SEC Form 6-K filed by Ardmore Shipping Corporation

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the three months ended March 31, 2024

Commission file number 001-36028

ARDMORE SHIPPING CORPORATION

(Exact name of Registrant as specified in its charter)

Belvedere Building,

Ground Floor,

69 Pitts Bay Road,

Pembroke,

HM08,

Bermuda

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ⌧           Form 40- F ◻

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INFORMATION CONTAINED IN THIS FORM 6-K REPORT

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Attached to this Report on Form 6-K are (1) Management’s Discussion and Analysis of Financial Condition and Results of Operations and (2) the unaudited interim condensed consolidated financial statements and related notes of Ardmore Shipping Corporation (the “Company”), as of March 31, 2024 and for the three months ended March 31, 2024 and 2023.

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This Report is hereby incorporated by reference into the following registration statements of the Company:

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FORWARD-LOOKING STATEMENTS

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Matters discussed in this report may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, expectations, projections, strategies, beliefs about future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe”, “anticipate”, “intend”, “estimate”, “forecast”, “project”, “plan”, “potential”, “should”, “may”, “will”, “expect” and similar expressions are among those that identify forward-looking statements.

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Forward-looking statements in this report include, among others, statements regarding: future operating results; the outcome of the Company’s strategies and implementation of the Company’s Energy Transition Plan; fleet expansion and vessel and business acquisitions; future drydocking days, drydocking expenses and anticipated installations of scrubbers and ballast water treatment systems; sufficiency of liquidity and capital resources; anticipated funds and sources of financing for liquidity needs; the Company’s expectations regarding covenants in financing arrangements; the Company’s expectations regarding foreign exchange risk and credit risks; the Company’s expectations regarding the risk and potential effects of inflation; the potential effect of the Israel-Hamas war on the Company’s business, results of operations, financial condition and cash flows; share-based compensation; and the timing and payment of quarterly dividends by the Company. The forward-looking statements in this report are based upon various assumptions, including, among others, the Company’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

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In addition to these important factors, other important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward-looking statements include: general market conditions, including fluctuations in charter rates and vessel values; changes in demand for and the supply of tanker vessel capacity; changes in the Company’s operating expenses, including bunker prices, drydocking and insurance costs; changes in the projections of spot and time charter or pool trading of the Company’s vessels; fluctuations in oil prices; the market for the Company’s vessels; competition in the tanker industry; availability and completion of financing and refinancings, the Company’s operating results and capital requirements and the declaration of any future dividends by the Company’s board of directors; charter counterparty performance; any unanticipated delays or complications with scheduled drydockings, or with anticipated installations of scrubbers and ballast water treatment systems; ability to obtain financing and comply with covenants in the Company’s financing arrangements; the strength of world economies and currencies; changes in governmental rules and regulations or actions taken by regulatory authorities; new or revised accounting pronouncements; general domestic and international political conditions; geopolitical conflicts; potential disruption of shipping routes due to accidents, piracy or other events; vessel breakdowns and instances of off-hires; future developments relating to the Russia-Ukraine war (including related sanctions and import bans) or the Israel-Hamas war; and other factors. Please see the Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s Form 20-F for the year ended December 31, 2023, for a more complete discussion of these and other risks and uncertainties. The Company cautions readers of this report not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to update or revise any forward-looking statements. These forward-looking statements are not guarantees of the Company’s future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements.

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SIGNATURES

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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ARDMORE SHIPPING CORPORATION

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited interim condensed consolidated financial statements and accompanying notes contained in this Report on Form 6-K (this “Report”) and with our audited consolidated financial statements contained in “Item 18. Financial Statements” and “Item 5. Operating and Financial Review and Prospects” of our Annual Report on Form 20-F for the year ended December 31, 2023. The unaudited interim condensed consolidated financial statements included in this Report have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements (“U.S. GAAP”) and are presented in U.S. dollars as of March 31, 2024 and for the three months ended March 31, 2024 and 2023. Unless the context otherwise requires, the terms “Ardmore,” the “Company”, “we,” “our” and “us” refer to Ardmore Shipping Corporation (NYSE: ASC) and its consolidated subsidiaries.

