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Scorpio Tankers Inc. Announces Financial Results for the First Quarter of 2022 and Declaration of a Quarterly Dividend

Apr 28, 2022

MONACO, April 28, 2022 (GLOBE NEWSWIRE) — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers” or the “Company”) today reported its results for the three months ended March 31, 2022. The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.10 per share on the Company’s common stock.

Results for the three months ended March 31, 2022 and 2021        

For the three months ended March 31, 2022, the Company had a net loss of $84.4 million, or $1.52 basic and diluted loss per share.

For the three months ended March 31, 2022, the Company had an adjusted net loss (see Non-IFRS Measures section below) of $14.9 million, or $0.27 basic and diluted loss per share, which excludes from the net loss (i) a $67.7 million, or $1.22 per basic and diluted share, aggregate write-down of vessels held for sale and loss on the sale of vessels, and (ii) $1.9 million, or $0.03 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on the debt or lease financing obligations relating to these vessel sales and related debt extinguishment costs.

For the three months ended March 31, 2021, the Company had a net loss of $62.4 million, or $1.15 basic and diluted loss per share.

For the three months ended March 31, 2021, the Company had an adjusted net loss (see Non-IFRS Measures section below) of $57.3 million, or $1.05 basic and diluted loss per share, which excludes from the net loss $3.9 million, or $0.07 per basic and diluted share, of losses recorded on the transaction to exchange $62.1 million in aggregate principal amount of its existing Convertible Notes due 2022 for $62.1 million in aggregate principal amount of new Convertible Notes due 2025, and $1.3 million, or $0.02 per basic and diluted share, of write-offs of deferred financing fees related to the refinancing of certain credit facilities.

Declaration of Dividend

On April 27, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about June 15, 2022 to all shareholders of record as of May 20, 2022 (the record date). As of April 27, 2022, there were 59,401,013 common shares of the Company outstanding.

Summary of First Quarter 2022 and Other Recent Significant Events

  • During the first quarter of 2022, the Company entered into agreements to sell 17 vessels, consisting of two LR2s, 12 LR1s, and three MRs. Seven of these sales closed within the first quarter of 2022 (six LR1s and one MR), raising $91.6 million in aggregate new liquidity after the repayment of debt and selling costs, three of these sales have closed within April 2022 (two LR1s and one MR), raising $39.8 million in aggregate new liquidity after the repayment of debt and selling costs, and the remaining seven vessels are expected to close before the end of the third quarter 2022. These remaining vessels are expected to raise $112.7 million in aggregate new liquidity after the repayment of debt and estimated selling costs.
  • In April 2022, the Company entered into an agreement to sell an LR2 tanker, STI Nautilus, for $42.7 million.   This sale is expected to raise approximately $22.0 million in aggregate new liquidity after the repayment of debt and estimated selling costs, and it is expected to close before the end of the third quarter of 2022.  
  • Below is a summary of the average daily Time Charter Equivalent (“TCE”) revenue (see Non-IFRS Measures section below) and duration of contracted voyages and time charters for the Company’s vessels (both in the pools and directly in the spot market) thus far in the second quarter of 2022 as of the date hereof (See footnotes to “Other operating data” table below for the definition of daily TCE revenue):
  Total
Vessel class Average daily TCE revenue % of Days
LR2 $ 24,300 44 %
MR $ 30,000 42 %
Handymax $ 30,000 33 %
  • Below is a summary of the average daily TCE revenue earned by the Company’s vessels (both in the pools and directly in the spot market) during the first quarter of 2022:
Vessel class Average daily TCE revenue
LR2 $ 14,475
LR1 $ 12,320
MR $ 16,305
Handymax $ 15,949
  • The Company has $38.3 million of additional liquidity available from previously announced financings or refinancings that have been committed. These drawdowns are expected to occur at varying points in the future as certain of these financings are tied to scrubber installations on the Company’s vessels.

Sales of Vessels

During the first quarter of 2022, the Company entered into agreements to sell 17 vessels, consisting of two LR2s, 12 LR1s, and three MRs. The sales prices of the two LR2s (STI Savile Row and STI Carnaby) are $43.0 million per vessel, the 12 LR1s (STI Excelsior, STI Executive, STI Excellence, STI Pride, STI Providence, STI Prestige, STI Experience, STI Express, STI Exceed, STI Excel, STI Expedite, and STI Precision) are $413.8 million in aggregate, and each of the three MRs (STI Fontvieille, STI Benicia, and STI Majestic) are $23.5 million, $26.5 million, and $34.9 million, respectively.

Seven of these sales closed within the first quarter of 2022 (six LR1s and one MR), raising $91.6 million in aggregate new liquidity after the repayment of debt and selling costs, three of these sales have closed within April 2022 (two LR1s and one MR), raising $39.8 million in aggregate new liquidity after the repayment of debt and selling costs, and the remaining seven vessels are expected to close before the end of the third quarter 2022. These remaining vessels are expected to raise approximately $112.7 million in aggregate new liquidity after the repayment of debt and selling costs.

During the first quarter, the Company recorded an aggregate loss on the sale of vessels or write-down of vessels held for sale of $67.7 million for the 17 vessels that were agreed to be sold. Additionally, the Company wrote-off, or accelerated the amortization of deferred financing fees of $1.9 million with respect to the debt or lease financings relating to these vessels during the first quarter of 2022.

Additionally, in April 2022, the Company entered into an agreement to sell an LR2 tanker, STI Nautilus, for $42.7 million. This sale is expected to raise approximately $22.0 million in aggregate new liquidity, after the repayment of debt and estimated selling costs. This sale is expected to result in a gain of approximately $2.5 million in the second quarter of 2022, and it is expected to close before the end of the third quarter of 2022.

Diluted Weighted Number of Shares

The computation of earnings or loss per share is determined by taking into consideration the potentially dilutive shares arising from (i) the Company’s equity incentive plan, and (ii) the Company’s Convertible Notes due 2022 and Convertible Notes due 2025. These potentially dilutive shares are excluded from the computation of earnings or loss per share to the extent they are anti-dilutive.

