Third d Quarter 2017 Earnings ings Presentatio ntation n - - PowerPoint PPT Presentation

ARDMORE SHIPPING CORPORATION Third d Quarter 2017 Earnings ings Presentatio ntation n

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 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 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, 2016. 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.

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 3

Earnings Release: Third Quarter 2017

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

Agenda

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 4

Highlights

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 5

Performance and Recent Market Activity

Highlights

▪ Reported EBITDA of $10.1 million and net loss $4.6 million, equating to loss of $0.14 per share in 3Q17; compared to net loss of $1.9 million

• r $0.06 per share in 2Q17

▪ Delivered satisfactory chartering performance in a challenging

• perating environment; spot and pool MR tanker rates averaged

$12,970 per day in 3Q17 vs. $13,765 per day in 2Q17 ▪ MR spot rates impacted by reduced cargo volumes resulting from refinery outages and low oil trading activity; however, near term

• utlook positive with recovering US Gulf refinery output, rapidly

rebalancing inventories, and seasonally stronger winter period ▪ Continuing to execute on strategy; focusing on operating performance, cost efficiency, and other steps to improve ROIC ▪ Agreed to acquire a high-quality, 2008 Japanese-built, MR product tanker at a very attractive price equating to 30% below age-adjusted newbuilding value but comparable to NAV estimates ▪ Completed an attractively priced $15 mln revolving credit facility, further enhancing our financial flexibility ▪ Maintaining dividend policy of paying out 60% of earnings from continuing operations. Consistent with policy, the Company is declaring no dividend for 3Q17

6

High Quality Fleet

1. Average age as at September 30, 2017

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 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 27 1,202,568 5.1(1)

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 7

Product and Chemical Tanker Markets

$10,000 $12,000 $14,000 $16,000 $18,000 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 10 20 30 40 50 60 70 80 90 100 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

OB as % Fleet Million DWT

8

Product Tanker Market

Average MR Spot Market TCE Rates(1) Product Tanker Orderbook and Fleet Development(3)

▪ MR product tanker rates softened in 3Q17; ASC MR Spot & Pool TCE averaged $12,970 vs. $13,765 in 2Q17 ▪ Nevertheless, outlook is positive for year end:

• US refinery throughput set to increase following Sept/Oct outages and

remain elevated in 2018; refinery margins at widest levels since 2013, which should incentivize elevated runs

• Inventory destocking higher than expected in 3Q17 as commercial stocks

continue to rebalance to 2014 levels(4); as a result, we expect normal trading activity to resume soon

• Product inventory imbalances particularly for middle distillates should lead

to increased activity in late 4Q17 and into 1Q18

▪ Underlying MR tonne mile demand growth remains strong:

• Global oil demand growth expected to be 1.6mbd in 2017 and 1.4mbd in

2018 matched with refinery capacity growth in export-oriented locations(5)

• Increased cargo volumes, regional product slate imbalances, emissions

regulations, trading complexity all continuing to drive demand growth at around 5%

▪ MR supply growth now at historically low levels:

• 55 MRs delivered YTD; estimate 8 MRs remaining in 4Q17(6)
• 14 MRs scrapped YTD; estimate 20 – 25 for full year
• Resulting in net fleet growth of 1.8% in 2017 / 1.1% or less 2018(7)
• Shipyard capacity remains constrained, only 9 active MR shipyards (down

from 20 shipyards in 2008)

▪ Anticipated demand growth of 5% combined with supply growth of 1.1% in 2018 should significantly tighten the market leading towards a sustained recovery

1. Source: Howe Robinson Partners - Rates quoted are the average $/day rates for TC6, TC7, TC 10, TC11/4 and TC2/14 for a MR Eco-design vessel from 1Q14 to 3Q17 2. Management’s estimates based on a full fleet of 27 vessels operating in the spot market for 363 revenue days / ship and MR product tankers earning $25,0000 / day and chemical tankers earning $18,000 / day 3. Source: Clarksons Shipping Intelligence Network and management’s estimates as at Oct 18th, 2017 4. PIRA Energy Group: September Monthly Oil Market Outlook 5. Source: International Energy Agency, “Oil Market Report Oct 2017” and management’s estimates. IEA estimates oil demand growth will average 1.6 million bpd per annum in 2017 and 1.4 million bpd in 2018 6. Management’s estimates of deliveries for 2017 and 2018, net of estimated scrapping 7. Management estimates based on 50% of 4Q17 scheduled deliveries slipping into 2018

4.1% EPS Breakeven ASC EPS ~$2.80(2) TCE $25,000 / day

30.00 35.00 40.00 45.00 50.00 55.00 60.00 65.00 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

$ / Tonne

0% 10% 20% 30% 40% 50% 60% 70% 80% 5 10 15 20 25 30 35 40 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

OB as % Fleet Million DWT

▪ Chemical tanker rates remained flat in 3Q17, ASC charter rates averaging $10,768 vs $10,736 in 2Q17 ▪ ASC chemical fleet cargos split 3Q17:

• 4% CPP / 64% chemicals / 32% vegoils
• Chemical cargoes generated 12% of ASC’s total fleet revenue

