Sealeader

1. 24 ships x $1 million = $24 million / 26.1 million shares = $0.92 / share

• Three attractive acquisitions in line with our focused strategy of

MR product and mid-sized chemicals

• Ardmore Endeavour - 49,997 Dwt Eco-design product / chemical

tanker

− Purchase price: $36 million − Built July 2013 at STX Offshore & Shipbuilding Co. Ltd, Korea − Delivered to Ardmore: June 25, 2014

• Ardmore Sealifter - 47,472 Dwt product tanker

− Purchase price: $23 million − Built July 2008 at Onomichi Dockyard Co. Ltd, Japan − Delivered to Ardmore: July 22, 2014

• TBN Ardmore Sealeader - 47,463 Dwt product tanker

− Purchase price: $23 million − Built August 2008 at Onomichi Dockyard Co. Ltd, Japan − Delivered to Ardmore: Est August 2014

• Acquisitions accretive to EPS and NAV
• $1 million increase in vessel values = $0.92 increase NAV / share

(1)

8

Chartering

Employment Outlook

1. Revenue days for 3Q 2014 is based on 99.25% utilization 2. Spot days includes unfixed TC days

Expected Revenue Days for 3Q14

1Q 2014 A 2Q 2014 A 3Q 2014 E Operating Days 893 1,007 1,220 Drydock / Repositioning Days 30 19 30 Revenue Days (1) 861 985 1,182 Revenue Days Breakdown: Fixed TC Days 683 798 792 Spot Days (2) 178 187 390

365 92 TC Days Spot Days

MR Eco-design

336 115 TC Days Spot Days

MR Eco-mod

3Q E TCE: ~$15,800 3Q E TCE: ~$13,800

91 183 TC Days Spot Days

Chemical

3Q E TCE: ~$13,500

9

Delivery Schedule and Newbuilding Progress

Scheduled/Contracted Fleet Development (1)

• 58% of fleet in operation upon delivery of the Ardmore

Sealeader (expected in August 2014)

• Ardmore Cherokee (FKA N-2062) launched in Japan in July

2014 and expected to deliver in November 2014

• H-2480 and H-2481 expected to deliver in January 2015

12 14 16 19 21 23 24 12 10 8 5 3 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 In Operation Predelivery

1. Assumes on time deliveries of all our vessels currently under construction FKA HULL N-2067 SPP HULL S-1172 FKA HULL N-2065 SPP HULL S-1171 SPP HULL S-1163 FKA HULL N-2063 SPP HULL S-1162 HMD HULL H-2481 FKA HULL N-2062 HMD HULL H-2480

Completed To Complete

Construction Progress Newbuilding Programme

10

Product and Chemical Markets

11

Commentary

Product Tanker Market

PADD3 Refinery Utilization 2Q13 v 2Q14

70% 75% 80% 85% 90% 95% 100% Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14

Product Tanker Orderbook and Fleet Development

Fleet million Dwt, start year Orderbook (% of Fleet) Source: Drewry, Clarksons Shipping Intelligence Network, internal market data

2Q13 2Q14

• PADD 3 utilization has a big impact on rates in Atlantic Basin

− Dropped significantly in 2Q14 (~84% in June ‘14) leading to decline in long haul exports − Utilisation improvement in July (94.8% as of July 23, 2014) has driven rates from WS 70 up to WS 150 on TC14

• Time charter market reflected spot weakness

− MR Eco-mods TC rates ~$13,750 / day - $14,500 / day − MR Eco-designs TC rates ~$15,000 / day - $16,000 / day depending on charter structure

• Outlook remains positive

− GDP improvement and refinery developments − Yanbu and Ruwais refineries in Middle East expected to open towards end of 2014

• MR product tanker orderbook declining

− Orderbook: ~293 vessels or 17% of fleet based on Dwt − 55 MR’s delivered in 2014 − 19 vessels reported scrapped in same period

• Sale and Purchase

− Low level of activity − Secondhand ship quality varies significantly

0% 10% 20% 30% 40% 50% 60% 70% 20 40 60 80 100 120 140 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

12

Commentary

Chemical Tanker Market

Chemical Vessels Cargo Split 2Q14

• Chemical pool rates remain steady

− Our vessels continue to trade across CPP / Vegoil / Chemicals − Ardmore Centurion performing well on time charter

• Considerable chartering interest in our newbuilding fleet
• U.S. petrochemical expansion driven by shale gas

continues − Exports from US Gulf expected to increase 45% by 2018(3) − Expect increased tonne mile demand

• Chemical tanker orderbook

− Approx 132 ships on orderor 11% of fleet based on Dwt (1) − Delivering 2014 to 2017 − Delays expected for orders outside the core chemical shipyards in Japan and Korea

• Sale and Purchase

− Newbuilding ordering slowed in 2Q14 − Second-hand activity limited Chemical Tanker Orderbook and Fleet Development(2)

