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Scorpio Tankers Inc. Announces Financial Results for the Fourth Quarter of 2015 and Declaration of a Quarterly Dividend
MONACO — (Marketwired) — 02/29/16 — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three months and year ended December 31, 2015 and declaration of a quarterly dividend.
Results for the three months ended December 31, 2015 and 2014
For the three months ended December 31, 2015, the Company’s adjusted net income was $36.3 million (see Non-IFRS Measures section below), or $0.22 basic and $0.21 diluted earnings per share, which excludes (i) a $0.7 million write-off of deferred financing fees, (ii) a $0.7 million write-off of deposits made for options to construct MR product tankers that expired unexercised, and (iii) a $0.7 million unrealized loss on derivative financial instruments. The adjustments aggregated to an increase of adjusted net income by $2.1 million or $0.01 basic and diluted earnings per share. For the three months ended December 31, 2015, the Company had net income of $34.2 million, or $0.21 basic and $0.20 diluted earnings per share.
For the three months ended December 31, 2015, the Company’s basic and diluted weighted average number of shares were 163,792,076 and 202,210,591, respectively. The diluted weighted average number of shares includes the potentially dilutive shares relating to the Company’s Convertible Senior Notes due 2019 (the “Convertible Notes”) representing 31,791,435 potential common shares that the Company may issue upon conversion (see below for further information).
For the three months ended December 31, 2014, the Company’s adjusted net income was $18.3 million (see Non-IFRS Measures Section below), or $0.12 basic and diluted earnings per share, which excludes (i) a $13.9 million write down from the discontinuation of equity method accounting for the Company’s investment in Dorian LPG Ltd. (“Dorian”), (ii) a $4.0 million write down from the designation of two vessels as held for sale, and (iii) a $0.1 million unrealized gain on derivative financial instruments. The adjustments aggregated to an increase of adjusted net income by $17.8 million or $0.12 basic and diluted earnings per share. For the three months ended December 31, 2014, the Company had net income of $0.5 million, or $0.00 basic and diluted earnings per share.
Results for the year ended December 31, 2015 and 2014
For the year ended December 31, 2015, the Company’s adjusted net income was $221.3 million (see Non-IFRS Measures section below), or $1.37 basic and $1.21 diluted earnings per share, which excludes (i) a $1.2 million gain from the sale of the Company’s investment in Dorian, (ii) a $1.4 million gain from the early termination of the contract on a time chartered-in vessel, (iii) a $1.4 million reserve for a pool bunker supplier in bankruptcy, (iv) a $2.7 million write-off of deferred financing fees, (v) a $0.7 million write-off of deposits made for options to construct MR product tankers that expired unexercised, (vi) a $35,000 net loss related to the sales of four vessels during 2015, (vii) a $1.3 million unrealized loss on derivative financial instruments, and (viii) a $46,000 gain from the repurchase of $1.5 million face value of the Company’s Convertible Notes. The adjustments aggregated to an increase of adjusted net income by $3.5 million or $0.02 basic and $0.01 diluted earnings per share. For the year ended December 31, 2015, the Company had net income of $217.7 million, or $1.35 basic and $1.20 diluted earnings per share.
For the year ended December 31, 2014, the Company’s adjusted net income was $7.7 million (see Non-IFRS Measures section below), or $0.04 basic and diluted earnings per share, which excludes (i) a $51.4 million gain from the sales of seven Very Large Crude Carriers (‘VLCCs’) under construction in March 2014, (ii) a $10.9 million gain from the acquisition of 7,500,000 common shares of the Company in exchange for 3,422,665 shares of Dorian in June 2014, (iii) a $13.9 million write down from the discontinuation of equity method accounting for the Company’s investment in Dorian, (iv) a $4.0 million write down from the designation of two vessels as held for sale, (v) a $0.3 million write-off of deferred financing fees and (vi) a $0.3 million unrealized gain on derivative financial instruments. The adjustments aggregated to a decrease of adjusted net income by $44.4 million or $0.26 basic and diluted loss per share. For the year ended December 31, 2014, the Company had net income of $52.1 million, or $0.30 basic and diluted earnings per share.
Declaration of Dividend
On February 25, 2016, the Company’s Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on March 30, 2016 to all shareholders as of March 10, 2016 (the record date). As of February 26, 2016, there were 173,035,794 shares outstanding.
