MONACO — (Marketwire) — 02/25/13 — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three months and year ended December 31, 2012.
Results for the three months ended December 31, 2012 and 2011
For the three months ended December 31, 2012, the Company had an adjusted net loss of $3.6 million (see Non-GAAP Measure section below), or $0.08 basic and diluted loss per share, excluding a $1.3 million, or $0.03 per share, unrealized loss on derivative financial instruments.
For the three months ended December 31, 2011, the Company had an adjusted net loss of $5.1 million (see Non-GAAP Measure section below), or $0.16 basic and diluted loss per share, excluding a $66.6 million, or $2.05 per share impairment charge.
For the three months ended December 31, 2012, the Company recorded a net loss of $4.9 million, or $0.11 basic and diluted loss per share. This is compared to a net loss of $71.7 million or $2.21 basic and diluted loss per share for the three months ended December 31, 2011.
Results for the year ended December 31, 2012 and 2011
For the year ended December 31, 2012, the Company had an adjusted net loss of $11.9 million (see Non-GAAP Measure section below), or $0.29 basic and diluted loss per share, excluding (i) a $10.4 million, or $0.25 per share, loss from sales of five vessels, (ii) a $3.0 million, or $0.07 per share, write-off of deferred financing fees attributable to the extension of the 2011 Credit Facility, and (iii) a $1.2 million, or $0.03 per share, unrealized loss on derivative financial instruments.
For the year ended December 31, 2011, the Company had an adjusted net loss of $16.1 million (see Non-GAAP Measure section below), or $0.56 basic and diluted loss per share, excluding a $66.6 million, or $2.32 per share impairment charge.
For the year ended December 31, 2012, the Company recorded a net loss of $26.5 million or $0.64 basic and diluted loss per share. This is compared to a net loss of $82.7 million or $2.88 basic and diluted loss per share for the year ended December 31, 2011.
Summary of Recent and Fourth Quarter Significant Events:
Emanuele Lauro, chief executive officer and chairman of the board, commented, “The first quarter has been marked by seasonal refinery turnarounds in the East and lower export volumes, yet we have experienced firm markets so far, particularly in the Atlantic basin as a result of increasing US Gulf exports. Going forward, we expect improvement in volumes and rates as several major refineries resume production.
“We continue to see confirmation of our longer-term thesis, that there will be significant increases in product tanker demand days as refining capacity inexorably shifts to more competitive locations. This shift is lengthening steaming distances, expanding the opportunity set for commodity traders, and solidifying the role of the product tanker as inexpensive and flexible storage as port infrastructure — both in the developed and developing world — is constrained.”
Mr. Lauro concluded, “Our new vessels are performing well, realizing the fuel savings we previously announced, and we are confident that our newbuilding program is well-timed. We see a very attractive competitive landscape to match our profile for growth.”
Recent Significant Events
Follow-on offering
In February 2013, the Company closed on the sale of 30,672,000 shares of common stock in a registered direct placement of common shares at an offering price of $7.50 per share. The Company received net proceeds of approximately $222.1 million, after deducting the placement agents’ discount and offering expenses and now has 94,499,846 shares outstanding.
Newbuilding vessel orders
In February 2013, the Company exercised options with Hyundai Mipo Dockyard Co. Ltd. of South Korea (“HMD”) for the construction of four Handymax, ice class 1A product tankers (38,000 DWT) for approximately $31.3 million each. These fuel efficient vessels will be delivered in the third quarter of 2014. In conjunction with these contracts, the Company received four new fixed price options for similar vessels which would be delivered in the first half of 2015.
In February 2013, the Company reached an agreement with SPP Shipbuilding Co., Ltd. of South Korea (“SPP”) for the construction of four MR product tankers for approximately $32.5 million each, two of which are the exercise of options from a previous contract. These vessels will be delivered in the third and fourth quarters of 2014. In conjunction with these contracts, the Company received extensions on several previously agreed options and received four new fixed price options for similar vessels which would be delivered in 2015.
In January 2013, the Company reached an agreement with HMD for the construction of two MR product tankers for approximately $32.5 million each. These vessels will be delivered in May and June 2014.
The Company currently has a total of 20 product tanker newbuilding orders with HMD and SPP (16 MR and four Handymax). Two of the newbuildings are expected to be delivered to the Company by April 2013 and the remaining 18 by the end of 2014. The Company also has fixed-price options to construct a total of 14 additional newbuilding product tankers at these yards.
