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Scorpio Tankers Inc. Announces Financial Results for the First Quarter of 2014, a $100.0 Million Stock Buyback Program, and Increases Its Quarterly Dividend
MONACO — (Marketwired) — 04/28/14 — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three months ended March 31, 2014.
Results for the three months ended March 31, 2014 and 2013
For the three months ended March 31, 2014, the Company had net income of $53.3 million, or $0.28 basic and diluted earnings per share. The Company’s adjusted net income was $1.9 million (see Non-GAAP Measure section below), or $0.01 basic and diluted earnings per share, which excludes (i) a gain of $51.4 million, or $0.27 per share, resulting from the previously announced sales agreement of seven Very Large Crude Carriers (‘VLCCs’) under construction, and (ii) an unrealized gain on derivative financial instruments of $47,000 or $0.00 per share.
For the three months ended March 31, 2013, the Company had net income of $6.6 million, or $0.08 basic and diluted earnings per share.
Declaration of Dividend
On April 28, 2014, the Scorpio Tankers’ board of directors declared a quarterly cash dividend of $0.09 per share, payable on June 12, 2014 to all shareholders as of May 27, 2014 (the record date). As of April 28, 2014, there are 199,718,567 shares outstanding.
Stock Buyback Program
Summary of Recent and First Quarter Significant Events:
- Closed on the previously announced sales agreement of seven VLCCs under construction for a gain of $51.4 million.
- Took delivery of three MR tankers under the Company’s Newbuilding Program, STI Texas City, in March 2014, and STI Opera and STI Duchessa, in January 2014.
- Converted the Newbuilding Credit Facility from a term loan into a reducing revolving credit facility giving the Company the ability to draw down and repay the available commitments under the facility when needed.
- Sold three of the Company’s older vessels, Noemi, Senatore, and STI Spirit for an aggregate selling price of $74.2 million, further emphasizing the Company’s commitment to a modern, fuel efficient fleet.
- Declared and paid a quarterly cash dividend on the Company’s common stock of $0.08 per share in March 2014.
Newbuilding Credit Facility conversion to a Revolver
In March 2014, the Company converted its Newbuilding Credit Facility with Credit Agricole Corporate and Investment Bank and Skandinaviska Enskilda Banken AB from a term loan to a reducing revolving credit facility. This gives the Company the ability to draw down and repay the available commitments under the facility when needed. All other terms and definitions remain unchanged.
The amount available under this facility is $82.3 million and is fully drawn as of the date of this press release. The amount available will reduce by $1.5 million each quarter until the maturity date in June 2019.
Vessel sales
As part of the Company’s commitment to a modern fuel efficient fleet, the Company recently sold three of its older vessels:
- Two, 2004 built, LR1 product tankers, Noemi and Senatore, for an aggregate selling price of $44.0 million. These sales closed in March and April 2014, respectively.
- The 2008 built LR2 product tanker, STI Spirit, for $30.2 million in April 2014.
The Company also made repayments of the debt associated with the three vessels sold for $43.9 million in aggregate. These repayments and their resultant impact on our credit facilities are further described below.
Time charter-in update
In April 2014, the Company extended the time charter on an MR tanker that is currently time chartered-in. The term of the agreement is for one year at $14,850 per day beginning in May 2014. The Company has options to extend the charter for up to two consecutive one year periods at $15,200 per day and $16,200 per day, respectively.
In April 2014, the Company extended the time charter on an LR2 that is currently time chartered-in. The term of the agreement is for six months at $15,250 per day beginning in May 2014. The Company has an option to extend the charter for up to six months at $15,500 per day.
In March 2014, the Company extended the time charter on a Handymax tanker that is currently time chartered-in. The term of the extension is for one year at $13,550 per day and began in April 2014.
In March 2014, the Company entered into a new time charter-in agreement on an LR1 vessel for one year at $15,000 per day. The Company has options to extend the charter for up to two consecutive one year periods at $16,250 per day and $17,250 per day, respectively. This vessel was delivered in March 2014.