▪ Recent activity:

• Market was soft overall, reflecting broader product tanker market
• Methanol volumes declined during the third quarter as a result of

combined impact of US Hurricane disruptions and Asia Pacific outages(3)

• Vegoil volumes fell; South America soybean exports averaged 550k MT in

Sept from 1,000k MT in June(4)

▪ Demand outlook positive:

• Improving global GDP and continued expansion of petrochemical plants in

US and ME will lead to increased exports and tonne mile demand

• Improving product tanker market conditions will increase demand for

chemical tankers in CPP trade

• Underlying fundamentals remain strong; seaborne chemical trade growth

estimated at 5% per annum

▪ Orderbook continuing to decline; 9% of existing fleet (Dwt basis):

• Stainless steel tankers 65% of orderbook / 13.5% of stainless fleet,

Coated IMO2 tankers 35% of orderbook / 5.6% of Coated IMO2 fleet

• Overall net fleet growth of approximately 4.4% in 2017(5) / 4.9% in 2018

9

Chemical Tanker Market

Chemical Tanker Spot Market Performance(1) Chemical Tanker Orderbook and Fleet Development(2)

1. Source: Clarksons Platou, Clarksons SIN. Management’s estimates based average chemical tanker spot rates on selected trades (Houston-F.East / Gulf-F.East / Gulf-Med / Houston-Rotterdam / Rotterdam-Houston / Houston- Santos / Gulf-Rotterdam / Ulsan-Houston) 2. Orderbook for coated IMO2 with average tank size <3000m3 and stainless steel ships above 10,000 Dwt as at Oct 24th, 2017 3. S&P Global Platts: “Asia: The Week In Petrochemicals August 28th” 4. Quincannon Associates Monthly Market Report: September 2017 5. Management’s estimates based on expected deliveries, net of estimated scrapping

9% Average of 8 Chemical Tanker Routes from Clarksons (Gross Freight before Voyage Costs)

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 10

Value-Creating Activity

11

Policy and Recent Activity

1. Acquisition is subject to completion of finance on terms which are acceptable to Ardmore. Vessel is expected to deliver to Ardmore in January 2018

▪ Clear policy of putting financial strength and efficiency first:

• Maintaining low leverage of 53% plus strong cash balances
• Recently completed an attractively priced $15 million revolving credit

facility, further enhancing financial flexibility

• Maintaining low breakeven rates and cost of capital

▪ Organisation focused on operating performance, cost efficiency, and further improvements to ROIC:

• Intensive focus on operating performance enhancements from chartering

and commercial operations

• Continued focus on reducing overhead costs; already lowest in our peer

group

• Effective capital allocation; June 2016 acquisition of 6 x MRs set market

low for eco-designs, still unmatched

▪ Most recently - highly attractive vessel acquisition(1)

• Priced at 30% discount to newbuild equivalent; in line with currently

depressed NAV estimates for ASC

• Highly attractive finance terms under a Japanese Tax Lease resulting in

minimal equity deployed, low breakevens, and high ROE

• Small transaction but potential to create significant value; EPS accretion of

5% at $18,000 / day

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 12

Fleet Update

13

Fleet Update

Revenue Days Profile(1) Fleet Update

1. Revenue Days based on management’s estimates.

+13% (Y-o-Y)

▪ Revenue days to increase by 13% to 9,761 in 2017 ▪ Drydocks:

• 3Q17: Ardmore Seamaster completed special

survey

• 4Q17: Expect 20 drydock days

7,071 8,635 2,410 2,425 2,467 2,458 9,761

• 2,000

4,000 6,000 8,000 10,000 12,000 2015 ACT 2016 ACT 1Q17 ACT 2Q17 ACT 3Q17 ACT 4Q17 EST 2017 EST

Revenue Days

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 14

Financial

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 15

Financial Performance

1. EBITDA is a non-GAAP measure. A reconciliation of this measure is included in the appendix of this presentation 2. 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 3. 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 of $381 / day 3Q17 and $385 / day in YTD 3Q17 4. Vessel operating costs per day include technical management fees

INCOME STATEMENT DATA Three months ended Nine months ended US$ millions, unless otherwise stated Sept 30, 2017 Sept 30, 2017 Results EBITDA(1) 10.1 34.7 Net (loss) / income (4.6) (8.7) Net (loss) / income per share ($/share) (0.14) (0.26) General and Administrative expenses Corporate 3.2 9.5 Commercial and Chartering 0.7 2.0 Depreciation & amortization 9.4 27.6 Interest & finance 5.4 16.0 OTHER OPERATING DATA Average Number of Vessels 27.0 27.0 Fleet time charter equivalent per day ($/day)(2) 12,376 12,751 Vessel operating expenses (US$ million) 16.3 46.8 Fleet operating cost per day ($/day) (3) 6,538 6,308 Eco-Design MR ($/day)(4) 6,341 6,190 Eco-Mod MR ($/day)(4) 7,175 6,583 Eco-Design Chemical ($/day)(4) 6,392 6,330

