MAY 2015 INVESTOR PRESENTATION – Ardmore Shipping Corporation

Ardmore Shipping Corporation · May 18, 2015 · 66 slides

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ARDMORE SHIPPING CORPORATION Investor Day Presentation May 18th, 2015
Investor Day May 18th, 2015 Agenda I. Introduction II. Overview of Ardmore Shipping III. Refinery Developments: The IEA View IV. Product Tanker Fundamentals: Aggregate Demand and Supply V. Impact of the New Oil Market on Cargo…
Whats Driving The Product Tanker Market Strong Demand Fundamentals New Oil Market Creating Extra Demand for the Foreseeable Future the New Normal Acceleration of Oil Consumption Growth Product Tanker Supply Growth Slower…
Overview of Ardmore Shipping . 5
Our Company Leading public product tanker company listed on the New York Stock Exchange (ASC) Owns and operates a fleet of 24 Eco medium size (MR) product and chemical tankers(1) Effective chartering strategy: value…
Our Fleet High Quality Vessels Fleet List Modern Eco Fleet Vessel Name Type Dwt Built Country Employment Specification Ardmore Seavaliant Product/Chemical 49,998 Feb-13 Korea Spot Eco-design Ardmore Seaventure Product/Chemical…
Our Strategy 1 Consistent Focus on MR Product and Chemical Tankers 2 Cost Efficiency 3 Highly Effective Chartering Strategy 4 Value Added Service = Max Earnings Acquire vessels at cyclical lows: low cash Time charter and spot…
Fully Funded with a Conservative Capital Structure Newbuilds Fully Funded Fully funded: 900 As at 1Q15 Pro-Forma 152.7mln committed debt available and 128mln remaining in yard installments for newbuildings 800 +128 700 Total…
Earnings: Review of 1Q15 and Outlook Delivered Strong Financial Performance in 1Q15 Newbuild Deliveries = 70% Increase in Revenue Days(1) 8,000 +70% Reported EPS of 20 cents with an average of 15.9 ships (24 (Y-o-Y) vessels in water…
Refinery Developments: The IEA View . 11
Ardmore Shipping Corporation Investor Day University Club - New York, 18 May 2015 Toril Bosoni, International Energy Agency OECD/IEA 2015 OECD/IEA 2015
About the International Energy Agency The IEA was established in 1974 and is the energy forum for 28 advanced economies IEA member countries are committed to taking joint measures to meet oil supply emergencies The also have…
Benchmark Oil Market Analysis The first stop oil market report since 1983, Annual outlook 5 years ahead, assessing with the latest, extensive statistical data plus industry investment trends 12-18 month fundamentals outlook Closes…
Oil price plunge triggers market reset Historical Brent crude oil prices IEA import price assumptions 160 120 140 110 108 102 100 100 98 120 95 93 USD/bbl USD/bbl 90 91 87 100 80 80 70 70 71 73 67 60 60 62 40…
Business as unusual 7 6 Implied OPECspare 5 capacity mb/d 4 3 World demand growth 2 1 World supply capacity 0 growth -1 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 The market…
Modest demand growth still foreseen 3.5 3.5% Other NonOECD 2.5 2.5% mb/d 1.5 1.5% NonOECDAsia 0.5 0.5% OECD -0.5 -0.5% -1.5 -1.5% World Growth Rate -2.5 -2.5% 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020…
Eastward pull unabated 1998-06 2006-14 2014-20 Europe 36 FSU 34 103 23 -79 -296 Asia/Pacific 680 672 Americas 633 Middle East 345 255 227 158 180 -1 Africa 76 121 142 Average global demand growth (kb/d) 1998-06…
Slowing supply growth 2.5 2.0 1.5 mb/d 1.0 0.5 0.0 -0.5 2014 2015 2016 2017 2018 2019 2020 OPECcrude capacity OPECNGLs Non-OPEC World Global capacity growth cut to annual average 860 kb/d through 2020, down from…
Non-OPEC growth drops from record high Annual non-OPEC supply growth 2500 PGand biofuels 2000 Other Asia China 1500 Middle East kb/d 1000 Africa 500 Latin America 0 Other Europe FSU -500 OECD Pacific -1000 OECD Europe…