Fleet million Dwt, start year Orderbook (% of Fleet) Source: Drewry, Clarksons Shipping Intelligence Network, internal market data 1. Orderbook for coated IMO2 and stainless steel ships above 10,000 Dwt only 2. Clarksons Shipping Intelligence Network. Handy chemical tanker fleet development (start of period ) Excludes all IMO 3 tankers and IMO 2 tankers sized 30-60,000 dwt of MR product tanker design characteristics 3. American Chemistry Council 0% 10% 20% 30% 40% 50% 60% 70% 5 10 15 20 25 30 35 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Chem / Vegoils 72% CPP 28%

13

Financial Performance

14

Income Statement

Income Statement Data

1. EBITDA, adjusted EBITDA, adjusted net earnings/(loss) and adjusted net profit/(loss) per share are non-GAAP measures. Reconciliations of such measures are included in Appendix II of this presentation 2. Time Charter Equivalent (“TCE”) daily rate is the gross charter rate or gross pool rate, as appropriate, per revenue day plus Communication Victualing and Entertainment Income (“CVE”). For vessels employed on voyage charters, TCE is the net rate after deducting voyage costs 3. Fleet operating costs per day are routine operating expenses and comprise, crewing, repairs and maintenance, insurance, stores, lube oils, communication costs. They do not include additional costs related to upgrading or enhancement of the vessels that are not capitalized 4. Technical management fees per day are fees paid to third-party technical managers

INCOME STATEMENT DATA Three months ended Six months ended US$ millions, unless otherwise stated Jun 30, 2014 Jun 30, 2013 Jun 30, 2014 Jun 30, 2013 Results Revenue 13.83 8.35 26.21 15.62 EBITDA(1) 5.02 2.61 8.97 5.17 Net profit/(loss) 0.09 (1.19) (0.32) (1.23) Net earnings/(loss) per share ($/share) 0.004 (0.148) (0.014) (0.153) Adjusted Results Adjusted EBITDA(1) 5.35 2.97 9.65 5.53 Adjusted net profit/(loss)(1) 0.43 (0.65) 0.37 (0.69) Adjusted net earnings/(loss) per share ($/share)(1) 0.016 (0.081) 0.016 (0.086) OTHER OPERATING DATA Average Number of Vessels 11.1 7.2 10.5 6.8 Fleet time charter equivalent per day ($/day)(2) 14,169 12,706 14,231 12,932 Fleet operating costs per day ($/day)(3) 6,122 6,056 6,138 6,081 Technical management fees per day ($/day)(4) 348 387 356 390

15

Time Charter Equivalent ($ / day) (1)

Substantial Operating Leverage and Acquisitions will be Accretive to EPS

Financial – Rates Improving Y-o-Y

1. Time Charter Equivalent (“TCE”) daily rate is the gross charter rate or gross pool rate, as appropriate, per revenue day plus Communication Victualing and Entertainment Income (“CVE) 2. Calculations based on existing cost structure and assume a fully-delivered fleet of 24 vessels, assumed utilization of 99.45% and 26.1 mln shares. Assumes no change in tax rate, cost of debt or share count.

For every $1,000/day increase in rates(2): Operating Income ($mln) EPS Existing 24 Ship Fleet $8.71 $0.33 $9,108 $10,483 $11,206 2012 2013 2Q 2014

Chemical Tankers

Chemical Tankers "Eco-Mod" $13,294 $13,732 $14,710 2012 2013 2Q 2014

MR Tankers "Eco-Mod"

MR Tankers "Eco-Mod" $15,089 $15,859 2012 2013 2Q 2014

MR Tankers “Eco-Design”

MR Tankers "Eco-Design" Trip Charter

16

Balance Sheet

Selected Balance Sheet Data

Low Financial Leverage and every $1M increase in vessel values = $0.92 in NAV / share(1)

BALANCE SHEET DATA As at US$ millions, unless otherwise stated Jun 30, 2014 Dec 31, 2013 Cash 66.0 56.9 Receivables, Inventories and Other Assets 13.2 9.1 Vessels, Instalment Payments & Drydock 418.9 292.0 Total Assets 498.1 358.0 Payables and Accruals 8.9 6.4 Debt & Capital Lease Obligations 158.2 119.2 Equity 331.0 232.4 Total Liabilities and Equity 498.1 358.0 Debt / Debt + Equity 32.34% 33.90%

1. 24 ships x $1 million = $24 million / 26.1 million shares = $0.92 / share

17

Financing

No Final Maturities Until 2018 Finance Update

$0 $10 $20 $30 $40 $50 $60 $70 2014 2015 2016 2017 2018 2019 2020 Millions

• Completed a $39 million senior loan facility with Credit Agricole on

May 22, 2014 for two chemical tankers currently under construction

• Increased the existing facility with ABN AMRO, Nordea and SEB by

$53 million to $225 million on July 24, 2014 for three recent acquisitions

• In discussions on a credit facility for Ardmore Seamariner following

which entire fleet, including vessels on order, will have debt finance in place

• Maintaining financial flexibility

18

Summary

19

Summary

Thank You

• Spot market experienced weakness in second quarter but near-term outlook has significantly

improved – Rate recovery in the Atlantic Basin on resumption of long haul exports from US Gulf