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GENERAL

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Ardmore owns and operates a fleet of Medium Range (“MR”) product and chemical tankers ranging from 25,000 to 50,000 deadweight tonnes (“dwt”). We provide through our modern, fuel-efficient fleet of mid-size tankers, seaborne transportation of petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies. As of March 31, 2024, we had in operation 26 vessels (including four chartered-in vessels), consisting of 20 MR tankers ranging from 45,000 dwt to 49,999 dwt (15 Eco-Design and five Eco-Mod) and six Eco-Design (IMO 2 product / chemical tankers) ranging from 25,000 dwt to 37,800 dwt.

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We are strategically focused on modern, fuel-efficient, mid-size product and chemical tankers. We actively pursue opportunities to exploit the overlap we believe exists between the clean petroleum product (“CPP”) and chemical sectors in order to enhance earnings, and also seek to engage in more complex CPP trades, such as multi-grade and multi-port loading and discharging operations, where our knowledge of chemical operations is beneficial to our CPP customers.

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Our fuel-efficient operations are designed to enhance our operating performance and provide value-added service to our customers. We believe we are at the forefront of fuel efficiency and emissions reduction trends and are well positioned to capitalize on these developments with our fleet of Eco-design and Eco-mod vessels. Our acquisition strategy includes continuing to build our fleet with Eco-design newbuilds or Eco-design second-hand vessels and with modern second-hand vessels that can be upgraded to Eco-mod.

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We believe that the global energy transition will have a profound impact on the shipping industry, including the product and chemical tanker segments. While this transition will unfold over years, the impact is already being felt through anticipated Energy Efficiency Existing Ship Index and Carbon Intensity Indicator regulations and constraints on newbuilding ordering activity. We view energy transition as less of a compliance challenge and more of an opportunity, which we have set out in our Energy Transition Plan (“ETP”). The information in our ETP is not incorporated by reference into this Report.

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We are an integrated shipping company. All of our 22 owned vessels are technically managed by a combination of Ardmore Shipping Services (Ireland) Limited and Anglo Ardmore Ship Management Limited, a joint venture entity that is 50% owned by us. We have a resolute focus on both high-quality service and efficient operations, and we believe that our expenses are very competitive with those of our peers.

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We are commercially independent, as we have no blanket employment arrangements with third-party or related-party commercial managers. Through our in-house chartering and commercial team, we market our services directly to a broad range of customers, including oil majors, national oil companies, oil and chemical traders and chemical companies. We monitor the tanker markets to understand how to best utilize our vessels and may change our chartering strategy to take advantage of changing market conditions.

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As of March 31, 2024, our fleet consisted of the following 22 owned vessels, excluding four chartered-in vessels.

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SIGNIFICANT DEVELOPMENTS

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Capital Allocation Policy, Including Dividends

Consistent with our variable dividend policy of paying out dividends on our shares of common stock equal to one-third of Adjusted earnings, as calculated for dividends, our Board of Directors declared a cash dividend on May 8, 2024, of $0.31 per common share for the quarter ended March 31, 2024. The dividend will be paid on June 14, 2024, to all shareholders of record on May 31, 2024.

Fleet

In April 2024, we delivered the 2010-built Ardmore Seafarer to its buyer and, in a separate transaction, took delivery of the previously announced acquisition of a 2017 Korean-built MR product tanker, the Ardmore Gibraltar.

In February 2024, we provided notice to exercise our purchase options for both the Ardmore Seawolf and Ardmore Seahawk, which are currently under sale-leaseback arrangements.  These vessel purchases are expected to close in June 2024.

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Financing

In March 2024, we amended our term loan agreement with ABN AMRO Bank NV and Credit Agricole Investment Bank by converting it entirely to an $88.4 million revolving credit facility.

