Anthony Gurnee - Chief Executive Officer Paul Tivnan - Senior Vice President and Chief Financial Officer.

Noah Parquette - JPMorgan Jon Chappell - Evercore Ben Nolan - Stifel Fotis Giannakoulis - Morgan Stanley Magnus Fyhr - Seaport Global Donald Bogden - Wells Fargo.

Good morning, ladies and gentlemen and welcome to Ardmore Shipping’s First Quarter 2017 Earnings Conference Call. Today’s call is being recorded and an audio webcast and presentation are available in the Investor Relations section of the company’s website ardmoreshipping.com. We will conduct a question-and-answer session after the opening remarks.

Instructions will follow at that time. A replay of the conference call will be accessible anytime during the next week by dialing 877-344-7529 or area code 412-317-0088 and entering passcode 10106417. At this time, I will turn the conference call over to Mr. Anthony Gurnee, Chief Executive Officer of Ardmore Shipping. Mr. Gurnee, the floor is yours sir..

Thank you. Good morning and welcome to Ardmore Shipping’s first quarter earnings call. First, let me ask Paul to describe the format for the call and forward-looking statements..

Thanks, Tony and welcome everyone. Before we begin our conference call, I would like to direct all participants to our website at ardmoreshipping.com where you will find a link this morning’s first quarter 2017 earnings release and presentation.

Tony and I will take about 15 minutes to go through the presentation and then open up the call to questions. Turning to Slide 2, please allow me to remind you that our discussion today contains forward-looking statements.

Actual results may differ materially from the results projected from those forward-looking statements and additional information concerning factors that could cause the actual results to differ materially from those in the forward-looking statements is contained in the first quarter 2017 earnings release, which is available on our website.

And now, I will turn the call back over to Tony..

Thanks, Paul. On the call today we will follow our usual format, first, discussing our performance and recent activity, then an update on the product and chemical tanker markets. After which, Paul will provide a fleet update and review our financial results and then I will conclude and open up the call for questions.

Turning first to Slide 5 on our performance in recent activity. We are reporting EBITDA at $11.7 million and a net loss of $2.2 million equating to a loss of $0.06 per share for the first quarter. This compares to a net loss of $0.11 per share in the prior quarter.

As expected the recently acquired 6 eco-design MRs have proven to be highly accretive to earnings even in a low rate environments generating $800,000 for the quarter equating to 42% increase in operating income over the existing fleet.

This positive impact results from the vessels low breakeven cost and high specifications enabling them to outperform in the challenging market. During the first quarter, we delivered satisfactory chartering results in spite of the soft market with overall MR performance of 13,100 per day and chemical tanker performance of 12,900 per day.

And throughout the quarter, we continued to focus on maintaining tight control of costs helping us to sustain the meaningful advantage over our peers.

In terms of market dynamics, the high level of refined product inventories continues to be the most significant short-term demand factor impacting MRs reducing oil trading activity and thus negatively impacting cargo flows.

However, evidence shows that the drawdown of these inventories is well underway with the latest IVA report indicating ongoing de-stocking of CPP in the first quarter continuing the trend from the first half – sorry from the second half of 2016.

Overall, the underlying fundamentals remain strong with demand growth set to exceed supply growth significantly in 2017 which when combined with an end to CPP inventory destocking should set the stage for a charter market rebound in the fourth quarter or perhaps even earlier.

And as a final point, we are maintaining our dividend policy of paying out 60% of earnings from continuing operations. Consistent with that policy, the company is declaring no dividend for the first quarter. Turning to Slide 6 for a quick look at our fleet profile, there has been no change to the fleet since our last earnings call.

But just as a reminder, this is a modern high-quality fleet fuel efficient all the vessels built to top tier yards. Turning now to Slide 8, on the product tanker market, our chartering performance was up about $1,000 a day as compared to the fourth quarter evidence of slightly improved MR charter market conditions in the first quarter.

As mentioned earlier, high levels of refined product inventories continue to put downward pressure on ton mile demand in the quarter, but nevertheless, there were number of bright spots in the market with continued strong demand from Latin America for U.S.