The impact of the Convertible Notes due 2022 and Convertible Notes due 2025 on earnings or loss per share is computed using the if-converted method. Under this method, the Company first includes the potentially dilutive impact of restricted shares issued under the Company’s equity incentive plan, and then assumes that its Convertible Notes due 2022 and Convertible Notes due 2025, which were issued in March and June 2021 were converted into common shares at the beginning of each period. The if-converted method also assumes that the interest and non-cash amortization expense associated with these notes of $6.4 million during the three months ended March 31, 2022 were not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.

For the three months ended March 31, 2022, the Company’s basic weighted average number of shares outstanding were 55,409,131. There were 57,130,119 weighted average shares outstanding including the potentially dilutive impact of restricted shares issued under the Company’s equity incentive plan for the three months ended March 31, 2022. There were 64,467,902 weighted average shares outstanding for the three months ended March 31, 2022 under the if-converted method. Since the Company was in a net loss position in both periods, the potentially dilutive shares arising from both restricted shares issued under the Company’s equity incentive plan and under the if-converted method were anti-dilutive for purposes of calculating the loss per share. Accordingly, basic weighted average shares outstanding were used to calculate both basic and diluted loss per share for this period.

Conference Call

The Company has scheduled a conference call on April 28, 2022 at 11:00 AM Eastern Daylight Time and 5:00 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: 3295797

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.

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: https://edge.media-server.com/mmc/p/u6omf566

Current Liquidity

As of April 27, 2022, the Company had $280.5 million in unrestricted cash and cash equivalents. In the next few days, the Company is expected to receive $33.8 million from the sale of one LR1 tanker (after estimated selling costs). The debt for this vessel was repaid prior to April 27, 2022. Our pro-forma cash balance, including the net proceeds from the sale of this vessel, was $314.3 million as of April 27, 2022.

Drydock, Scrubber and Ballast Water Treatment Update

Set forth below is a table summarizing the drydock, scrubber, and ballast water treatment system activity that occurred during the first quarter of 2022 and that is in progress as of April 1, 2022.

  Number of Vessels Drydock Ballast Water Treatment Systems Scrubbers Aggregate Costs (in millions of U.S. Dollars) (1) Aggregate Off-hire Days in Q1 2022
Completed in the first quarter of 2022            
LR2 3 3 $4.4 93
LR1 2 2 7.3 65
MR
Handymax
  5 3 2 $11.7 158
             
In progress as of April 1, 2022            
LR2 1 1 $2.5 11
LR1 3 3 11.0 104
MR 2 2 2.0 24
Handymax
  6 2 4 $15.5 139

(1)   Aggregate costs for vessels completed in the quarter represent the total costs incurred, some of which may have been incurred in prior periods.

Set forth below are the estimated expected payments to be made for the Company’s drydocks, ballast water treatment system installations, and scrubber installations through 2023 (which also include actual payments made during the second quarter of 2022 and through April 27, 2022): 

In millions of U.S. dollars As of March 31, 2022 (1) (2)
   
Q2 2022 – payments made through April 27, 2022 $ 3.4
Q2 2022 – remaining payments   14.1
Q3 2022   10.5
Q4 2022   7.5
FY 2023   16.8

(1)   Includes estimated cash payments for drydocks, ballast water treatment system installations and scrubber installations.  These amounts include installment payments that are due in advance of the scheduled service and may be scheduled to occur in quarters prior to the actual installation. In addition to these installment payments, these amounts also include estimates of the installation costs of such systems.  The timing of the payments set forth are estimates only and may vary as the timing of the related drydocks and installations finalize. 

(2)   Based upon the commitments received to date, which include the remaining availability under certain financing transactions that have been previously announced, the Company expects to raise approximately $11.3 million of aggregate additional liquidity to finance the purchase and installations of scrubbers once all of the agreements are closed and drawn.  These drawdowns are expected to occur at varying points in the future as these financings are tied to scrubber installations on the Company’s vessels.

Set forth below are the estimated expected number of vessels and estimated expected off-hire days for the Company’s drydocks, ballast water treatment system installations, and scrubber installations (1):

  Q2 2022  
  Vessels Scheduled for (2): Off-hire
  Drydock Ballast Water Treatment Systems Scrubbers Days (3)
LR2 2 70
LR1 81
MR 1 46
Handymax
         
Total Q2 2022 2 1 197
         
  Q3 2022  
  Vessels Scheduled for(2): Off-hire
  Drydock Ballast Water Treatment Systems Scrubbers Days(3)
LR2
LR1
MR 6 4 1 140
Handymax
         
Total Q3 2022 6 4 1 140
         
  Q4 2022  
  Vessels Scheduled for(2): Off-hire
  Drydock Ballast Water Treatment Systems Scrubbers Days(3)
LR2
LR1
MR 3 1 2 100
Handymax
         
Total Q4 2022 3 1 2 100
         
  FY 2023  
  Vessels Scheduled for(2): Off-hire
  Drydock Ballast Water Treatment Systems Scrubbers Days(3)
LR2
LR1
MR 6 6 240
Handymax
         
Total FY 2023 6 6 240

(1)   The number of vessels in these tables may reflect a certain amount of overlap where certain vessels are expected to be drydocked and have ballast water treatment systems and/or scrubbers installed simultaneously.  Additionally, the timing set forth in these tables may vary as drydock, ballast water treatment system installation and scrubber installation times are finalized.
(2)   Represents the number of vessels scheduled to commence drydock, ballast water treatment system, and/or scrubber installations during the period. It does not include vessels that commenced work in prior periods but will be completed in the subsequent period.
(3)   Represents total estimated off-hire days during the period, including vessels that commenced work in a previous period.

