Company: ASC
Filing Date: 2025-03-07
Form Type: 20-F
Source: 0001558370-25-002500
Chunk: 111

Company: Ardmore Shipping Corp
Filing Date: 2025-03-07
Form: 20-F
Item: Item 5
Chunk 111
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lical, 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.

Table of Contents

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. Commercial pools reduce revenue volatility because they aggregate the revenues and expenses of all pool participants and distribute net earnings to the participants based on an agreed upon formula. 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.

Our primary known and estimated liquidity needs for 2025 include drydocking expenditures ($17.5 million), committed capital expenditures ($14.7 million), operating lease payments ($5.0 million), quarterly preferred stock dividend distributions ($2.6 million), debt service costs ($2.4 million), variable quarterly common stock dividend distributions and the funding of general working capital requirements and funding any common stock repurchases or preferred stock redemption we may undertake.

The capital expenditures are related to our obligations with respect to the purchase and installation of scrubber systems.

For at least the one-year period following the filing of this Annual Report, we expect that our existing liquidity, combined with the cash flow we expect to generate from our operations, will be sufficient to finance our liquidity needs for this period.

Our long-term capital needs are primarily for capital expenditures and debt repayment and any future finance lease payments. Our long-term known and estimated liquidity needs beyond 2025 include scheduled repayments and maturities of long-term debt ($38.8 million), forecasted drydock expenditures ($25.3 million), debt service costs ($3.4 million), our quarterly preferred stock dividend distributions ($2.6 million per annum), operating lease payments ($0.5 million), aggregate capital expenditures ($Nil) and quarterly common stock dividend distributions. Additional information on our annual scheduled obligations under our debt and operating leases are described in Notes