Diluted Weighted Number of Shares
Diluted earnings per share for the three months and year ended December 31, 2015 includes the potentially dilutive shares relating to the Convertible Notes representing 31,791,435 potential common shares that the Company may issue upon conversion. The Convertible Notes were issued in June 2014. The dilutive impact of the Convertible Notes is determined using the if-converted method. Under this method, the Company assumes that the Convertible Notes are converted into common shares at the beginning of each period and the interest and non-cash amortization expense associated with these notes of $5.4 million and $21.4 million during the three months and year ended December 31, 2015, respectively, are not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive. The Convertible Notes are currently ineligible for conversion.
Summary of Recent and Fourth Quarter Significant Events:
- Below is a summary of the voyages fixed thus far in the first quarter of 2016:
- For the LR2s in the pool: approximately $28,000 per day for 80% of the days
- For the LR1s in the pool: approximately $24,000 per day for 74% of the days
- For the MRs in the pool: approximately $19,000 per day for 72% of the days
- For the Handymaxes in the pool: approximately $18,000 per day for 66% of the days
- Below is a summary of the TCE revenue earned during the fourth quarter of 2015:
- For the LR2s in the pool: $26,464 per day
- For the LR1s in the pool: $21,013 per day
- For the MRs in the pool: $19,800 per day
- For the MRs outside of the pool: $18,086 per day
- For the Handymaxes in the pool: $18,562 per day
- Reached an agreement with an unrelated third party to sell five 2014 built MR tankers for approximately $33.3 million each. Two of these sales are expected to close in March 2016, and the remaining three sales are expected to close in the second quarter of 2016.
- Repurchased an aggregate of 5,220,971 of the Company’s common shares since October 1, 2015 that are being held as treasury shares at an average price of $7.35 per share.
- Entered into time charter out agreements with an unrelated third party for two ice-class 1B MRs, STI Notting Hill and STI Westminster, each for three years at $20,500 per day. These charters commenced in November 2015 and December 2015, respectively.
- Entered into a time charter out agreement with an unrelated third party for an LR2 product tanker, STI Rose, for three years at $28,000 per day. This charter commenced in February 2016.
- Entered into time charter out agreements with an unrelated third party for two ice-class 1A Handymaxes, STI Poplar and STI Pimlico, each for three years at $18,000 per day. These charters commenced in January and February 2016, respectively.
- Received a commitment from Scotiabank Europe plc for a loan facility of up to $36.0 million, which will be utilized to refinance the existing indebtedness on an LR2 product tanker (2015 built). The loan facility has a maturity of three years from the drawdown date and bears interest at LIBOR plus a margin of 1.50% per annum.
- Received a commitment to upsize the previously announced $87.0 million credit facility with ING Bank N.V. to $132.5 million. The proceeds from the upsizing will be utilized to partially finance the purchase of STI Lombard (currently bareboat chartered-in) and refinance the existing indebtedness on an MR product tanker (2015 built).
- Executed a loan facility for $34.5 million with BNP Paribas. The facility bears interest at LIBOR plus a margin of 1.95% per annum, and the proceeds were utilized to partially finance the purchase of STI Memphis and refinance the existing indebtedness on STI Battery.
- Paid a quarterly cash dividend on the Company’s common stock of $0.125 per share in December 2015.
- Reached agreements with Hyundai Mipo Dockyard of South Korea (“HMD”) in October 2015 to construct four MR product tankers for $36.0 million each with deliveries scheduled in the third and fourth quarters of 2017.
- Sold the 2007 built Handymax product tanker, STI Highlander, for a selling price of $19.35 million in October 2015.
Agreement to Sell Five MR Product Tankers
In February 2016, the Company reached an agreement with an unrelated third party to sell five 2014 built MR product tankers (STI Powai, STI Lexington, STI Chelsea, STI Olivia and STI Mythos) for approximately $33.3 million each. The sales of two vessels are expected to close in March 2016, and the sales of the remaining three vessels are expected to close in the second quarter of 2016. The Company expects to record a write-down of approximately $3.2 million during the first quarter of 2016 in connection with the entry into this agreement.
$36.0 Million Scotiabank Credit Facility
In November 2015, the Company received a commitment from Scotiabank Europe plc for a loan facility of up to $36.0 million. The facility will bear interest at LIBOR plus a margin of 1.50% per annum, and the proceeds are expected to be used to refinance the existing indebtedness on one LR2 product tanker (2015 built).
The facility has a final maturity of three years from the drawdown date and is subject to customary conditions precedent and the execution of definitive documentation.