2013 Credit Facility
In February 2013, the Company signed a commitment letter for a $267.0 million credit facility (“2013 Credit Facility”) with Nordea Bank Finland plc, acting through its New York branch, ABN AMRO Bank N.V and Skandinaviska Enskilda Banken AB.
The 2013 Credit Facility, which will be split into a term loan and a revolving loan, will be used to finance up to 60% of the purchase price of vessels, including newbuildings upon delivery. The credit facility matures six years after the loan is signed. The covenants and other conditions are similar to the Company’s existing credit facilities.
Delivery of STI Sapphire
The Company took delivery of the sixth vessel under its Newbuilding program, STI Sapphire, in January 2013. Upon delivery, the vessel began a time charter for up to 80 days at $20,750 per day. The vessel was partially financed by the Company’s 2011 Credit Facility.
Time chartered-in vessels
In January 2013, the Company agreed to time charter-in and took delivery of a 2007 built MR ice-class 1B product tanker (49,999 DWT) on a one year time charter-in agreement at $14,000 per day. The agreement also contains an option for the Company to extend the charter by one year at $15,000 per day.
In January 2013, the Company took delivery of a previously announced 2013 built MR product tanker (51,561 DWT). This vessel is a sister ship of our newbuilding vessels from HMD. The vessel will be chartered-in for three years at $15,750 per day in year one, $16,250 per day in year two and $16,750 per day in year three. The agreement includes two consecutive options for the Company to extend the charter for up to two consecutive one year periods at $17,500 per day and $18,000 per day.
In January 2013, the Company took delivery of a previously announced 2007 built MR ice-class 1B product tanker (52,684 DWT) on a one year time charter-in agreement at $13,500 per day. The agreement includes an option for the Company to extend the charter for an additional year at $14,500 per day.
In January 2013, the Company took delivery of a previously announced 2003 built LR1 product tanker (72,344 DWT) on a two year time charter-in agreement at $11,250 per day with a 50% profit sharing provision whereby the Company splits any of the vessel’s profits above $11,250 per day with the vessel owner. The agreement includes an option for the Company to extend the charter for an additional year at $12,500 per day with a 50% profit sharing provision.
In January 2013, the Company took delivery of a previously announced 2012 built LR2 product tanker (99,993 DWT) on a six month time charter-in agreement at $14,750 per day. The Company has options to extend the charter for three consecutive six month periods at $15,000 per day, $15,250 per day, and $15,500 per day respectively.
In January 2013, the Company took delivery of a previously announced 2008 built LR2 product tanker (115,406 DWT) on a six month time charter-in agreement at $16,000 per day. The Company has options to extend the charter for three consecutive six month periods at $16,250 per day, $16,500 per day, and $16,750 per day respectively.
Fourth Quarter Significant Events
Follow-on offering
In December 2012, the Company closed on the sale of 21,639,774 shares of common stock in a registered direct placement of common shares at an offering price of $6.10 per share. The Company received net proceeds of approximately $127.2 million, after deducting the placement agents’ discount and offering expenses.
Newbuilding vessel orders
In December 2012, the Company exercised options with HMD for the construction of two MR product tanker newbuildings, and it also reached an agreement with SPP Shipbuilding Co., Ltd. of South Korea (“SPP”) for the construction of four MR product tanker newbuildings. The six newbuildings are scheduled to be delivered to the Company in the second and third quarters of 2014. The contract price for each of the newbuildings is approximately $33.0 million.
Time chartered-in vessels
In December 2012, the Company took delivery of a 2007 built LR1 product tanker (73,669 DWT) on a one year time charter-in agreement at $12,500 per day. The agreement includes an option for the Company to extend the charter for an additional six months at $14,250 per day.
In December 2012, the Company agreed to extend the charter on a 2007 built Handymax product tanker (40,394 DWT), which is already time chartered-in by the Company for one additional year, commencing in April 2013, at $12,600 per day. The agreement includes an option for the Company to extend the charter for an additional year at $13,550 per day.
Conference Call
The Company will have a conference call on February 26, 2013 at 11:00 AM Eastern Standard Time.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(877)-719-9789 (U.S.) or 1(719) 325-4933 (International). The conference participant passcode is 7673945. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.