Gulf exports, coupled with increased activity into West Africa, both from the Europe and the U.S resulting in overall stronger Atlantic base in rates and providing evidence that the supply demand pounds is already quite tight. Looking ahead, the outlook is positive.

Underlying demand growth remains robust in the 4% to 5% range underpinned by 1.3 million barrels per day of oil consumption growth as well as the long-term trend of ongoing refinery development away from points of consumption and ever increasing trade complexity which results in longer duration voyages.

Meanwhile, turning to supply, the order book now stands at a historical low of 4.5% and supply growth is continuing to decelerate. A year ago about 13 MRs were delivering per month. This declined to 8 in the first quarter of 2017 and we estimate it will decline further to only 4 or 5 per month for rest of this year when taking into account slippage.

Factoring in scrapping at a rate of 20 to 25 units per year, the net fleet growth through the remainder of 2017 should be at or below 2% and then 1% or lower for 2018.

So, the fundamentals with supply and demand are very compelling and we believe this will set the stage for a return to the strong charter market conditions as early as the fourth quarter of this year.

To elaborate a little further on this very important point, we think that the specific catalyst for a full market recovery will be the end of CPP inventory run-off for destocking.

This will lead to return to more normal oil market in the oil trading conditions and thus a one-time jump in demand, which combined with the already fairly tight and continuously improving supply demand balance, should result in a rapid return to strong market conditions. Turning now to Slide 9 on the chemical tanker market.

Similar to MRs, the chemical tanker market also improved slightly with our ships averaging 12,900 in the first quarter, up from 12,500 in the fourth quarter. In the first quarter, we saw continued strength in ethanol exports from the U.S.

to South America, but offsetting this demand high methanol prices reduced operating margins for Asian MTO plants, which impacted the flow of cargos from the US Gulf to China.

In addition, the impact of last year’s El Nino drought has resulted in lower levels of Southeast Asian palm oil exports thus further reducing chemical tanker demand, but these are all short-term factors and we expect continued solid demand growth in the chemical trades.

Seaborne trade of methanol is the key driver for the chemical tanker market and is forecast to grow by an average of 7% per annum to 2021. This coupled with more general ongoing petrochemical plant expansion in the US Gulf and Middle East should result in overall chemical tanker demand growth of around 5% for the foreseeable future.

We also expect the better oil market to strengthen through the reminder of the year as outfit in South East Asia increases due to more favorable growing conditions. And in addition, an anticipated strengthening of the product tanker market would increase demand for chemical tankers in CPP trade.

Looking at supply, the chemical tanker order book currently stands at moderate levels, but there is a difference between stainless and coated type tankers.

The total order book is 10.3% of the existing fleet, but within that the percentage of orders for stainless steel tankers amounts to 17% of the existing stainless steel fleet, whereas for coated tankers on order of the amount is only 5% of the existing fleet.

So, the situation for coated chemical tankers such as the ones that we own is much more favorable than the headline figure suggests.

Overall, net of scrapping we expect fleet growth both coated and stainless steel of approximately 4% to 5% in 2017 probably in line with demand growth, but as pointed out much more favorable for coated tankers, where the dynamics are in fact very similar to MRs. And with that, I will hand the call back to Paul..

Thanks, Tony. Moving to Slide 11, we will run through the fleet days. Starting with the charts on the right, you will see that our revenue days have increased by 13% for the full year 2017 to 759 days.

And we had one drydock in the first quarter with the Ardmore Seavanguard completing our first intermediate survey and we expect to have 30 drydock days in the second quarter. Turning to Slide 13, we will take a look at the financials. As you would see in the third line, we reported net loss of $2.2 million or $0.06 per share for the first quarter.

Total overhead costs were approximately $3.7 million of the first quarter comprising corporate expenses of $3 million and commercial and chartering cost of $660,000. As mentioned before in many companies, the commercial and chartering costs are incorporated to avoid expenses, which means that our corporate cost is the comparable overhead.

