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Scorpio Tankers Inc. Announces Financial Results for the First Quarter of 2015 and Declaration of a Quarterly Dividend
MONACO — (Marketwired) — 04/27/15 — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three months ended March 31, 2015.
Results for the three months ended March 31, 2015 and 2014
For the three months ended March 31, 2015, the Company’s adjusted net income was $39.3 million (see Non-GAAP Measures section below), or $0.26 basic and $0.24 diluted earnings per share, which excludes (i) a gain of $2.0 million, or $0.01 per basic and diluted shares, related to the closing of the sales of Venice, STI Harmony and STI Heritage and (ii) an unrealized loss on derivative financial instruments of $0.6 million, or $0.00 per basic and diluted shares (see non-GAAP Measures section below). For the three months ended March 31, 2015, the Company had net income of $40.7 million, or $0.27 basic and $0.25 diluted earnings per share.
For the three months ended March 31, 2015, the Company’s basic and diluted weighted average number of shares were 151,838,124 and 186,916,874, respectively. The diluted weighted average number of shares includes the potentially dilutive shares relating to our Convertible Senior Notes due 2019 (the “Convertible Notes”) representing 30,679,767 potential common shares (see below for further information).
For the three months ended March 31, 2014, 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 sales 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, 2014, the Company had net income of $53.3 million, or $0.28 basic and diluted earnings per share.
Declaration of Dividend
On April 27, 2015, the Scorpio Tankers’ board of directors declared a quarterly cash dividend of $0.125 per share, payable on June 10, 2015 to all shareholders as of May 21, 2015 (the record date). As of April 27, 2015 there were 163,827,903 shares outstanding.
Diluted Weighted Number of Shares
Diluted earnings per share for the three months ended March 31, 2015 includes the potentially dilutive shares relating to the Convertible Notes representing 30,679,767 potential common shares. The Convertible Notes were issued in June 2014. The dilutive impact of the Convertible Notes is determined using the if-converted method. Under this method, we assume that the Convertible Notes are converted into common shares during the period and the interest and non-cash amortization expense of $5.3 million associated with these notes is not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive. The Convertible Notes are currently ineligible for conversion.
Summary of Recent and First Quarter Significant Events:
- Below is a summary of the voyages fixed thus far in the second quarter of 2015:
- For the LR2s: approximately $29,000 per day for 48% of the days
- For the LR1s: approximately $24,000 per day for 48% of the days
- For the MRs: approximately $23,000 per day for 35% of the days
- For the Handymaxes: approximately $20,000 per day for 37% of the days
- Recently took delivery of two vessels under the Company’s Newbuilding Program, one LR2, STI Oxford and one MR, STI Queens.
- Took delivery of 11 vessels under the Company’s Newbuilding Program (four LR2, five MR, and two ice-class 1A Handymax) during the first quarter of 2015.
- Received commitments from two leading European financial institutions for two separate loan facilities of up to $113.2 million in aggregate to partially finance the purchase of four LR2 product tankers that was announced in December 2014.
- Paid a quarterly cash dividend on the Company’s common stock of $0.12 per share in March 2015.
Newbuilding Vessel deliveries
The Company took delivery of two vessels under its Newbuilding Program in April 2015.
- STI Oxford, an LR2 product tanker, was delivered from Hyundai Samho Heavy Industries Co. Ltd. (“HSHI”). Upon delivery, this vessel began a voyage for 50 days at approximately $41,000 per day.
- STI Queens, an MR product tanker, was delivered from SPP Shipbuilding Co., Ltd. of South Korea (“SPP”). Upon delivery, this vessel began a time charter for up to 120 days at approximately $18,000 per day.
The Company has taken delivery of 13 vessels under its Newbuilding Program with HSHI, Hyundai Mipo Dockyard Co. Ltd. (“HMD”), SPP, Daewoo Shipbuilding and Marine Engineering Co. Ltd. (“DSME”) and Daehan Shipbuilding Co. Ltd., (“DHSC”) during 2015. These deliveries are summarized as follows:
Month
Name Delivered Type Shipyard
-----------------------------------------------------------------------
1 STI Tribeca January 2015 MR SPP
2 STI Hammersmith January 2015 Handymax HMD
3 STI Rotherhithe January 2015 Handymax HMD
4 STI Rose January 2015 LR2 DHSC
5 STI Gramercy January 2015 MR SPP
6 STI Veneto January 2015 LR2 HSHI
7 STI Alexis February 2015 LR2 DHSC
8 STI Bronx February 2015 MR SPP
9 STI Pontiac March 2015 MR HMD
10 STI Manhattan March 2015 MR SPP
11 STI Winnie March 2015 LR2 DSME
12 STI Oxford April 2015 LR2 HSHI
13 STI Queens April 2015 MR SPP
Time charter-in update
In February 2015, the Company took delivery of a previously announced time chartered-in LR2 tanker that was under construction in South Korea. The vessel is chartered-in for one year at $21,050 per day, and the Company also has an option to extend the charter for one year at $22,600 per day. Upon delivery from the shipyard, this vessel began a voyage for 54 days at approximately $31,000 per day.