$34.5 Million BNP Paribas Credit Facility
In December 2015, the Company executed a senior secured term loan facility for $34.5 million with BNP Paribas. The facility bears interest at LIBOR plus a margin of 1.95% per annum, and the proceeds were used to partially finance the purchase of STI Memphis and to refinance the existing indebtedness on STI Battery.
The facility has a 15 year repayment profile and a final maturity of five years from the signing date of the loan for each vessel. The terms and conditions, including covenants, are similar to those in the Company’s existing credit facilities.
Upsizing of ING Credit Facility
In January 2016, the Company received a commitment to upsize its previously announced $87.0 million credit facility with ING Bank N.V. to $132.5 million. The facility bears interest at LIBOR plus a margin of 1.95% per annum, and the proceeds from the upsizing are expected to be used to partially finance the purchase of STI Lombard (currently bareboat chartered-in) and refinance the existing indebtedness on an MR product tanker (2015 built).
The terms and conditions, including covenants, are similar to those in the Company’s existing credit facilities.
$250 Million Securities Repurchase Program
In May 2015, the Company’s Board of Directors authorized a new Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company’s common stock and bonds, which currently consist of its (i) Convertible Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 2017 (NYSE: SBNB), which were issued in October 2014. This program replaces the Company’s stock buyback program that was previously announced in July 2014 and was terminated in conjunction with this new repurchase program.
Since January 2015 through the date of this press release, the Company has acquired the following:
- an aggregate of 10,573,315 of its common shares that are being held as treasury shares at an average price of $8.49 per share (9,826,676 shares were purchased at an average price of $8.53 under the May 2015$250 million Securities Repurchase Program; the remaining shares were purchased in the first quarter of 2015 under the previous buyback program). There are 173,035,794 shares outstanding as of February 26, 2016.
- $1.5 million face value of its Convertible Notes at an average price of $1,088.10 per $1,000 principal amount (all of the Convertible Notes were purchased under the May 2015$250 million Securities Repurchase Program).
The Company has $164.5 million remaining under its Securities Repurchase Program as of the date of this press release. The Company expects to repurchase any securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any securities.
Time Charter-out Update
In December 2015, the Company entered into time charter-out agreements with an unrelated third party on two ice class 1A Handymax product tankers, STI Poplar and STI Pimlico. The term of each agreement is for three years at $18,000 per day. These charters commenced in January and February 2016, respectively.
In October 2015, the Company entered into time charter-out agreements with an unrelated third party on two ice class 1B MR product tankers, STI Notting Hill and STI Westminster. The term of each agreement is for three years at $20,500 per day. These charters commenced in November 2015 and December 2015, respectively.
In October 2015, the Company entered into a time charter-out agreement with an unrelated third party for an LR2 product tanker, STI Rose. The term of the agreement is for three years at $28,000 per day. This charter commenced in February 2016.
Time Charter-in Update
In February 2016, the Company extended the time charter on an LR1 tanker that is currently time chartered-in. The term of the agreement is for an additional year at $17,250 per day effective March 2016.
In November 2015, the Company declared an option to extend the charter on an LR2 product tanker that is currently time chartered-in for an additional year at $22,600 effective February 2016.
In October 2015, the Company declared an option to extend the time charter on an MR product tanker that is currently time chartered-in for an additional year at $17,500 per day effective January 2016. The Company also has an option to extend the charter for an additional year at $18,000 per day.
Conference Call
The Company will have a conference call on February 29, 2016 at 10:30 AM Eastern Standard Time and 4:30 PM Central European Time.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-888-797-2998 (U.S.) or +1-913-312-0664 (International). The conference participant passcode is 4772057. 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: https://www.webcaster4.com/Webcast/Page/610/13482
Current Liquidity
As of February 26, 2016, the Company had $169.9 million in cash.
Debt
The Company made the following drawdowns from its credit facilities since September 30, 2015 and through the date of this press release:
Drawdown
amount
(in $
Credit facility millions) Drawdown date Collateral
--------------------------- ------------- ------------- -------------
1 ING Credit Facility 17.5 October 2015 STI Pontiac (1)
2 BNP Paribas Credit Facility 17.3 December 2015 STI Memphis
3 BNP Paribas Credit Facility 17.3 February 2016 STI Battery (2)
(1) The Company refinanced the debt for this vessel by repaying $18.9
million into the 2013 Credit Facility and drawing down $17.5 million
from the ING Credit Facility.
