Scorpio Tankers Inc. Announces Financial Results for the First Quarter of 2017 and Declaration of a Quarterly Dividend

26/04/2017

MONACO, April 26, 2017 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE:STNG) ("Scorpio Tankers," or the "Company") today reported its results for the three months ended March 31, 2017 and declaration of a quarterly dividend.

Results for the three months ended March 31, 2017 and 2016

For the three months ended March 31, 2017, the Company's adjusted net loss (see Non-IFRS Measures section below) was $11.5 million, or $0.07 basic and diluted loss per share, which excludes a $0.1 million, or $0.00 per basic and diluted share, write-off of deferred financing fees. For the three months ended March 31, 2017, the Company had a net loss of $11.5 million, or $0.07 basic and diluted loss per share.

For the three months ended March 31, 2016, the Company's adjusted net income was $30.5 million (see Non-IFRS Measures section below), or $0.19 basic and $0.18 diluted earnings per share, which excludes (i) a $2.2 million loss on sales of vessels and write-down of vessels held for sale, (ii) a $1.8 million write-off of deferred financing fees, (iii) a $1.0 million unrealized gain on derivative financial instruments and (iv) a $0.6 million gain recorded on the repurchase of $5.0 million face value of the Company's Convertible Senior Notes due 2019 (the "Convertible Notes"). The adjustments aggregated to an increase of the Company's net income by $2.4 million or $0.02 basic and $0.01 diluted earnings per share. For the three months ended March 31, 2016, the Company had net income of $28.0 million, or $0.17 basic and diluted earnings per share.

Declaration of Dividend

On April 26, 2017, the Company's Board of Directors declared a quarterly cash dividend of $0.01 per share, payable on or about June 14, 2017 to all shareholders as of May 11, 2017 (the record date). As of April 26, 2017, there were 174,629,755 shares outstanding.

Diluted Weighted Number of Shares

Diluted earnings per share is determined using the if-converted method. Under this method, the Company assumes that the Convertible Notes (which were issued in June 2014) are converted into common shares at the beginning of each period and the interest and non-cash amortization expense associated with these notes of $5.5 million and $5.5 million during the three months ended March 31, 2017 and 2016, respectively are not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.

For the three months ended March 31, 2017, the Company's basic weighted average number of shares was 162,711,256. The weighted average number of shares, both diluted and under the if-converted method, were anti-dilutive for the three months ended March 31, 2017 as the Company incurred a net loss. For the three months ended March 31, 2016, the Company's basic weighted average number of shares was 160,471,857. The Company’s diluted weighted average number of shares was 165,680,353 excluding the impact of the Convertible Notes and 197,620,040 under the if-converted method (assuming the Convertible Notes are converted into common shares). Earnings per share for the three months ended March 31, 2016 does not consider the effect of the Convertible Notes as the if-converted method was anti-dilutive. Adjusted earnings per share (see Non-IFRS Measures section below) for the three months ended March 31, 2016 was calculated using the if-converted method as the effect of which was dilutive. As of the date hereof, the Convertible Notes are not eligible for conversion.

Summary of Recent and First Quarter Significant Events

  • Below is a summary of the average daily TCE revenue and duration for voyages fixed thus far in the second quarter of 2017 as of the date hereof:

    • For the LR2s in the pool: approximately $17,000 per day for 42% of the days

    • For the LR1 in the pool: approximately $9,000 per day for 38% of the days

    • For the MRs in the pool: approximately $15,500 per day for 38% of the days

    • For the ice-class 1A and 1B Handymaxes in the pool: approximately $13,000 per day for 34% of the days

  • Below is a summary of the average daily TCE revenue earned during the first quarter of 2017:

    • For the LR2s in the pool: $16,094 per revenue day

    • For the LR1 in the pool: $13,545 per revenue day

    • For the MRs in the pool: $13,203 per revenue day

    • For the Handymaxes in the pool: $14,863 per revenue day

  • Executed agreements in April 2017 to sell and leaseback three MR product tankers, STI Beryl, STI Le Rocher and STI Larvotto, to an unaffiliated third party. Two of these sales closed in April 2017 and the third is expected to close prior to May 1, 2017.  Upon closing, all outstanding amounts under the Company's 2011 Credit Facility are expected to be repaid, and the Company's liquidity is expected to increase by an aggregate of approximately $30 million.

  • Took delivery of STI Selatar and STI Rambla, two LR2 product tankers that were under construction, from Sungdong Shipbuilding and Marine Engineering Co., Ltd ("SSME") in February and March 2017, respectively. As part of these deliveries, the Company drew down an aggregate of $58.4 million from its credit facility with Credit Suisse AG dated October 2015 (the "Credit Suisse Credit Facility") to partially finance the purchase of these vessels.

  • Took delivery of STI Galata and STI Bosphorus, two MR product tankers that were under construction, from Hyundai Mipo Dockyard Co. Ltd. of South Korea ("HMD") in March 2017 and April 2017, respectively. As part of these deliveries, the Company drew down $20.4 million in March 2017 and $20.4 million in April 2017 from its 2017 Credit Facility (described below) to partially finance the purchase of these vessels.

  • Issued $50.0 million of 8.25% Senior Unsecured Notes due June 2019 (the "Senior Notes due 2019") in March 2017 in an underwritten public offering and issued an additional $7.5 million of Senior Notes due 2019 in April 2017 when the underwriters fully exercised their option to purchase additional Senior Notes due 2019 under the same terms and conditions.

  • Completed a cash tender offer of its 7.50% Senior Unsecured Notes due October 2017 (the "Senior Notes due 2017") in April 2017 and repurchased $6.1 million aggregate principal amount of the Senior Notes due 2017.

  • Executed a loan facility with Macquarie Bank Limited (London Branch), DekaBank Deutsche Girozentrale, The Export-Import Bank of Korea ("KEXIM") and Garanti-Instituttet for Eksportkreditt ("GIEK") for up to $172.0 million. A portion of the proceeds of this facility were used to partially finance the purchase of STI Galata and STI Bosphorus, and the remaining proceeds are expected to be used to partially finance six MR product tankers that are currently under construction at HMD.