North America remains backbone of non-OPEC growth US total oil production Canada total oil production 14 6 12 5 10 4 mb/d mb/d 8 3 6 4 2 2 1 0 0 2008 2010 2012 2014 2016 2018 2020 2013 2014 2015 2016 2017 2018 2019…
Price drop curbs OPEC crude capacity growth 37 mb/d 36 35 34 2014 2015 2016 2017 2018 2019 2020 Current data June 2014 Growth expectations reduced to 200 kb/d annually, vs 350 kb/d prior to the price drop OECD/IEA 2015
OPEC growth hinges on Iraq 0.6 0.4 0.2 mb/d 0.0 -0.2 -0.4 -0.6 -0.8 2014 2015 2016 2017 2018 2019 2020 Iraq Rest of OPEC OPEC Price drop, ISIL add to Iraq institutional and infrastructure constraints Total Iraq growth…
Crude trade has peaked Inter-regional crude trade 36.0 35.5 35.0 mb/d 34.5 34.0 33.5 33.0 2006 2008 2010 2012 2014 2016 2018 2020 Crude trade peaked at 36 mb/d in 2012 and declined swiftly over 2012- 2014 on lower US…
World crude markets fragmenting Crude Exports in 2020 and Growth in 2014-20 for Key Trade Routes 1 (million barrels per day) 0.5 (-0.1) 3.6 0.2 OECD (+0.1) Europe (-0.5) OECD 0.4 Asia 0.2 Oceania 3 (+0.1) 2.0 (+0.2) OECD…
Refining surplus lingers despite scaling back Global crude distillation capacity additions 2 000 OECDAmericas 1 500 OECDEurope 1 000 OECDAsia Oceania kb/d China 500 Other Asia 0 Middle East - 500 Other non-OECD -1 000…
Non-OECD accounts for 90% of growth Others OECD 14% 10% Latin America 8% China 24% Middle East 26% Other Asia 18% Non-OECD Asia adds 42% of total, or 2.7 mb/d of crude distillation capacity Middle East expands capacity…
Non-OECD expansions front-loaded Non- OECD refinery capacity additions 1.8 China 1.6 1.4 Other Asia 1.2 mb/d 1.0 Middle East 0.8 FSU 0.6 0.4 Latin America 0.2 Africa 0.0 2014 2015 2016 2017 2018 2019 2020 Projects…
More OECD closures in the cards OECD refinery closures OECD refinery utilisation rates 1 400 100% 1 200 90% 1 000 mb/d 800 80% 600 70% 400 60% 200 0 50% 2008 2010 2012 2014 2016 2007 2009 2011 2013 2015 2017 2019…
Light distillate surplus emerge Product supply balances: naphtha / gasoline Regional balances in 2014 and 2020 (kb/d) OECD/IEA 2015
Exporters to fight for market share as traditional outlets vanish Atlantic basin gasoline balances Key regional naphtha balances 1.5 1.5 Exports 1.0 mb/d mb/d 0.5 1.0 0.0 -0.5 0.5 -1.0 Imports -1.5 0.0 2008 2010 2012…
US Turns Gasoline Net-Exporter But Jones Act provides market for Europe on US East Coast US Gasoline Imports (kb/d) (Incl blending Components) 1600 1400 1200 1000 800 600 400 200 0 Jan-2005 Jan-2008 Jan-2011 Jan-2014 Europe…
US Gasoline Exports Stay in the Americas But increasing share of Distillates coming to Europe US Distillate Exports (kb/d) 1400 1200 1000 800 600 400 200 0 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Europe Others Mexico and…
Europes middle distillate import dependence Product supply balances: gasoil / kerosene Regional balances in 2014 and 2020 (kb/d) Asia set to become a middle distillate net-importer China to become a gasoil exporter Uncertainty…
Middle East and FSU increasingly long distillates Middle East oil product balances FSU oil product balances 1.5 1.5 Exports Exports 1.0 1.0 mb/d mb/d 0.5 0.5 0.0 0.0 Imports Imports -0.5 -0.5 2008 2010 2012 2014 2016…
What about China China oil product balances China gasoil balances 13.0 5.5 12.0 5.0 11.0 4.5 10.0 4.0 mb/d mb/d 9.0 8.0 3.5 7.0 3.0 6.0 2.5 5.0 2.0 1Q06 1Q08 1Q10 1Q12 1Q14 1Q16 1Q18 1Q20 1Q06 1Q08 1Q10 1Q12 1Q14…
Africa and Latin America remain importers African refinery output Latin American refinery output vs demand vs demand 5.5 8.0 5.0 7.5 4.5 4.0 7.0 mb/d 3.5 6.5 mb/d 3.0 6.0 2.5 5.5 2.0 1.5 5.0 1.0 4.5 1Q06 1Q08…
Fuel oil challenges Product supply balances: fuel oil Regional balances in 2014 and 2020 (kb/d) Fuel oil tightens ahead of 2020 bunker fuel switch to 0.5% S, as refiners upgrade but then become massively oversupplied Global fuel…