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Geopolitical Conflict

The ongoing Russia-Ukraine war has disrupted energy supply chains, caused instability and significant volatility in the global economy and resulted in economic sanctions by several nations. The ongoing conflict has contributed significantly to related increases in spot tanker rates.

Geopolitical tensions have increased since commencement of the Israel-Hamas war in October 2023. Since mid-December 2023, Houthi rebels in Yemen have carried out numerous attacks on vessels in the Red Sea area. As a result of these attacks, many shipping companies have routed their vessels away from the Red Sea, which has affected trading patterns, rates and expenses. Further escalation or expansion of hostilities of such crisis could continue to affect the price of crude oil and the oil industry, the tanker industry and demand for our services.

Please see “Item 3. Key Information--Risk Factors” in our Annual Report on Form 20-F for information about risks to us and our business relating to political instability, terrorist or other attacks, war or international hostilities.

RESULTS OF OPERATIONS

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Factors You Should Consider When Evaluating Our Results

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There are a number of factors that should be considered when evaluating our historical financial performance and assessing our future prospects. We use a variety of financial and operational terms and concepts when analyzing our results of operations. Please read “Item 5. Operating and Financial Review and Prospects” in our Annual Report on Form 20-F for the year ended December 31, 2023 for additional information.

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In accordance with U.S. GAAP, we report gross revenues in our condensed statements of operations and report voyage expenses separately. Ship-owners base economic decisions regarding the deployment of their vessels upon actual and anticipated time charter equivalent, or TCE rates (which represent net revenues divided by revenue days) and industry analysts typically measure rates in terms of TCE rates. This is because under time charters the customer typically pays the voyage expenses, while under voyage charters, also known as spot market charters, the shipowner usually pays the voyage expenses. Accordingly, the discussion of revenue below focuses on TCE rates where applicable, as TCE provides meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it allows Ardmore to evaluate its revenue on a consistent basis, regardless of whether Ardmore chooses to employ its vessels on voyage charters or time charters. Our calculation of TCE may not be comparable to that reported by other companies. Net revenues, a non-GAAP financial measure, represents revenues less voyage expenses. Voyage expenses are all expenses related to a particular voyage, which include, among other things, bunkers and port/canal costs. Net revenue utilized to calculate TCE is determined on a discharge to discharge basis, which is different from how we record revenue under U.S. GAAP. Under discharge to discharge, revenue is recognized beginning from the discharge of cargo from the prior voyage to the anticipated discharge of cargo in the current voyage, and voyage expenses are recognized as incurred.

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Statements of Operations for the Three Months Ended March 31, 2024 and March 31, 2023

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The following table presents our operating results for the three months ended March 31, 2024 and March 31, 2023.

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Revenue. Revenue for the three months ended March 31, 2024, was $106.3 million, a decrease of $11.9 million from $118.2 million for the three months ended March 31, 2023. Our average number of operating vessels was 26.0 for the three months ended March 31, 2024, as compared to 26.7 for the three months ended March 31, 2023.  

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We had 2,214 spot revenue days for the three months ended March 31, 2024, as compared to 2,386 for the three months ended March 31, 2023. We had 25 vessels employed directly in the spot market as of March 31, 2024 compared with 26 vessels as of March 31, 2023. Increases in spot rates during the three months ended March 31, 2024 were offset by a decrease in spot revenue days, as a result of scheduled drydocking, resulting in a decrease in revenue of $12.7 million for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

We had one product tanker employed under time charter as of March 31, 2024 compared to none as of March 31, 2023. We had 29 revenue days derived from time charters for the three months ended March 31, 2024, as compared to none for the three months ended March 31, 2023. The increase in revenue days for time-chartered vessels resulted in an increase in revenue of $0.8 million for the three months ended March 31, 2024.

Voyage Expenses. Voyage expenses were $30.5 million for the three months ended March 31, 2024, a decrease of $6.1 million from $36.6 million for the three months ended March 31, 2023. The overall decrease included a $3.4 million decrease from lower bunker prices and a $2.7 million decrease in port and agency expenses plus commission costs.