16

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 27 vessels, (b) utilization of 99.45% , (c) 33.6 mln shares and (d) dividend policy of paying out 60% of earnings from continuing operations. Assumes no change in tax rate, cost of debt or share count

For every $1,000/day increase in rates, EPS increases by $0.29 cents and Dividend by $0.17 cents

(2)

Time Charter Equivalent ($ / day)(1)

+37% YoY

• AVG. FLEET

MR ECO-DES MR ECO-MOD

• CHEM. TANKERS

12,307 12,389 11,910 12,502 12,919 13,181 12,260 12,907 12,996 13,452 13,959 10,736 12,376 12,938 12,534 10,768 4Q16 1Q17 2Q17 3Q17

Low Financial Leverage and every $1 million increase in vessel values = $0.80 in NAV / share(3) 17

Strong Balance Sheet

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 $9.6 mln in 3Q17 ($11.2 mln in 4Q16) and netting of $2.9 mln receivable in respect of capital lease in 3Q17 3. Leverage calculation based on gross debt before netting of deferred finance fees. Gross debt of $452.7 mln 3Q17 / $473.5 mln 4Q16 4. 27 ships x $1 million = $27 million / 33.6 million shares = $0.80 / share; assumes no change in share count

BALANCE SHEET DATA As at; US$ millions, unless otherwise stated Sept 30, 2017 Dec 31, 2016 Cash 45.8 56.0 Receivables & Inventories(1) 48.1 38.5 Vessels & Drydock 764.9 789.2 Total Assets 858.8 883.6 Payables and Accruals 19.8 17.0 Debt & Capital Lease Obligations(2) 443.1 462.3 Equity 396.0 404.3 Total Liabilities and Equity 858.8 883.6 Debt / Debt + Equity(3) 52.81% 53.35%

18

Conservative Capital Structure

▪ Book value of vessel assets $764.4 million and gross debt $452.7 million ($443.1 million net deferred finance fees) as at Sep 30, 2017(1) ▪ Low corporate leverage: 52.8% as at Sep 30, 2017 with significant liquidity; cash and net working capital $73.5 million(2) ▪ All debt (includes capital leases) is amortizing at approximately $44.0 million per year (No non-amortizing debt) ▪ Completed an attractively priced $15 mln revolving credit facility, further enhancing our financial flexibility

Debt Profile

1. Gross Debt excludes impact of netting of deferred finance fees of $9.6 mln as required under US GAAP ($452.7 mln - $9.6 mln = $443.1 mln) 2. $73.5 mln consists of $45.8 mln cash and net working capital of approximately $27.7 mln

$452.7 $441.7 $441.7 $764.4 $11.0 $73.5 Vessel Assets, Cash & Net Working Capital Gross Debt @ 3Q17 4Q 2017 Pro-Forma Debt @ 4Q17 Gross Debt Vessel Assets Debt Repayments Cash & Net Working Capital

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 19

Company Review and Summary

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 20

Summary

▪ Reported EBITDA of $10.1 million and net loss $4.6 million, equating to loss of $0.14 per share in the third quarter; compared to net loss of $1.9 million or $0.06 per share in second quarter of 2017. ▪ MR product tanker rates declined in 3Q17 due to significantly lower refinery output. ▪ Positive outlook for year end as normal trading activity gets set to resume; refined product inventories reaching balance and increasing refinery throughput. ▪ Fundamentals remain strong; underlying MR tonne mile demand growth estimated to be around 5%, underpinned by oil consumption growth, export oriented refinery capacity growth and increasing trade complexity. ▪ Supply growth continues to decelerate; orderbook at historical lows, resulting net fleet growth approximately 1.8% in 2017 and 1.1% or less in 2018, setting the stage for significant rebound in charter rates. ▪ Highly attractive vessel acquisition at a compelling price; 30% below age-adjusted newbuilding equivalent which is in line with currently depressed NAV estimates for ASC, signalling value not just in the acquisition but also in current company valuation ▪ Maintaining financial strength with low leverage and healthy cash balance; completed a $15 million revolving credit facility in October further enhancing our financial flexibility. ▪ Overall with our modern fleet and industry-leading cost structure, Ardmore is well positioned to take advantage of a charter market recovery and generate strong returns and value accretion for our shareholders.

Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commercial capability 21

Appendix

22

Non-GAAP Measures

1. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. This non-GAAP measure is presented in this presentation as the Company believes that it provides investors with a means of evaluating and understanding how Ardmore’s management evaluates operating performance. This non-GAAP measure should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with US

• GAAP. In addition, this non-GAAP measure does not have a standardized meaning, and is therefore unlikely to be comparable to similar measures presented by other companies

NON-GAAP MEASURES Three months ended Nine Months Ended expressed in US$, unless otherwise stated Sept 30, 2017 Sept 30, 2017 Reconciliation of Net (Loss) / Income to EBITDA Net (loss) / income (4,639,605) (8,660,943) Interest income (136,198) (327,016) Interest expense and finance costs 5,425,243 16,029,527 Income tax 16,500 47,839 Depreciation 8,638,739 25,625,382 Amortization of deferred dry dock expenditure 771,037 1,971,213 EBITDA(1) 10,075,716 34,686,002