In February 2015, the Company extended the time charter on an LR2 tanker that is currently time chartered-in. The term of the agreement is for six months at $16,250 per day beginning in March 2015.
In February 2015, the Company extended the time charter on an LR1 tanker that is currently time chartered-in. The term of the agreement is for one year at $16,250 per day beginning in March 2015.
In March 2015, 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 $15,200 per day beginning in May 2015.
In April 2015, the Company time chartered-in an MR product tanker that is currently under construction in South Korea with delivery expected in May 2015. Upon delivery from the shipyard, the vessel will be chartered-in for three years at $17,034 per day.
In April 2015, the Company time chartered-in an MR product tanker for six months at $15,250 per day. We also have two consecutive options to extend the charter for an additional six month and one year periods at $15,250 per day and $16,350 per day, respectively. Delivery is expected in May 2015.
In April 2015, the Company extended the time charter on an LR2 product tanker that is currently time chartered-in. The term of the agreement is for one year at $24,875 per day beginning in September 2015. We also have an option to extend the charter for an additional year at $26,925 per day.
$52.0 Million Loan Facility
In March 2015, we received a commitment from a leading European financial institution for a loan facility of up to $52.0 million. The proceeds of this facility will be used to finance a portion of the purchase price of two LR2 product tankers currently under construction at DHSC with expected deliveries in the first and second quarters of 2016. This loan facility has a final maturity of seven years from the date of signing and bears interest at LIBOR plus a margin of 1.95% per annum. This facility is subject to customary conditions precedent and the execution of definitive documentation.
$61.2 Million Loan Facility
In March 2015, we received a commitment from a leading European financial institution for a loan facility of up to $61.2 million. The proceeds of this facility will be used to finance a portion of the purchase price of two LR2 product tankers currently under construction at Sungdong Shipbuilding & Marine Engineering Co. Ltd. (“SSME”) with expected deliveries in the third and fourth quarters of 2016. This loan facility has a final maturity of five years from the date of delivery of each vessel and bears interest at LIBOR plus a margin ranging between 1.95% and 2.40% per annum (depending on the advance ratio). This facility is subject to customary conditions precedent and the execution of definitive documentation.
$30.0 Million Term Margin Loan Facility
In March 2015, we entered into a term margin loan facility with Nomura Securities International, Inc. (“Nomura”) for up to $30.0 million. All of the shares that we own in Dorian LPG Ltd. have been pledged as collateral under this facility, and we are subject to certain covenants, including a loan to value ratio based on the amount outstanding and the market value of the shares that are collateral. Interest on the facility is LIBOR plus 4.50% per annum and the facility matures in March 2016, which can be extended to March 2017 at Nomura’s option. The outstanding balance was $30.0 million as of March 31, 2015, and the facility was fully drawn.
Stock Buyback Program Update
During the first quarter of 2015, the Company acquired an aggregate of 746,639 of its common shares that are being held as treasury shares at an average price of $7.91 per share. There are 163,827,903 shares outstanding as of April 27, 2015.
The Company has $69.3 million remaining under its stock buyback program as of the date of this press release. 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.
Current Liquidity
As of April 24, 2015, the Company had $138.5 million in cash.