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TCE Rate. The average TCE rate for our fleet was $34,720 per day for the three months ended March 31, 2024, an increase of $762 per day from $33,958 per day for the three months ended March 31, 2023. TCE rates represent net revenues (or revenue less voyage expenses) divided by revenue days. Net revenue utilized to calculate TCE is determined on a discharge-to-discharge basis, which is different from how we record revenue under U.S. GAAP.

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Vessel Operating Expenses. Vessel operating expenses were $14.9 million for the three months ended March 31, 2024, consistent with $14.9 million for the three months ended March 31, 2023.

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Charter Hire Costs. Total charter hire expenses were $5.4 million for the three months ended March 31, 2024, generally consistent with $5.5 million for the three months ended March 31, 2023. Total charter hire expenses in the first quarter of 2024 were comprised of an operating expense component of $2.8 million and a vessel lease expense component of $2.6 million, consistent with the first quarter of 2023.

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Depreciation. Depreciation expense for the three months ended March 31, 2024 was $7.0 million, generally consistent with $6.9 million for the three months ended March 31, 2023.

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Amortization of Deferred Drydock Expenditures. Amortization of deferred drydock expenditures for the three months ended March 31, 2024 was $0.8 million, a decrease of $0.2 million from $1.0 million for the three months ended March 31, 2023. The deferred costs of drydockings for a given vessel are amortized on a straight-line basis to the next scheduled drydocking of the vessel.

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General and Administrative Expenses: Corporate. Corporate-related general and administrative expenses for the three months ended March 31, 2024 were $5.1 million, consistent with $5.1 million for the three months ended March 31, 2023.

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General and Administrative Expenses: Commercial and Chartering. Commercial and chartering expenses are the expenses attributable to our chartering and commercial operations departments in connection with our spot trading activities. Commercial and chartering expenses for the three months ended March 31, 2024 were $1.1 million, generally consistent with $1.2 million for the three months ended March 31, 2023.

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Interest Expense and Finance Costs. Interest expense and finance costs for the three months ended March 31, 2024 were $2.5 million, a decrease of $0.4 million from $2.9 million for the three months ended March 31, 2023. The decrease in costs was primarily due to the conversion of our term loan into a fully revolving facility, with 50% of the term loan being converted to a revolving facility during the three months ended June 30, 2023, and the remaining 50% being converted during the three months ended March 31, 2024. The flexibility of our revolving facilities, with only $23.1 million drawn down as of March 31, 2024, has minimized the impact of the elevated interest rate environment. Amortization of deferred finance fees for the three months ended March 31, 2024 was $0.3 million, consistent with $0.3 million for the three months ended March 31, 2023.

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LIQUIDITY AND CAPITAL RESOURCES

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Our primary sources of liquidity are cash and cash equivalents, cash flows provided by our operations, our undrawn credit facilities and capital raised through financing transactions. As of March 31, 2024, we had $285.3 million in liquidity available with cash and cash equivalents of $48.6 million (December 31, 2023: $46.8 million) and amounts available and undrawn under our revolving credit facilities of $236.7 million (December 31, 2023: $221.2 million). In April 2024, we paid $34.4 million for the purchase of the Ardmore Gibraltar, in addition to $8.4 million which we previously paid as a deposit. In April 2024, we received $27.1 million for the sale of the Ardmore Seafarer. In June 2024, we intend to pay $41.0 million to complete the purchases of the Ardmore Seawolf and Ardmore Seahawk tankers, which are currently under sale-leaseback arrangements and for which we exercised purchase options in February 2024. We believe that our working capital, together with expected cash flows from operations, will be sufficient for our present requirements.