  • Executed a loan facility with DVB Bank SE which was used to refinance the existing indebtedness on four product tankers in April 2017.

  • Upsized the Company's BNP Paribas Credit Facility by $27.6 million, the proceeds of which were used to refinance the existing indebtedness on two MR product tankers in January and February 2017. These vessels were previously financed under the 2011 Credit Facility.

  • Executed a loan facility with HSH Nordbank AG, which was used to refinance the existing indebtedness on two MR product tankers in February 2017. These vessels were previously financed under the 2011 Credit Facility.

  • Paid a quarterly cash dividend on the Company's common stock of $0.01 per share in March 2017.

Sale and leaseback of three vessels

In April 2017, the Company executed agreements with Bank of Communications Financial Leasing Co., Ltd. (the “Buyers”) to sell and leaseback, on a bareboat basis, three 2013 built MR product tankers, STI Beryl, STI Le Rocher and STI Larvotto. The selling price is $29.0 million per vessel and the Company will bareboat charter-in the vessels for a period of up to eight years at $8,800 per day per vessel.  These leases will be accounted for as operating leases.

The Company has the option to purchase these vessels beginning at the end of the fifth year of the agreements through the end of the eighth year of the agreements. Additionally, a deposit of $4.35 million per vessel will be retained by the Buyers and will either be applied to the purchase price of the vessel if a purchase option is exercised, or refunded to the Company at the expiration of the agreement. Two of these sales closed in April 2017, and the third is expected to close before May 1, 2017. The Company expects to record a write down of approximately $14.3 million in the second quarter of 2017 as a result of these sales.

Upon closing, all amounts outstanding under the Company’s 2011 Credit Facility are expected to be fully repaid, and the Company’s liquidity is expected to increase by an aggregate of approximately $30 million.

Issuance of $57.5 million of 8.25% Senior Unsecured Notes due June 2019

In March 2017, the Company completed a $50.0 million underwritten public offering of Senior Notes due 2019 and issued an additional $7.5 million of Senior Notes due 2019 in April 2017 when the underwriters fully exercised their option to purchase additional notes under the same terms and conditions. The aggregate net proceeds of the Senior Notes due 2019, after estimated fees and expenses, are estimated to be $55.3 million.  The Senior Notes due 2019 will mature on June 1, 2019 and bear interest at a coupon rate of 8.25% per year, payable in arrears on the 1st day of March, June, September and December of each year, commencing on June 1, 2017.  The Company may redeem the Senior Notes due 2019, at its option, in whole or in part, at any time on or after December 1, 2018, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.  The Senior Notes due 2019 trade on the New York Stock Exchange under the symbol SBBC.

Cash Tender Offer for the Company’s 7.50% Senior Unsecured Notes due October 2017

In April 2017, the Company completed a cash tender offer for its Senior Notes due 2017 (NYSE:SBNB) and repurchased $6.1 million aggregate principal amount of the Senior Notes due 2017.  The cash tender offer commenced simultaneously with the offering of the Senior Notes due 2019 described above.  As of April 26, 2017, the outstanding aggregate principal amount of the Senior Notes due 2017 was $45.7 million.

Furthermore, an additional $0.2 million aggregate principal amount of the Senior Notes due 2017 were also tendered as part of a final tender deadline on April 25,  2017, which is scheduled to be settled on April 28, 2017.

DVB 2017 Credit Facility

In March 2017, the Company executed a loan facility of up to $81.4 million with DVB Bank SE (the “DVB 2017 Credit Facility”) to refinance its previous facility with DVB Bank SE. The loan facility was fully drawn in April 2017, and the aggregate proceeds were used to refinance the existing indebtedness on four product tankers which were financed under the Company's previous DVB Credit Facility that was scheduled to mature in August 2017.

Repayments of outstanding borrowings under the DVB 2017 Credit Facility are scheduled to be made in 20 consecutive quarterly installments of $1.5 million, the last of which shall be payable together with an additional balloon installment equal to the then outstanding balance of the loan on the final maturity date of December 15, 2021. The facility bears interest at LIBOR plus a margin of 2.75% per annum. The remaining terms and conditions, including financial covenants, are similar to those in the Company's existing credit facilities.

2017 Credit Facility

In March 2017, the Company executed a senior secured term loan facility with a group of financial institutions led by Macquarie Bank Limited (London Branch) for a total loan facility of up to $172.0 million (the "2017 Credit Facility"). The facility includes two commercial tranches of $15.0 million and $25.0 million, a KEXIM guaranteed tranche (the "KEXIM Guaranteed Tranche") of $48.0 million, a KEXIM funded tranche of $52.0 million (the "KEXIM Funded Tranche"), and a GIEK guaranteed tranche of $32.0 million (the "GIEK Guaranteed Tranche").

In March 2017, $20.4 million was drawn from this facility to partially finance the purchase of STI Galata and in April 2017, $20.4 million was drawn to partially finance the purchase of STI Bosphorus. The remaining availability is expected to be used to partially finance the purchase of six MR product tankers that are currently under construction at HMD. Drawdowns are available at an amount equal to the lower of 60% of the contract price and 60% of the fair market value of each respective vessel. Other key terms are as follows:

  • The first commercial tranche of $15.0 million has a final maturity of six years from the drawdown date of each vessel, bears interest at LIBOR plus a margin of 2.25% per annum, and has a 15 year repayment profile.
  • The second commercial tranche of $25.0 million has a final maturity of nine years from the drawdown date of each vessel (assuming KEXIM or GIEK have not exercised their option to call for prepayment of the KEXIM and GIEK funded and guaranteed tranches by the date falling two months prior to the maturity of the first commercial tranche and in the event that the first commercial tranche has not been extended), bears interest at LIBOR plus a margin of 2.25% per annum, and has a 15 year repayment profile.
  • The KEXIM Funded Tranche and GIEK Guaranteed Tranche have a final maturity of 12 years from the drawdown date of each vessel (assuming the commercial tranches are refinanced through that date), bear interest at LIBOR plus a margin of 2.15% per annum, and have a 12 year repayment profile.
  • The KEXIM Guaranteed Tranche has a final maturity of 12 years from the drawdown date of each vessel (assuming the commercial tranches are refinanced through that date), bears interest at LIBOR plus a margin of 1.60% per annum, and has a 12 year repayment profile.
  • The remaining terms and conditions, including financial covenants, are similar to those in the Company’s existing credit facilities.