In February 2014, the Company extended the time charters on two Handymax tankers that are currently time chartered-in. The terms of the agreements are for one year at $13,650 per day beginning in April and May 2014. The time charter beginning in April 2014 contains a 50% profit and loss sharing provision whereby the Company will split all of the vessel’s profits and losses above or below the daily base rate with the vessel’s owner.
In February 2014, the Company entered into a new time charter-in agreement on an LR2 vessel that is currently time chartered-in. The new agreement is for six months at $16,500 per day and commenced upon the expiration of the existing charter in February 2014.
In February 2014, the Company entered into a new time charter-in agreement on an LR2 vessel for one year at $15,000 per day. The Company has an option to extend the charter for an additional six months at $16,250 per day. This vessel was delivered in March 2014.
Conference Call
The Company will have a conference call on April 28, 2014 at 11:00 AM Eastern Daylight Time and 5:00 PM Central European Time.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866)-675-4790 (U.S.) or 1(913)-312-0643 (International). The conference participant passcode is 3528758. 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://www.visualwebcaster.com/event.asp?id=99087
Current Liquidity
As of April 25, 2014, the Company had $151.7 million in cash.
Debt
2010 Credit Facility
In January 2014, the Company drew down $72.4 million from the 2010 Revolving Credit Facility.
In March 2014, the Company repaid $22.5 million into this facility as a result of the sales of Noemi and Senatore. Consequently, the availability of this facility reduced by such amount and the quarterly reduction reduced to $2.1 million from $3.1 million per quarter. Additionally, we wrote off $0.2 million of deferred financing fees as a result of this repayment in the first quarter of 2014.
The amount available under the facility is now $47.8 million and is fully drawn as of the date of this press release.
2011 Credit Facility
In January 2014, the Company drew down $52.0 million from the 2011 Credit Facility. In connection with this drawdown, STI Duchessa, STI Le Rocher and STI Larvotto were provided as collateral under the facility. There are no further amounts available to draw under this facility.
2013 Credit Facility
In February 2014, the Company drew down $64.2 million from the 2013 Credit Facility. In connection with this draw down, STI Opera, STI Fontvieille and STI Ville were provided as collateral under the facility.
In March 2014, the Company drew down $20.5 million from the 2013 Credit Facility to partially finance the delivery of STI Texas City.
STI Spirit Credit Facility
In April 2014, the Company repaid the outstanding balance under its STI Spirit Credit Facility of $21.4 million as a result of the sale of STI Spirit. $0.3 million of deferred financing fees will be written off as a result of this repayment in the second quarter of 2014.
As of April 28, 2014, the Company’s outstanding debt balance, and amount available to draw, is as follows:
As of April 28, 2014
-------------------------------------
In millions of U.S. dollars Amount outstanding Amount available
------------------ ------------------
2010 Revolving Credit Facility $ 47.8 $ -
STI Spirit Credit Facility - -
2011 Credit Facility 114.9 -
Newbuilding Credit Facility 82.3 -
2013 Credit Facility 84.7 440.3(1)
K-Sure Credit Facility - 458.3(2)
KEXIM Credit Facility - 429.6(2)
------------------ ------------------
Total $ 329.7 $ 1,328.2
================== ==================
(1) Availability can be used to finance the lesser of 60% of the contract
price for a qualifying newbuilding vessel and such vessel's fair market
value at the date of drawdown.
(2) Availability can be used to finance the lesser of 60% of the newbuilding
contract price and 74% of the fair market value of the relevant vessel
specified in the agreement.