(2) The Company refinanced the debt for this vessel by repaying $18.2
million into the 2013 Credit Facility and drawing down $17.25 million
from the BNP Paribas Credit Facility.
As of February 26, 2016, the Company’s outstanding debt balance, and amount available to draw, is as follows:
Amount Amount Availability
outstanding Outstanding as of the
at December at February date of this
In thousands of U.S. dollars 31, 2015 26, 2016 report
------------ ------------ ------------
2011 Credit Facility $ 100,976$ 100,976 $ -
Newbuilding Credit Facility 71,843 71,843 -
2013 Credit Facility (1) 428,253 410,053 -
K-Sure Credit Facility 439,999 425,072 -
KEXIM Credit Facility 400,250 395,950 -
Credit Suisse Credit Facility (2) - - 61,200
ING Credit Facility (5) 34,708 34,417 97,500
ABN AMRO Credit Facility 139,830 138,055 -
BNP Paribas Credit Facility (1) 17,250 34,500 -
Scotiabank Credit Facility (3) - - 36,000
Senior Unsecured Notes 105,500 105,500 -
Convertible Notes (4) 358,500 358,500 -
Finance Lease 53,372 53,158 -
------------ ------------ ------------
Total $ 2,150,481$ 2,128,024$ 194,700
============ ============ ============
(1) In January 2016, $18.2 million was repaid into the 2013 Credit Facility
and $17.25 million was drawn from the BNP Paribas Credit Facility as
part of the refinancing of the amounts borrowed for STI Battery.
(2) The Company entered into a senior secured term loan facility with Credit
Suisse AG in March 2015. Availability can be used to finance the lesser
of $30.6 million and 60% of each vessel's fair market value at the
respective drawdown dates.
(3) In November 2015, the Company received a commitment for a loan facility
of up to $36.0 million from Scotiabank Europe plc which is expected to
be utilized to refinance the existing indebtedness on an LR2 product
tanker (2015 built). This facility has a maturity of three years from
the drawdown date and bears interest at LIBOR plus a margin of 1.50% per
annum.
(4) As of December 31, 2015, $44.7 million of this amount has been
attributed to the conversion feature of the Convertible Notes and
recorded within additional paid in capital on the consolidated balance
sheet.
(5) In January 2016, the Company received a commitment to upsize its
previously announced $87.0 million credit facility with ING Bank N.V. to
$132.5 million. The proceeds are expected to be utilized to finance the
purchase of STI Lombard (currently bareboat chartered-in) and refinance
the existing indebtedness on an MR product tanker (2015 built).
Newbuilding Program
During the fourth quarter of 2015, the Company made $42.1 million of installment payments on its newbuilding vessels.
The Company currently has 12 newbuilding vessel orders with HMD, Daehan Shipbuilding Co., Ltd (“DHSC”), and Sungdong Shipbuilding and Marine Engineering Co., Ltd. (“SSME”) (eight MRs and four LR2s), and one LR2 vessel (STI Lombard) to be acquired in April 2016 at the conclusion of its bareboat charter-in agreement. The estimated first quarter of 2016 and future payments are as follows*:
$ in millions
-----------------
Q1 2016 - installment payments made $ 56.9
Q1 2016 - remaining installment payment 15.3
Q2 2016 74.7
Q3 2016 36.7
Q4 2016 44.0
Q1 2017 57.3
Q2 2017 46.6
Q3 2017 54.1
Q4 2017 43.3
-----------------
Total $ 428.9
=================
*These are estimates only and are subject to change as construction progresses.
Explanation of Variances on the Fourth Quarter of 2015 Financial Results Compared to the Fourth Quarter of 2014
For the three months ended December 31, 2015, the Company recorded net income of $34.2 million compared to net income of $0.5 million for the three months ended December 31, 2014. The following were the significant changes between the two periods:
- Time charter equivalent, or TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management. The following table depicts TCE revenue for the three months ended December 31, 2015 and 2014:
For the three months ended
December 31,
--------------------------
In thousands of U.S. dollars 2015 2014
------------ ------------
Vessel revenue $ 178,398$ 125,738
Voyage expenses (293) (2,106)
------------ ------------
TCE revenue $ 178,105$ 123,632
============ ============
- TCE revenue increased $54.5 million to $178.1 million. This increase was driven by an increase in the average number of operating vessels (owned and time chartered-in) to 92.2 from 72.8 for the three months ended December 31, 2015 and 2014, respectively, along with an increase in time charter equivalent revenue per day to $21,057 per day from $18,664 per day for the three months ended December 31, 2015 and 2014, respectively (see the breakdown of daily TCE below). Product tanker market fundamentals continued to show strength during the fourth quarter of 2015 as the continuing glut of crude oil supplies has led to lower worldwide oil prices and thus higher demand for refined products. As such, global refinery utilization has increased which, along with increased refining capacity in the Middle East and India, has resulted in increased demand across all of the Company’s vessel classes.