Debt

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

  In thousands of U.S. Dollars Outstanding Principal as of December 31, 2021 Outstanding Principal as of March 31, 2022 Outstanding Principal as of April 27, 2022
1 Credit Agricole Credit Facility (1) $ 73,591 $ 53,578 $ 17,535
2 Citibank / K-Sure Credit Facility (2)   78,401   37,881   18,736
3 Hamburg Commercial Credit Facility   37,024   36,201   36,201
4 Prudential Credit Facility   44,832   43,445   42,983
5 2019 DNB / GIEK Credit Facility   45,450   43,672   43,672
6 BNPP Sinosure Credit Facility   86,314   89,761   84,402
7 2020 $225 Million Credit Facility (3)   145,636   103,818   103,818
8 2021 $21.0 Million Credit Facility   19,245   18,660   18,660
9 2021 $43.6 Million Credit Facility (4)   43,550   21,222   21,222
10 Ocean Yield Lease Financing   127,263   124,460   123,525
11 BCFL Lease Financing (LR2s)   79,321   76,560   75,630
12 CSSC Lease Financing   135,843   132,202   130,988
13 BCFL Lease Financing (MRs)   68,888   65,115   63,793
14 2018 CMBFL Lease Financing   111,986   108,734   108,734
15 $116.0 Million Lease Financing   95,789   93,246   92,345
16 AVIC Lease Financing (5)   106,405   86,316   86,316
17 China Huarong Lease Financing   103,416   99,208   99,208
18 $157.5 Million Lease Financing   109,657   106,121   106,121
19 COSCO Lease Financing   61,050   59,125   59,125
20 2020 CMBFL Lease Financing   41,332   40,521   40,521
21 2020 TSFL Lease Financing   43,928   43,098   43,098
22 2020 SPDBFL Lease Financing   90,006   88,382   88,382
23 2021 AVIC Lease Financing   91,886   90,073   90,073
24 2021 CMBFL Lease Financing   74,565   72,935   72,530
25 2021 TSFL Lease Financing   54,377   53,282   53,282
26 2021 CSSC Lease Financing   53,893   52,577   52,139
27 2021 $146.3 Million Lease Financing   146,250   143,583   140,288
28 2021 Ocean Yield Lease Financing   69,783   68,341   67,860
29 IFRS 16 – Leases – 3 MR   29,268   27,314   26,630
30 $670.0 Million Lease Financing (6)   546,730   535,061   505,743
31 Unsecured Senior Notes Due 2025   70,209   70,571   70,571
32 Convertible Notes Due 2022   69,695   69,695   69,695
33 Convertible Notes Due 2025 (7)   208,133   210,897   211,702
  Gross debt outstanding   3,163,716   2,965,655   2,865,528
  Cash and cash equivalents   230,415   242,684 280,527
  Net debt $ 2,933,301 $ 2,722,971 $ 2,585,001

(1)   In March 2022, the Company closed on the sale of STI Excelsior and repaid $18.4 million on the Credit Agricole Credit Facility as a result of this sale. In April 2022, the Company repaid $36.0 million on the Credit Agricole Credit Facility related to STI Exceed and STI Expedite. The sales of both vessels have closed as of April 27, 2022.

(2)   In March 2022, the Company closed on the sales of STI Executive and STI Excellence and repaid $39.5 million on the Citibank / K-Sure Credit Facility as a result of these sales. In April 2022, the Company repaid $19.1 million on the Citibank / K-Sure Credit Facility related to STI Express, the sale of which is expected to close in the next few days.

(3)   In March 2022, the Company closed on the sales of STI Pride and STI Providence and repaid $38.7 million on the 2020 $225.0 Million Credit Facility as a result of these sales.

(4)   In March 2022, the Company closed on the sale of STI Prestige and repaid $21.2 million on the 2021 $43.6 Million Credit Facility as a result of this sale.

(5)   In February 2022, the Company exercised the option to repurchase STI Fontvieille and repaid $17.2 million on the AVIC Lease Financing in advance of the sale of the vessel, which closed shortly thereafter.

(6)   In April 2022, the Company exercised the option to repurchase STI Majestic and repaid $25.6 million on the $670.0 Million Lease Financing in advance of the sale of the vessel. The sale of this vessel has closed as of April 27, 2022.

(7)   The outstanding principal balance reflects the par value of the Convertible Notes Due 2025 of $200.0 million plus the accreted principal balance as of each date presented. The Convertible Notes Due 2025 are scheduled to accrete at an annualized rate of approximately 5.52% per annum, with the total balance due at maturity equal to 125.3% of par. The Convertible Notes Due 2025 also bear interest at a cash coupon rate of 3.0% per annum, which is calculated based upon the par value of the instrument.

Set forth below are the estimated expected future principal repayments on the Company’s outstanding indebtedness as of March 31, 2022, which includes principal amounts due under the Company’s secured credit facilities, Convertible Notes due 2022, Convertible Notes due 2025, lease financing arrangements, Senior Notes due 2025, and lease liabilities under IFRS 16 (which also include actual scheduled payments made during the second quarter of 2022 through April 27, 2022):

    As of March 31, 2022 (1)
In millions of U.S. dollars   Total Less: scheduled repayments on vessels to be sold (2) Pro forma total – excluding scheduled repayments vessels to be sold Maturities of unsecured debt Vessel financings – 2022 and 2023 maturities, excluding vessels to be sold Vessel financings – scheduled repayments, in addition to maturities in 2024 and thereafter, excluding vessels to be sold
Q2 2022 – principal payments made through April 27, 2022   $ 100.9 $ 80.8 $ 20.1 $ $ $ 20.1
Q2 2022 (3)     233.0   113.9   119.1   69.7     49.4
Q3 2022     84.3   20.0   64.3       64.3
Q4 2022 (4)     86.7     86.7     17.5   69.2
Q1 2023     63.8     63.8       63.8
Q2 2023     69.6     69.6       69.6
Q3 2023     63.8     63.8       63.8
Q4 2023     68.7     68.7       68.7
2024 and thereafter     2,194.9     2,194.9   281.5     1,913.4
    $ 2,965.7 $ 214.7 $ 2,751.0 $ 351.2 $ 17.5 $ 2,382.3

(1)   Amounts represent the principal payments due on the Company’s outstanding indebtedness as of March 31, 2022 and do not incorporate the impact of any of the Company’s new financing initiatives which have not closed as of that date.