Slides and Audio Webcast:
There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Webcast URL:http://www.visualwebcaster.com/event.asp?id=92533
Current Liquidity
As of February 25, 2013, the Company had $271.7 million in cash and $67.4 million available to draw down from its 2010 Revolving Credit Facility.
Debt
As of February 25, 2013, the Company’s outstanding debt balance is as follows:
2010 Revolving Credit Facility $ 17.2 million
2011 Credit Facility $ 32.5 million
STI Spirit Credit Facility $ 23.4 million
Newbuilding Credit Facility $ 89.8 million
-----------
Total $ 162.9 million
===========
2010 Revolving Credit Facility
In December 2012, the Company repaid $50.0 million into the 2010 Revolving Credit Facility.
2011 Credit Facility
In January 2013, the Company drew down $17.0 million from the 2011 Credit Facility to partially finance the delivery of the Company’s sixth newbuilding vessel, STI Sapphire.
STI Spirit Credit Facility Repayment
The credit facility with DVB Bank SE requires that the charter-free market value of STI Spirit shall be no less than 140% of the then outstanding loan balance. In order to stay in compliance with this covenant, the Company made a prepayment of $1.3 million in December 2012, which will be applied to the next four quarterly payments.
2013 Debt Repayments
The first quarter of 2013 debt repayment for the Newbuilding Credit Facility and 2011 Credit Facility will be $1.8 million. There are no principal payments due for the 2010 Revolving Credit Facility since the amount available is greater than the amount drawn. There are no principal payments due for the STI Spirit Credit Facility as a result of the $1.3 million prepayment made in December 2012.
Newbuilding Program
During the fourth quarter of 2012, the Company made $13.6 million of installment payments on its newbuilding vessels. The Company currently has 20 product tanker newbuilding orders with HMD and SPP (16 MR and four Handymax). The estimated future payment dates and amounts including the newbuilding contracts signed in 2013 are as follows*:
Q1 2013 $ 105.4 million**
Q2 2013 41.3 million
Q3 2013 51.0 million
Q4 2013 41.6 million
Q1 2014 70.9 million
Q2 2014 99.5 million
Q3 2014 202.2 million
Q4 2014 39.8 million
---------
Total $ 651.7 million
*These are estimates only and are subject to change as construction progresses.
**$42.3 million has been paid as of the date of this press release which includes the final installment payment of $22.2 million relating to the delivery of STI Sapphire in January 2013.
Explanation of Variances on the Fourth Quarter of 2012 Financial Results Compared to the Fourth Quarter of 2011
For the three months ended December 31, 2012, the Company incurred a net loss of $4.9 million compared to a net loss of $71.7 million in the three months ended December 31, 2011. The following were the significant changes between the two periods:
For the three months ended
December 31,
-----------------------------
In thousands of U.S. dollars 2012 2011
------------- -------------
Vessel revenue $ 30,104$ 22,642
Voyage expenses (1,794) (2,733)
------------- -------------
TCE revenue $ 28,310$ 19,909
============= =============
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Profit or Loss
(unaudited)
For the three months For the year ended
ended December 31, December 31,
------------------------ ------------------------
In thousands of U.S.
dollars except per
share and share data 2012 2011 2012 2011
----------- ----------- ----------- -----------
Revenue:
Vessel revenue $ 30,104$ 22,642$ 115,381$ 82,110
Operating expenses:
Vessel operating costs (8,195) (8,039) (30,353) (31,370)
Voyage expenses (1,794) (2,733) (21,744) (6,881)
Charterhire (14,222) (7,214) (43,701) (22,750)
Impairment - (66,611) - (66,611)
Depreciation (4,605) (5,025) (14,818) (18,460)
Loss from sale of
vessels (1) - - (10,404) -
General and
administrative
expenses (3,132) (3,025) (11,536) (11,637)
----------- ----------- ----------- -----------
Total operating
expenses (31,948) (92,647) (132,556) (157,709)
----------- ----------- ----------- -----------
Operating loss (1,844) (70,005) (17,175) (75,599)
----------- ----------- ----------- -----------
Other (expense) and
income, net
Financial expenses (1,929) (1,700) (8,512) (7,060)
Earnings from profit
or loss sharing
agreements 157 - 443 -
Unrealized loss on
derivative financial
instruments (1,269) - (1,231) -
Financial income 29 1 35 51
Other expenses, net (24) 18 (97) (119)
----------- ----------- ----------- -----------
Total other expense,
net (3,036) (1,681) (9,362) (7,128)
----------- ----------- ----------- -----------
Net loss $ (4,880)$ (71,686)$ (26,537)$ (82,727)
=========== =========== =========== ===========
Loss per share
Basic and diluted (2) $ (0.11)$ (2.21)$ (0.64)$ (2.88)
Basic and diluted
weighted average
shares outstanding
(2) 46,090,794 32,413,382 41,413,339 28,704,876
(1) The year ended December 31, 2012 includes the loss from sales of STI
Diamond, STI Coral, STI Conqueror, STI Matador, and STI Gladiator which
closed on August 15, 2012, September 11, 2012, March 20, 2012, April
18, 2012, and May 2, 2012, respectively.