BNP Paribas Credit Facility

In January and February 2017, the Company refinanced the outstanding indebtedness related to STI Sapphire and STI Emerald by repaying an aggregate of $26.3 million on the 2011 Credit Facility and drawing down an aggregate amount of $27.6 million from this facility (the "BNP Paribas Credit Facility").          

HSH Nordbank Credit Facility

In January 2017, the Company entered into a senior secured credit facility agreement with HSH Nordbank AG for $31.1 million (the "HSH Nordbank Credit Facility"). In February 2017, the Company refinanced the outstanding indebtedness related to STI Duchessa and STI Onyx by repaying an aggregate of $23.7 million on the 2011 Credit Facility and drawing down an aggregate of $31.1 million from this facility.

Repayments on all borrowings under the HSH Nordbank Credit Facility are scheduled to be made in 20 consecutive quarterly installments, the first eight of which are $745,669 each and the next 12 are $648,408 each, the last of which shall be payable together with an additional balloon installment equal to the then outstanding balance of the loan.  The facility has a final maturity of five years from the first drawdown date, and bears interest at LIBOR plus a margin of 2.50% per annum.

The remaining terms and conditions, including financial covenants, are similar to those in the Company’s existing credit facilities.

Time Charter-in Update

In February 2017, the Company entered into new time charter agreements on two 2007 built, ice-class 1B Handymax product tankers which the Company then time chartered-in, each for one year at $11,250 per day, one effective March 2017 and the other effective May 2017. The Company also has options to extend these charters for an additional year, each at $13,250 per day.

In February 2017, the Company entered into a new time charter agreement on a 2013 built, LR2 product tanker, which the Company then time chartered-in, for an additional six months at $14,360 per day effective February 2017. The Company also has an option to extend the charter for an additional six months at $15,385 per day.

$250 Million Securities Repurchase Program

In May 2015, the Company's Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company's securities, which currently consist of its (i) Convertible Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE:SBNA), which were issued in May 2014, (iii) Unsecured Senior Notes Due 2017 (NYSE:SBNB), which were issued in October 2014, and (iv) Unsecured Senior Notes Due 2019 (NYSE:SBBC), which were issued in March 2017. As of the date hereof, the Company has the authority to purchase up to an additional $153.3 million of its securities under its Securities Repurchase Program. The Company expects to repurchase its securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the Securities Repurchase Program to repurchase any of its securities.

No securities have been repurchased under this program during 2017.

Conference Call

The Company will have a conference call on April 27, 2017 at 10:00 AM Eastern Daylight Time and 4:00 PM Central European Summer Time.  The dial-in information is as follows:

US Dial-In Number: 1 (855) 861-2416

International Dial-In Number: +1 (703) 736-7422

Conference ID: 10316408

Participants should dial into the call 10 minutes before the scheduled time. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.

Slides and Audio Webcast:

There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Webcast URL: http://edge.media-server.com/m/p/w9i9pzcr 

Current Liquidity

As of April 25, 2017, the Company had $104.2 million in unrestricted cash and cash equivalents. This amount is prior to the monthly distribution from the pools. 

Debt

Set forth below is a summary of the Company’s outstanding indebtedness as of the dates presented:

In millions of U.S. dollars Outstanding
as of
December
31, 2016
Drawdowns
and
repayments,
net
Outstanding
as of March
31, 2017
Drawdowns
and
repayments,
net
Outstanding
as of April
25, 2017
 Availability
as of April 25,
2017
2011 Credit Facility (1) $93.0 $(50.9)$42.1 $(27.8)$14.3  $ 
K-Sure Credit Facility 314.0 (14.9)299.1  299.1   
KEXIM Credit Facility 366.6 (16.8)349.8  349.8   
Credit Suisse Credit Facility (2)  58.4 58.4  58.4   
ABN AMRO Credit Facility 126.3 (2.3)124.0 (0.6)123.4   
ING Credit Facility 124.3 (2.2)122.1 (1.1)121.0   
BNP Paribas Credit Facility 32.2 27.6 59.8  59.8   
Scotiabank Credit Facility 32.2 (0.6)31.6  31.6   
NIBC Credit Facility 39.8 (1.0)38.8 (1.0)37.8   
2016 Credit Facility 281.2 (6.8)274.4  274.4   
DVB Credit Facility (3) 88.4 (1.6)86.8 (86.8)   
HSH Nordbank Credit Facility  31.1 31.1  31.1   
2017 Credit Facility (4)  20.4 20.4 20.4 40.8  129.1 
DVB 2017 Credit Facility (3)    81.4 81.4   
2020 senior unsecured notes 53.8  53.8  53.8   
2017 senior unsecured notes (5) 51.8  51.8 (6.1)45.7   
2019 senior unsecured notes (6)  50.0 50.0 7.5 57.5   
Convertible Notes 348.5  348.5  348.5   
  $1,952.1 $90.4 $2,042.5 $(14.1)$2,028.4  $129.1 
                     

