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Ardmore Shipping H1 profit slips by 5.8%

Ardmore Shipping H1 profit slips by 5.8%
Ardmore Shipping saw its first half profit declined by 5.8% year-on-year on the back of a softer MR tanker market during the period, but revenue rose in an overall firm tanking shipping market.

The first six months profit was recorded at $12.24m, down from $12.99m in the same period of last year, due mainly to lower contributions from the MR tankers segment.

“The spot market for MRs showed strength in the early part of the quarter, before softening in late May and June as a result of reduced refinery output and thus lower cargo volumes and trading activity,” said Anthony Gurnee, ceo of Ardmore Shipping.

Gurnee believed the refinery output will increase late in the third quarter to support MR tanker charter rates.

“We are very positive on MR spot rates beyond the current short term softness, and we believe that fundamental product tanker demand growth continues to be strong in the 4-6% range,” he commented.

This continuing growth would result in an increasing supply-demand tension as the pace of new vessel deliveries falls off significantly during the third quarter and the orderbook for MR product tankers declines to approximately 5% of the fleet by year-end, the lowest level in at least 20 years.

“As a result of these factors, we anticipate that fleet growth net of scrapping will decline to only 2-3% in 2017 and will be meaningfully outstripped by demand growth for the foreseeable future,” Gurnee said.

Revenue for Ardmore Shipping in the first half stood at $83.26m, up 20.8% year-on-year.

“Charter performance across the Ardmore fleet was solid, given overall market conditions, with a particularly strong performance from our chemical tankers,” Gurnee noted.

Ardmore Shipping has 22 vessels currently in operation, comprising 15 MR tankers and seven product and chemical tankers.

In June, Ardmore entered into an agreement to buy six modern, eco-design MR product/chemical tankers for a total price of $172.5m. The ships, which have an average age of 2.4 years, are scheduled to be delivered to Ardmore Shipping between September and October this year.