Ardmore Shipping has the firepower to grow its fleet after significant strengthening of its balance sheet this year, analysts say.
New York-listed Ardmore, which booked a profit in line with Wall Street expectations this week, is well set to add to its fleet, according to Fotis Giannakoulis of Morgan Stanley.
Ardmore finished the first quarter with $47m in cash, with the sale of two chemical tankers swelling its cash pile to $60m and raising its liquidity to over $100m, the analyst says.
“That would be sufficient to fund at least two more vessel acquisitions without new equity or buyback stock as it trades below its $11.5/ish net asset value,” Giannakoulis said in a report.
Ardmore logged a profit of $6.7m in the opening three months of 2016, against $5.1m in the same period of 2015. Earnings per share of $0.26 were a cent below Street forecasts.
Doug Mavrinac of Jefferies says the company will generate almost $15m per quarter in cash through 2017, suggesting the money will be set to work in a “value creating way”.
Magnus Fyhr of Seaport Global notes Ardmore has grown its chemical tanker fleet from three to nine ships in the past year, at a time when a structural shift is taking place in the market.
“With new export-oriented petrochemical facilities coming on line in the Middle East and the US Gulf, we expect long-haul petrochemical exports to increase in coming years,” he said.
“In addition, we expect the orderbook to decline to 6% by the end of 2016, creating a favorable backdrop for the chemical tanker segment.”
