Second Quarter 2018 Earnings Presentation Disclaimer 2 This - - PowerPoint PPT Presentation

ARDMORE SHIPPING CORPORATION Second Quarter 2018 Earnings Presentation

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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 share repurchase program; ability to enter into fixed-rate charters after the current charters expire and the Company’s ability to earn income in the spot market; expectations of the availability of vessels to purchase and 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"), including the Company’s Annual Report on Form 20-F for the year ended December 31, 2017. 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.

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Earnings Release: Second Quarter 2018

▪ Performance and Recent Activity ▪ Product and Chemical Tanker Markets ▪ Fleet Update ▪ Financial Review ▪ Summary ▪ Appendix

Agenda

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Highlights

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Performance and Recent Market Activity

Highlights

▪ Reporting EBITDA of $7.6 million and an adjusted net loss of $8.2 million, or $0.25 per share for the second quarter, reflecting weakness in product tanker charter rates ▪ Fleet is performing very well; operating expenses were reduced in the quarter and overhead below budget year to date ▪ MR product tankers earned $11,510 per day for 2Q18 and $12,086 year to

• date. MR spot charter rates impacted by:
• Lower cargo volumes due to unrelated one-off events in key consumer regions in

the Atlantic Basin (Brazil, Mexico and West Africa)

• Exceptional weakness in crude tanker market resulted in some newbuildings

carrying refined products on maiden voyages East of Suez

▪ Charter market remains soft but we believe rates have bottomed out; refinery throughput set to reach record levels in 3Q18(1), cargo volumes in the Atlantic should normalise and crude tanker trading in CPP on maiden voyages expected to decline in 2H18(2) ▪ Looking ahead, 2020 sulphur cap is coming into focus; expect significant increase in seaborne volumes of refined products with cost advantages for more fuel efficient vessels such as Ardmore’s

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1. IEA Oil Market Report , June 2018 2. Source: Clarksons Shipping Intelligence Network and management’s estimates

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Fleet Profile

1. Average age as at June 30, 2018

✓ Modern, highly fuel efficient fleet of MRs ✓ Average age of 6.0 years ✓ Built at high-quality yards in Korea and Japan ✓ Quality fleet = lower operating cost, higher utilization and maximum value appreciation ✓ Complementary fleet ✓ Increased scale improves commercial flexibility High Quality Vessels

Vessel Name Type Dwt Tonnes IMO Built Country Flag Specification Ardmore Seavaliant Product/Chemical 49,998 2/3 Feb-13 Korea MI Eco-design Ardmore Seaventure Product/Chemical 49,998 2/3 Jun-13 Korea MI Eco-design Ardmore Seavantage Product/Chemical 49,997 2/3 Jan-14 Korea MI Eco-design Ardmore Seavanguard Product/Chemical 49,998 2/3 Feb-14 Korea MI Eco-design Ardmore Sealion Product/Chemical 49,999 2/3 May-15 Korea MI Eco-design Ardmore Seafox Product/Chemical 49,999 2/3 Jun-15 Korea MI Eco-design Ardmore Seawolf Product/Chemical 49,999 2/3 Aug-15 Korea MI Eco-design Ardmore Seahawk Product/Chemical 49,999 2/3 Nov-15 Korea MI Eco-design Ardmore Endeavour Product/Chemical 49,997 2/3 Jul-13 Korea MI Eco-design Ardmore Enterprise Product/Chemical 49,453 2/3 Sep-13 Korea MI Eco-design Ardmore Endurance Product/Chemical 49,466 2/3 Dec-13 Korea MI Eco-design Ardmore Explorer Product/Chemical 49,494 2/3 Jan-14 Korea MI Eco-design Ardmore Encounter Product/Chemical 49,478 2/3 Jan-14 Korea MI Eco-design Ardmore Exporter Product/Chemical 49,466 2/3 Feb-14 Korea MI Eco-design Ardmore Engineer Product/Chemical 49,420 2/3 Mar-14 Korea MI Eco-design Ardmore Seafarer Product/Chemical 45,744 3 Aug-04 Japan MI Eco-mod Ardmore Seatrader Product 47,141 — Dec-02 Japan MI Eco-mod Ardmore Seamaster Product/Chemical 45,840 3 Sep-04 Japan MI Eco-mod Ardmore Seamariner Product/Chemical 45,726 3 Oct-06 Japan MI Eco-mod Ardmore Sealancer Product 47,451 — Jun-08 Japan MI Eco-mod Ardmore Sealeader Product 47,463 — Aug-08 Japan MI Eco-mod Ardmore Sealifter Product 47,472 — Jul-08 Japan MI Eco-mod Ardmore Dauntless Product/Chemical 37,764 2 Feb-15 Korea MI Eco-design Ardmore Defender Product/Chemical 37,791 2 Feb-15 Korea MI Eco-design Ardmore Cherokee Product/Chemical 25,215 2 Jan-15 Japan MI Eco-design Ardmore Cheyenne Product/Chemical 25,217 2 Mar-15 Japan MI Eco-design Ardmore Chinook Product/Chemical 25,217 2 Jul-15 Japan MI Eco-design Ardmore Chippewa Product/Chemical 25,217 2 Nov-15 Japan MI Eco-design Total 28 1,250,019 6.0(1)