Newbuilding Program
During the first quarter of 2014, the Company made $190.9 million of installment payments on its newbuilding vessels, which included an aggregate of $60.0 million for the delivery installment payments for STI Opera, STI Duchessa and STI Texas City. The Company currently has 55 newbuilding vessel orders with HMD, SPP, HSHI and DSME (29 MRs, 14 Handymaxes and 12 LR2s). The estimated future payment dates and amounts are as follows*:
Q2 2014 $ 347.9 million**
Q3 2014 477.4 million
Q4 2014 258.3 million
Q1 2015 186.8 million
Q2 2015 147.4 million
--------------------
Total $ 1,417.8 million
====================
*These are estimates only and are subject to change as construction progresses.
**$22.8 million has been paid prior to the date of this press release.
Explanation of Variances on the First Quarter of 2014 Financial Results Compared to the First Quarter of 2013
For the three months ended March 31, 2014, the Company recorded net income of $53.3 million compared to net income of $6.6 million in the three months ended March 31, 2013. 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, 2014 and 2013:
For the three months ended March 31,
------------------------------------
In thousands of U.S. dollars 2014 2013
----------------- -----------------
Vessel revenue 76,734 $ 44,924
Voyage expenses (3,974) (1,200)
----------------- -----------------
TCE revenue $ 72,760 $ 43,724
================= =================
- TCE revenue increased $29.0 million to $72.8 million. This increase was primarily driven by an increase in the average number of operating vessels (owned and time chartered-in) to 50.7 from 29.6 for the three months ended March 31, 2014 and 2013, respectively. This increase was offset by an overall decrease in time charter equivalent revenue per day to $15,906 per day from $16,597 per day for the three months ended March 31, 2014 and 2013, respectively (see the breakdown of daily TCE averages below).
- Vessel operating costs increased $5.1 million to $13.1 million from $8.0 million for the three months ended March 31, 2014 and 2013, respectively. This increase was primarily driven by an increase in the Company’s owned fleet to an average of 20.2 vessels from 12.8 vessels for the three months ended March 31, 2014 and 2013, respectively. The increase was augmented by an overall decrease in vessel operating costs per day to $7,185 per day from $6,840 per day for the three months ended March 31, 2014 and 2013, respectively (see the breakdown of daily TCE averages below).
- Charterhire expense increased $19.7 million to $40.2 million from $20.5 million as a result of an increase in the average number of vessels time chartered-in to 30.5 from 16.8 for the three months ended March 31, 2014 and 2013, respectively. See the Company’s Fleet List below for the terms of these agreements.
- Depreciation expense increased $1.2 million to $6.0 million from $4.8 million primarily as a result of an increase in the average number of owned vessels to 20.2 from 12.8 for the three months ended March 31, 2014 and 2013, respectively.
- General and administrative expenses increased $8.2 million to $11.0 million from $2.8 million. This increase was driven by a $6.5 million increase in the amortization of restricted stock (non-cash) and an overall increase in other general and administrative expenses due to the significant growth in the Company’s fleet and Newbuilding Program.