Our full year overheads – our full year corporate costs are expected to be $13 million, which works out $1,300 per day across the 27 ship fleet. Overall, we expect total overhead as corporate and commercials to be approximately 4 million per quarter for the remainder of 2017.

Depreciation and amortization for the first quarter was $9.1 million and we expect to depreciation and amortization in the second quarter to be approximately $9.2 million. Our interest and finance costs were $4.9 million for the quarter which includes $600,000 of amortized deferred finance fees.

We expect interest and finance costs in the second quarter to be approximately $5.2 million, which includes amortization of deferred finance fees of $650,000. Moving to the bottom of this slide, our operating costs for the quarter came in at $6,351 per day across the fleets including technical management.

OpEx for the eco-design MRs was $6,221 per day. Our eco-mod MRs came in at $6,459 per day while the eco-design chemical tankers came in at $6,385. Looking ahead, we expect total OpEx for the second quarter to be approximately $16.1 million.

Finally, based on the company’s policy of paying out dividends equal to 60% of earnings from continuing operations, we have not declared a dividend for the quarter following a net loss of $2.2 million.

Now turning to Slide 14, as Tony mentioned, the last of ship from our six vessel acquisition delivered to us in November last year making the first quarter of ‘17, the first period to experience the full benefit and the earnings accretion from having all 6 vessels in operation.

The ships are very high-quality and were acquired at attractive prices which results in lower running cost and breakeven. The acquisition also delivered meaningful efficiencies in corporate overhead for the company.

Looking at the first quarter, you will see the chart on the left, but against a soft market backdrop, the vessels made a very positive contribution to financial performance generating operating income of $800,000 on top of $1.9 million in operating income for the original fleet which equates to accretion of 42%.

Moving to corporate overhead on the right, the chart shows that efficiencies and overheads associated with the acquisition. Our corporate overhead did not increase as a result of the six additional vessels. And as a consequence corporate overhead per share decreases by $130,000 per ship per year.

To highlight, with every $1,000 a day increase in charter rates across the fleet, our operating income and cash flow increases by $10.0 million in a full year. Turning to slide 15, we will take a look at charter rates for the quarter.

Starting on the left, overall across the fleet we saw a slight improvement in charter rates with the fleet earning an average of $12,919 for the quarter as compared to $12,307 in fourth quarter of ‘16.

Moving on to the various ship types, we had 15 eco-design MRs in operations, which earned an average of $13,180 per day, while our six eco-mod MRs earned $12,260 per day and our six eco-design chemical tankers earned an average of $12,900 per day for the quarter.

Looking ahead to the second quarter as of today, our spot and full MRs are running at approximately $14,000 per day for voyages in progress with approximately 40% of days booked. Overall, we are satisfied with our chartering performance. Our fleet continues to perform well in spite of the soft charter market.

On Slide 16, we have our summary balance sheet, which shows at the end of March, our gross debt was $462 million which net of deferred finance fees was $452 million. We have total capital of $870 million and cash in hand of $45 million.

Our working capital increased by $7 million in the quarter accounting for most of the movement in our cash balance quarter-on-quarter. Turning to Slide 17, our balance sheet remains strong with gross leverage of 53.5% and we have cash and net working capital of $73 million at the end of the quarter.

Finally, as you all know, all of our debt is amortizing with principal repayments of $45 million annually, so we are continuing to de-lever and strengthen the balance sheet. And with that, I would like to turn the call back over to Tony..

Thanks, Paul. And to sum up then, we are reporting a net loss of $0.06 per share in the first quarter compared to a loss of $0.11 in the fourth quarter of 2016.

Our recently acquired 6 eco-design MRs have made a very positive contribution to our financial performance in the quarter contributing $800,000, which equates to 43% increase in operating income.

MR swap rates improved in the first quarter due to continued strong demand from Latin America coupled with increased activity into West Africa resulting in overall stronger Atlantic Basin rates.

However, high levels of refined inventory has continued to negatively impact demand, but evidence suggests that the drawdown is well underway and may conclude in the fourth quarter of 2017 or perhaps even sooner.