(1) In April 2017, the Company repaid $27.8 million on the 2011 Credit Facility as part of the closing of the sale and leaseback transactions for STI Beryl and STI Le Rocher. The sale and leaseback of STI Larvotto is expected to close by May 1, 2017, and a portion of the proceeds from that sale are expected to repay the remaining outstanding balance on the 2011 Credit Facility.
(2) In February 2017 and March 2017, the Company took delivery of STI Selatar and STI Rambla, respectively, two LR2 product tankers from SSME and drew down an aggregate of $58.4 million from the Credit Suisse Credit Facility to partially finance the purchase of these vessels.
(3) In April 2017, the Company refinanced the outstanding amounts borrowed under the DVB Credit Facility by repaying $86.8 million on this facility and drawing down $81.4 million from the DVB 2017 Credit Facility.
(4) In March and April 2017, the Company took delivery of STI Galata and STI Bosphorus, respectively, two MR product tankers from HMD. The Company drew down $20.4 million in March 2017 and $20.4 million in April 2017 from the 2017 Credit Facility to partially finance the purchase of these vessels.
(5) In April 2017, the Company completed a cash tender offer of its 7.50% Senior Notes due October 2017 and repurchased $6.1 million aggregate principal amount of the Senior Notes due 2017.  Furthermore, an additional $0.2 million aggregate principal amount of the Senior Notes due 2017 were also tendered as part of a final tender deadline on April 25, 2017, which is scheduled to be settled on April 28, 2017.  
(6) In March 2017, the Company issued $50.0 million of Senior Notes due 2019 in an underwritten public offering and in April 2017, the Company issued an additional $7.5 million of Senior Notes due 2019 when the underwriters fully exercised their option to purchase additional notes under the same terms and conditions. The Senior Notes due 2019 mature on June 1, 2019 and bear interest at a coupon rate of 8.25% per year.

Newbuilding Program

As of March 31, 2017, the Company had seven MR product tankers under construction with HMD and currently has six MR product tankers under construction with HMD after taking delivery of STI Bosphorus in April 2017.  The Company refers to these vessels under construction as its Newbuilding Program.

During the first quarter of 2017, the Company made installment payments of $80.3 million relating to vessels under its Newbuilding Program.

Set forth below are the expected future installment payments and estimated debt drawdowns to partially finance the purchase vessels under construction as of March 31, 2017 (1):

  In millions of U.S. dollars
Q2 2017 - installment payments made to date$28.9 
Q2 2017 - remaining installment payments7.2 
Q3 201768.2 
Q4 201750.5 
Q1 201821.6 
  
 $176.4 
  
Expected future debt drawdowns (1)(2) 
Q2 2017 - drawdowns made to date$20.4 
Q3 201764.5 
Q4 201743.1 
Q1 201821.5 
  
Total expected future debt drawdowns$149.5 
    

(1) The installment payments and debt drawdowns are estimates only and are subject to change as construction progresses.

(2) As of March 31, 2017, the Company had $149.5 million available under its 2017 Credit Facility to partially finance the purchase of its seven MR product tankers that were under construction at HMD.  In April 2017, the Company drew down $20.4 million to partially finance the purchase of STI Bosphorus.

Explanation of Variances on the First Quarter of 2017 Financial Results Compared to the First Quarter of 2016

For the three months ended March 31, 2017, the Company recorded a net loss of $11.5 million compared to net income of $28.0 million for the three months ended March 31, 2016. The following were the significant changes between the two periods:

  • Time charter equivalent, or TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management. The following table depicts TCE revenue for the three months ended March 31, 2017 and 2016:
    
   For the three months ended March 31,
In thousands of U.S. dollars 2017 2016
 Vessel revenue $122,801  $165,128 
 Voyage expenses (2,532) (356)
 TCE revenue $120,269  $164,772 
          
  • TCE revenue decreased $44.5 million to $120.3 million from $164.8 million for the three months ended March 31, 2017 and 2016, respectively. This decrease was driven by a decrease in overall time charter equivalent revenue per day to $14,408 per day from $20,203 per day for the three months ended March 31, 2017 and 2016, respectively (see the breakdown of daily TCE below). TCE revenue per day decreased across all of our operating segments as unfavorable market conditions that developed during the second half of 2016, driven by the delivery of newbuildings, high product inventories, low refining margins and a lack of arbitrage opportunities, persisted into the first quarter of 2017.

  • Vessel operating costs increased $0.1 million to $48.1 million from $48.0 million for the three months ended March 31, 2017 and 2016, respectively.  This increase was the result of an increase in the average number of owned and bareboat chartered-in vessels to 80.6 vessels from 79.8 vessels for the three months ended March 31, 2017 and 2016, respectively.  This increase was partially offset by an overall decrease in vessel operating costs per day to $6,519 per day from $6,612 per day for the three months ended March 31, 2017 and 2016, respectively which was driven by improvements in our LR2 and MR operating segments (see the breakdown of daily vessel operating costs below).

  • Charterhire expense increased $3.8 million to $19.4 million from $15.6 million for the three months ended March 31, 2017 and 2016, respectively. This increase was primarily driven by an increase in the Company's time and bareboat chartered-in fleet to an average of 15.6 vessels from an average of 10.3 vessels for the three months ended March 31, 2017 and 2016, respectively.

  • Depreciation expense increased $0.3 million to $30.5 million from $30.2 million for the three months ended March 31, 2017 and 2016, respectively. This increase was primarily driven by the delivery of four LR2 tankers (two in 2016, and two during the three months ended March 31, 2017), offset by the sales of five MR tankers during the first and second quarters of 2016.

  • General and administrative expenses decreased $5.1 million to $11.9 million from $17.0 million for the three months ended March 31, 2017 and 2016, respectively. This decrease was primarily driven by reductions in compensation expense (which includes a reduction in restricted stock amortization).

  • Financial expenses decreased $3.6 million to $21.7 million from $25.2 million for the three months ended March 31, 2017 and 2016, respectively. The decrease was primarily the result of a decrease in interest expense as average debt outstanding decreased to $1.9 billion from $2.1 billion for the three months ended March 31, 2017 and 2016, respectively. Additionally, financial expenses for the three months ended March 31, 2016 includes a $1.8 million write-off of deferred financing fees, whereas a $0.1 million write-off of deferred financing fees was recorded during the three months ended March 31, 2017.

  • Realized and unrealized gains and losses on derivative financial instruments relate to the profit or loss agreement on one of the Company’s time chartered-in vessels with a third party who neither owns nor operates the vessel. This agreement was settled in January 2017.
 