- Gain on sale of VLCCs of $51.4 million relates to the gain recorded as a result of the sale of our VLCCs under construction.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Profit or Loss
(unaudited)
For the three months ended March 31,
------------------------------------
In thousands of U.S. dollars except
per share and share data 2014 2013
----------------- -----------------
Revenue
Vessel revenue $ 76,734 $ 44,924
Operating expenses
Vessel operating costs (13,070) (7,971)
Voyage expenses (3,974) (1,200)
Charterhire (40,173) (20,496)
Depreciation (5,953) (4,767)
General and administrative expenses (10,966) (2,759)
Gain on sale of VLCCs 51,419 -
----------------- -----------------
Total operating expenses (22,717) (37,193)
----------------- -----------------
Operating income 54,017 7,731
----------------- -----------------
Other (expense) and income, net
Financial expenses (399) (1,399)
Realized gain on derivative
financial instruments 17 68
Unrealized gain on derivative
financial instruments 47 44
Financial income 27 181
Share of loss from associate (324) -
Other expenses, net (47) (15)
----------------- -----------------
Total other expenses, net (679) (1,121)
----------------- -----------------
Net income $ 53,338 $ 6,610
================= =================
Earnings per share
Basic and diluted $ 0.28 $ 0.08
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
As of
------------------------------------
In thousands of U.S. dollars March 31, 2014 December 31, 2013
----------------- -----------------
Assets
Current assets
Cash and cash equivalents $ 194,987 $ 78,845
Accounts receivable 84,448 72,542
Prepaid expenses and other current
assets 3,855 2,277
Inventories 4,553 2,857
Vessels held for sale 61,410 82,649
----------------- -----------------
Total current assets 349,253 239,170
----------------- -----------------
Non-current assets
Vessels and drydock 631,385 530,270
Vessels under construction 649,718 649,526
Other assets 30,213 17,907
Investment in associate 209,479 209,803
----------------- -----------------
Total non-current assets 1,520,795 1,407,506
----------------- -----------------
Total assets $ 1,870,048$ 1,646,676
================= =================
Current liabilities
Bank loans 27,744 10,453
Accounts payable 21,977 20,696
Accrued expenses 7,940 7,251
Derivative financial instruments 482 689
Bank loans related to vessels held for
sale 27,617 21,397
----------------- -----------------
Total current liabilities 85,760 60,486
----------------- -----------------
Non-current liabilities
Bank loans 289,273 135,279
Derivative financial instruments 51 188
----------------- -----------------
Total non-current liabilities 289,324 135,467
----------------- -----------------
Total liabilities 375,084 195,953
----------------- -----------------
Shareholders' equity
Issued, authorized and fully paid in
share capital:
Share capital 2,021 1,999
Additional paid in capital 1,527,802 1,536,945
Treasury shares (7,938) (7,938)
Hedging reserve (188) (212)
Accumulated deficit (26,733) (80,071)
----------------- -----------------
Total shareholders' equity 1,494,964 1,450,723
----------------- -----------------
Total liabilities and shareholders'
equity $ 1,870,048$ 1,646,676
================= =================
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
For the three months ended March 31,
------------------------------------
In thousands of U.S. dollars 2014 2013
----------------- -----------------
Operating activities
Net income $ 53,338 $ 6,610
Gain on sale of VLCCs (51,419) -
Depreciation 5,953 4,767