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Our short-term liquidity requirements include the payment of operating expenses (including voyage expenses and bunkers from spot chartering our vessels), drydocking expenditures, debt servicing costs, lease payments, quarterly preferred and common stock cash dividends, interest rate swap settlements, scheduled repayments of long-term debt, as well as funding our other working capital requirements. Our short-term and spot charters contribute to the volatility of our net operating cash flows, and thus our ability to generate sufficient cash flows to meet our short-term liquidity needs. Historically, the tanker industry has been cyclical, experiencing volatility in profitability and asset values resulting from changes in the supply of, and demand for, vessel capacity. In addition, tanker spot markets historically have exhibited seasonal variations in charter rates. Tanker spot markets are typically stronger in the winter months as a result of increased oil consumption in the northern hemisphere and unpredictable weather patterns that tend to disrupt vessel scheduling.

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Time charters provide contracted revenue that may reduce the volatility (as rates can fluctuate within months) and seasonality from revenue generated by vessels that operate in the spot market. Spot charters preserve flexibility to take advantage of increasing rate environments, but also expose the ship-owner to decreasing rate environments. Variability in our net operating cash flow also reflects changes in interest rates, fluctuations in working capital balances, the timing and the amount of drydocking expenditures, repairs and maintenance activities and the average number of vessels in service. The number of vessel dry dockings tends to vary each period depending on the vessel's maintenance schedule and required maintenance.

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Our long-term capital needs are primarily for capital expenditures and debt repayment and finance lease payments. Generally, we expect that our long-term sources of funds will be cash balances, long-term bank borrowings, finance leases and other debt or equity financings. We expect that we will rely upon internal and external financing sources, including, cash balances, bank borrowings, finance leases and the issuance of debt and equity securities, to fund vessel acquisitions or newbuildings and expansion capital expenditures.

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Our credit facilities and finance leases are described in Notes 3 (“Debt”) and 4 (“Leases”), respectively, to our unaudited interim condensed consolidated financial statements included in this Report. Our financing facilities contain covenants and other restrictions we believe are typical of debt financing collateralized by vessels, including those that restrict the relevant subsidiaries from incurring or guaranteeing additional indebtedness, granting certain liens, and selling, transferring, assigning or conveying assets.  Our financing facilities do not impose a restriction on dividends, distributions, or returns of capital unless an event of default has occurred, is continuing or will result from such payment. The majority of our financing facilities require us to maintain various financial covenants. Should we not meet these financial covenants or other covenants, the lenders may declare our obligations under the applicable agreements immediately due and payable, and terminate any further loan commitments, which would significantly affect our short-term liquidity requirements. As of March 31, 2024, we were in compliance with all covenants relating to our financing facilities.

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Our debt facilities and certain of our obligations related to finance leases typically require us to make interest payments based on the Secured Overnight Financing Rate (“SOFR”). Continuing high or increases in interest rates could adversely affect results of operations and our ability to service our debt; however, as part of our strategy to minimize financial risk, at times we use interest rate swaps to reduce our exposure to market risk from changes in interest rates. We currently do not have any interest rate swaps in place.

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The shares of our Series A Preferred Stock (described in Note 6) accrue cumulative dividends, and so long as any share of the Series A Preferred Stock remains outstanding, no cash dividend may be declared or paid on our shares of common stock unless, among other things, all accrued and unpaid dividends have been paid on the Series A Preferred Stock.  

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CASH FLOW DATA

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Cash Flow Data for the Three Months Ended March 31, 2024 and March 31, 2023

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Cash provided by operating activities

For the three months ended March 31, 2024, net cash provided by operating activities was $49.2 million compared to net cash provided by operating activities of $56.8 million for the three months ended March 31, 2023. Although net income was $39.2 million for the three months ended March 31, 2024 compared with $44.1 million for the three months ended March 31, 2023, the decrease in net cash provided by operating activities was primarily due to an increase in receivables of $4.1 million for the three months ended March 31, 2024 compared to a decrease in receivables of $10.9 million for the three months ended March 31, 2023.