Fundamentals remains strong with demand growth estimated to be in the 4% to 5% range underpinned by 1.3 million barrels a day of oil consumption growth, ongoing refinery development away from points of consumption and increasing trade complexity.

Meanwhile, supply growth continues to decelerate resulting in anticipated net fleet growth of 2% or less in 2017 and 1% or less in 2018.

And as a final point through a combination of our fully delivered high-quality fleet and our ongoing focus on spot chartering performance and cost efficiency, Ardmore has significant earnings power where every $1,000 a day increase in rates equates to $0.29 in EPS and $0.17 in dividends.

Given the very positive outlook for charter rates, we believe we are on the cusp of a significant rebound in earnings and dividends when market returns. And with that, we are now pleased to open the call for questions.

But before we do, just reminder that we will be holding our – an investor presentation in New York on May 24 and that investors and analysts who would like to attend should reach out to Bryan Degnan at The IGB Group, whose contact information appears on the press release..

And thank you, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question we have will come from Noah Parquette of JPMorgan. Please go ahead..

Thanks.

I just wanted to ask you guys are doing a good job of laying out how the order book is declining and supply growth is going to be very well kind of in the next half of this year, in your discussions of your counterparty, has there been any – I don’t know indications that they are aware of this or they are watching that in terms of interest in longer term charters or is it still kind of not talked about it?.

Yes. I mean, it’s all about price, right. So, there is I think it would – if you were to say you are prepared to do a long-term charter, let’s say 3 or 5 years at a certain rate, if you go low enough, you will find people.

But at the moment, I think anybody that’s fully engaged in the spot market would view that the upside is significant and that the time charter rates on offer even for a 1 year period don’t really reflect the upside potential..

Okay.

And then I just wanted to ask, we have seen a lot of order for the larger crude tankers in the last few months, how do you view the shipyard capacity right now for product tankers versus crude, could you kind of tell us what the earliest delivery would be for a ship that was ordered today and you think shipyard capacity is changed materially over the last year?.

Yes, that’s a good question and I think an important topic. There has been a fairly limited amount of MR ordering in the last kind of month or two. Part of that has to do with some of the Hyundai Mipo actually selling their final Tier 2 berths.

And beyond that, there has been a little bit of ordering at GSI or [indiscernible] in China, maybe a couple of ships at Hyundai Vinashin in Vietnam, but very, very limited numbers.

The reality is that probably the only yard you could go to today to get – to be confident you are going to not only get the order, but a refund guarantee and have a delivery within a reasonable timeframe would be Hyundai Mipo.

And they are probably willing to – they can probably still take in orders for the end of 2018, but that would rapidly fill us. So I think if you look at the scope of what’s really required and when the bulk of orders when they do begin to happen would come in at least in 2019.

Meanwhile, Japanese yards are filled out pretty much until the end of 2019 and the remaining yards in Korea are kind of hobbled or closed for one reason or another. It’s still very constrained..

I assume fair to say that we kind of have good supply visibility through 2018 with some risk for 2019?.

Yes. But we don’t really anticipate a lot of ordering until rates improve significantly and remain at elevated levels for long enough to convince people that we have really turned in the market..

Okay, that’s really helpful. Thank you..

The next question we have comes from Jon Chappell of Evercore..

Thanks. Good afternoon, guys..

Hey, Jon..

Hey, Tony. I want to follow-up on that first question just little bit noteworthy that I think for the first time since you have been a public company, it’s a 100% spot market exposure and I understand that we are bouncing along the bottom here and you have a very favorable outlook starting as soon as maybe two quarters from now.

So, you want to maintain full operational leverage. But have you kind of thought about putting some way it seems to us from the market reports that time charter rates are starting to move up and as far as kind of strategically relationships with customers etcetera.

Has there been any thought process on maybe putting a couple away just for the visibility of cash flow there and strategically?.

We are always looking at that. And it has been okay or not, [indiscernible] is not a business for us and we are always looking at opportunities and thinking about it. But very often, when you look at these charter positions and the rates that are offered, the devil is in the details.