- Vessel operating costs increased $19.8 million to $50.9 million from $31.1 million for the three months ended December 31, 2015 and 2014, respectively. This increase was primarily driven by an increase in the Company’s owned fleet to an average of 80.3 vessels from 50.8 vessels for the three months ended December 31, 2015 and 2014, respectively. Additionally, overall vessel operating costs per day increased to $6,891 per day from $6,662 per day for the three months ended December 31, 2015 and 2014, respectively (see the breakdown of daily vessel operating costs below). This increase was primarily attributable to increased crewing and spares and stores costs incurred in our MR and LR2 operating segments during the quarter.
- Charterhire expense decreased $11.6 million to $18.2 million from $29.8 million for the three months ended December 31, 2015 and 2014, respectively. This decrease was driven by a decrease in the Company’s time chartered-in fleet to an average of 11.9 vessels from 22.0 vessels for the three months ended December 31, 2015 and 2014, respectively.
- Depreciation expense increased $13.2 million to $30.9 million from $17.7 million for the three months ended December 31, 2015 and 2014, respectively. This increase was the result of an increase in the average number of owned vessels to 80.3 from 50.8 for the three months ended December 31, 2015 and 2014, respectively.
- General and administrative expenses increased $4.4 million to $18.2 million from $13.8 million for the three months ended December 31, 2015 and 2014, respectively. This increase is due to the significant growth in the Company’s fleet to an average of 92.2 owned and time chartered-in vessels from an average of 72.8 owned and time chartered-in vessels during the three months ended December 31, 2015 and 2014, respectively.
- The write down of vessels held for sale and loss from sale vessels of $4.0 million for the three months ended December 31, 2014 is attributable to the designation of STI Harmony and STI Heritage as held for sale at that date.
- The write-off of vessel purchase options of $0.7 million for the three months ended December 31, 2015 is the write-off of deposits made for options to construct MR product tankers that expired unexercised in December 2015.
- The re-measurement of the Company’s investment in Dorian for the three months ended December 31, 2014 is from the change in the accounting method of this investment from the equity method to the available for sale method in October 2014 which resulted in a write-down of $13.9 million. The Company’s investment in Dorian was sold in July 2015 for a gain of $1.2 million.
- Financial expenses increased $10.9 million to $24.1 million from $13.2 million primarily as a result of:
- an increase in average debt outstanding to $2.1 billion from $1.4 billion for the three months ended December 31, 2015 and 2014, respectively;
- a decrease in the amount of interest capitalized of $2.8 million;
- a write-off of $0.7 million of deferred financing fees as a result of the refinancing of the amounts borrowed for STI Pontiac during the three months ended December 31, 2015.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Income or Loss
(unaudited)
For the three months ended For the year ended
December 31, December 31,
-------------------------- --------------------------
In thousands of U.S.