Debt
We made the following drawdowns from our credit facilities during 2015:
Drawdown amount
Credit facility (in $ millions) Drawdown date Collateral
-------------------------- ---------------- ------------- -------------
1 K-Sure Credit Facility $19.9 January 2015 STI Gramercy
2 KEXIM Credit Facility $30.3 January 2015 STI Veneto
3 2013 Credit Facility $35.4 January 2015 STI Alexis
4 K-Sure Credit Facility $19.5 February 2015 STI Bronx
5 2013 Credit Facility $19.5 March 2015 STI Pontiac
6 K-Sure Credit Facility $19.5 March 2015 STI Manhattan
7 K-Sure Credit Facility $30.3 March 2015 STI Winnie
8 K-Sure Credit Facility $30.3 April 2015 STI Oxford
9 K-Sure Credit Facility $19.5 April 2015 STI Queens
10 2013 Credit Facility $19.3 April 2015 STI Osceola
As of April 27, 2015, the Company’s outstanding debt balance, and amount available to draw, is as follows:
Amount
Amount Outstanding as Availability
In thousands of U.S. outstanding at of the date of as of the date
dollars March 31, 2015 this report of this report
-------------- -------------- --------------
2010 Revolving Credit
Facility $ 33,597$ 8,014 - (1)
2011 Credit Facility 106,927 106,927 -
Newbuilding Credit Facility 76,341 76,341 -
2013 Credit Facility 432,837 452,087 55,350 (2)
K-Sure Credit Facility 286,360 336,160 122,100 (3)
KEXIM Credit Facility 417,075 417,075 -
Nomura Term Margin Facility 30,000 30,000 - (4)
Senior Unsecured
NotesConvertible Senior 105,500 105,500 -
Notes 360,000 360,000 - (5)
-------------- -------------- --------------
Total $ 1,848,637$ 1,892,104$ 177,450
============== ============== ==============
(1) A repayment of $25.6 million was made in April 2015 in connection with
the sales of STI Harmony and STI Heritage, which closed in April 2015.
(2) Availability can be used to finance the lesser of 60% of the contract
price for a qualifying newbuilding vessel or such vessel's fair market
value at the date of drawdown. The amount outstanding as of the date
of this report includes a drawdown of $19.3 million to partially
finance the delivery of STI Osceola, which is scheduled to be
delivered on April 30, 2015.
(3) 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.
(4) We entered into a term margin loan facility with Nomura in March 2015
and pledged our 9,392,083 shares in Dorian as collateral.
(5) As of March 31, 2015, $53.3 million of this amount has been attributed
to the conversion feature of the Convertible Senior Notes and recorded
within additional paid in capital on the consolidated balance sheet.
Newbuilding Program
During the first quarter of 2015, the Company made $197.5 million of installment payments on its newbuilding vessels.
The Company currently has 11 newbuilding vessel orders with HMD, SPP, HSHI, DSME, DHSC, and SSME (five MRs and six LR2s). The estimated second quarter of 2015 and future payments are as follows*:
$ in millions
-------------
Q2 2015 - installment payments made $ 61.9
Q2 2015 - remaining installment payments 195.9
Q3 2015 27.5
Q4 2015 24.8
Q1 2016 40.5
Q2 2016 26.0
Q3 2016 29.6
Q4 2016 29.6
-------------
Total $ 435.8
=============
*These are estimates only and are subject to change as construction progresses.
Explanation of Variances on the First Quarter of 2015 Financial Results Compared to the First Quarter of 2014
For the three months ended March 31, 2015, the Company recorded net income of $40.7 million compared to net income of $53.3 million for the three months ended March 31, 2014. 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, 2015 and 2014:
For the three months ended
March 31,
----------------------------
2015 2014
------------- -------------
In thousands of U.S. dollars
Vessel revenue $ 160,706$ 76,734
Voyage expenses (2,094) (3,974)
------------- -------------
TCE revenue $ 158,612$ 72,760
============= =============
- TCE revenue increased $85.9 million to $158.6 million. This increase was driven by an increase in the average number of operating vessels (owned and time chartered-in) to 84.0 from 50.7 for the three months ended March 31, 2015 and 2014, respectively, along with an increase in time charter equivalent revenue per day to $21,138 per day from $15,906 per day for the three months ended March 31, 2015 and 2014, respectively (see the breakdown of daily TCE averages below). Spot rates across all operating segments improved during the first quarter as fundamentals in the product tanker market remained strong. These fundamentals were driven by increased refining capacity in the Middle East and India along with improved refining margins worldwide which have had a resultant, positive impact on the demand for our vessels. Furthermore, we have benefited from the collapse in crude oil prices through the consequent decline in bunker costs, positively impacting our TCE revenue.
- Vessel operating costs increased $24.4 million to $37.5 million from $13.1 million for the three months ended March 31, 2015 and 2014, respectively. This increase was primarily driven by an increase in the Company’s owned fleet to an average of 63.0 vessels from 20.2 vessels for the three months ended March 31, 2015 and 2014, respectively. The increase was offset by an overall decrease in vessel operating costs per day to $6,583 per day from $7,185 per day for the three months ended March 31, 2015 and 2014, respectively (see the breakdown of daily TCE averages below). Vessel operating costs per day improved across all operating segments as the Company’s fleet transitioned to a modern, more cost-efficient fleet with the delivery of 52 vessels under our newbuilding program since January 2014 and the disposal of four of our older vessels during that same time period.