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Product and Chemical Tanker Markets

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0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 10 20 30 40 50 60 70 80 90 100 1997 2000 2003 2006 2009 2012 2015 2018

OB as % Fleet Million DWT

Fleet (Million DWT) OB as % of Fleet

Product Tanker Market

Product Tanker Orderbook and Fleet Development (2)

▪ ASC MR pool and spot rates averaged $11,510 per day in 2Q18 reflecting softer market conditions in May / June ▪ Recent market activity:

• One-off events in key consumer regions: lower cargo volumes in the Atlantic

Basin due to independent, short term, factors in Brazil, Mexico and West Africa(1)

• Oil market dynamics: increased oil price and bunker prices, backwardation

affecting trade and strong domestic demand in US and India

• Other factors: crude tanker weakness resulting in some encroachment East of

Suez and slower oil consumption growth

▪ MR supply growth remains at all-time lows:

• Forecasting 23 MRs to deliver over the remainder of 2018 (29 ytd) (2)
• Scrapping run rate has increased to approx. 40 - 60 MRs per year: 31

scrapped ytd in 2018 (compared to 14 scrapped in 4Q17) (2)

• Fleet growth net of scrapping expected to be below 1% in 2018 and 2019 (2)(3)

▪ Demand fundamentals remain solid:

• Strong oil demand growth coupled with global refinery expansion

▪ Near term outlook remains positive:

• Atlantic basin cargo volumes should return to normal levels in 2H18
• Oil trading activity expected to increase; refined product inventories well

below five year averages and refinery throughput is set to increase by 2mbd from 2Q18 to 3Q18(4)

• IMO 2020 sulphur regulations expected to significantly increase seaborne

volumes of refined products from mid-2019; initial estimates +2mbd(5)

1. VV Trade, July 2018 2. Clarksons Shipping Intelligence Network and management’s estimates 3. Management’s estimates of deliveries for 2018, net of estimated scrapping. Management’s estimates based on 50% of 4Q18 scheduled deliveries slipping into 2019 4. IEA Oil Market Report , June 2018 & PIRA S&P Platts 5. IEA: Oil 2018, Deutsche Bank: IMO 2020 and management estimates

8 5.2% Oil Inventory Surplus and Refinery Throughput(3)

76.0 77.0 78.0 79.0 80.0 81.0 82.0 83.0 84.0 (100)

• 100

200 300 400 500 600 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18E 3Q18E 4Q18E

Global Refinery Runs (mmbpd) Inventroy Surplus (mmb) Inventory Surplus Refinery Runs

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0% 10% 20% 30% 40% 50% 60% 70% 80% 5 10 15 20 25 30 35 40 1997 2000 2003 2006 2009 2012 2015 2018 OB as % Fleet Million DWT Fleet (Million DWT) Orderbook as % Fleet

Chemical Tanker Market

▪ ASC Chemical tankers averaged $12,527 per day in 2Q18, down from $13,504 per day in 1Q18 ▪ Recent chemical market activity:

• Product tanker sector put downward pressure on chemical freight rates

late in 2Q18

• Import taxes imposed on palm oil in India resulted in lower cargo

volumes while soybean oil and sunflower oil volumes were stable(1)

• UAN shipping volumes down in 2018; US imports reduced as new

domestic production came on line(1)

▪ Demand outlook is very positive:

• Fundamental chemical demand is highly correlated to global economy;

global GDP forecast to grow 3.9% in 2018(5)