dollars except per
share and share data 2015 2014 2015 2014
------------ ------------ ------------ ------------
Revenue
Vessel revenue $ 178,398$ 125,738$ 755,711$ 342,807
Operating expenses
Vessel operating
costs (50,916) (31,140) (174,556) (78,823)
Voyage expenses (293) (2,106) (4,432) (7,533)
Charterhire (18,206) (29,834) (96,865) (139,168)
Depreciation (30,874) (17,721) (107,356) (42,617)
General and
administrative
expenses (18,245) (13,830) (65,831) (48,129)
Write-down of
vessel held for
sale and loss on
sales of vessels - (3,978) (35) (3,978)
Write-off of vessel
purchase options (731) - (731) -
Gain on sale of
VLCCs - - - 51,419
Gain on sale of
Dorian shares - - 1,179 10,924
Re-measurement of
investment in
Dorian - (13,895) - (13,895)
------------ ------------ ------------ ------------
Total operating
expenses (119,265) (112,504) (448,627) (271,800)
------------ ------------ ------------ ------------
Operating income 59,133 13,234 307,084 71,007
------------ ------------ ------------ ------------
Other (expense) and
income, net
Financial expenses (24,149) (13,216) (89,596) (20,770)
Realized gain on
derivative
financial
instruments - - 55 17
Unrealized gain /
(loss) on
derivative
financial
instruments (678) 77 (1,255) 264
Financial income 18 32 145 203
Share of income
from associate - 438 - 1,473
Other expenses, net (112) (70) 1,316 (103)
------------ ------------ ------------ ------------
Total other
expense, net (24,921) (12,739) (89,335) (18,916)
------------ ------------ ------------ ------------
Net income $ 34,212$ 495$ 217,749$ 52,091
============ ============ ============ ============
Earnings per share
Basic $ 0.21$ 0.00$ 1.35$ 0.30
Diluted $ 0.20$ 0.00$ 1.20$ 0.30
Basic weighted
average shares
outstanding 163,792,076 152,880,399 161,436,449 171,851,061
Diluted weighted
average shares
outstanding 202,210,591 156,447,674 199,739,326 176,292,802
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
As of
----------------------------
December 31, December 31,
In thousands of U.S. dollars 2015 2014
------------- -------------
Assets
Current assets
Cash and cash equivalents $ 200,970$ 116,143
Accounts receivable 69,017 78,201
Prepaid expenses and other current assets 3,585 2,420
Inventories 6,575 6,075
Vessels held for sale - 70,865
------------- -------------
Total current assets 280,147 273,704
------------- -------------
Non-current assets
Vessels and drydock 3,087,753 1,971,878
Vessels under construction 132,218 404,877
Other assets 23,337 23,728
Available for sale investment - 130,456
------------- -------------
Total non-current assets 3,243,308 2,530,939
------------- -------------
Total assets $ 3,523,455$ 2,804,643
============= =============
Current liabilities
Current portion of long-term debt 124,503 87,163
Debt related to vessels held for sale - 32,932
Finance lease liability 53,372 -
Accounts payable 25,683 14,929
Accrued expenses 32,643 55,139
Derivative financial instruments 1,175 205
------------- -------------
Total current liabilities 237,376 190,368
------------- -------------
Non-current liabilities
Long-term debt 1,872,114 1,451,427
Derivative financial instruments 80 -
------------- -------------
Total non-current liabilities 1,872,194 1,451,427
------------- -------------
Total liabilities 2,109,570 1,641,795
------------- -------------
Shareholders' equity
Issued, authorized and fully paid in share
capital:
Share capital 2,224 2,033
Additional paid in capital 1,729,314 1,550,956
Treasury shares (427,311) (351,283)
Accumulated other comprehensive income /
(loss) - (10,878)
Retained earnings / (accumulated deficit) 109,658 (27,980)
------------- -------------
Total shareholders' equity 1,413,885 1,162,848
------------- -------------
Total liabilities and shareholders' equity $ 3,523,455$ 2,804,643
============= =============
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
For the year ended
December 31,
----------------------------
In thousands of U.S. dollars 2015 2014
------------- -------------
Operating activities
Net income $ 217,749$ 52,091
Gain on sale of VLCCs - (51,419)
Gain on sale of Dorian shares (1,179) (10,924)
Re-measurement of investment in Dorian - 13,895
Loss on sales of vessels 35 -
Write down of vessels held for sale - 3,978
Write-off of vessel purchase options 731 -
Depreciation 107,356 42,617
Amortization of restricted stock 33,687 29,726
Amortization of deferred financing fees 17,418 4,834
Straight-line adjustment for charterhire
expense - 3
Share of profit from associate - (1,473)
Unrealized loss/(gain) on derivative financial
instruments 1,255 (264)