(2) Diluted weighted shares outstanding, which consists of the impact of
restricted shares, for the three months and years ended December 31,
2012 and 2011 would be anti-dilutive since the Company is in a net loss
position. As such, there is no difference between basic and diluted
earnings per share for these periods.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
As of
-----------------------------
December 31, December 31,
In thousands of U.S. dollars 2012 2011
------------- -------------
Assets
Current assets
Cash and cash equivalents $ 87,165$ 36,833
Accounts receivable 36,438 20,386
Prepaid expenses and other current assets 956 1,535
Inventories 2,170 2,696
------------- -------------
Total current assets 126,729 61,450
------------- -------------
Non-current assets
Vessels and drydock 395,412 322,458
Vessels under construction 50,251 60,333
Other assets 889 3,989
------------- -------------
Total non-current assets 446,552 386,780
------------- -------------
Total assets $ 573,281$ 448,230
============= =============
Current liabilities
Bank loans 7,475 2,889
Accounts payable 11,387 11,732
Accrued expenses 3,057 3,376
Derivative financial instruments 844 237
------------- -------------
Total current liabilities 22,763 18,234
------------- -------------
Non-current liabilities
Bank loans 134,984 142,679
Derivative financial instruments 743 464
------------- -------------
Total non-current liabilities 135,727 143,143
------------- -------------
Total liabilities 158,490 161,377
------------- -------------
Shareholders' equity
Issued, authorized and fully paid-in share
capital:
Share capital 650 391
Additional paid-in capital 519,493 363,210
Treasury shares (7,938) (5,498)
Hedging reserve (329) (701)
Accumulated deficit (97,085) (70,549)
------------- -------------
Total shareholders' equity 414,791 286,853
------------- -------------
Total liabilities and shareholders' equity $ 573,281$ 448,230
============= =============
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
For the year ended December 31,
-------------------------------
In thousands of U.S. dollars 2012 2011
-------------- --------------
Operating activities
Net loss $ (26,537)$ (82,727)
Loss from sale of vessels 10,404 -
Depreciation 14,818 18,460
Impairment - 66,611
Amortization of restricted stock 3,490 3,362
Amortization of deferred financing fees 4,093 986
Write off of vessel purchase options - 126
Straight-line adjustment for charterhire
expense 41 84
Unrealized loss on derivative financial
instruments 1,231 -
-------------- --------------
7,540 6,902
-------------- --------------
Changes in assets and liabilities:
Drydock payments (1,702) (2,516)
Decrease/(increase) in inventories 527 (1,410)
Increase in accounts receivable (16,052) (13,031)
Decrease/(increase) in prepaid expenses 547 (1,075)
Decrease/(increase) in other assets 2,442 (1,374)
Increase/(decrease) in accounts payable 3,966 (954)
Increase in accrued expenses 804 1,006
-------------- --------------
(9,468) (19,354)
-------------- --------------
Net cash outflow from operating activities (1,928) (12,452)
-------------- --------------
Investing activities
Acquisition of vessels and payments for
vessels under construction (191,490) (122,573)
Proceeds from disposal of vessels 101,335 -
-------------- --------------
Net cash outflow from investing activities (90,155) (122,573)
-------------- --------------
Financing activities
Bank loan repayment (129,076) (109,638)
Bank loan drawdown 124,171 115,308
Debt issuance costs (3,293) (4,134)
Net proceeds from issuance of common stock 153,053 104,986
Purchase of Treasury shares (2,440) (2,851)
