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
operating 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
or $0.06 per share in 2Q17
▪ Delivered satisfactory chartering performance in a challenging
operating 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
outlook 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
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
10
20
30
40
50
60
70
80
90
100
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
OB
as
% F
leet
Mill
ion
DW
T
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:
o 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
o 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
o 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:
o 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)
o 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:
o 55 MRs delivered YTD; estimate 8 MRs remaining in 4Q17(6)
o 14 MRs scrapped YTD; estimate 20 – 25 for full year
o Resulting in net fleet growth of 1.8% in 2017 / 1.1% or less 2018(7)
o 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 3Q172. 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 / day3. Source: Clarksons Shipping Intelligence Network and management’s estimates as at Oct 18th, 20174. PIRA Energy Group: September Monthly Oil Market Outlook5. 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 20186. Management’s estimates of deliveries for 2017 and 2018, net of estimated scrapping7. 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
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
$ /
To
nn
e
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
5
10
15
20
25
30
35
40
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
OB
as
% F
leet
Mill
ion
DW
T
▪ Chemical tanker rates remained flat in 3Q17, ASC charter rates averaging
$10,768 vs $10,736 in 2Q17
▪ ASC chemical fleet cargos split 3Q17:
o 4% CPP / 64% chemicals / 32% vegoils
o Chemical cargoes generated 12% of ASC’s total fleet revenue
▪ Recent activity:
o Market was soft overall, reflecting broader product tanker market
o Methanol volumes declined during the third quarter as a result of
combined impact of US Hurricane disruptions and Asia Pacific outages(3)
o Vegoil volumes fell; South America soybean exports averaged 550k MT in
Sept from 1,000k MT in June(4)
▪ Demand outlook positive:
o Improving global GDP and continued expansion of petrochemical plants in
US and ME will lead to increased exports and tonne mile demand
o Improving product tanker market conditions will increase demand for
chemical tankers in CPP trade
o Underlying fundamentals remain strong; seaborne chemical trade growth
estimated at 5% per annum
▪ Orderbook continuing to decline; 9% of existing fleet (Dwt basis):
o Stainless steel tankers 65% of orderbook / 13.5% of stainless fleet,
Coated IMO2 tankers 35% of orderbook / 5.6% of Coated IMO2 fleet
o 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, 20173. S&P Global Platts: “Asia: The Week In Petrochemicals August 28th”
4. Quincannon Associates Monthly Market Report: September 20175. 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:
o Maintaining low leverage of 53% plus strong cash balances
o Recently completed an attractively priced $15 million revolving credit
facility, further enhancing financial flexibility
o Maintaining low breakeven rates and cost of capital
▪ Organisation focused on operating performance, cost efficiency, and
further improvements to ROIC:
o Intensive focus on operating performance enhancements from chartering
and commercial operations
o Continued focus on reducing overhead costs; already lowest in our peer
group
o 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)
o Priced at 30% discount to newbuild equivalent; in line with currently
depressed NAV estimates for ASC
o Highly attractive finance terms under a Japanese Tax Lease resulting in
minimal equity deployed, low breakevens, and high ROE
o 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:
o 3Q17: Ardmore Seamaster completed special
survey
o 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
Rev
enu
e D
ays
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 presentation2. 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 managers3. 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 $385 / day in YTD 3Q17 4. Vessel operating costs per day include technical management fees
INCOME STATEMENT DATA Three months ended Nine months endedUS$ millions, unless otherwise stated Sept 30, 2017 Sept 30, 2017
ResultsEBITDA(1) 10.1 34.7Net (loss) / income (4.6) (8.7)Net (loss) / income per share ($/share) (0.14) (0.26)
General and Administrative expensesCorporate 3.2 9.5Commercial and Chartering 0.7 2.0
Depreciation & amortization 9.4 27.6Interest & finance 5.4 16.0
OTHER OPERATING DATAAverage Number of Vessels 27.0 27.0
Fleet time charter equivalent per day ($/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 6,190Eco-Mod MR ($/day)(4) 7,175 6,583Eco-Design Chemical ($/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 2Q172. 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 3Q173. 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 statedSept 30, 2017 Dec 31, 2016
Cash 45.8 56.0
Receivables & Inventories(1) 48.1 38.5Vessels & 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