- Charterhire expense decreased $11.5 million to $28.7 million from $40.2 million for the three months ended March 31, 2015 and 2014, respectively. This difference was driven by a decrease in the Company’s time chartered-in fleet to an average of 21.0 vessels from 30.5 vessels for the three months ended March 31, 2015 and 2014, respectively.
- Depreciation expense increased $15.4 million to $21.4 million from $6.0 million for the three months ended March 31, 2015 and 2014, respectively. This change was the result of an increase in the average number of owned vessels to 63.0 from 20.2 for the three months ended March 31, 2015 and 2014, respectively.
- General and administrative expenses increased $2.7 million to $13.7 million from $11.0 million for the three months ended March 31, 2015 and 2014, respectively. This increase was driven by a $0.7 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.
- Gain on sale of vessels of $2.0 million for the three months ended March 31, 2015 relates to the sales of Venice, STI Harmony and STI Heritage, which closed in March, April and April, respectively. This gain relates to lower than expected closing costs incurred relating to the closing of the sales of each vessel.
- Gain on sale of VLCCs of $51.4 million for the three months ended March 31, 2014 relates to the gain recorded as a result of our sale of seven VLCCs under construction.
- Financial expenses increased $17.7 million to $18.1 million from $0.4 million primarily as a result of an increase in the Company’s debt balance for the three months ended March 31, 2015 and 2014, respectively. Total debt outstanding, net of deferred financing fees, was $1.7 billion at March 31, 2015 compared to $344.6 million at March 31, 2014.
- Unrealized loss on derivative financial instruments of $0.6 million for the three months ended March 31, 2015 relates to the mark-to-market value on a profit or loss sharing agreement with a third party relating to one of our time chartered-in vessels.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Income or Loss
(unaudited)
For the three months ended
March 31,
----------------------------
In thousands of U.S. dollars except per share
and share data 2015 2014
------------- -------------
Revenue
Vessel revenue $ 160,706$ 76,734
Operating expenses
Vessel operating costs (37,475) (13,070)
Voyage expenses (2,094) (3,974)
Charterhire (28,731) (40,173)
Depreciation (21,408) (5,953)
General and administrative expenses (13,702) (10,966)
Gain on sale of VLCCs - 51,419
Gain on sale of vessels 2,008 -
------------- -------------
Total operating expenses (101,402) (22,717)
------------- -------------
Operating income 59,304 54,017
------------- -------------
Other (expense) and income, net
Financial expenses (18,058) (399)
Realized gain on derivative financial
instruments 40 17
Unrealized gain / (loss) on derivative
financial instruments (606) 47
Financial income 25 27
Share of loss from associate - (324)
Other expenses, net (10) (47)
------------- -------------
Total other expense, net (18,609) (679)
------------- -------------
Net income $ 40,695$ 53,338
============= =============
Earnings per share
Basic $ 0.27$ 0.28
Diluted* $ 0.25$ 0.28
Basic weighted average shares outstanding 151,838,124 189,290,673
Diluted weighted average shares outstanding* 186,916,874 192,430,865
*Diluted earnings per share for the three months ended March 31, 2015 primarily includes the potentially dilutive shares relating to our Convertible Senior Notes due 2019 (the “Convertible Notes”) representing 30,679,767 potential common shares. The dilutive impact of the Convertible Notes is determined using the if-converted method. Under this method, we assume that the Convertible Notes are converted into common shares during the period and the interest and non-cash amortization expense of $5.3 million associated with these notes is not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive. The Convertible Notes are currently ineligible for conversion.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
As of
----------------------------
March 31, December 31,
In thousands of U.S. dollars 2015 2014
------------- -------------
Assets
Current assets
Cash and cash equivalents $ 135,694$ 116,143
Accounts receivable 76,098 78,201
Prepaid expenses and other current assets 11,608 2,420
Inventories 6,181 6,075
Vessels held for sale 60,270 70,865
------------- -------------