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Cash (used in) investing activities

For the three months ended March 31, 2024, net cash used in investing activities was $13.4 million, primarily due to an $8.4 million deposit we paid for the acquisition of a new vessel, and payments for the acquisition of vessels and vessel equipment of $4.8 million. Payments for other non-current assets were $0.2 million. For the three months ended March 31, 2023, net cash provided by investing activities was $6.2 million, primarily due to advances for ballast water and scrubber systems of $2.9 million, payments for vessels and vessel equipment of $2.6 million, as well as payments in relation to equity investments and other non-current assets of $0.8 million.

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Cash (used in) financing activities

For the three months ended March 31, 2024, net cash used in financing activities was $33.9 million. Revolver repayments totaled $30.0 million. Proceeds from revolving facilities were $7.9 million, and repayments of long-term debt were $1.6 million. The payment of cash dividends on our shares of common stock was $8.7 million, the dividend payments on shares of our Series A Redeemable Preferred Stock were $0.9 million, and repayments of finance leases were $0.5 million. Payments for deferred finance fees were $0.2 million. For the three months ended March 31, 2023, net cash used in financing activities was $48.7 million. Repayments of debt totaled $29.0 million, the payment of a common stock dividend on our shares of common stock was $18.3 million, the dividend payments on shares of our Series A Redeemable Preferred Stock were $0.9 million, and repayments of finance leases were $0.5 million.

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CAPITAL EXPENDITURES

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Drydock

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The drydocking schedule for our vessels that were in operation as of March 31, 2024 is as follows:

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We intend to continue to seek to stagger drydockings across the fleet. As our fleet matures and expands, our drydocking expenses are likely to increase. Ongoing costs for compliance with environmental regulations and society classification surveys (including ballast water treatment systems) are a component of our vessel operating expenses.

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(1)    Nine-month period ending December 31, 2024

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Ballast Water Treatment Systems Installation

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The installation schedule for ballast water treatment systems on our vessels that were in operation as of March 31, 2024 is as follows:

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Ballast water treatment system installations are timed to coincide with the drydocking schedule.

As of March 31, 2024, we had ballast water treatment systems on 20 of our owned vessels, with two installations in progress.

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(1)    Nine-month period ending December 31, 2024

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Scrubber System Installation

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The installation schedule for scrubber systems on our vessels that were in operation as of March 31, 2024 is as follows:

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Scrubber system installations are timed to coincide with the drydocking schedule.

As of March 31, 2024, we had scrubber systems on six of our owned vessels, with three installations in progress.

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(1)    Nine-month period ending December 31, 2024

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CRITICAL ACCOUNTING ESTIMATES

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We prepare our financial statements in accordance with U.S. GAAP, which require us to make estimates in the application of our accounting policies based on our best assumptions, judgments and opinions. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ materially from our assumptions and estimates. Accounting estimates and assumptions that we consider to be the most critical to an understanding of our financial statements because they inherently involve significant judgments and uncertainties are discussed in “Item 5. Operating and Financial Review and Prospects” in our Annual Report on Form 20-F for the year ended December 31, 2023. There have been no significant changes to these estimates and assumptions during the three months ended March 31, 2024.

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DISCLOSURES ABOUT MARKET RISK

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In addition to the risks set forth below, you should carefully consider the risk factors discussed in “Item 3. Key Information – D. Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2023, regarding risks which could materially affect our business, financial condition and results of operations.

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Operational Risk

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We are exposed to operating costs arising from various vessel operations. Key areas of operating risk include drydocking, repair costs, insurance, piracy and fuel prices. Our risk management includes various strategies for technical management of drydocking and repairs coordinated with a focus on measuring cost and quality. Our modern fleet helps to minimize the risk. Given the potential for accidents and other incidents that may occur in vessel operations, the fleet is insured against various types of risk. We have established a set of countermeasures in order to minimize the risk of piracy attacks during voyages, particularly through regions which the Joint War Committee or our insurers consider high risk, or which they recommend monitoring, to make the navigation safer for sea staff and to protect our assets We also periodically consider and monitor the need for fuel hedging to manage the risk associated with the unpredictable and fluctuating nature of the price and supply of fuel.