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statements of Income or Loss
(unaudited)
 
  For the three months ended March 31,
In thousands of U.S. dollars except per share and share data2017 2016
Revenue   
 Vessel revenue$122,801  $165,128 
     
Operating expenses   
 Vessel operating costs(48,148) (48,035)
 Voyage expenses(2,532) (356)
 Charterhire(19,431) (15,645)
 Depreciation(30,502) (30,204)
 General and administrative expenses(11,910) (17,017)
 Loss on sales of vessels and write down of vessels held for sale  (2,215)
 Total operating expenses(112,523) (113,472)
Operating income10,278  51,656 
Other (expense) and income, net   
 Financial expenses(21,664) (25,221)
 Realized loss on derivative financial instruments(116)  
 Unrealized gain on derivative financial instruments  1,002 
 Financial income52  615 
 Other expenses, net(83) (21)
 Total other expense, net(21,811) (23,625)
Net (loss) / income$(11,533) $28,031 
     
(Loss) / earnings per share   
     
 Basic$(0.07) $0.17 
 Diluted$(0.07) $0.17 
 Basic weighted average shares outstanding162,711,256  160,471,857 
 Diluted weighted average shares outstanding (1)162,711,256  165,680,353 

(1) The dilutive effect of (i) unvested shares of restricted stock and (ii) the potentially dilutive securities relating to our Convertible Notes were excluded from the computation of diluted earnings per share for the three months ended March 31, 2017 because their effect would have been anti-dilutive. Weighted average shares under the if-converted method (which includes the potential dilutive effect of both the unvested shares of restricted stock and our Convertible Notes) were 201,397,805 for the three months ended March 31, 2017.

 
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
 As of
In thousands of U.S. dollarsMarch 31, 2017 December 31, 2016
Assets   
Current assets   
Cash and cash equivalents$129,459  $99,887 
Restricted cash (escrow for tender offer of Senior Notes due 2017)1,213   
Accounts receivable38,276  42,329 
Prepaid expenses and other current assets8,333  9,067 
Derivative financial instruments  116 
Inventories6,838  6,122 
Total current assets184,119  157,521 
Non-current assets   
Vessels and drydock3,025,031  2,913,254 
Vessels under construction84,067  137,917 
Other assets25,262  21,495 
Restricted cash565   
Total non-current assets3,134,925  3,072,666 
Total assets$3,319,044  $3,230,187 
Current liabilities   
Current portion of long-term debt$311,548  $353,012 
Accounts payable16,860  9,282 
Accrued expenses20,341  23,024 
Total current liabilities348,749  385,318 
Non-current liabilities   
Long-term debt1,662,085  1,529,669 
Total non-current liabilities1,662,085  1,529,669 
Total liabilities2,010,834  1,914,987 
Shareholders' equity   
Issued, authorized and fully paid-in share capital:   
Share capital2,247  2,247 
Additional paid-in capital1,761,312  1,756,769 
Treasury shares(443,816) (443,816)
Accumulated deficit(11,533)  
Total shareholders' equity1,308,210  1,315,200 
Total liabilities and shareholders' equity$3,319,044  $3,230,187 
        


Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
 
 For the three months ended March 31,
In thousands of U.S. dollars2017 2016
Operating activities   
Net (loss) /  income$(11,533) $28,031 
Loss on sales of vessels and write down of vessels held for sale  2,215 
Depreciation30,502  30,204 
Amortization of restricted stock6,289  8,308 
Amortization of deferred financing fees3,251  3,848 
Write-off of deferred financing fees66  1,795 
Unrealized gain on derivative financial instruments  (1,002)
Amortization of acquired time charter contracts  65 
Accretion of Convertible Notes3,004  2,901 
Gain on repurchase of Convertible Notes  (581)
 31,579  75,784 
Changes in assets and liabilities:   
Increase in inventories(652) (212)
Decrease in accounts receivable4,053  13,304 
Decrease / (increase) in prepaid expenses and other current assets734  (1,035)
(Increase) / decrease in other assets(1,745) 398 
Increase in accounts payable2,326  326 
Decrease in accrued expenses(2,754) (9,695)
 1,962  3,086 
Net cash inflow from operating activities33,541  78,870 
Investing activities   
Acquisition of vessels and payments for vessels under construction(83,303) (75,114)
Proceeds from disposal of vessels  63,263 
Net cash outflow from investing activities(83,303) (11,851)
Financing activities   
Debt repayments(97,182) (100,688)
Issuance of debt187,475  43,250 
Debt issuance costs(7,435) (1,833)
Increase in restricted cash(1,778)  
Repayment of Convertible Notes  (4,155)
Dividends paid(1,746) (21,629)
Repurchase of common stock  (13,707)
Net cash inflow / (outflow) from financing activities79,334  (98,762)
Increase / (decrease) in cash and cash equivalents29,572  (31,743)
Cash and cash equivalents at January 1,99,887  200,970 
Cash and cash equivalents at March 31,$129,459  $169,227 
        


Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three months ended March 31, 2017
(unaudited)
 
  For the three months ended March 31,
  2017 2016
Adjusted EBITDA(1)  (in thousands of U.S. dollars) $46,870  $92,362 
     
Average Daily Results    
Time charter equivalent per day(2) $14,408  $20,203 
Vessel operating costs per day(3) $6,519  $6,612 
     
LR2    
TCE per revenue day (2) $16,543  $27,383 
Vessel operating costs per day(3) $6,555  $6,805 
Average number of owned vessels 21.3  19.1 
Average number of time chartered-in vessels 1.2  2.0 
     
Panamax/LR1    
TCE per revenue day (2) $13,545  $25,078 
Vessel operating costs per day(3)    
Average number of owned vessels    
Average number of time chartered-in vessels 1.0  1.0 
     
MR    
TCE per revenue day (2) $13,429  $18,525 
Vessel operating costs per day(3) $6,318  $6,582 
Average number of owned vessels 42.0  46.7 
Average number of time chartered-in vessels 8.0  4.0 
     
Handymax    
TCE per revenue day (2) (4) $14,497  $15,989 
Vessel operating costs per day(3) (4) $6,939  $6,446 
Average number of owned vessels 14.0  14.0 
Average number of time chartered-in vessels 2.2  3.2 
Average number of bareboat chartered-in vessels 3.3   
     