Amortization of restricted stock 6,955 500
Amortization of deferred financing
fees 155 255
Straight-line adjustment for
charterhire expense 3 (31)
Share of loss from associate 324 -
Unrealized gain on derivative
financial instruments (47) (44)
----------------- -----------------
15,262 12,057
----------------- -----------------
Changes in assets and liabilities:
Drydock payments - (1,202)
Increase in inventories (1,700) (719)
Increase in accounts receivable (11,906) (11,211)
Increase in prepaid expenses and other
current assets (935) (1,006)
Increase in other assets (47) -
Increase in accounts payable 3,125 593
Increase / (decrease) in accrued
expenses 1,759 (88)
Interest rate swap termination payment (274) -
----------------- -----------------
(9,978) (13,633)
----------------- -----------------
Net cash inflow / (outflow) from
operating activities 5,284 (1,576)
----------------- -----------------
Investing activities
Acquisition of vessels and payments
for vessels under construction (199,055) (155,180)
Proceeds from disposal of vessels 162,950 -
----------------- -----------------
Net cash outflow from investing
activities (36,105) (155,180)
----------------- -----------------
Financing activities
Bank loan repayment (27,674) (1,838)
Bank loan drawdown 209,100 34,375
Debt issuance costs (18,345) (343)
Gross proceeds from issuance of common
stock - 465,037
Equity issuance costs (42) (15,774)
Dividends paid (16,076) -
----------------- -----------------
Net cash inflow from financing
activities 146,963 481,457
----------------- -----------------
Increase in cash and cash equivalents 116,142 324,701
Cash and cash equivalents at January
1, 78,845 87,165
----------------- -----------------
Cash and cash equivalents at March 31, $ 194,987 $ 411,866
================= =================
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three months ended March 31, 2014 and 2013
(unaudited)
For the three months ended March 31,
-------------------------------------
2014 2013
------------------ ------------------
Adjusted EBITDA(1)(in thousands of
U.S. dollars) $ 15,896 $ 13,051
Average Daily Results
Time charter equivalent per day(2) $ 15,906 $ 16,597
Vessel operating costs per day(3) 7,185 6,840
Aframax/LR2
TCE per revenue day (2) $ 14,342 $ 19,172
Vessel operating costs per day(3) 7,386 6,960
Panamax/LR1
TCE per revenue day (2) $ 20,063 $ 12,895
Vessel operating costs per day(3) 8,372 7,982
MR
TCE per revenue day (2) $ 14,262 $ 18,259
Vessel operating costs per day(3) 6,466 5,852
Handymax
TCE per revenue day (2) $ 16,736 $ 16,343
Vessel operating costs per day(3) 10,814 6,698
Fleet data
Average number of owned vessels 20.2 12.8
Average number of time chartered-in
vessels 30.5 16.8
(1) See Non-GAAP Measure 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
excluding non-recurring expenses (for example insurance deductible
expenses for repairs) divided by the number of days the vessel is owned
during the period.
Fleet List as of April 28, 2014
Ice
Vessel Name Year Built DWT class Employment Vessel type
---------------- ---------- --------- --------- ------------- -----------
Owned vessels
1 STI Highlander 2007 37,145 1A SHTP (1) Handymax
2 STI Amber 2012 52,000 - SMRP(4) MR
3 STI Topaz 2012 52,000 - SMRP(4) MR
4 STI Ruby 2012 52,000 - SMRP(4) MR
5 STI Garnet 2012 52,000 - SMRP(4) MR
6 STI Onyx 2012 52,000 - SMRP(4) MR
7 STI Sapphire 2013 52,000 - SMRP(4) MR
8 STI Emerald 2013 52,000 - SMRP(4) MR
9 STI Beryl 2013 52,000 - SMRP(4) MR
10 STI Le Rocher 2013 52,000 - SMRP(4) MR
11 STI Larvotto 2013 52,000 - SMRP(4) MR