Total current assets 289,851 273,704
------------- -------------
Non-current assets
Vessels and drydock 2,372,883 1,971,878
Vessels under construction 199,666 404,877
Other assets 19,820 23,728
Available for sale investment 122,379 130,456
------------- -------------
Total non-current assets 2,714,748 2,530,939
------------- -------------
Total assets $ 3,004,599$ 2,804,643
============= =============
Current liabilities
Current portion of long term debt 132,817 87,163
Debt related to vessels held for sale 25,562 32,932
Accounts payable 36,361 14,929
Accrued expenses 47,213 55,139
Derivative financial instruments 661 205
------------- -------------
Total current liabilities 242,614 190,368
------------- -------------
Non-current liabilities
Long term debt 1,584,370 1,451,427
------------- -------------
Total non-current liabilities 1,584,370 1,451,427
------------- -------------
Total liabilities 1,826,984 1,641,795
------------- -------------
Shareholders' equity
Issued, authorized and fully paid in share
capital:
Share capital 2,033 2,033
Additional paid in capital 1,551,688 1,550,956
Treasury shares (357,189) (351,283)
Accumulated other comprehensive loss (18,917) (10,878)
Retained earnings / (accumulated deficit) - (27,980)
------------- -------------
Total shareholders' equity 1,177,615 1,162,848
------------- -------------
Total liabilities and shareholders' equity $ 3,004,599$ 2,804,643
============= =============
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 2015 2014
------------- -------------
Operating activities
Net income $ 40,695$ 53,338
Gain on sale of VLCCs - (51,419)
Gain on sale of vessels (2,008) -
Depreciation 21,408 5,953
Amortization of restricted stock 7,676 6,955
Amortization of deferred financing fees 3,124 155
Straight-line adjustment for charterhire
expense - 3
Share of loss from associate - 324
Unrealized (gain) / loss on derivative
financial instruments 606 (47)
Amortization of acquired time charter
contracts 195 -
Accretion of convertible senior notes 2,735 -
------------- -------------
74,431 15,262
------------- -------------
Changes in assets and liabilities:
(Increase)/decrease in inventories 825 (1,700)
(Increase)/decrease in accounts receivable 2,104 (11,906)
Increase in prepaid expenses and other current
assets (9,318) (935)
Increase in other assets (2,365) (47)
Increase in accounts payable 10,722 3,125
Increase/(decrease) in accrued expenses (11,847) 1,759
Interest rate swap termination payment (113) (274)
------------- -------------
(9,992) (9,978)
------------- -------------
Net cash inflow from operating activities 64,439 5,284
------------- -------------
Investing activities
Acquisition of vessels and payments for
vessels under construction (203,501) (199,055)
Proceeds from disposal of vessels 12,602 162,950
------------- -------------
Net cash outflow from investing activities (190,899) (36,105)
------------- -------------
Financing activities
Debt repayments (30,453) (27,674)
Issuance of debt 204,400 209,100
Debt issuance costs (2,370) (18,345)
Equity issuance costs - (42)
Dividends paid (19,659) (16,076)
Repurchase of common stock (5,907) -
------------- -------------
Net cash inflow from financing activities 146,011 146,963
------------- -------------
Increase in cash and cash equivalents 19,551 116,142
Cash and cash equivalents at January 1, 116,143 78,845
------------- -------------
Cash and cash equivalents at March 31, $ 135,694$ 194,987
============= =============
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three months ended March 31, 2015 and 2014
(unaudited)
For the three months ended
March 31,
---------------------------
2015 2014
------------- -------------
Adjusted EBITDA(1)(in thousands of U.S. dollars) $ 86,410$ 15,896
Average Daily Results
Time charter equivalent per day(2) $ 21,138$ 15,906
Vessel operating costs per day(3) 6,583 7,185
Aframax/LR2
TCE per revenue day (2) 25,231 14,342
Vessel operating costs per day(3) 6,858 7,386
Panamax/LR1
TCE per revenue day (2) 21,943 20,063
Vessel operating costs per day(3) 7,216 8,372
MR
TCE per revenue day (2) 20,061 14,262
Vessel operating costs per day(3) 6,400 6,466
Handymax
TCE per revenue day (2) 20,006 16,736
Vessel operating costs per day(3) 6,754 10,814
Fleet data
Average number of owned vessels 63.0 20.2
Average number of time chartered-in vessels 21.0 30.5
Drydock
Expenditures for drydock (in thousands of U.S.