And often, a rate that looks good is comes at the expense of giving away very strong delivery position and taking a very weak redelivery position, which could be worth up to $1,000 a day, for example.

So, we are constantly looking, I think if we saw 1 year TC rates that matched our expectation of the spot market or even a little bit less, we would consider it. But so far, we are just not seeing that..

Okay.

So broadly speaking though, would you say that the time charter rates kind of like an apples-to-apples basis of just bottom now and you haven’t seen any early signs of a recovery yet, there maybe a couple of quarters away as well in your same view as the spot market?.

Yes, I think that’s correct..

Okay.

And then the second question kind of a two-parter related to the first one as well, that same question that I just ask on the asset values, because it seems that they have bottomed and some of the recent deals done have been uptakes, which is pretty noteworthy, because we haven’t seen that across the other segments and tankers yet and it was kind of the canary in the coal mine and a good way with the drybulk industry as soon as you saw the first couple of uptakes in asset values, it was kind off to the races.

So are those prints accurate as well or the devil is in the details there? And then the second part to that question and maybe this is for Paul, you have laid out the balance sheet and liquidity profile, how much kind of growth liquidity would you say you have available – availability or you are comfortable with right now as far as expansion this year?.

Yes. I think that the talk certainly is and it does feel that we have hit a bottom and moved up and that there is I think some broader buying interest now really not necessarily on the back of stronger charter rates, but really on an expectation based on fundamentals and understanding of the oil market. So, there seems to be more interest.

And I think it is a legitimate and real uptick. But also we were not at the levels that drybulk got to. So, I think that the balance might not be quite as hard until charter rates rebound. And then I think you could see very significant and rapid rise in values..

Yes. Just on the cash point, Jon, I think we are comfortable with the liquidity position as it is today. I think we would have thought obviously to tack off one or two acquisitions, but I think we like having cash and like having the ability to be opportunistic.

So, no pressure to do anything, but we certainly have their resources to do something if need to be, but we will see how the market evolves..

Okay. Thanks, Paul. Thanks, Tony..

And next, we have Ben Nolan of Stifel..

Yes, thanks. So, Tony, one of the things that we heard from one of your competitors last week was that in their view, the market was better thus far in 2017 than they had anticipated that it would be. And as a consequence they were probably more optimistic than they had been with respect to the outlook for the back half of the year.

Just curious if that’s how you see the world too.

I mean is it tighter than you thought it would be and does that mean it will be tighter than you previously thought it would be in the back half of the year?.

Good question. I think our takeaway is that when we have seen these jumps in rates in different parts of the Atlantic Basin. Now, admittedly the East has been really lagging.

So, let’s not paint overly rosier picture here in the near-term, but nevertheless there have been jumps in rates in different parts of the Atlantic Basin that would suggest for us, what our real takeaway is that the supply demand balance isn’t that far away from conditions that would really sustain the strong recovery and underlying that you have got gradually improving conditions with demand growth and supply growth well below that.

And in spite of the – what we think is a continued depressed level of overall demand because of the oil market dynamics. So, I think we are probably as bullish as they are, but we are expressing it in a different way..

Okay. And then sort of dovetailing with that a little bit, obviously you guys are mostly exposed to the product tanker market, but you did lay out an optimistic view for the chemical market. I am just curious you would pair one versus the other in terms of your level of optimism.

Is there a preference and how does that sort of feed through and to how you look at further opportunities?.

I think we are mot excited about the MR sector. But close behind that is the commodity chemical or the coated chemical tanker sector, where the dynamics are similar, maybe that won’t be – quite the immediate upside, but we are quite positive on those ships in that part of the chemical world.

But without a doubt I think we see the upside potential in MR rates and values as you know being the best across the board and certainly a bit ahead of chemicals..

Okay. And then lastly sort of along those lines and this kind of ties into what Jon and Noah are talking about a little bit.

Are you seeing opportunities, are there active sellers whether it’s a decent number of one-off transactions or potential for deals in size?.

I think there is always a potential for deals in size, but at a higher price level. I think a lot of the sales that have taken place in last 6 months or for sales or distressed sales or low quality ships.