-------------- --------------
Net cash inflow from financing activities 142,415 103,671
-------------- --------------
Increase/(decrease) in cash and cash
equivalents 50,332 (31,354)
Cash and cash equivalents at January 1, 36,833 68,187
-------------- --------------
Cash and cash equivalents at December 31, $ 87,165$ 36,833
============== ==============
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three months and year ended December 31, 2012
and 2011
(unaudited)
For the three
months ended For the year ended
December 31, December 31,
------------------ ------------------
2012 2011 2012 2011
-------- -------- -------- --------
Adjusted EBITDA(1)(in thousands of
U.S. dollars) $ 3,786$ 2,518$ 11,883$ 12,715
Average Daily Results
Time charter equivalent per day(2) $ 13,392$ 11,912$ 12,960$ 12,898
Vessel operating costs per day 7,348 7,239 7,605 7,581
Aframax/LR2
TCE per revenue day - pool $ 6,619$ 14,924$ 10,201$ 14,849
TCE per revenue day - time charters - - - 15,457
Vessel operating costs per day(3) 7,884 6,644 8,436 6,960
Panamax/LR1
TCE per revenue day - pool $ 13,130$ 10,533$ 14,242$ 12,876
TCE per revenue day - spot 18,496 - 15,147 -
TCE per revenue day - time charters - 24,098 - 23,962
Vessel operating costs per day(3) 7,509 7,782 7,714 7,891
MR
TCE per revenue day - pool $ 12,135 - $ 11,811 -
TCE per revenue day - spot 16,352 12,148 12,541 12,092
Vessel operating costs per day(3) 5,994 6,175 6,770 6,748
Handymax
TCE per revenue day - pool $ 13,810$ 10,762$ 13,166$ 11,343
TCE per revenue day - spot - - 11,201 -
Vessel operating costs per day(3) 7,908 7,242 7,594 7,619
Fleet data
Average number of owned vessels 12.00 12.00 10.81 11.29
Average number of time chartered-in
vessels 11.81 5.48 9.18 4.95
Drydock
Expenditures for drydock (in
thousands of U.S. dollars) $ 2,869$ 705$ 2,869$ 2,624
(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 February 25, 2013
Ice
Year Vessel
Vessel Name Built DWT Class Employment type
----------- ----- --------- ----- ---------- --------
Owned
vessels
1 STI
Highlander 2007 37,145 1A SHTP (1) Handymax
2 STI Amber 2012 52,000 - SMRP(4) MR
3 STI Topaz 2012 52,000 - SMRP(4) MR
4 STI Ruby 2012 52,000 - SMRP(4) MR
5 STI Garnet 2012 52,000 - SMRP(4) MR
6 STI Onyx 2012 52,000 - SMRP(4) MR
7 STI
Sapphire 2013 52,000 - Spot MR
8 Noemi 2004 72,515 - SPTP (2) LR1
9 Senatore 2004 72,514 - SPTP (2) LR1
10 STI Harmony 2007 73,919 1A SPTP (2) LR1
11 STI
Heritage 2008 73,919 1A SPTP (2) LR1
12 Venice 2001 81,408 1C SPTP (2) Post-
Panamax
13 STI Spirit 2008 113,100 - SLR2P (3) LR2
---------
Total owned
DWT 836,520
=========
Time Charter
Info
--------------
Time Chartered-In Daily
vessels Ice Base
Year Vessel Expiry
Vessel Name Built DWT Class Employment type Rate (5)
----------- ----- --------- ----- ---------- -------- ------- ------
14 Kraslava 2007 37,258 1B SHTP (1) Handymax $12,070 18- (6)
Jul-13
15 Krisjanis 14-
Valdemars 2007 37,266 1B SHTP (1) Handymax $12,000 Jun-13 (7)
16 Histria 04-
Azure 2007 40,394 - SHTP (1) Handymax $12,000 Apr-14 (8)
17 Histria 17-
Coral 2006 40,426 - SHTP (1) Handymax $13,000 Jul-13 (9)
18 Histria 15-
Perla 2005 40,471 - SHTP (1) Handymax $13,000 Jul-13 (9)
19 STX Ace 6 2007 46,161 - SMRP(4) MR $14,150 17- (10)
May-14
20 Pacific 17-
Duchess 2009 46,697 - SMRP(4) MR $13,800 Mar-13 (11)
21 Targale 2007 49,999 - SMRP(4) MR $14,500 17- (12)
May-14
22 Ugale 2007 49,999 1B SMRP(4) MR $14,000 15- (13)
Jan-14
23 Freja Lupus 2012 50,385 - SMRP(4) MR $14,760 26- (14)
Apr-14
24 Valle 22-
Bianca 2007 50,633 - SMRP(4) MR $12,000 Mar-13 (15)
25 Gan-Trust 2013 51,561 - Spot MR $16,250 06- (16)
Jan-16
26 Usma 2007 52,684 1B SMRP(4) MR $13,500 03- (17)