Fleet data    
Average number of owned vessels 77.3  79.8 
Average number of time chartered-in vessels 12.3  10.3 
Average number of bareboat chartered-in vessels 3.3   
     
Drydock    
Expenditures for drydock (in thousands of U.S. dollars)    

(1) See Non-IFRS Measures section below.
(2) Freight rates are commonly measured in the shipping industry in terms of time charter equivalent per day (or TCE per day), which is calculated by subtracting voyage expenses, including bunkers and port charges, from vessel revenue and dividing the net amount (time charter equivalent revenues) by the number of revenue days in the period. Revenue days are the number of days the vessel is owned less the number of days the vessel is off-hire for drydock and repairs.
(3) Vessel operating costs per day represent vessel operating costs divided by the number of days the vessel is owned during the period.
(4) Handymax TCE per day and vessel operating costs per day for 2017 include the activity of seven bareboat chartered-in Handymax vessels (as described in the Fleet List below). These vessels operated in the spot market prior to their entrance into the Scorpio Handymax Tanker pool. TCE per day and vessel operating costs per day for our Handymax operating segment, excluding the activity of these vessels were $15,131 per day and $6,581 per day, respectively.

 
Fleet list as of April 26, 2017
 
 Vessel Name Year
Built
 DWT Ice
class
 Employment Vessel type       
 Owned vessels                 
1 STI Brixton 2014 38,734  1A SHTP (1) Handymax       
2 STI Comandante 2014 38,734  1A SHTP (1) Handymax       
3 STI Pimlico 2014 38,734  1A Time Charter (5) Handymax       
4 STI Hackney 2014 38,734  1A SHTP (1) Handymax       
5 STI Acton 2014 38,734  1A SHTP (1) Handymax       
6 STI Fulham 2014 38,734  1A SHTP (1) Handymax       
7 STI Camden 2014 38,734  1A SHTP (1) Handymax       
8 STI Battersea 2014 38,734  1A SHTP (1) Handymax       
9 STI Wembley 2014 38,734  1A SHTP (1) Handymax       
10 STI Finchley 2014 38,734  1A SHTP (1) Handymax       
11 STI Clapham 2014 38,734  1A SHTP (1) Handymax       
12 STI Poplar 2014 38,734  1A Time Charter (5) Handymax       
13 STI Hammersmith 2015 38,734  1A SHTP (1) Handymax       
14 STI Rotherhithe 2015 38,734  1A SHTP (1) Handymax       
15 STI Amber 2012 49,990   SMRP(2) MR       
16 STI Topaz 2012 49,990   SMRP(2) MR       
17 STI Ruby 2012 49,990   SMRP(2) MR       
18 STI Garnet 2012 49,990   SMRP(2) MR       
19 STI Onyx 2012 49,990   SMRP(2) MR       
20 STI Sapphire 2013 49,990   SMRP(2) MR       
21 STI Emerald 2013 49,990   SMRP(2) MR       
22 STI Larvotto 2013 49,990   SMRP(2) MR       
23 STI Fontvieille 2013 49,990   SMRP(2) MR       
24 STI Ville 2013 49,990   SMRP(2) MR       
25 STI Duchessa 2014 49,990   SMRP(2) MR       
26 STI Opera 2014 49,990   SMRP(2) MR       
27 STI Texas City 2014 49,990   SMRP(2) MR       
28 STI Meraux 2014 49,990   SMRP(2) MR       
29 STI San Antonio 2014 49,990   SMRP(2) MR       
30 STI Venere 2014 49,990   SMRP(2) MR       
31 STI Virtus 2014 49,990   SMRP(2) MR       
32 STI Aqua 2014 49,990   SMRP(2) MR       
33 STI Dama 2014 49,990   SMRP(2) MR       
34 STI Benicia 2014 49,990   SMRP(2) MR       
35 STI Regina 2014 49,990   SMRP(2) MR       
36 STI St. Charles 2014 49,990   SMRP(2) MR       
37 STI Mayfair 2014 49,990   SMRP(2) MR       
38 STI Yorkville 2014 49,990   SMRP(2) MR       
39 STI Milwaukee 2014 49,990   SMRP(2) MR       
40 STI Battery 2014 49,990   SMRP(2) MR       
41 STI Soho 2014 49,990   SMRP(2) MR       
42 STI Memphis 2014 49,995   SMRP(2) MR       
43 STI Tribeca 2015 49,990   SMRP(2) MR       
44 STI Gramercy 2015 49,990   SMRP(2) MR       
45 STI Bronx 2015 49,990   SMRP(2) MR       
46 STI Pontiac 2015 49,990   SMRP(2) MR       
47 STI Manhattan 2015 49,990   SMRP(2) MR       
48 STI Queens 2015 49,990   SMRP(2) MR       
49 STI Osceola 2015 49,990   SMRP(2) MR       
50 STI Notting Hill 2015 49,687  1B Time Charter (6) MR       
51 STI Seneca 2015 49,990   SMRP(2) MR       
52 STI Westminster 2015 49,687  1B Time Charter (6) MR       
53 STI Brooklyn 2015 49,990   SMRP(2) MR       
54 STI Black Hawk 2015 49,990   SMRP(2) MR       
55 STI Galata 2017 49,990   Spot MR       
56 STI Bosphorus 2017 49,990   Spot MR       
57 STI Elysees 2014 109,999   SLR2P (4) LR2       
58 STI Madison 2014 109,999   SLR2P (4) LR2       
59 STI Park 2014 109,999   SLR2P (4) LR2       
60 STI Orchard 2014 109,999   SLR2P (4) LR2       
61 STI Sloane 2014 109,999   SLR2P (4) LR2       
62 STI Broadway 2014 109,999   SLR2P (4) LR2       
63 STI Condotti 2014 109,999   SLR2P (4) LR2       
64 STI Rose 2015 109,999   Time Charter (7) LR2       
65 STI Veneto 2015 109,999   SLR2P (4) LR2       
66 STI Alexis 2015 109,999   SLR2P (4) LR2       
67 STI Winnie 2015 109,999   SLR2P (4) LR2       
68 STI Oxford 2015 109,999   SLR2P (4) LR2       
69 STI Lauren 2015 109,999   SLR2P (4) LR2       
70 STI Connaught 2015 109,999   SLR2P (4) LR2       
71 STI Spiga 2015 109,999   SLR2P (4) LR2       
72 STI Savile Row 2015 109,999   SLR2P (4) LR2       
73 STI Kingsway 2015 109,999   SLR2P (4) LR2       
74 STI Carnaby 2015 109,999   SLR2P (4) LR2       
75 STI Lombard 2015 109,999   SLR2P (4) LR2       
76 STI Grace 2016 109,999   SLR2P (4) LR2       
77 STI Jermyn 2016 109,999   SLR2P (4) LR2       
78 STI Selatar 2017 109,999   SLR2P (4) LR2       
79 STI Rambla 2017 109,999    SLR2P (4) LR2       
                   
