Ardmore Shipping Corp. :ASC-US: Earnings Analysis: Q3, 2017 By the Numbers : November 8, 2017

Ardmore Shipping Corp. reports financial results for the quarter ended September 30, 2017.


  • Summary numbers: Revenues of USD 48.65 million, Net Earnings of USD -4.64 million.
  • Gross margins narrowed from 16.08% to 9.48% compared to the same period last year, operating (EBITDA) margins now 20.71% from 26.85%.
  • Change in operating cash flow of -19.03% compared to same period last year is about the same as change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth due to contribution of one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2017-09-30 2017-06-30 2017-03-31 2016-12-31 2016-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 48.65 49.85 49.67 43.18 37.97
Revenue Growth (%YOY) 28.14 25.51 14.08 3.37 -19.53
Earnings (mil) -4.64 -1.85 -2.17 -3.69 -4.8
Earnings Growth (%YOY) 3.34 -133.74 -132.16 -168.73 -135.29
Net Margin (%) -9.54 -3.72 -4.36 -8.54 -12.64
EPS -0.14 -0.06 -0.07 -0.11 -0.14
Return on Equity (%) -1.17 -0.46 -0.54 -0.91 -1.17
Return on Assets (%) -2.14 -0.85 -0.99 -1.67 -2.28

Access our Ratings and Scores for Ardmore Shipping Corp.

Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, ASC-US’s change in revenue was close to the amount of its change in earnings. It remains to be seen how the rest of its peer group’s results will turn out and if ASC-US’s performance is a sign of any major shift in the composition of market share in this sector. Also, for comparison purposes, revenues changed by -2.40% and earnings by -150.23% compared to the previous period.

Earnings Growth Analysis

The company’s earnings rose year-on-year. But this growth has not come as a result of improvement in gross margins or any cost control activities in its operations. Gross margins went from 9.48% to 16.08% for the same period last year, while operating margins (EBITDA margins) went from 20.71% to 26.85% over the same time frame.

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

ASC-US’s decline in gross margins were offset by some improvements on the balance sheet. The management of working capital, for example, shows progress. The company’s working capital days are now 68.58 days from 158.21 days for the same period last year. This leads Capital Cube to conclude that the gross margin decline is not altogether bad.

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

ASC-US’s year-on-year change in operating cash flow of -19.03% is around its change in earnings. This suggests that there are likely no significant movement in accruals or reserves for managing earnings this period.


The company’s operating (EBIT) margins contracted from 5.49% to 1.37%. In spite of this, the company’s earnings rose. This was influenced primarily by one-time items, which improved pretax margins from -12.59% to -9.50%.

EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Ardmore Shipping Corp.

Company Profile

Ardmore Shipping Corp. operates as a shipping company. It provides seaborne transportation of petroleum products and chemicals to oil majors, national oil companies and traders, chemical traders and companies, with its fuel-efficient fleet of tankers. The company was founded by Anthony Gurnee on May 14, 2013 and is headquartered in Hamilton, Bermuda.

CapitalCube does not own any shares in the stocks mentioned and focuses solely on providing unique fundamental research and analysis on approximately 50,000 stocks and ETFs globally. Try any of our analysis, screener or portfolio premium services free for 7 days. To get a quick preview of our services, check out our free quick summary analysis of ASC-US.


The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any of our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website