Jan-14
27 SN Federica 2003 72,344 - Spot LR1 $11,250 28- (18)
Feb-15
28 Hellespont 16-
Promise 2007 73,669 - SPTP (2) LR1 $12,500 Dec-13 (19)
29 FPMC P 09-
Eagle 2009 73,800 - SPTP (2) LR1 $12,800 Sep-13 (20)
30 FPMC P Hero 2011 99,995 - SLR2P (3) LR2 $14,750 13- (21)
Oct-13
31 FPMC P 09-
Ideal 2012 99,993 - SLR2P (3) LR2 $14,750 Jul-13 (21)
32 Fair Seas 2008 115,406 - SLR2P (3) LR2 $16,000 27- (22)
Jul-13
---------
Total time
chartered-in DWT 1,129,141
=========
Newbuildings currently
under construction Ice
Vessel
Vessel Name DWT Class type
----------- --------- ----- --------
33 Hull 2451 38,000 1A Handymax (23)
34 Hull 2452 38,000 1A Handymax (23)
35 Hull 2453 38,000 1A Handymax (23)
36 Hull 2454 38,000 1A Handymax (23)
37 Hull 2362 52,000 MR (23)
38 Hull 2369 52,000 MR (23)
39 Hull 2389 52,000 MR (23)
40 Hull 2390 52,000 MR (23)
41 Hull 2391 52,000 MR (23)
42 Hull 2392 52,000 MR (23)
43 Hull 2449 52,000 MR (23)
44 Hull 2450 52,000 MR (23)
45 Hull S1138 52,000 MR (24)
46 Hull S1139 52,000 MR (24)
47 Hull S1140 52,000 MR (24)
48 Hull S1141 52,000 MR (24)
49 Hull S1142 52,000 MR (24)
50 Hull S1143 52,000 MR (24)
51 Hull S1144 52,000 MR (24)
52 Hull S1145 52,000 MR (24)
---------
Total newbuilding
DWT 984,000
=========
---------
Total DWT 2,949,661
=========
(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) Redelivery from the charterer is plus or minus 30 days from the expiry
date.
(6) We have an option to extend the charter for an additional year at
$13,070 per day.
(7) We have an option to extend the charter for an additional year at
$13,000 per day. 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.
(8) In April 2013, the daily base rate will increase to $12,600 per day for
one year thereafter. We have an option to extend the term of the
charter for an additional year at $13,550 per day.
(9) Represents the average rate for the two year duration of the agreement.
The rate for the first year is $12,750 per day and the rate for the
second year is $13,250 per day. We have an option to extend the charter
for an additional year at $14,500 per day.
(10) We have an option to extend the charter for an additional year at
$15,150 per day.
(11) We have an option for the Company to extend the charter for an
additional year at $14,800 per day.
(12) We have options to extend the charter for up to three consecutive one
year periods at $14,850 per day, $15,200 per day and $16,200 per day,
respectively.
(13) We have an option to extend the charter for an additional year at
$15,000 per day.
(14) We have an option to extend the charter for an additional year at
$16,000 per day.
(15) We have an option to extend the charter for an additional six months at
$13,000 per day.
(16) The daily base rate represents the average rate for the three year
duration of the agreement. The rate for the first year is $15,750 per
day, the rate for the second year is $16,250 per day, and the rate for
the third year is $16,750 per day. We have options to extend the
charter for up to two consecutive one year periods at $17,500 per day
and $18,000 per day, respectively.
(17) We have an option to extend the charter for an additional year at
$14,500 per day.
(18) 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 owner
whereby we split all of the vessel's profits above the daily base rate.
(19) We have an option to extend the charter for an additional six months at
$14,250 per day.
(20) We have options to extend the charter for up to two consecutive one
year periods at $13,400 per day and $14,400 per day, respectively. We
have also 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.