• Solid financial performance for the quarter

– EBITDA

(1) of $5.0 mln and net profit of $0.1 mln

• Balanced fleet employment ensures cash-flow and earnings stability with upside exposure
• Continuing to expand in favorable conditions with acquisition of three high quality vessels
• Maintaining conservative financial profile; fleet fully financed
• Focused on building shareholder value and maximizing upside in market recovery
• Quarterly dividend of $0.10 per share

1. EBITDA is a non-GAAP measures. Reconciliations of such measures are included in the appendix of this presentation

20

Appendix

I. Fleet List II. Non-GAAP Measures

21

Appendix

1. Expected delivery August 2014 2. Average age at December 31, 2015, after all vessels are delivered

PRODUCT TANKERS CHEMICAL TANKERS

NAME SIZE (DWT) DELIVERED BUILT IN OPERATION ARDMORE SEAVANGUARD 49,998 2014 Korea ARDMORE SEAVANTAGE 49,998 2014 Korea ARDMORE SEAVALIANT 49,997 2013 Korea ARDMORE SEAVENTURE 49,998 2013 Korea ARDMORE ENDEAVOUR 49,997 2013 Korea ARDMORE SEATRADER 47,141 2002 Japan ARDMORE SEAMASTER 45,840 2004 Japan ARDMORE SEAFARER 45,744 2004 Japan ARDMORE SEAMARINER 45,726 2006 Japan ARDMORE SEALEADER(1) 47,463 2008 Japan ARDMORE SEALIFTER 47,472 2008 Japan ON ORDER SPP Hull S-1162 50,300 2Q15 Korea SPP Hull S-1163 50,300 3Q15 Korea SPP Hull S-1171 50,300 3Q15 Korea SPP Hull S-1172 50,300 4Q15 Korea TOTAL 15 Vessels 5 Years Average Age (2) NAME SIZE (DWT) DELIVERED BUILT IN OPERATION ARDMORE CENTURION 29,006 2005 Korea ARDMORE CALYPSO 17,589 2010 Korea ARDMORE CAPELLA 17,567 2010 Korea ON ORDER HMD Hull H-2480 37,000 4Q14 Korea HMD Hull H-2481 37,000 1Q15 Korea FKA Hull N-2062 25,000 4Q14 Japan FKA Hull N-2063 25,000 1Q15 Japan FKA Hull N-2065 25,000 3Q15 Japan FKA Hull N-2067 25,000 4Q15 Japan TOTAL 9 Vessels 3 Years Average Age (2)

22

Appendix

Non-GAAP Measures

(1) 1. EBITDA, adjusted EBITDA, adjusted net profit/(loss) and adjusted profit/(loss) per share are not measures prepared in accordance with U.S. GAAP. These Non-GAAP measures are presented in this presentation as we believe that they provide investors with a means of evaluating and understanding how Ardmore’s management evaluate operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with U.S. GAAP

NON-GAAP MEASURES Three months ended Six months ended expressed in US$, unless otherwise stated Jun 30, 2014 Jun 30, 2013 Jun 30, 2014 Jun 30, 2013 EBITDA & Adjusted EBITDA Net profit/(loss) 94,745 (1,189,200) (318,707) (1,229,892) Interest income (8,278) (1,310) (10,300) (2,191) Interest expense and finance costs 1,000,036 1,400,413 1,890,022 1,942,949 Income tax 13,505 7,734 26,054 14,382 Depreciation 3,401,368 2,024,909 6,423,130 3,728,926 Amortization of deferred dry dock expenditure 514,253 365,526 955,838 714,422 EBITDA 5,015,629 2,608,072 8,966,037 5,168,596 Share based compensation (non-cash) 334,099 5,625 687,954 5,625 IPO related fees and expenses

• 352,500
• 352,500

Adjusted EBITDA 5,349,728 2,966,197 9,653,991 5,526,721 Adjusted net loss Net profit/(loss) 94,745 (1,189,200) (318,707) (1,229,892) Share based compensation (non-cash) 334,099 5,625 687,954 5,625 Deferred finance fee write off (non-cash)

• 179,816
• 179,816

IPO related fees and expenses

• 352,500
• 352,500

Adjusted net profit/(loss) 428,844 (651,259) 369,247 (691,951) Adjusted earniings/(loss) per share, basic and diluted 0.016 (0.081) 0.016 (0.086) Weighted average number of shares, basic and diluted 26,100,000 8,049,764 22,996,409 8,049,633