12 STI Fontvieille 2013 52,000 - SMRP(4) MR
13 STI Ville 2013 52,000 - SMRP(4) MR
14 STI Duchessa 2014 52,000 - SMRP(4) MR
15 STI Opera 2014 52,000 - Spot (5) MR
16 STI Texas City 2014 - Time Charter MR
52,000 (6)
17 STI Harmony 2007 73,919 1A SPTP (2) LR1
18 STI Heritage 2008 73,919 1A SPTP (2) LR1
19 Venice 2001 1C Spot Post-
81,408 Panamax
---------
Total owned DWT 1,046,391
=========
Year Daily
Vessel Built Ice Employment Vessel Base Expiry
Name DWT class type Rate (7)
---------- ---- --------- ----- --------- -------- ------- ---------
Time chartered-in vessels
20 Kraslava 2007 37,258 1B SHTP (1) Handymax $12,800 18-May-15
21 Krisjanis 2007 1B SHTP (1) Handymax $13,650 14-Apr-15 (8)
Valdemars 37,266
22 Jinan 2003 37,285 - SHTP (1) Handymax $12,600 28-Apr-15
23 Iver 2007 - SHTP (1) Handymax $12,500 03-Mar-15 (9)
Progress 37,412
24 Iver 2007 - SHTP (1) Handymax $12,500 20-Oct-14 (10)
Prosperity 37,455
25 Histria 2007 - SHTP (1) Handymax $13,550 04-Apr-15 (11)
Azure 40,394
26 Histria 2006 - SHTP (1) Handymax $12,800 17-Jul-14 (12)
Coral 40,426
27 Histria 2005 - SHTP (1) Handymax $12,800 15-Jul-14 (12)
Perla 40,471
28 STX Ace 6 2007 46,161 - SMRP(4) MR $14,150 17-May-14 (13)
29 Targale 2007 49,999 - SMRP(4) MR $14,500 17-May-15 (14)
30 Gan- 2010 - SMRP(4) MR $14,150 20-May-14
Triumph 49,999
31 Nave Orion 2013 49,999 - SMRP(4) MR $14,300 25-Mar-15 (15)
32 Gan-Trust 2013 51,561 - SMRP(4) MR $16,250 06-Jan-16 (16)
33 Usma 2007 52,684 1B SMRP(4) MR $14,500 03-Jan-15
34 SN 2003 - SPTP (2) LR1 $11,250 15-May-15 (17)
Federica 72,344
35 SN Azzura 2003 72,344 - SPTP (2) LR1 $13,600 25-Dec-14
36 King 2008 - SPTP (2) LR1 $14,000 08-Aug-14 (18)
Douglas 73,666
37 Hellespont 2007 - SPTP (2) LR1 $14,250 14-Aug-14
Promise 73,669
38 Hellespont 2006 - SPTP (2) LR1 $15,000 18-Mar-15 (19)
Progress 73,728
39 FPMC P 2009 - SPTP (2) LR1 $14,525 09-Sep-15
Eagle 73,800
40 FPMC P 2011 - SLR2P (3) LR2 $15,000 02-Nov-14 (20)
Hero 99,995
41 FPMC P 2012 - SLR2P (3) LR2 $15,250 09-Jul-14 (21)
Ideal 99,993
42 Swarna 2010 SLR2P (3) LR2 $15,000 11-Mar-15 (22)
Jayanti 104,895
43 Densa 2013 - SLR2P (3) LR2 $16,500 17-Sep-14 (23)
Alligator 105,708
44 Khawr 2006 - SLR2P (3) LR2 $15,400 11-Jul-15
Aladid 106,003
45 Fair Seas 2008 115,406 - SLR2P (3) LR2 $16,500 21-Aug-14
46 Southport 2008 115,462 SLR2P (3) LR2 $15,700 10-Dec-14
47 Four Sky 2010 115,708 - SLR2P (3) LR2 $16,250 02-Sep-14
---------
Total time
chartered-in
DWT 1,911,091
=========
Newbuildings currently under construction
Ice
Vessel Name Yard DWT class Vessel type
--------------------- ---------- ---------- ---------- ------------
Product tankers
48 Hull 2451 HMD (24) 38,000 1A Handymax
49 Hull 2452 HMD (24) 38,000 1A Handymax
50 Hull 2453 HMD (24) 38,000 1A Handymax
51 Hull 2454 HMD (24) 38,000 1A Handymax
52 Hull 2462 HMD (24) 38,000 1A Handymax
53 Hull 2463 HMD (24) 38,000 1A Handymax
54 Hull 2464 HMD (24) 38,000 1A Handymax
55 Hull 2465 HMD (24) 38,000 1A Handymax
56 Hull 2476 HMD (24) 38,000 1A Handymax
57 Hull 2477 HMD (24) 38,000 1A Handymax
58 Hull 2478 HMD (24) 38,000 1A Handymax
59 Hull 2479 HMD (24) 38,000 1A Handymax
60 Hull 2499 HMD (24) 38,000 1A Handymax
61 Hull 2500 HMD (24) 38,000 1A Handymax
62 Hull 2391 HMD (24) 52,000 MR
63 Hull 2392 HMD (24) 52,000 MR
64 Hull 2449 HMD (24) 52,000 MR
65 Hull 2450 HMD (24) 52,000 MR
66 Hull 2458 HMD (24) 52,000 MR
67 Hull 2459 HMD (24) 52,000 MR
68 Hull 2460 HMD (24) 52,000 MR
69 Hull 2461 HMD (24) 52,000 MR
70 Hull 2492 HMD (24) 52,000 MR
71 Hull 2493 HMD (24) 52,000 MR
72 Hull 2445 HMD (24) 52,000 MR