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Foreign Exchange Risk

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The majority of our transactions, assets and liabilities are denominated in U.S. Dollars, our functional currency. We incur certain general and operating expenses in other currencies (primarily the Euro, Singapore Dollar, and British Pound Sterling) and, as a result, there is a transactional risk to us that currency fluctuations will have a negative effect on the value of our cash flows. Such risk may have an adverse effect on our financial condition and results of operations. We believe these adverse effects to be immaterial and we have not entered into any derivative contracts to manage foreign exchange risk during the three months ended March 31, 2024.

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Interest Rate Risk

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We are exposed to the impact of interest rate changes, primarily through borrowings that require us to make interest payments based on the SOFR. Significant increases in interest rates could adversely affect our results of operations and our ability to repay debt. We regularly monitor interest rate exposure and may enter into swap arrangements to hedge exposure when we considered it economically advantageous to do so.

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Liquidity Risk

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Our principal objective in relation to liquidity is to ensure that we have access at minimum cost to sufficient liquidity to enable us to meet our obligations as they come due and to provide adequately for contingencies. Our policy is to manage our liquidity by forecasting of cash flows arising from and expense relating to spot voyage revenue, time charter revenue, pool revenue, vessel operating expenses, general and administrative overhead and servicing of debt.

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Credit Risk

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There is a concentration of credit risk with respect to our cash and cash equivalents to the extent that substantially all of the amounts are held in ABN AMRO and Nordea, and in short-term funds (with a credit risk rating of at least AA) managed by BlackRock, State Street Global Advisors and JPMorgan Asset Management. While we believe this risk of loss is low, we intend to review and revise our policy for managing cash and cash equivalents if considered prudent to do so.

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We limit our credit risk with trade accounts receivable by performing ongoing credit evaluations of our customers’ financial condition. We generally do not require collateral for our trade accounts receivable.

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We may be exposed to a credit risk in relation to vessel employment and at times may have multiple vessels employed by one charterer. We consider and evaluate concentration of credit risk regularly and perform on-going evaluations of these charterers for credit risk, including credit concentration risk. As of March 31, 2024, our 26 vessels in operation (including four chartered-in vessels) were employed with 15 different charterers.

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Inflation

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Since 2022, inflation has been a significant factor in the global economy, and inflationary pressures have resulted in increased operating, voyage (including bunkers) and general and administrative costs. Although inflation has been moderating, inflationary pressures could adversely affect our operating results to the extent our spot charter rates do not adequately cover the cost of any increases in bunker costs.

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Geopolitical Factors

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Please see “Significant Developments—Conflicts in Israel and Ukraine” in this Report for information about risks to us and our business relating to the ongoing conflict in Ukraine and the Israel-Hamas war.

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Ardmore Shipping Corporation

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INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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Ardmore Shipping Corporation

Unaudited Interim Condensed Consolidated Balance Sheets

As of March 31, 2024 and December 31, 2023

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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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Ardmore Shipping Corporation

Unaudited Interim Condensed Consolidated Statements of Operations

For the Three Months Ended March 31, 2024 and March 31, 2023

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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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F-3

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Ardmore Shipping Corporation

Unaudited Interim Condensed Consolidated Statements of Comprehensive Income

For the Three Months Ended March 31, 2024 and March 31, 2023

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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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F-4

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Ardmore Shipping Corporation

Unaudited Interim Condensed Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders’ Equity

For the Three Months Ended March 31, 2024 and March 31, 2023

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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-5

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Ardmore Shipping Corporation

Unaudited Interim Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2024 and 2023

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The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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F-6

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three months ended March 31, 2024 and March 31, 2023

(Expressed in thousands of U.S. Dollars, except for shares and as otherwise stated)

F-7

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three months ended March 31, 2024 and March 31, 2023

(Expressed in thousands of U.S. Dollars, except for shares and as otherwise stated)

F-8

Ardmore Shipping Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

For the three months ended March 31, 2024 and March 31, 2023

(Expressed in thousands of U.S. Dollars, except for shares and as otherwise stated)