(2)   The repayments of debt set forth in this column represent the previously scheduled repayments due on vessels that have recently been agreed to be sold whose sales had not yet closed as of March 31, 2022. These credit facilities and lease financing arrangements are expected to be repaid in full prior to the closing of each vessel sale, which have occurred, or are expected to occur during the second and third quarters of 2022. The repayments include two LR1s under the Citibank / K-Sure Credit Facility, three LR1s under the Credit Agricole Credit Facility, one LR1 under the 2021 $43.6 Million Credit Facility, one MR under the $157.5 Million Lease Financing, one MR under the $670.0 Million Lease Financing and three LR2s under the 2020 $225.0 Million Credit Facility.

(3)   Repayments include the scheduled maturity of the outstanding face value of the Convertible Notes due 2022 of $69.7 million.

(4)   Repayments include the scheduled maturity of the outstanding debt related to one vessel under the 2021 $21.0 Million Credit Facility for $17.5 million.

Explanation of Variances on the First Quarter of 2022 Financial Results Compared to the First Quarter of 2021

For the three months ended March 31, 2022, the Company recorded a net loss of $84.4 million compared to a net loss of $62.4 million for the three months ended March 31, 2021. The following were the significant changes between the two periods:

  • 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 voyages, time charters, and pool charters), and it provides useful information to investors and management. The following table sets forth TCE revenue for the three months ended March 31, 2022 and 2021:
      For the three months ended March 31,
In thousands of U.S. dollars     2022       2021  
  Vessel revenue   $ 174,047     $ 134,165  
  Voyage expenses     (2,023 )     (1,385 )
  TCE revenue   $ 172,024     $ 132,780  
  • TCE revenue for the three months ended March 31, 2022 increased by $39.2 million to $172.0 million, from $132.8 million for the three months ended March 31, 2021. Overall average TCE revenue per day increased to $15,415 per day during the three months ended March 31, 2022, from $11,166 per day during the three months ended March 31, 2021.
    • TCE revenue for the three months ended March 31, 2022 reflected an improving spot market for product tankers, particularly at the end of quarter, which was triggered by myriad factors including (i) the easing of COVID-19 restrictions around the globe which triggered increased personal mobility and the demand for refined petroleum products; (ii) strengthening refining margins which, combined with low global refined petroleum product inventories, increased demand for the seaborne transportation of refined petroleum products, and; (iii) the volatility brought on by the conflict in Ukraine, which has disrupted supply chains for crude oil and refined petroleum products, changing volumes and trade routes, and thus increased ton-mile demand for refined petroleum products.
    • TCE revenue for the three months ended March 31, 2021 reflected the adverse market conditions brought on by the COVID-19 pandemic. Demand for crude and refined petroleum products remained low during this period as inventories that built up during 2020 continued to be drawn, and most countries throughout the world continued to implement restrictive policies in an effort to control the spread of the virus.
  • Vessel operating costs for the three months ended March 31, 2022 increased by $1.5 million to $84.8 million, from $83.3 million for the three months ended March 31, 2021. Vessel operating costs per day increased to $7,290 per day for the three months ended March 31, 2022 from $6,891 per day for the three months ended March 31, 2021. Vessel operating costs per day increased across most vessel classes, driven by increased repairs and maintenance, and spares and stores expenses.
  • Depreciation expense – owned or sale leaseback vessels for the three months ended March 31, 2022 decreased by $4.7 million to $44.1 million, from $48.8 million for the three months ended March 31, 2021. This decrease is attributable to 17 of the Company’s vessels being designated as held for sale during the three months ended March 31, 2022. These vessels were written down to their net realizable value upon being designated as held for sale, and depreciation expense ceased being recorded upon that designation. Therefore, depreciation expense for these vessels only reflected a partial period during the three months ended March 31, 2022, and the Company expects depreciation expense to decrease slightly in subsequent quarters to reflect the full impact of these vessel sales.
  • Depreciation expense – right of use assets for the three months ended March 31, 2022 decreased by $2.1 million to $9.7 million from $11.8 million for the three months ended March 31, 2021. Depreciation expense – right of use assets reflects the straight-line depreciation expense recorded under IFRS 16Leases. Right of use asset depreciation expense was impacted by the expiration of the bareboat charter-in agreements on four Handymax vessels at the end of the first quarter of 2021. The Company had four LR2s and 18 MRs that were accounted for under IFRS 16 – Leases during the three months ended March 31, 2022.
  • General and administrative expenses for the three months ended March 31, 2022, decreased by $1.1 million to $12.5 million, from $13.6 million for the three months ended March 31, 2021. This decrease was primarily due to a reduction in restricted stock amortization.
  • Financial expenses for the three months ended March 31, 2022 increased by $3.9 million to $38.0 million, from $34.1 million for the three months ended March 31, 2021. This increase was primarily attributable to the increase in the accretion of convertible notes, which increased to $4.1 million from $1.9 million for the three months ended March 31, 2022 and 2021, respectively. This increase was due to the issuance of the Convertible Notes due 2025 in March and June 2021.

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 data   2022       2021  
Revenue      
  Vessel revenue $ 174,047     $ 134,165  
         
Operating expenses      
  Vessel operating costs   (84,832 )     (83,302 )
  Voyage expenses   (2,023 )     (1,385 )
  Depreciation – owned or sale leaseback vessels   (44,108 )     (48,784 )
  Depreciation – right of use assets   (9,720 )     (11,841 )
  General and administrative expenses   (12,454 )     (13,560 )
  Loss on sale of vessels   (67,738 )      
  Total operating expenses   (220,875 )     (158,872 )
Operating loss   (46,828 )     (24,707 )
Other (expense) and income, net      
  Financial expenses   (38,001 )     (34,067 )
  Loss on Convertible Notes exchange         (3,856 )
  Financial income   188       225  
  Other income and (expense), net   193       11  
  Total other expense, net   (37,620 )     (37,687 )
Net loss $ (84,448 )   $ (62,394 )
         
Loss per share      
         
  Basic $ (1.52 )   $ (1.15 )
  Diluted $ (1.52 )   $ (1.15 )
  Basic weighted average shares outstanding   55,409,131       54,318,792  
  Diluted weighted average shares outstanding(1)   55,409,131       54,318,792  

(1)  The computation of diluted loss per share for the three months ended March 31, 2022 and 2021 excludes the effect of potentially dilutive unvested shares of restricted stock and the Convertible Notes due 2022 and Convertible Notes due 2025 because their effect would have been anti-dilutive.

Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)

  As of
In thousands of U.S. dollars March 31, 2022   December 31, 2021
Assets      
Current assets      
Cash and cash equivalents $ 242,684     $ 230,415  
Accounts receivable   70,274       38,069  
Prepaid expenses and other current assets   11,110       7,954  
Inventories   15,373       8,781  
Restricted cash   2,006       4,008  
Assets held for sale   342,760        
Total current assets   684,207       289,227  
Non-current assets      
Vessels and drydock   3,217,112       3,842,071  
Right of use assets for vessels   718,933       764,025  
Other assets   93,190       108,963  
Goodwill   8,900       8,900  
Restricted cash   783       783  
Total non-current assets   4,038,918       4,724,742  
Total assets $ 4,723,125     $ 5,013,969  
Current liabilities      
Current portion of long-term debt $ 274,636     $ 235,278  
Lease liability – sale and leaseback vessels   189,293       178,062  
Lease liability – IFRS 16   78,067       54,515  
Accounts payable   16,689       35,080  
Accrued expenses   31,079       24,906  
Total current liabilities   589,764       527,841  
Non-current liabilities      
Long-term debt   508,507       666,409  
Lease liability – sale and leaseback vessels   1,390,073       1,461,929  
Lease liability – IFRS 16   483,644       520,862  
Total non-current liabilities   2,382,224       2,649,200  
Total liabilities   2,971,988       3,177,041  
Shareholders’ equity      
Issued, authorized and fully paid-in share capital:      
Share capital   659       659  
Additional paid-in capital   2,854,455       2,855,798  
Treasury shares   (480,172 )     (480,172 )
Accumulated deficit   (623,805 )     (539,357 )
Total shareholders’ equity   1,751,137       1,836,928  
Total liabilities and shareholders’ equity $ 4,723,125     $ 5,013,969  

Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited)

  For the three months ended March 31,
In thousands of U.S. dollars   2022       2021  
Operating activities      
Net loss $ (84,448 )   $ (62,394 )
Depreciation – owned or finance leased vessels   44,108       48,784  
Depreciation – right of use assets   9,720       11,841  
Amortization of restricted stock   4,494       6,192  
Amortization of deferred financing fees   1,806       1,825  
Write-off of deferred financing fees and unamortized discounts on sale and leaseback facilities   1,586       1,275  
Accretion of convertible notes   4,128       1,922  
Loss on sales of vessels   67,738        
Accretion of fair value measurement on debt assumed in business combinations   889       847  
Loss on Convertible Notes transactions         3,856  
Share of income from dual fuel tanker joint venture   (174 )      
    49,847       14,148  
Changes in assets and liabilities:      
(Increase) / decrease in inventories   (2,589 )     1,157  
Increase in accounts receivable   (27,137 )     (12,069 )
Increase in prepaid expenses and other current assets   (3,156 )     (600 )
Increase in other assets   (27     (147 )
(Decrease) / increase in accounts payable   (17,162 )     2,428  
Increase / (decrease) in accrued expenses   5,758       (6,745 )
    (44,313 )     (15,976 )
Net cash inflow / (outflow) from operating activities   5,534       (1,828 )
Investing activities      
Net proceeds from sales of vessels   225,815        
Distributions from dual fuel tanker joint venture   240        
Drydock, scrubber, ballast water treatment system and other vessel related payments (owned, leased financed and bareboat-in vessels)   (14,279 )     (16,601 )
Net cash inflow / (outflow) from investing activities   211,776       (16,601 )
Financing activities      
Debt repayments   (191,163 )     (224,757 )
Issuance of debt   3,806       273,421  
Debt issuance costs   (184 )     (3,643 )
Principal repayments on lease liability – IFRS 16   (13,666 )     (14,856 )
Issuance of convertible notes         76,100  
Decrease in restricted cash   2,003        
Dividends paid   (5,837 )     (5,809 )
Net cash (outflow) / inflow from financing activities   (205,041 )     100,456  
Increase in cash and cash equivalents   12,269       82,027  
Cash and cash equivalents at January 1,   230,415       187,511  
Cash and cash equivalents at March 31, $ 242,684     $ 269,538  

Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three months ended March 31, 2022 and 2021
(unaudited)

    For the three months ended March 31,
        2022     2021  
Adjusted EBITDA(1) (in thousands of U.S. dollars except Fleet Data)   $   79,425   $ 42,121  
         
Average Daily Results        
TCE per revenue day(2)   $   15,415   $ 11,166  
Vessel operating costs per day (3)   $   7,290   $ 6,891  
         
LR2        
TCE per revenue day (2)   $   14,475   $ 11,947  
Vessel operating costs per day (3)   $   7,228   $ 6,675  
Average number of vessels       42.0     42.0  
         
LR1        
TCE per revenue day (2)   $   12,320   $ 11,228  
Vessel operating costs per day (3)   $   7,170   $ 6,646  
Average number of vessels       10.7     12.0  
         
MR        
TCE per revenue day (2)   $   16,305   $ 11,281  
Vessel operating costs per day (3)   $   7,364   $ 6,974  
Average number of vessels       62.6     63.0  
         
Handymax        
TCE per revenue day (2)   $   15,949   $ 8,844  
Vessel operating costs per day (3)   $   7,231   $ 7,280  
Average number of vessels       14.0     17.3  
         
Fleet data        
Average number of vessels       129.3     134.3  
         
Drydock        
Drydock, scrubber, ballast water treatment system and other vessel related payments for owned, sale leaseback and bareboat chartered-in vessels (in thousands of U.S. dollars)   $   14,279   $ 16,601  

(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, sale leasebacked, or chartered-in 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 operating days during the period. Operating days are the total number of available days in a period with respect to the owned, sale leasebacked or bareboat chartered-in vessels, before deducting available days due to off-hire days and days in drydock. Operating days is a measurement that is only applicable to owned, sale leasebacked, or bareboat chartered-in vessels, not time chartered-in vessels.