73 Hull 2474 HMD (24) 52,000 MR
74 Hull 2475 HMD (24) 52,000 MR
75 Hull 2490 HMD (24) 52,000 MR
76 Hull S1138 SPP (25) 52,000 MR
77 Hull S1139 SPP (25) 52,000 MR
78 Hull S1140 SPP (25) 52,000 MR
79 Hull S1141 SPP (25) 52,000 MR
80 Hull S1142 SPP (25) 52,000 MR
81 Hull S1143 SPP (25) 52,000 MR
82 Hull S1144 SPP (25) 52,000 MR
83 Hull S1145 SPP (25) 52,000 MR
84 Hull S1167 SPP (25) 52,000 MR
85 Hull S1168 SPP (25) 52,000 MR
86 Hull S1169 SPP (25) 52,000 MR
87 Hull S1170 SPP (25) 52,000 MR
88 Hull S5123 SPP (25) 52,000 MR
89 Hull S5124 SPP (25) 52,000 MR
90 Hull S5125 SPP (25) 52,000 MR
91 Hull S703 HSHI (26) 114,000 LR2
92 Hull S704 HSHI (26) 114,000 LR2
93 Hull S705 HSHI (26) 114,000 LR2
94 Hull S706 HSHI (26) 114,000 LR2
95 Hull S709 HSHI (26) 114,000 LR2
96 Hull S710 HSHI (26) 114,000 LR2
97 Hull S715 HSHI (26) 114,000 LR2
98 Hull S716 HSHI (26) 114,000 LR2
99 Hull 5394 DSME (27) 114,000 LR2
100 Hull 5395 DSME (27) 114,000 LR2
101 Hull 5398 DSME (27) 114,000 LR2
102 Hull 5399 DSME (27) 114,000 LR2
----------
Total newbuilding product tankers DWT 3,408,000
==========
----------
Total Fleet DWT 6,365,482
==========
(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
Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related
party to the Company.
(3) 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.
(4) 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.
(5) This vessel is on a short term time charter for up to 120 days at
approximately $19,000 per day.
(6) This vessel is on a time charter agreement for two years at $16,000 per
day. The agreement also contains a 50% profit sharing provision whereby
we split all of the vessel's profits above the daily base rate with the
charterer.
(7) Redelivery from the charterer is plus or minus 30 days from the expiry
date.
(8) The agreement also contains a 50% profit and loss sharing provision
whereby we split all of the vessel's profits and losses above or below
the daily base rate with the vessel's owner.
(9) We have an option to extend the charter for an additional year at
$13,500 per day.
(10) We have an option to extend the charter for an additional year at
$13,250 per day.
(11) We have an option to extend the charter for an additional year at
$13,550 per day.
(12) We have an option to extend the charter for an additional year at
$13,550 per day.
(13) We have an option to extend the charter for an additional year at
$15,150 per day.
(14) We have options to extend the charter for up to two consecutive one
year periods at $15,200 per day and $16,200 per day, respectively.
(15) We have an option to extend the charter for an additional year at
$15,700 per day.
(16) The daily base rate represents the average rate for the three year
duration of the agreement. The rate for the first year is $15,750 per
day, the rate for the second year is $16,250 per day, and the rate for
the third year is $16,750 per day. We have options to extend the
charter for up to two consecutive one year periods at $17,500 per day
and $18,000 per day, respectively.
(17) We have an option to extend the charter for an additional year at
$12,500 per day. We have also entered into an agreement with the
vessel's owner whereby we split all of the vessel's profits above the
daily base rate.
(18) We have an option to extend the charter for an additional year at
$15,000 per day.
(19) We have options to extend the charter for up to two consecutive one
year periods at $16,250 per day and $17,250 per day, respectively.
(20) We have an option to extend the charter for an additional six month at
$15,500 per day.