dollars) - -
(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 27, 2015
Year
Vessel Name Built DWT Ice class Employment Vessel type
------------------ ----- --------- --------- ---------------- -----------
Owned vessels
1 STI Highlander 2007 37,145 1A SHTP (1) Handymax
2 STI Brixton 2014 38,000 1A SHTP (1) Handymax
3 STI Comandante 2014 38,000 1A SHTP (1) Handymax
4 STI Pimlico 2014 38,000 1A SHTP (1) Handymax
5 STI Hackney 2014 38,000 1A SHTP (1) Handymax
6 STI Acton 2014 38,000 1A SHTP (1) Handymax
7 STI Fulham 2014 38,000 1A SHTP (1) Handymax
8 STI Camden 2014 38,000 1A SHTP (1) Handymax
9 STI Battersea 2014 38,000 1A SHTP (1) Handymax
10 STI Wembley 2014 38,000 1A SHTP (1) Handymax
11 STI Finchley 2014 38,000 1A SHTP (1) Handymax
12 STI Clapham 2014 38,000 1A SHTP (1) Handymax
13 STI Poplar 2014 38,000 1A SHTP (1) Handymax
14 STI Hammersmith 2015 38,000 1A SHTP (1) Handymax
15 STI Rotherhithe 2015 38,000 1A SHTP (1) Handymax
16 STI Amber 2012 52,000 - SMRP(4) MR
17 STI Topaz 2012 52,000 - SMRP(4) MR
18 STI Ruby 2012 52,000 - SMRP(4) MR
19 STI Garnet 2012 52,000 - SMRP(4) MR
20 STI Onyx 2012 52,000 - SMRP(4) MR
21 STI Sapphire 2013 52,000 - SMRP(4) MR
22 STI Emerald 2013 52,000 - SMRP(4) MR
23 STI Beryl 2013 52,000 - SMRP(4) MR
24 STI Le Rocher 2013 52,000 - SMRP(4) MR
25 STI Larvotto 2013 52,000 - SMRP(4) MR
26 STI Fontvieille 2013 52,000 - SMRP(4) MR
27 STI Ville 2013 52,000 - SMRP(4) MR
28 STI Duchessa 2014 52,000 - SMRP(4) MR
29 STI Opera 2014 52,000 - SMRP(4) MR
30 STI Texas City 2014 52,000 - Time Charter (5) MR
31 STI Meraux 2014 52,000 - Time Charter (6) MR
32 STI Chelsea 2014 52,000 - SMRP(4) MR
33 STI Lexington 2014 52,000 - SMRP(4) MR
34 STI San Antonio 2014 52,000 - Time Charter (6) MR
35 STI Venere 2014 52,000 - SMRP(4) MR
36 STI Virtus 2014 52,000 - SMRP(4) MR
37 STI Powai 2014 52,000 - SMRP(4) MR
38 STI Aqua 2014 52,000 - SMRP(4) MR
39 STI Dama 2014 52,000 - SMRP(4) MR
40 STI Olivia 2014 52,000 - SMRP(4) MR
41 STI Mythos 2014 52,000 - SMRP(4) MR
42 STI Benicia 2014 52,000 - Time Charter (6) MR
43 STI Regina 2014 52,000 - SMRP(4) MR
44 STI St. Charles 2014 52,000 - SMRP(4) MR
45 STI Mayfair 2014 52,000 - SMRP(4) MR
46 STI Yorkville 2014 52,000 - SMRP(4) MR
47 STI Milwaukee 2014 52,000 - SMRP(4) MR
48 STI Battery 2014 52,000 - SMRP(4) MR
49 STI Soho 2014 52,000 - SMRP(4) MR
50 STI Tribeca 2015 52,000 - SMRP(4) MR
51 STI Gramercy 2015 52,000 - Spot MR
52 STI Bronx 2015 52,000 - Spot MR
53 STI Pontiac 2015 52,000 - Spot MR
54 STI Manhattan 2015 52,000 - Spot MR
55 STI Queens 2015 52,000 - Spot MR
56 STI Elysees 2014 109,999 - SLR2P (3) LR2
57 STI Madison 2014 109,999 - SLR2P (3) LR2
58 STI Park 2014 109,999 - SLR2P (3) LR2
59 STI Orchard 2014 109,999 - SLR2P (3) LR2
60 STI Sloane 2014 109,999 - SLR2P (3) LR2
61 STI Broadway 2014 109,999 - SLR2P (3) LR2
62 STI Condotti 2014 109,999 - SLR2P (3) LR2
63 STI Rose 2015 109,999 - SLR2P (3) LR2
64 STI Veneto 2015 109,999 - SLR2P (3) LR2
65 STI Alexis 2015 109,999 - SLR2P (3) LR2
66 STI Winnie 2015 109,999 - SLR2P (3) LR2
67 STI Oxford 2015 109,999 - SLR2P (3) LR2
---------
Total owned DWT 3,969,133
=========
Daily
Year Ice Employ- Vessel Base Expiry
Vessel Name Built DWT class ment type Rate (7)
-------------- ----- --------- ----- ------ -------- ------- -------
Time
chartered-in
vessels
68 Kraslava 2007 37,258 1B SHTP Handymax $13,650 18-May-
(1) 15
69 Krisjanis 2007 37,266 1B SHTP Handymax $13,650 01-May- (8)