Fleet list as of April 27, 2022

  Vessel Name   Year Built   DWT   Ice class   Employment   Vessel type   Scrubber  
  Owned, sale leaseback and bareboat chartered-in vessels                  
1 STI Brixton   2014   38,734   1A   SHTP (1)   Handymax   N/A  
2 STI Comandante   2014   38,734   1A   SHTP (1)   Handymax   N/A  
3 STI Pimlico   2014   38,734   1A   SHTP (1)   Handymax   N/A  
4 STI Hackney   2014   38,734   1A   SHTP (1)   Handymax   N/A  
5 STI Acton   2014   38,734   1A   SHTP (1)   Handymax   N/A  
6 STI Fulham   2014   38,734   1A   SHTP (1)   Handymax   N/A  
7 STI Camden   2014   38,734   1A   SHTP (1)   Handymax   N/A  
8 STI Battersea   2014   38,734   1A   SHTP (1)   Handymax   N/A  
9 STI Wembley   2014   38,734   1A   SHTP (1)   Handymax   N/A  
10 STI Finchley   2014   38,734   1A   SHTP (1)   Handymax   N/A  
11 STI Clapham   2014   38,734   1A   SHTP (1)   Handymax   N/A  
12 STI Poplar   2014   38,734   1A   SHTP (1)   Handymax   N/A  
13 STI Hammersmith   2015   38,734   1A   SHTP (1)   Handymax   N/A  
14 STI Rotherhithe   2015   38,734   1A   SHTP (1)   Handymax   N/A  
15 STI Amber   2012   49,990     SMRP (2)   MR   Yes  
16 STI Topaz   2012   49,990     SMRP (2)   MR   Yes  
17 STI Ruby   2012   49,990     SMRP (2)   MR   Not Yet Installed  
18 STI Garnet   2012   49,990     SMRP (2)   MR   Yes  
19 STI Onyx   2012   49,990     SMRP (2)   MR   Yes  
20 STI Ville   2013   49,990     SMRP (2)   MR   Not Yet Installed  
21 STI Duchessa   2014   49,990     SMRP (2)   MR   Not Yet Installed  
22 STI Opera   2014   49,990     SMRP (2)   MR   Not Yet Installed  
23 STI Texas City   2014   49,990     SMRP (2)   MR   Yes  
24 STI Meraux   2014   49,990     SMRP (2)   MR   Yes  
25 STI San Antonio   2014   49,990     SMRP (2)   MR   Yes  
26 STI Venere   2014   49,990     SMRP (2)   MR   Yes  
27 STI Virtus   2014   49,990     SMRP (2)   MR   Yes  
28 STI Aqua   2014   49,990     SMRP (2)   MR   Yes  
29 STI Dama   2014   49,990     SMRP (2)   MR   Yes  
30 STI Benicia   2014   49,990     SMRP (2)   MR   Yes (5)  
31 STI Regina   2014   49,990     SMRP (2)   MR   Yes  
32 STI St. Charles   2014   49,990     SMRP (2)   MR   Yes  
33 STI Mayfair   2014   49,990     SMRP (2)   MR   Yes  
34 STI Yorkville   2014   49,990     SMRP (2)   MR   Yes  
35 STI Milwaukee   2014   49,990     SMRP (2)   MR   Yes  
36 STI Battery   2014   49,990     SMRP (2)   MR   Yes  
37 STI Soho   2014   49,990     SMRP (2)   MR   Yes  
38 STI Memphis   2014   49,990     SMRP (2)   MR   Yes  
39 STI Tribeca   2015   49,990     SMRP (2)   MR   Yes  
40 STI Gramercy   2015   49,990     SMRP (2)   MR   Yes  
41 STI Bronx   2015   49,990     SMRP (2)   MR   Yes  
42 STI Pontiac   2015   49,990     SMRP (2)   MR   Yes  
43 STI Manhattan   2015   49,990     SMRP (2)   MR   Yes  
44 STI Queens   2015   49,990     SMRP (2)   MR   Yes  
45 STI Osceola   2015   49,990     SMRP (2)   MR   Yes  
46 STI Notting Hill   2015   49,687   1B   SMRP (2)   MR   Yes  
47 STI Seneca   2015   49,990     SMRP (2)   MR   Yes  
48 STI Westminster   2015   49,687   1B   SMRP (2)   MR   Yes  
49 STI Brooklyn   2015   49,990     SMRP (2)   MR   Yes  
50 STI Black Hawk   2015   49,990     SMRP (2)   MR   Yes  
51 STI Galata   2017   49,990     SMRP (2)   MR   Yes  
52 STI Bosphorus   2017   49,990     SMRP (2)   MR   Not Yet Installed  
53 STI Leblon   2017   49,990     SMRP (2)   MR   Yes  
54 STI La Boca   2017   49,990     SMRP (2)   MR   Yes  
55 STI San Telmo   2017   49,990   1B   SMRP (2)   MR   Not Yet Installed  
56 STI Donald C Trauscht   2017   49,990   1B   SMRP (2)   MR   Not Yet Installed  
57 STI Esles II   2018   49,990   1B   SMRP (2)   MR   Not Yet Installed  
58 STI Jardins   2018   49,990   1B   SMRP (2)   MR   Not Yet Installed  
59 STI Magic   2019   50,000     SMRP (2)   MR   Yes  
60 STI Mystery   2019   50,000     SMRP (2)   MR   Yes  
61 STI Marvel   2019   50,000     SMRP (2)   MR   Yes  
62 STI Magnetic   2019   50,000     SMRP (2)   MR   Yes  
63 STI Millennia   2019   50,000     SMRP (2)   MR   Yes  
64 STI Magister   2019   50,000     SMRP (2)   MR   Yes  
65 STI Mythic   2019   50,000     SMRP (2)   MR   Yes  
66 STI Marshall   2019   50,000     SMRP (2)   MR   Yes  
67 STI Modest   2019   50,000     SMRP (2)   MR   Yes  
68 STI Maverick   2019   50,000     SMRP (2)   MR   Yes  
69 STI Miracle   2020   50,000     SMRP (2)   MR   Yes  
70 STI Maestro   2020   50,000     SMRP (2)   MR   Yes  
71 STI Mighty   2020   50,000     SMRP (2)   MR   Yes  
72 STI Maximus   2020   50,000     SMRP (2)   MR   Yes  
73 STI Excel   2015   74,000     SLR1P (3)   LR1   Yes (5)  
74 STI Experience   2016   74,000     SLR1P (3)   LR1   Not Yet Installed (5)  
75 STI Express   2016   74,000     SLR1P (3)   LR1   Yes (5)  
76 STI Precision   2016   74,000     SLR1P (3)   LR1   Yes (5)  
77 STI Elysees   2014   109,999     SLR2P (4)   LR2   Yes  
78 STI Madison   2014   109,999     SLR2P (4)   LR2   Yes  
79 STI Park   2014   109,999     SLR2P (4)   LR2   Yes  
80 STI Orchard   2014   109,999     SLR2P (4)   LR2   Yes  
81 STI Sloane   2014   109,999     SLR2P (4)   LR2   Yes  
82 STI Broadway   2014   109,999     SLR2P (4)   LR2   Yes  
83 STI Condotti   2014   109,999     SLR2P (4)   LR2   Yes  
84 STI Rose   2015   109,999     SLR2P (4)   LR2   Yes  
85 STI Veneto   2015   109,999     SLR2P (4)   LR2   Yes  
86 STI Alexis   2015   109,999     SLR2P (4)   LR2   Yes  
87 STI Winnie   2015   109,999     SLR2P (4)   LR2   Yes  
88 STI Oxford   2015   109,999     SLR2P (4)   LR2   Yes  
89 STI Lauren   2015   109,999     SLR2P (4)   LR2   Yes  
90 STI Connaught   2015   109,999     SLR2P (4)   LR2   Yes  
91 STI Spiga   2015   109,999     SLR2P (4)   LR2   Yes  
92 STI Savile Row   2015   109,999     SLR2P (4)   LR2   Yes (5)  
93 STI Kingsway   2015   109,999     SLR2P (4)   LR2   Yes  
94 STI Carnaby   2015   109,999     SLR2P (4)   LR2   Yes (5)  
95 STI Solidarity   2015   109,999     SLR2P (4)   LR2   Yes  
96 STI Lombard   2015   109,999     SLR2P (4)   LR2   Yes  
97 STI Grace   2016   109,999     SLR2P (4)   LR2   Yes  
98 STI Jermyn   2016   109,999     SLR2P (4)   LR2   Yes  
99 STI Sanctity   2016   109,999     SLR2P (4)   LR2   Yes  
100 STI Solace   2016   109,999     SLR2P (4)   LR2   Yes  
101 STI Stability   2016   109,999     SLR2P (4)   LR2   Yes  
102 STI Steadfast   2016   109,999     SLR2P (4)   LR2   Yes  
103 STI Supreme   2016   109,999     SLR2P (4)   LR2   Not Yet Installed  
104 STI Symphony   2016   109,999     SLR2P (4)   LR2   Yes  
105 STI Gallantry   2016   113,000     SLR2P (4)   LR2   Yes  
106 STI Goal   2016   113,000     SLR2P (4)   LR2   Yes  
107 STI Nautilus   2016   113,000     SLR2P (4)   LR2   Yes (5)  
108 STI Guard   2016   113,000     SLR2P (4)   LR2   Yes  
109 STI Guide   2016   113,000     SLR2P (4)   LR2   Yes  
110 STI Selatar   2017   109,999     SLR2P (4)   LR2   Yes  
111 STI Rambla   2017   109,999     SLR2P (4)   LR2   Yes  
112 STI Gauntlet   2017   113,000     SLR2P (4)   LR2   Yes  
113 STI Gladiator   2017   113,000     SLR2P (4)   LR2   Yes  
114 STI Gratitude   2017   113,000     SLR2P (4)   LR2   Yes  
115 STI Lobelia   2019   110,000     SLR2P (4)   LR2   Yes  
116 STI Lotus   2019   110,000     SLR2P (4)   LR2   Yes  
117 STI Lily   2019   110,000     SLR2P (4)   LR2   Yes  
118 STI Lavender   2019   110,000     SLR2P (4)   LR2   Yes  
119 STI Beryl   2013   49,990     SMRP (2)   MR   Not Yet Installed  
120 STI Le Rocher   2013   49,990     SMRP (2)   MR   Not Yet Installed  
121 STI Larvotto   2013   49,990     SMRP (2)   MR   Not Yet Installed  
                             