https://www.iea.org/oilmarketreport/
Product Tanker Fundamentals . 40
Products Tanker Market Overview Ardmore Shipping Investor Day Simon Chattrabhuti, Director, Head of Tanker Market Analysis 18 May 2015 www.clarksons.com www.clarksons.com
Deep Sea Products Tanker Market Structure Avg. Fleet Size Orderbook Size Range Type Size (No. of (No. of Cargo Types (dwt) (dwt)* vessels) vessels) LR2 Clean products, crude oil, dirty products, (Coated 85-125k 109k 268 70…
Key Products Tanker Cargoes and Uses Transportation Naphtha Manufacturing Gasoline and blending Construction components Agriculture Jet fuel / kerosene Power generation Gasoil / diesel Heating Fuel Oil / VGO Refinery feedstock…
MR Products Tanker Trading Map Data source: Clarksons Seanet 18 May 2015 Products Tanker Market Overview Ardmore Shipping Investor Day www.clarksons.com 45
Key Products Tanker Demand Drivers Middle Eastern and Indian refinery capacity expansion US condensate splitter & topping capacity expansions and processed condensate exports Russian refinery upgrades Closure of European and…
World Seaborne Oil Products Trade CAGR Trade Tonne-Miles 1984-14 2.91% 3.09% 1994-14 4.22% 4.36% 2004-14 4.18% 4.68% Data Source: Clarksons 18 May 2015 Products Tanker Market Overview Ardmore Shipping Investor Day…
Aframax/LR2 Tanker Fleet Age Profiles Updated start of May 2015 Data Source: Clarksons 18 May 2015 Products Tanker Market Overview Ardmore Shipping Investor Day www.clarksons.com 48
Tanker Fleet Age Profiles Panamax/LR1 MR Handy Updated start of May 2015 Data Source: Clarksons 18 May 2015 Products Tanker Market Overview Ardmore Shipping Investor Day www.clarksons.com 49
MR Products Tanker Orderbook Delivery Analysis NB: Based on orderbook at the start of the year Data Source: Clarksons 18 May 2015 Products Tanker Market Overview Ardmore Shipping Investor Day www.clarksons.com 50
Tanker Fleet Developments Panamax/LR1 MR Handy Updated start of May 2015 Data Source: Clarksons 18 May 2015 Products Tanker Market Overview Ardmore Shipping Investor Day www.clarksons.com 51
25-125K DWT Products Tanker Fleet Development Updated start of May 2015 Data Source: Clarksons 18 May 2015 Products Tanker Market Overview Ardmore Shipping Investor Day www.clarksons.com 52
Upcoming Regulations Ballast water treatment (US) Ballast water treatment (IMO) Common Structural Rules Harmonisation NOx Tier III Data source: Clarksons 18 May 2015 Products Tanker Market Overview Ardmore Shipping Investor…
Newbuilding Dynamics vs. MR NB Price Data source: Clarksons/TEX/Asiasis/Reuters 18 May 2015 Products Tanker Market Overview Ardmore Shipping Investor Day www.clarksons.com 54
Thank You 18 May 2015 Products Tanker Market Overview Ardmore Shipping Investor Day www.clarksons.com 55
Impact of New Oil Market on Product Cargo Movements . 56
Example Houston . 57
Example Houston Regional Markets . 58
Example Houston Superregional Markets . 59
Example Houston Global Markets . 60
Opportunistic Oil Trading is Expanding Tonne-Miles 61
Volatility Is Creating Zero Ballast Trades . 62
Increasingly Complex and Time-Consuming Trading . 63
Port Congestion Amsterdam 07-May-2015 Buenos Aires 07-May-2015 . Houston 07-May-2015 Singapore 07-May-2015 64
Closing Remarks . 65
Key Takeaways Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commerical capability 66
Why Invest In Ardmore Fundamentals continue to drive underlying demand growth on a long-term basis New oil market is creating sustained price volatility, increased volumes and port congestion, adding a new layer of demand for MR…
Q&A Modern Fleet of Eco-design and Eco-mod built at high quality Korean and Japanese shipyards with upgrades to improve fuel efficiency and commerical capability 68

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