• Significant increase in US petrochemical capacity to start coming on

stream in 2018; US expected to become a significant exporter of methanol and petrochemicals

• Seaborne trade in commodity chemicals expected to increase by 6%

p.a. 2017 – 2020(4):

▪ Chemical tanker orderbook continuing to decline; 5.9% of existing fleet(2)

• Stainless steel tankers: 51% of orderbook / 6.8% of stainless fleet(2)
• Coated IMO2 tankers: 49% of orderbook / 5.2% of coated fleet(2)
• Overall net fleet growth in 2018 estimated at 3%(3)

▪ Overall chemical market set to strengthen as volumes increase and the product tanker market improves

Chemical Tanker Orderbook and Fleet Development(3)

1. Quincanon Associates: June, 2018 2. Clarksons World Fleet Register, Orderbook for coated IMO2 with average tank size <3000m3 and stainless steel ships above 10,000 Dwt as at July 2018 3. Management’s estimates based on expected deliveries, net of estimated scrapping 4. Deep sea commodity chemical trade growth as per Richardson Lawrie Chemical Carrier World No. 44 5. IMF World Economic Outlook Update, April 2018

5.9% 9 Seaborne Chemical & Methanol Trade Growth 2017 – 2020(4)

15,000 20,000 25,000 30,000 35,000 40,000 2017 2018 2019 2020

Commodity Chemical Trade (000's Tonnes)

Other Commodity Chemical Methanol

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Fleet Update

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9,741 2,416 2,505 2,508 2,537 9,966

• 2,000

4,000 6,000 8,000 10,000 12,000 2017 ACT 1Q18 ACT 2Q19 ACT 3Q18 EST 4Q18 EST 2018 EST

Revenue Days

Fleet Update

Revenue Days Profile(1) Fleet Update

+2.3% (Y-o-Y)

▪ Revenue days to increase by 2.3% to 9,966 in 2018 ▪ Drydocks:

• 2Q18: completed 5 drydocks totalling 35 days
• 3Q18: 55 drydock days (estimate)

1. Revenue Days based on management’s estimates.

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Financial Review

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Financial Performance

1. EBITDA is a non-GAAP measure. A reconciliation of this measure is included within Ardmore’s results filing 2. Adjusted net loss is a non-GAAP measure, excluding one-time write off of deferred finance fees of $0.4mln in 2Q18. A reconciliation of this measure is included within Ardmore’s results filing 3. Definitions: 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 incurred by commercial managers 4. Fleet operating costs per day are routine operating expenses and comprise crewing, repairs and maintenance, insurance, stores, lube oils and communication costs. Also included are technical management fees paid to third-party managers 5. Vessel operating costs per day include technical management fees

13 INCOME STATEMENT DATA

Three Months Three Months Six Months

US$ millions, unless otherwise stated

March 31, 2018 June 30, 2018 June 30, 2018 Results

EBITDA(1) $9.9 $7.6 $17.5 Adjusted Net (loss) / income(2) ($5.2) ($8.2) ($13.3) Adjusted Net (loss) / income per share ($/share) (2) ($0.16) ($0.25) ($0.41) General and Administrative expenses Corporate ($2.9) ($3.8) ($6.7) Commercial and Chartering ($0.8) ($0.8) ($1.6) Depreciation & amortization ($9.5) ($9.6) ($19.1) Interest & finance Interest and DFF Amortization ($5.5) ($6.1) ($11.6) Write-off of DFF due to Refinancing ($0.1) ($0.4) ($0.5)

OTHER OPERATING DATA

Average Number of Vessels 28 28 28 Fleet time charter equivalent per day ($/day)(3) $12,897 $11,503 $12,057 Vessel operating expenses (US$ million) $17.3 $16.1 $33.4 Fleet operating cost per day ($/day) (4) $6,786 $6,328 $6,556 Eco-Design MR ($/day)(5) $6,915 $6,360 $6,636 Eco-Mod MR ($/day)(5) $6,632 $6,615 $6,623 Eco-Design Chemical ($/day)(5) $6,635 $5,923 $6,277

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Product and Chemical Tanker Charter Rates

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”). For vessels employed on voyage charters, TCE is the net rate after deducting voyage costs incurred by commercial managers. Chemical tankers are full IMO2 rated vessels 2. Calculations based on existing cost structure and assume (a) fleet of 28 vessels, (b) utilization of 99.45% , (c) 33.1 mln shares as of June 30, 2018. Assumes no change in tax rate, cost of debt

