Ardmore Shipping Corporation (NYSE:ASC) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 10:00 am ET

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Ardmore Shipping Corporation (NYSE:ASC) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, and welcome to the Ardmore Shipping's Third Quarter 2019 Earnings Conference Call. Today's call is being recorded, and an audio webcast and presentation are available in the Investor Relations section of the company's website, ardmoreshipping.com. We will conduct a question- and-answer session after the opening remarks and instructions will follow at that time. A replay of the conference call will be accessible anytime during the next two weeks, by dialing 1-877-344-7529 or 1-412-317-0088 and entering passcode number 10136638.

At this time, I will turn the call over to Anthony Gurnee, Chief Executive Officer of Ardmore Shipping. Please go ahead.

Executive
Anthony Gurnee

Good morning and welcome to Ardmore Shipping's third quarter 2019 earnings call. First, let me ask our CFO, Paul Tivnan, to describe the format for the call and discuss forward-looking statements.

Executive
Paul Tivnan

Thanks, Tony, and welcome, everyone. Before we begin our conference call, I would like to direct all participants to our website at ardmoreshipping.com, where you'll find a link to this morning's third quarter 2019 earnings release and presentation. Tony and I will take about 15 minutes to go through the presentation and then open up the call to questions.

Turning to Slide Two, please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from the results projected from those forward-looking statements, and additional information concerning factors that could cause the actual results to differ materially from those in the forward-looking statements is contained in the third quarter 2019 earnings release, which is available on our website.

And now, I will turn the call back over Tony.

Executive
Anthony Gurnee

Thank you, Paul. Let me first outline the format of today's call. To begin with, I'll discuss the quarterly highlights and then key market developments, after which, Paul will provide a summary of our performance and update on tanker market activity and the detailed financial update. And then, I will conclude the presentation and open up the call for questions.

Turning first to Slide Four, after three difficult years we believe the tanker market is in the early stages of a sustained upcycle, characterized by repetitive spikes with settling periods in between, but at levels well above the recent past. Sentiment has fundamentally changed over the past month, with rates now pushing up against what we would describe as a demand ceiling rather than bouncing along the supply floor. Rates for our MRs fixed since October 5th, have been a bit over $20,000 a day compared to an average for the third quarter of $13,800. The immediate driver is IMO 2020. Preparations are well underway and adding an additional layer of demand for product tankers with more to come.

On the back of these positive developments and with a fleet of 25 modern fuel-efficient ships, which are 100% employed in the spot market, Ardmore is well positioned to deliver strong results, where every $1,000 a day increase in rates translates into $0.27 in EPS. Based on these new rate levels, we expect