 Total owned DWT   5,171,232              
                   
 Vessel Name Year
Built
 DWT Ice
class
 Employment Vessel type Charter type Daily
Base
Rate
 Expiry (8) 
 Time or bareboat chartered-in vessels                 
80 Kraslava 2007 37,258  1B SHTP (1) Handymax Time Charter $17,000  13-May-18 (9) 
81 Krisjanis Valdemars 2007 37,266  1B SHTP (1) Handymax Time Charter $11,250  13-Mar-18 (10) 
82 Silent 2007 37,847  1A SHTP (1) Handymax Bareboat $7,500  31-Mar-19 (11) 
83 Single 2007 37,847  1A SHTP (1) Handymax Bareboat $7,500  31-Mar-19 (11) 
84 Star I 2007 37,847  1A SHTP (1) Handymax Bareboat $7,500  31-Mar-19 (11) 
85 Sky 2008 37,847  1A SHTP (1) Handymax Bareboat $6,000  31-Mar-19 (12) 
86 Steel 2008 37,847  1A SHTP (1) Handymax Bareboat $6,000  31-Mar-19 (12) 
87 Stone I 2008 37,847  1A SHTP (1) Handymax Bareboat $6,000  31-Mar-19 (12) 
88 Style 2008 37,847  1A SHTP (1) Handymax Bareboat $6,000  31-Mar-19 (12) 
89 Miss Mariarosaria 2011 47,499   SMRP(2) MR Time Charter $16,350  26-May-17 
90 STI Beryl 2013 49,990   SMRP(2) MR Bareboat $8,800  18-Apr-25 (13) 
91 STI Le Rocher 2013 49,990   SMRP(2) MR Bareboat $8,800  21-Apr-25 (13) 
92 Vukovar 2015 49,990   SMRP(2) MR Time Charter $17,034  01-May-18 
93 Targale 2007 49,999   SMRP(2) MR Time Charter $16,200  17-May-17 
94 Zefyros 2013 49,999   SMRP(2) MR Time Charter $15,800  08-Jul-17 (14) 
95 Gan-Trust 2013 51,561   SMRP(2) MR Time Charter $13,050  06-Jan-18 (15) 
96 CPO New Zealand 2011 51,717   SMRP(2) MR Time Charter $15,250  12-Sep-18 (16) 
97 CPO Australia 2011 51,763   SMRP(2) MR Time Charter $15,250  01-Sep-18 (16) 
98 Ance 2006 52,622   SMRP(2) MR Time Charter $13,500  12-Oct-17 (17) 
99 Hellespont Progress 2006 73,728   SPTP (3) LR1 Time Charter $17,250  15-May-17 
100 Densa Alligator 2013 105,708   SLR2P (4) LR2 Time Charter $14,360  17-Aug-17 (18) 
                   
 Total time or bareboat chartered-in DWT   1,024,019              
                   
 Newbuildings currently under construction                 
 Vessel Name Yard DWT Vessel
type
           
101 Hull 2603 - TBN STI Leblon HMD(19)52,000  MR           
102 Hull 2604 - TBN STI La Boca HMD(19)52,000  MR           
103 Hull 2605 - TBN STI San Telmo HMD(19)52,000  MR           
104 Hull 2606 - TBN STI Donald C Trauscht HMD(19)52,000  MR           
105 Hull 2607 - TBN STI Esles II HMD(19)52,000  MR           
106 Hull 2608 - TBN STI Jardins HMD(19)52,000  MR           
                   