Valdemars (1) 15
70 Jinan 2003 37,285 - SHTP Handymax $12,600 15-May-
(1) 15
71 Iver 2007 37,412 - SHTP Handymax $13,500 03-Apr- (9)
Prosperity (1) 16
72 Histria Azure 2007 40,394 - SHTP Handymax $13,550 01-May-
(1) 15
73 Histria Coral 2006 40,426 - SHTP Handymax $13,550 17-Jul-
(1) 15
74 Histria Perla 2005 40,471 - SHTP Handymax $13,550 15-Jul-
(1) 15
75 Miss 2011 47,499 - SMRP MR $15,250 15-Oct- (10)
Mariarosaria (4) 15
76 Vukovar 2015 49,990 - SMRP MR $17,034 02-May- (11)
(4) 18
77 Targale 2007 49,999 - SMRP MR $14,850 17-May- (12)
(4) 16
78 Gan-Trust 2013 51,561 - SMRP MR $16,250 06-Jan- (13)
(4) 16
79 SN Federica 2003 72,344 - SPTP LR1 $11,250 15-May- (14)
(2) 15
80 SN Azzura 2003 72,344 - SPTP LR1 $13,600 13-May-
(2) 15
81 King Douglas 2008 73,666 - SPTP LR1 $15,000 08-Nov-
(2) 15
82 Hellespont 2006 73,728 - SPTP LR1 $16,250 18-Mar- (15)
Progress (2) 16
83 FPMC P Eagle 2009 73,800 - SPTP LR1 $14,525 09-Sep-
(2) 15
84 FPMC P Hero 2011 99,995 - SLR2P LR2 $15,500 02-May-
(3) 15
85 Swarna Jayanti 2010 104,895 - SLR2P LR2 $16,250 11-Sep- (16)
(3) 15
86 Densa 2015 105,408 - SLR2P LR2 $21,050 07-Feb- (17)
Crocodile (3) 16
87 Densa 2013 105,708 - SLR2P LR2 $17,550 17-Sep- (18)
Alligator (3) 16
88 Khawr Aladid 2006 106,003 - SLR2P LR2 $15,400 11-Jul-
(3) 15
---------
Total time
chartered-in
DWT 1,357,452
=========
Newbuildings currently under construction
Ice
Vessel Name Yard DWT class Vessel type
--------------------------------- ------ --------- ----- -----------
89 Hull 2490 - TBN STI Osceola HMD (19) 52,000 - MR
90 Hull 2492 - TBN STI Notting Hill HMD (19) 52,000 - MR
91 Hull 2493 - TBN STI Westminster HMD (19) 52,000 - MR
92 Hull 2475 - TBN STI Seneca HMD (19) 52,000 - MR
93 Hull S1168 - TBN STI Brooklyn SPP (20) 52,000 - MR
94 Hull S716 - TBN STI Connaught HSHI (21) 109,999 - LR2
95 Hull 5399 - TBN STI Lauren DSME (22) 109,999 - LR2
96 Hull S3120 - TBN STI Selatar SSME (23) 109,999 - LR2
97 Hull S3121 - TBN STI Rambla SSME (23) 109,999 - LR2
98 Hull 5003 - TBN STI Grace DHSC (24) 109,999 - LR2
99 Hull 5004 - TBN STI Jermyn DHSC (24) 109,999 - LR2
---------
Total newbuilding product tankers
DWT 919,994
=========
---------
Total Fleet DWT 6,246,579
=========
(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 time charter agreement for two years expiring in
March 2016, which also contains a 50% profit sharing provision whereby
we split all of the vessel's profits above the daily base rate with
the charterer.
(6) This is one of three vessels on a one-year time charter agreement that
expire between May and September 2015. These agreements contain 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) In September 2014, we declared an option to extend the charter for an
additional year at $13,500 per day effective April 3, 2015.
(10) We have two consecutive options to extend the charter for an
additional six month and one year periods at $15,250 per day and
$16,350 per day, respectively.
(11) This vessel is currently under construction and is scheduled to be
delivered in early May 2015.
(12) In March 2015, we declared an option to extend the charter for an
additional year at $15,200 per day effective May 2015. We have an
option to extend the charter for an additional year at $16,200 per
day.
(13) The rate for the first year of this agreement was $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.
(14) 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.