(21) We have options to extend the charters for three consecutive six month
periods at $15,000 per day, $15,250 per day, and $15,500 per day
respectively. FPMC P Hero is expected to be delivered in April 2013 and
FPMC P Ideal was delivered in January 2013.
(22) We have options to extend the charter for three consecutive six month
periods at $16,250 per day, $16,500 per day, and $16,750 per day
respectively.
(23) These Newbuilding vessels are being constructed at HMD (Hyundai Mipo
Dockyard Co. Ltd. of South Korea). Two vessels are expected to be
delivered between March 2013 and April 2013, and the remaining 10 are
expected to be delivered by October 2014.
(24) These Newbuilding vessels are being constructed at SPP (SPP
Shipbuilding Co., Ltd. of South Korea). These eight vessels are
expected to be delivered by the end of 2014.
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 medium-sized tanker vessels. The Company intends to acquire modern, high-quality tankers through timely and selective acquisitions. The Company is currently concentrating on product or coated tankers because of the fundamentals of this segment, which the Company believes includes:
Dividend Policy
The Company does not have immediate plans to pay dividends but will continue to assess the dividend policy. In the future, the board of directors may determine it is in the best interest of the Company to pay dividends.
Share Buyback Program
On July 9, 2010, the board of directors authorized a share buyback program of up to $20 million. Scorpio Tankers expects to repurchase these shares in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any shares.
As of February 25, 2013, the Company has purchased $7.9 million of shares in the open market at an average price of $6.78.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 13 tankers (one LR2 tanker, four LR1 tankers, one Handymax tanker, six MR tankers, and one post-Panamax tanker) with an average age of 4.6 years, time charters-in 19 product tankers (three LR2, three LR1, eight MR and five Handymax tankers), and has contracted for 20 newbuilding product tankers (16 MR and four Handymax vessels), two of which are expected to be delivered to the Company by April 2013 and the remaining 18 by the end of 2014. Additional information about the Company is available at the Company’s website www.scorpiotankers.com, which is not a part of this press release.
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.
Non-GAAP Measures
This press release describes adjusted net loss 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 loss
For the three months For the three months
ended December 31, ended December 31,
2012 2011
--------------------- ---------------------
--------- --------- --------- ---------
In thousands of U.S. dollars
except per share and share
data Amount Per share Amount Per share
--------- --------- --------- ---------
Net loss $ (4,880)$ (0.11)$ (71,686)$ (2.21)
Add:
Impairment - - 66,611 2.05
Unrealized loss on
derivative financial
instruments 1,269 0.03 - -
--------- --------- --------- ---------
Total adjustments 1,269 0.03 66,611 2.05
--------- --------- --------- ---------
Adjusted net loss $ (3,611)$ (0.08)$ (5,075)$ (0.16)
========= ========= ========= =========
For the year ended For the year ended
December 31, 2012 December 31, 2011
--------------------- ---------------------
In thousands of U.S. dollars
except per share and share
data Amount Per share Amount Per share
--------- --------- --------- ---------
Net loss $ (26,537)$ (0.64)$ (82,727)$ (2.88)
Add:
Impairment - - 66,611 2.32
Loss from sale of
vessels 10,404 0.25 - -
Write off of deferred
financing fees 2,978 0.07 - -
Unrealized loss on
derivative financial
instruments 1,231 0.03 - -
--------- --------- --------- ---------
Total adjustments 14,613 0.35 66,611 2.32
--------- --------- --------- ---------
Adjusted net loss $ (11,924)$ (0.29)$ (16,116)$ (0.56)
========= ========= ========= =========
Adjusted EBITDA
For the three months For the year ended
ended December 31, December 31,
-------------------- --------------------
In thousands of U.S. dollars 2012 2011 2012 2011
--------- --------- --------- ---------
Net loss $ (4,880)$ (71,686)$ (26,537)$ (82,727)
Financial expenses 1,929 1,700 8,512 7,060
Unrealized loss on derivative
financial instruments 1,269 - 1,231 -
Financial income (29) (1) (35) (51)
Depreciation 4,605 5,025 14,818 18,460
Amortization of restricted
stock 892 869 3,490 3,362
Impairment - 66,611 - 66,611
Loss from sale of vessels - - 10,404 -
--------- --------- --------- ---------
Adjusted EBITDA $ 3,786$ 2,518$ 11,883$ 12,715
========= ========= ========= =========
Source: Scorpio Tankers Inc.