• r share count

For every $1,000/day increase in rates, EPS increases by $0.31 cents(2) Time Charter Equivalent ($ / day)(1)

• AVG. FLEET

MR ECO-DES MR ECO-MOD

• CHEM. TANKERS

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12,583 12,042 13,163 13,369 12,897 13,146 11,806 13,504 11,503 10,600 12,579 12,527 12,057 11,826 11,893 12,816

• AVG. FLEET TCE

MR ECO-DES MR ECO-MOD CHEMICAL TANKERS 4Q17 1Q18 2Q18 2018 YTD

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Strong Balance Sheet

Low Financial Leverage and every $1 million increase in vessel values = $0.85 in NAV / share(4)

1. Excludes amount receivable in respect of capital leases of $2.9 mln provided to the purchasers under the sale and leaseback of the Ardmore Sealeader and Ardmore Sealifter in 2Q17 2. Debt balance includes impact of netting of deferred finance fees of $8.4 mln in 2Q18 ($8.9 mln in 4Q17) and netting of $2.9 mln receivable in respect of capital lease (as above) in both 2Q18 and 4Q17 3. Leverage calculation basis US GAAP 4. 28 ships x $1 million = $28 million / 33,097,831 shares = $0.85 / share; (33,097,831 shares outstanding as at June 30, 2018)

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▪ Maintaining a conservative capital structure with leverage 54.8% and $69.7 million in cash and net working capital BALANCE SHEET DATA As at US$ millions, unless otherwise stated June, 2018 December, 2017 Cash 47.9 39.5 Receivables, Inventories & Other Current Assets 44.4 44.4 Vessels, Drydock & Other Non-Current Assets(1) 759.8 758.8 Total Assets 852.1 842.7 Payables and Accruals 22.6 17.6 Debt & Lease Obligations(2) 454.2 444.0 Equity 375.3 381.0 Total Liabilities and Equity 852.1 842.7 Debt / Debt + Equity(3) 54.8%. 53.8%.

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Liquidity Position and Debt Amortization Schedule

1. Gross debt balance net of sellers’ credit $2.9mln 2. Gross debt excludes netting of deferred financed fees of $8.4 mln and operating lease of $2.4mln in 2Q18

+37% YoY

▪ Strong liquidity position at June 30, 2018 with cash of $47.9 million and additional $21.8 million in net working capital ▪ Completed sale and leaseback on two 2013 built MR’s in June with top tier Asian financier releasing cash of $10.3 million and maintaining corporate leverage level ▪ Issued $5.2 million through an ATM at $8.15 per share for general corporate purposes ▪ All debt (including capital leases) is amortizing at approximately $44 million per year (no non-amortizing debt). Maintaining balance sheet strength and liquidity

Senior Debt / Leases Amortizing

• approx. $44 million / year

Debt Repayment Profile ($ mln)(1)(2) $460.2 $438.1 $759.8 $69.7 $11.0 $11.0 Vessel Assets, Cash & Net Working Capital Gross Debt @ 2Q18 3Q18 4Q18 Pro-Forma Debt @ 4Q18 Gross Debt Vessel Assets Cash & Net Working Capital Debt Repayments

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Company Review and Summary

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Summary

▪ Reporting an adjusted net loss of $8.2 million or $0.25 per share for 2Q18, reflecting ongoing weakness in the product tanker market ▪ Decline in MR spot rates in 2Q18 was largely the result of unrelated short-term events, most notably in Brazil, Mexico and West Africa, as well as higher bunker prices and some incursion of crude tankers into product trades ▪ Supply-demand fundamentals are sound:

• MR orderbook continuing at record lows; supply growth expected to be below 1% in 2018 and 2019
• Tonne-mile demand growth underpinned by 1.4 million bpd oil consumption growth and export-oriented refineries coming on line

▪ IMO 2020 now coming into focus; major event for the product tanker sector, which may prove to be a game-changer in terms of demand starting mid-2019 ▪ MR rates have bottomed out; should see continued improvement through the second half of 2018 ▪ Ardmore is well positioned to benefit from a recovery in product tanker charter rates:

• Significant earnings power, where every $1,000 / day translates into 31 cents per share earnings
• Company remains on solid financial footing, with conservative leverage, good balance sheet liquidity, and an efficient cost

structure

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