(15) In February 2015, we declared an option to extend the charter for an
additional year at $16,250 per day effective March 18, 2015. We have
an option to extend the charter for an additional year at $17,250 per
day.
(16) In February 2015, we declared an option to extend the charter for an
additional six months at $16,250 per day effective March 11, 2015.
(17) This vessel was delivered in February 2015. We have entered into an
agreement with a third party whereby we split all of the vessel's
profits and losses above or below the daily base rate. We also have an
option to extend the charter for an additional year at $22,600 per
day.
(18) In April 2015, we extended the charter for an additional year at
$24,875 per day effective September 2015. We also have an option to
extend the charter for an additional year at $26,925 per day.
(19) These newbuilding vessels are being constructed at HMD (Hyundai Mipo
Dockyard Co. Ltd. of South Korea). Four vessels are expected to be
delivered in the second quarter of 2015.
(20) This newbuilding vessel is being constructed at SPP (SPP Shipbuilding
Co., Ltd. of South Korea). This vessel is expected be delivered in the
second quarter of 2015.
(21) This newbuilding vessel is being constructed at HSHI (Hyundai Samho
Heavy Industries Co., Ltd). This vessel is expected to be delivered in
the second quarter of 2015.
(22) This newbuilding vessel is being constructed at DSME (Daewoo
Shipbuilding and Marine Engineering). This vessel is expected to be
delivered in the second quarter of 2015.
(23) These newbuilding vessels are being constructed at SSME (Sungdong
Shipbuilding & Marine Engineering Co., Ltd). One vessel is expected to
be delivered in the third quarter and one in fourth quarter of 2016.
(24) These newbuilding vessels are being constructed at DHSC (Daehan
Shipbuilding Co. Ltd). These two vessels are expected to be delivered
in the first and second quarter of 2016.
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.
The Company’s dividend history is as follows:
Date paid Dividends per share
----------------------------------------------------------------------------
June 2013$0.025September 2013$0.035December 2013$0.070March 2013$0.080June 2014$0.090September 2014$0.100December 2014$0.120March 2015$0.120
Share Buyback Program
During 2015, the Company acquired an aggregate of 746,639 of its common shares that are being held as treasury shares at an average price of $7.91. There are 163,827,903 shares outstanding as of April 27, 2015.
The Company has $69.3 million remaining under its stock buyback program as of the date of this press release. 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.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 67 tankers (12 LR2 tankers, 15 Handymax tankers, and 40 MR tankers) with an average age of 0.9 years, time charters-in 21 product tankers (five LR2, five LR1, four MR and seven Handymax tankers), and has contracted for 11 newbuilding product tankers (five MR and six LR2), seven of which are expected to be delivered in the second quarter of 2015 and the remaining four vessels throughout 2016. The Company also owns approximately 16% 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
For the three months ended
March 31, 2015
-------------------------------
In thousands of U.S. dollars except per Per share Per share
share and share data Amount basic diluted
--------- --------- ---------
Net income $ 40,695$ 0.27$ 0.25
Adjustments:
Unrealized loss on derivative financial
instruments 606 0.00 0.00
Gain on sale of vessels (2,008) (0.01) (0.01)
--------- --------- ---------
Total adjustments (1,402) (0.01) (0.01)
--------- --------- ---------
Adjusted net income $ 39,293$ 0.26$ 0.24
========= ========= =========
For the three months ended
March 31, 2014
-------------------------------
In thousands of U.S. dollars except per Per share Per share
share and share data Amount basic diluted
--------- --------- ---------
Net income $ 53,338$ 0.28$ 0.28
Adjustments:
Unrealized gain on derivative financial
instruments (47) (0.00) (0.00)
Gain on sale of VLCCs (51,419) (0.27) (0.27)
--------- --------- ---------
Total adjustments (51,466) (0.27) (0.27)
--------- --------- ---------
Adjusted net income $ 1,872$ 0.01$ 0.01
========= ========= =========
Adjusted EBITDA
For the three months
ended March 31,
------------------------
In thousands of U.S. dollars 2015 2014
----------- -----------
Net income $ 40,695$ 53,338
Financial expenses 18,058 399
Unrealized (gain) / loss on derivative financial
instruments 606 (47)
Financial income (25) (27)
Depreciation 21,408 5,953
Depreciation component of our net profit from
associate - 744
Amortization of restricted stock 7,676 6,955
Gain on sale of VLCCs - (51,419)
Gain on sale of vessels (2,008) -
----------- -----------
Adjusted EBITDA $ 86,410$ 15,896
=========== ===========
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.