And so I think in order to probably lose some blocks that are higher quality, you are probably going to have to pay more than that, but those are still attractive levels right. So long story short, I think it’s really a matter of price.

And I think that our segment still has a lot of unnatural owners that would like to get back to their core business..

And just kind of with that, how do you view your current currency, we have the liquidity for a little bit, but are you at a place where if the right deal comes along and it was big enough needed extra equity that you would consider it or how are you at with that respect?.

Well, I don’t think our view has changed since we did the frontline acquisition 9 months ago where you know first level stock was at a higher level, but it was still at a level that didn’t make everyone happy. We are issuing. However, the use of proceeds was accretive and we have now seen the results of that.

So, we are not – I think the frontline acquisition did a lot for us. Even though, it was relatively small, it was almost strategic and what it did for us. We are now at a level where we feel very comfortable. I think we have done a lot in last 2 or 3 years and we are ready for an upturn with the fleet we have and with the organization we have.

If something comes along probably at a significantly higher stock price than we are today, that’s accretive, then you know we might take a shot of that, but we are very happy where we are today with the exception of our stock price..

Okay, I will turn it over. Thanks a lot, Tony..

Next, we have Fotis Giannakoulis of Morgan Stanley. Please go ahead..

Yes. Hi, Tony and thank you. Tony, I want to ask you about the inventories that you mentioned they are coming down since the beginning of the year, but last week we had the deal up in U.S. inventories.

Have you seen anything in the shipping market in the trading activity that can give us some inside about last week’s bill, but it was a random event or do you see any change in the way that the charters have behaved the last few days?.

No, just to note the TC14 is down. So, if we are talking about US Gulf that market has come up a little bit, but these are short-term swings. I will say that you have to consider the fact that if you have an inventory buildup at sort of at the refinery gate that’s actually good thing for MRs because that cargo will ship.

So it really very much depends on where it is. But overall we have been – we have kind of parsed the latest IDI report pretty carefully and matched it up against the last couple of reports. And our conclusion is that when you look at CPP stocks globally, there is a continued runoff.

And that can happen independent of what’s happening on the crude oil side..

So, in our other words can we assume that if we have built up in the U.S., but at the same time, we have a decline in a worldwide product inventories, this is going to trigger more experts and more demand for product carriers?.

Yes. And that will be a short-term thing, but that’s a good thing. Overall, we would like to see inventories much lower, but if they have to be there let’s have them at the refinery and not at the receiving end..

Okay. Thank you, Tony.

My other question is about the slide that you showed with MR order book, I was pleasantly surprised that this number is lower than what I thought than lower I think about what the Clarkson’s illustrates, you talk about 50 MRs, of course everybody has a little bit different definition of what is the MR, can you clarify that how come this order book is only 4.5% and what kind of vessels does this include.

And the second part of this question is that do you see that charters given the order book has come down so much being willing to look cargos, to look vessels, available vessels or even buying vessels at this point?.

Okay. So to answer your first question, from IPO we have been very consistent on our definition of an MR and the reason for it, which is we look at the actual technical definition of an MR. If you look in the index or the glossary of books on shipping, it’s 25,000 to 55,000 that way.

The reason why we decided to stick with that is that there is a lot of overlap and direct completion between handies and “MR1s and “MR2s”.

But also it’s important to note that if you go a little bit below the 30,000 ton size, there is old generation of MRs that are basically the same size with an MR1 or like 29,000 toners, that are nevertheless about the same size. They are just measured down on deadweight which is really a kind of obituary thing.

So that’s the size range that we track consistently and that’s the size range which is really directly competitive with each other, okay. So that’s the scope of the definition. In terms of ships, we don’t include stainless steel in that or shuttle tankers, but we include all coated chemical tankers that has no carriers.

And sorry no [indiscernible] either or fleet replenishment vessels that kind of thing. So it’s really we thought about it and decided to include all the ships that would be potentially competing or directly or indirectly for product cargos, right. So that’s the definition that we use, and that’s been consistent.