  Total owned, sale leaseback and bareboat chartered-in fleet DWT       9,223,160                  

(1)  This vessel operates in, or is expected to operate in, the Scorpio Handymax Tanker Pool, or SHTP. SHTP is a Scorpio Pool and is operated by Scorpio Commercial Management S.A.M. (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, or SMRP. SMRP is a Scorpio Pool and is operated by SCM. SMRP and SCM are related parties to the Company.

(3)  This vessel operates in the Scorpio LR1 Pool, or SLR1P. SLR1P is a Scorpio Pool and is operated by SCM. SLR1P and SCM are related parties to the Company.

(4)  This vessel operates in, or is expected to operate in, the Scorpio LR2 Pool, or SLR2P. SLR2P is a Scorpio Pool and is operated by SCM. SLR2P and SCM are related parties to the Company.

(5)  The Company has entered into an agreement to sell this vessel, which is expected to close before the end of the third quarter of 2022.

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 the amount of dividends, if any, depends on the Company’s earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.

The Company’s dividends paid during 2021 and 2022 were as follows:

Date paid Dividends per common
share
March 2021 $ 0.10
June 2021 $ 0.10
September 2021 $ 0.10
December 2021 $ 0.10
March 2022 $ 0.10

On April 27, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about June 15, 2022 to all shareholders of record as of May 20, 2022 (the record date). As of April 27, 2022, there were 59,401,013 common shares of the Company outstanding.