 Total newbuilding product tankers DWT   312,000              
                   
 Total Fleet DWT   6,507,251              
                   

(1) This vessel operates in or is expected to operate in the Scorpio Handymax Tanker Pool ("SHTP"). SHTP is operated by Scorpio Commercial Management ("SCM"). SHTP and SCM are related parties to the Company.
(2) This vessel operates in or is expected to operate in the Scorpio MR Pool ("SMRP"). SMRP is operated by SCM. SMRP is a related party to the Company.
(3) This vessel operates in or is expected to operate in the Scorpio Panamax Tanker Pool ("SPTP"). SPTP is operated by SCM. SPTP is a related party to the Company.
(4) This vessel operates in or is expected to operate in the Scorpio LR2 Pool ("SLR2P"). SLR2P is operated by SCM. SLR2P is a related party to the Company.
(5) This vessel is currently time chartered-out to an unrelated third-party for three years at $18,000 per day. This time charter is scheduled to expire in January 2019.
(6) This vessel is currently time chartered-out to an unrelated third-party for three years at $20,500 per day. This time charter is scheduled to expire in December 2018.
(7) This vessel is currently time chartered-out to an unrelated third-party for three years at $28,000 per day. This time charter is scheduled to expire in February 2019.
(8) Redelivery from the charterer is plus or minus 30 days from the expiry date.
(9) In February 2017, we entered into a new time charter-in agreement for one year at $11,250 per day effective May 2017. We have an option to extend the charter for an additional year at $13,250 per day.
(10) In February 2017, we entered into a new time charter-in agreement for one year at $11,250 per day effective March 2017. We have an option to extend the charter for an additional year at $13,250 per day.
(11) In December 2016, we entered into an agreement to bareboat-in this vessel, which was previously time chartered-in by the Company for $15,600 per day. The time charter-in contract was cancelled in January 2017 and replaced by the new bareboat contract at a rate of $7,500 per day. The agreement includes a purchase option which can be exercised through December 31, 2018. If the purchase option is not exercised, the bareboat-in agreement will expire on March 31, 2019. This vessel was delivered under the bareboat agreement in January 2017.
(12) In December 2016, we entered into an agreement to bareboat-in this vessel at a rate of $6,000 per day. The agreement includes a purchase option which can be exercised through December 31, 2018. If the purchase option is not exercised, the bareboat-in agreement will expire on March 31, 2019. This vessel was delivered under the bareboat agreement in February 2017.
(13) In April 2017, we sold and leased back this vessel for a period of up to eight years for $8,800 per day. The selling price was $29.0 million and we have the option to purchase this vessel beginning at the end of the fifth year of the agreement through the end of the eighth year of the agreement, at market based prices. Additionally, a deposit of $4.35 million was retained by the buyer and will either be applied to the purchase price of the vessel if a purchase option is exercised, or refunded to the Company at the expiration of the agreement.
(14) We have an option to extend the charter for an additional year at $17,000 per day.
(15) In November 2016, we entered into a new time charter-in agreement for one year at $13,050 per day effective January 2017. We have an option to extend the charter for an additional year at $15,000 per day.
(16) We have an option to extend the charter for an additional year at $16,000 per day.
(17) We have an option to extend the charter for an additional year at $15,000 per day.
(18) In February 2017, we entered into a new time charter-in agreement for six months at $14,360 per day. We have an option to extend the charter for an additional six months at $15,385 per day.
(19) These newbuilding vessels are being constructed at HMD. Five vessels are expected to be delivered throughout 2017 and one vessel is expected to be delivered in the first quarter of 2018.

Dividend Policy

The declaration and payment of dividends is subject at all times to the discretion of the Company's Board of Directors. The timing and amount of dividends, if any, depends on the Company's earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.

The Company's dividends paid during 2016 and 2017 were as follows:

 Date paidDividends per
share
 March 2016$0.125
 June 2016$0.125
 September 2016$0.125
 December 2016$0.125
 March 2017$0.010

On April 26, 2017, the Company's Board of Directors declared a quarterly cash dividend of $0.01 per share, payable on or about June 14, 2017 to all shareholders as of May 11, 2017 (the record date). As of April 26, 2017, there were 174,629,755 shares outstanding.

Securities Repurchase Program

In May 2015, the Company's Board of Directors authorized a new Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company's securities, which currently consist of its (i) Convertible Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE:SBNA), which were issued in May 2014, (iii) Unsecured Senior Notes Due 2017 (NYSE:SBNB), which were issued in October 2014, and (iv) Unsecured Senior Notes Due 2019 (NYSE:SBBC), which were issued in March 2017. As of the date hereof, the Company has the authority to purchase up to an additional $153.3 million of its securities under its Securities Repurchase Program. The Company expects to repurchase any securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the Securities Repurchase Program to repurchase any securities.

No securities have been repurchased under this program during 2017.

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 79 product tankers (23 LR2, 14 Handymax, and 42 MR tankers) with an average age of 2.3 years and time or bareboat charters-in 21 product tankers (one LR2, one LR1, ten MR and nine Handymax tankers). The Company has contracted for six newbuilding MR product tankers, which are expected to be delivered throughout 2017 and the first quarter of 2018. Additional information about the Company is available at the Company's website www.scorpiotankers.com, which is not a part of this press release.

Non-IFRS Measures

Reconciliation of IFRS Financial Information to Non-IFRS Financial Information

This press release describes adjusted net income or loss and adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. "Non-IFRS" measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.

The Company believes that the presentation of adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful to investors because they facilitate the comparability and the evaluation of companies in the Company’s industry. In addition, the Company believes that adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful in evaluating its operating performance compared to that of other companies in the Company’s industry. The Company’s definitions of adjusted net income or loss with the adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA may not be the same as reported by other companies in the shipping industry or other industries.

Reconciliation of Net (Loss) / Income to Adjusted Net (Loss) / Income

   For the three months ended March 31, 2017
     Per share Per share
In thousands of U.S. dollars except per share data Amount  basic  diluted
 Net loss $(11,533) $(0.07) $(0.07)
 Adjustments:      
 Deferred financing fees write-off 66  0.00  0.00 
 Adjusted net loss $(11,467) $(0.07) $(0.07)
              


   For the three months ended March 31, 2016
     Per share Per share
In thousands of U.S. dollars except per share data Amount  basic  diluted
 Net income $28,031  $0.17  $0.17 
 Adjustments:      
 Deferred financing fees write-off 1,795  0.01  0.01 
 Unrealized gain on derivative financial instruments (1,002) (0.01) (0.01)
 Gain on repurchase of Convertible Notes (581)    
 Loss on sale of vessels and write down of vessels held for sale 2,215  0.01  0.01 
 Adjusted net income $30,458  $0.19 (1)$0.18 
               

(1) Summation differences due to rounding

Reconciliation of Net (Loss) / Income to Adjusted EBITDA

   For the three months ended March 31,
In thousands of U.S. dollars 2017 2016
 Net (loss) / income $(11,533) $28,031 
 Financial expenses 21,664  25,221 
 Unrealized gain on derivative financial instruments   (1,002)
 Financial income (52) (34)
 Depreciation 30,502  30,204 
 Amortization of restricted stock 6,289  8,308 
 Loss on sale of vessels and write down of vessels held for sale   2,215 
 Gain on repurchase of Convertible Notes (recorded within Financial income)   (581)
 Adjusted EBITDA $46,870  $92,362 
          

Forward-Looking Statements
Matters discussed in this press release 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, strategies, 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," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe 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 our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

Scorpio Tankers Inc.
212-542-1616

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Source: Scorpio Tankers Inc.