Your second question was are we seeing oil traders and companies interested in buying ships, now. Not really, I think that I don’t think that we haven’t sensed any changed in that areas..

And then one last question obviously rates they are not at profitable levels right now, but I am wondering how much of this current weakness can be attributed to the increase in deliveries of crude tankers, is there any spillover effect put some pressure, any overlap between the two segments when this goes away, we can see an easy increase in the MR rates?.

Well, there has been a lot of talk about new building crude tankers doing their maiden voyage with CPP from North Asia on a long-haul basis to somewhere else and that’s been very limited and very selective. So we don’t think it really has a measurable impact on certainly MR demand..

Thank you very much, Tony..

Yes..

Next we have Magnus Fyhr of Seaport Global..

Yes. Hey guys.

Just one question, with the upcoming regulations what’s your view on new builds versus buying secondhand vessels going forward?.

Well, within certain constraints of quality, it’s all about price. And the upgrade of let’s say of an eco-design ship that was fitted out, but not kitted out with Ballast Water Treatment might be a $0.5 million difference for ones that were never fitted out for them to begin with could be for an MR between $750,000 and $1 million.

So that’s a number, it’s not a tradability question. I think it’s really it would depend on where you see the value. And also the timing, so if you – we think there are certain times when new buildings make a lot of sense, we are certainly engaged in it and feel that we have been able to assemble a high quality fleet as a consequence.

But if you think the markets could return and towards the end of this year and you have a great run for a year or two after that or maybe longer, obviously ordering you might get the ship a little later than you would like. So I think that probably has a bigger impact on your perception of value than certainly Ballast Water Treatment.

The 2020 sulfur emissions regulations, everybody is trying to figure it out.

The one thing that we feel reasonably confident about is that it should actually have a very positive impact on MR ton mile demand, because there is going to be a lot of gas haul cargos moving around the world to meet bunker requirements and that will move on MRs for the most part. So I think the – yes, so that’s based on the question you asked.

That’s I think all we have to say on regulatory impact..

That sounds like pricing is key here, I mean do you see the shipyards getting a little bit more aggressive, I mean to fill their slots our I mean there is being some pretty attractive pricing on the crude tankers and you have – you see some of the yards now marketing their slots at pretty attractive levels?.

Well, Hyundai Mipo is more or less the only game in town for MRs. And they have actually increased their pricing quite a bit after they sold the remainder of their Tier 2 berths are now talking significantly higher numbers..

Okay.

So it sounds like there is more opportunities in the second hand market than new build going forward at least near-term?.

I think so and I think the price levels that have been kind of set and used for calculating NAVs are artificially low and they are set on the basis of pretty lower quality ships. So I think that’s been overshot as well..

Okay, great. Thanks..

[Operator Instructions] The next we have comes from Mike Webber of Wells Fargo. Please go ahead..

Good morning guys. This is Donald Bogden stepping in for Mike.

Most of my questions have been answered, so I will just say a follow-up on Magnus’ previous question, I am just trying to get a better picture of when upside risks for the current products tanker order book could materialize or if you took a Hyundai berth today, when those delivery windows would be, are we talking sort of Q4 2018 or mid-2019?.

Well, that’s a good question Don and they – I think that the first ship, let’s say if you wanted to order a series of ships at Mipo oday, you might get your first one in the fourth quarter of ‘18. But on average they are going to spread out through ‘19, maybe even into ‘20.

So that’s why we talk about that we don’t really envision or based on what we see today, we don’t see meaningful numbers of deliveries coming from fresh orders arriving probably at this point before kind of mid-‘19..

Okay, that makes sense. Thank you for the color Tony..

Yes..

Well, at this time, we are showing no further question. We will go ahead and conclude today’s question-and-answer session. I would now like to turn the conference back over to Mr. Anthony Gurnee for any closing remarks, sir..

Thank you. And as our tradition goes, we have no closing remarks. But thank you all for attending. And we hope we will see you all at the Investor Day conference on May 24..

We thank you sir and also to the rest of the management team for your time also today. The conference call is now concluded. At this time, you may disconnect your lines. Thank you. Take care and have a great day everyone..