(21) We have an option to extend the charter for an additional six months at
$15,500 per day.
(22) We have an option to extend the charter for an additional six months at
$16,250 per day.
(23) We have an option to extend the charter for one year at $17,550 per
day.
(24) These newbuilding vessels are being constructed at HMD (Hyundai Mipo
Dockyard Co. Ltd. of South Korea). 23 vessels are expected to be
delivered in 2014 and five vessels in the first and second quarters of
2015.
(25) These newbuilding vessels are being constructed at SPP (SPP
Shipbuilding Co., Ltd. of South Korea). 11 vessels are expected to be
delivered in 2014 and four in the first and second quarters of 2015.
(26) These newbuilding vessels are being constructed at HSHI (Hyundai Samho
Heavy Industries Co., Ltd.). Six vessels are expected to be delivered
in the third and fourth quarters of 2014 and two in the first quarter
of 2015.
(27) These newbuilding vessels are being constructed at DSME (Daewoo
Shipbuilding and Marine Engineering). Two vessels are expected to be
delivered in the fourth quarter of 2014 and two in the second quarter
of 2015.
Business Strategy, Dividend Policy, and Stock Buyback Program
Business Strategy
The Company’s primary objectives are to profitably grow the business and emerge as a major operator of product tanker vessels. The Company intends to acquire modern, high-quality tankers through timely and selective acquisitions. The Company is currently concentrating on these sectors because of their attractive fundamentals which the Company believes includes:
- increasing demand for refined products.
- increasing ton miles (distance between production and areas of demand), and
- reduced order book.
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.
On April 28, 2014, the Company’s board of directors declared a quarterly cash dividend of $0.09 per share, payable on June 12, 2014 to all shareholders as of May 27, 2014 (the record date). On March 26, 2014, the Company paid a quarterly cash dividend on its common stock of $0.08 per share to all shareholders as of March 11, 2014 (the record date).
Share Buyback Program
On July 9, 2010, the Company’s board of directors authorized a share buyback program of up to $20 million. The Company expects to repurchase these shares 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 program to repurchase any shares.
As of April 28, 2014, the Company has purchased $18.9 million of shares in the open market at an average price of $7.80 and has authorization to purchase an additional $100 million of shares.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 19 tankers (two LR1 tankers, one Handymax tanker, 15 MR tankers, and one post-Panamax tanker) with an average age of 2.9 years, time charters-in 28 product tankers (eight LR2, six LR1, six MR and eight Handymax tankers), and has contracted for 55 newbuilding product tankers (29 MR, 12 LR2, and 14 Handymax ice class-1A product tankers), 42 are expected to be delivered to the Company throughout 2014 and 13 in 2015. The Company also owns approximately 26% of Dorian LPG Ltd. 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-GAAP Measures
This press release describes adjusted net income and Adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. “Non-GAAP” measure). The Non-GAAP 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-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
Adjusted net income / (loss)
For the three months
ended March 31, 2014
-------------------------
In thousands of U.S. dollars except per share
and share data Amount Per share
----------- -----------
Net income $ 53,338$ 0.28
Adjustments:
Unrealized gain on derivative financial
instruments (47) (0.00)
Gain on sale of VLCCs (51,419) (0.27)
----------- -----------
Total adjustments (51,466) (0.27)
----------- -----------
Adjusted net income $ 1,872$ 0.01
=========== ===========
Adjusted EBITDA
For the three months
ended March 31,
------------------------
In thousands of U.S. dollars 2014 2013
----------- -----------
Net income $ 53,338$ 6,610
Financial expenses 399 1,399
Unrealized gain on derivative financial
instruments (47) (44)
Financial income (27) (181)
Depreciation 5,953 4,767
Depreciation component of our net loss from
associate 744 -
Amortization of restricted stock 6,955 500
Gain on sale of VLCCs (51,419) -
----------- -----------
Adjusted EBITDA $ 15,896$ 13,051
=========== ===========
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.
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.