$250 Million Securities Repurchase Program

In September 2020, 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, in addition to its common shares, currently consist of its Senior Notes due 2025 (NYSE: SBBA), which were originally issued in May 2020, Convertible Notes due 2022, which were issued in May and July 2018, and Convertible Notes due 2025, which were issued in March and June 2021. No securities have been repurchased under the new program since its inception through the date of this press release.

COVID-19

Since the beginning of calendar year 2020, the outbreak of the COVID-19 virus has resulted in a significant reduction in global economic activity and extreme volatility in the global financial markets, the effects of which continued throughout 2021. While the easing of restrictive measures that were put in place to combat the spread of the virus, and the successful roll-out of vaccines in certain countries served as a catalyst for an economic recovery in many countries throughout the world, the Company expects that the COVID-19 virus will continue to cause volatility in the commodities markets. In particular, the spread of more contagious and vaccine resistant variants, along with the continued implementation of restrictive measures by governments in certain parts of the world, have hampered a full re-opening of the global economy, thus preventing demand for refined petroleum products from reaching pre-pandemic levels. The scale and duration of these circumstances is unknowable but could continue to have a material impact on the Company’s earnings, cash flow and financial condition. An estimate of the impact on the Company’s results of operations, financial condition, and future performance cannot be made at this time.

Conflict in Ukraine

The recent military conflict in Ukraine has had a significant direct and indirect impact on the trade of refined petroleum products. This conflict has resulted in the United States, United Kingdom, and the European Union, among other countries, implementing sanctions and executive orders against citizens, entities, and activities connected to Russia. Some of these sanctions and executive orders target the Russian oil sector, including a prohibition on the import of oil from Russia to the United States or the United Kingdom. The Company cannot foresee what other sanctions or executive orders may arise that affect the trade of petroleum products. Furthermore, the conflict and ensuing international response has disrupted the supply of Russian oil to the global market, and as a result, the price of oil and petroleum products has experienced significant volatility. The Company cannot predict what effect the higher price of oil and petroleum products will have on demand, and it is possible that the current conflict in Ukraine could adversely affect the Company’s financial condition, results of operations, and future performance.

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns, lease finances or bareboat charters-in 121 product tankers (42 LR2 tankers, four LR1 tankers, 61 MR tankers and 14 Handymax tankers) with an average age of 6.3 years. The Company has recently agreed to sell four LR1 tankers, three LR2 tankers and one MR tanker. These sales are expected to close before the end of the third quarter of 2022. 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 time charter equivalent revenue, or TCE revenue, adjusted net income or loss, and adjusted EBITDA, which are not measures prepared in accordance with IFRS (“Non-IFRS” measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors and other users of our financial statements, such as our lenders, 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 TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful to investors or other users of our financial statements, such as our lenders, because they facilitate the comparability and the evaluation of companies in the Company’s industry. In addition, the Company believes that TCE revenue, 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 TCE revenue, adjusted net income or loss with 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.

TCE revenue, on a historical basis, is reconciled above in the section entitled “Explanation of Variances on the First Quarter of 2022 Financial Results Compared to the First Quarter of 2021”. The Company has not provided a reconciliation of forward-looking TCE revenue because the most directly comparable IFRS measure on a forward-looking basis is not available to the Company without unreasonable effort.

Reconciliation of Net Loss to Adjusted Net Loss

      For the three months ended March 31, 2022  
          Per share   Per share  
In thousands of U.S. dollars except per share data   Amount   basic   diluted  
  Net loss   $ (84,448 )   $ (1.52 )   $ (1.52 )  
  Adjustments:              
  Loss on sales of vessels     67,738     $ 1.22     $ 1.22    
  Write-offs of deferred financing fees and debt extinguishment costs     1,855       0.03       0.03    
  Adjusted net loss   $ (14,855 )   $ (0.27 )   $ (0.27 )  

      For the three months ended March 31, 2021  
          Per share   Per share  
In thousands of U.S. dollars except per share data   Amount   basic   diluted  
  Net loss   $ (62,394 )   $ (1.15 )   $ (1.15 )  
  Adjustment:              
  Loss on Convertible Notes exchange     3,856       0.07       0.07    
  Write-off of deferred financing fees     1,275       0.02       0.02    
  Adjusted net loss   $ (57,263 )   $ (1.05 ) (1 ) $ (1.05 ) (1 )

(1) Summation difference due to rounding.

Reconciliation of Net Loss to Adjusted EBITDA

      For the three months ended March 31,
In thousands of U.S. dollars     2022       2021  
  Net Loss   $ (84,448 )   $ (62,394 )
  Financial expenses     38,001       34,067  
  Financial income     (188 )     (225 )
  Depreciation – owned or finance leased vessels     44,108       48,784  
  Depreciation – right of use assets     9,720       11,841  
  Amortization of restricted stock     4,494       6,192  
  Loss on Convertible Notes exchange           3,856  
  Loss on sales of vessels     67,738        
  Adjusted EBITDA   $ 79,425     $ 42,121  

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,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “target,” “project,” “likely,” “may,” “will,” “would,” “could” 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, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although management believes 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 the Company’s control, there can be no assurance that the Company will achieve or accomplish these expectations, beliefs or projections. The Company undertakes no obligation, and specifically declines 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 the Company’s view, could cause actual results to differ materially from those discussed in the forward‐looking statements include unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, length and severity of the ongoing novel coronavirus (COVID-19) outbreak, including its effect on demand for petroleum products and the transportation thereof, expansion and growth of the Company’s operations, risks relating to the integration of assets or operations of entities that it has or may in the future acquire and the possibility that the anticipated synergies and other benefits of such acquisitions may not be realized within expected timeframes or at all, the failure of counterparties to fully perform their contracts with the Company, 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 the Company’s operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company’s 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 the Company’s filings with the SEC for a more complete discussion of certain of these and other risks and uncertainties.

Scorpio Tankers Inc.
212-542-1616