Amortization of acquired time charter
contracts 513 478
Accretion of Convertible Notes 11,096 5,330
Gain on repurchase of Convertible Notes (46) -
------------- -------------
388,615 88,872
------------- -------------
Changes in assets and liabilities:
Drydock payments - (1,290)
Increase in inventories (1,909) (3,218)
Decrease/(increase) in accounts receivable 9,184 (5,660)
Increase in prepaid expenses and other current
assets (1,615) (154)
Increase in other assets (14,153) (2,901)
Increase in accounts payable 775 6,471
Increase in accrued expenses 11,206 12,070
Interest rate swap termination payment (128) (274)
------------- -------------
3,360 5,044
------------- -------------
Net cash inflow from operating activities 391,975 93,916
------------- -------------
Investing activities
Acquisition of vessels and payments for
vessels under construction (905,396) (1,403,181)
Proceeds from disposal of vessels 90,820 213,670
Proceeds from sale of Dorian shares 142,435 -
Deposit (returned)/received for vessel
purchases (31,277) 31,277
------------- -------------
Net cash outflow from investing activities (703,418) (1,158,234)
------------- -------------
Financing activities
Debt repayments (226,260) (74,674)
Issuance of debt 643,550 1,219,784
Debt issuance costs (8,497) (45,670)
(Repayment) / proceeds of Convertible Notes (1,632) 360,000
Convertible Notes issuance costs - (10,993)
Gross proceeds from issuance of common stock 159,747 -
Equity issuance costs (7,554) (42)
Dividends paid (87,056) (70,495)
Repurchase of common stock (76,028) (276,294)
------------- -------------
Net cash inflow from financing activities 396,270 1,101,616
------------- -------------
Increase in cash and cash equivalents 84,827 37,298
Cash and cash equivalents at January 1, 116,143 78,845
------------- -------------
Cash and cash equivalents at December 31, $ 200,970$ 116,143
============= =============
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three months and year ended December 31, 2015
and 2014
(unaudited)
For the three months For the year ended
ended December 31, December 31,
----------------------- -----------------------
2015 2014 2015 2014
----------- ----------- ----------- -----------
Adjusted EBITDA(1)(in
thousands of U.S. dollars) $ 99,520$ 57,061$ 449,084$ 102,342
Average Daily Results
Time charter equivalent per
day(2) $ 21,057$ 18,664$ 23,163$ 15,935
Vessel operating costs per
day(3) 6,891 6,662 6,564 6,802
Aframax/LR2
TCE per revenue day (2) 26,464 23,561 30,544 18,621
Vessel operating costs per
day(3) 7,330 6,520 6,865 6,789
Panamax/LR1
TCE per revenue day (2) 21,013 17,571 21,804 16,857
Vessel operating costs per
day(3) - 7,705 8,440 8,332
MR
TCE per revenue day (2) 19,681 18,619 21,803 15,297
Vessel operating costs per
day(3) 6,838 6,621 6,461 6,580
Handymax
TCE per revenue day (2) 18,562 15,705 19,686 14,528
Vessel operating costs per
day(3) 6,483 6,563 6,473 6,704
Fleet data
Average number of owned
vessels 80.3 50.8 72.7 31.6
Average number of time
chartered-in vessels 11.9 22.0 16.9 26.3
Drydock
Expenditures for drydock (in
thousands of U.S. dollars) - - - $ 1,290
(1) See Non-IFRS Measures section below.
(2) Freight rates are commonly measured in the shipping industry in terms of
time charter equivalent per day (or TCE per day), which is calculated by
subtracting voyage expenses, including bunkers and port charges, from
vessel revenue and dividing the net amount (time charter equivalent
revenues) by the number of revenue days in the period. Revenue days are
the number of days the vessel is owned less the number of days the
vessel is off-hire for drydock and repairs.
(3) Vessel operating costs per day represent vessel operating costs
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 26, 2016
Year Ice
Vessel Name Built DWT class Employment Vessel type
------------------ ------ --------- ------ ----------------- -----------
Owned vessels
1 STI Brixton 2014 38,000 1A SHTP (1) Handymax
2 STI Comandante 2014 38,000 1A SHTP (1) Handymax
3 STI Pimlico 2014 38,000 1A Time Charter (5) Handymax
4 STI Hackney 2014 38,000 1A SHTP (1) Handymax
5 STI Acton 2014 38,000 1A SHTP (1) Handymax
6 STI Fulham 2014 38,000 1A SHTP (1) Handymax
7 STI Camden 2014 38,000 1A SHTP (1) Handymax
8 STI Battersea 2014 38,000 1A SHTP (1) Handymax
9 STI Wembley 2014 38,000 1A SHTP (1) Handymax
10 STI Finchley 2014 38,000 1A SHTP (1) Handymax
11 STI Clapham 2014 38,000 1A SHTP (1) Handymax
12 STI Poplar 2014 38,000 1A Time Charter (5) Handymax
13 STI Hammersmith 2015 38,000 1A SHTP (1) Handymax
14 STI Rotherhithe 2015 38,000 1A SHTP (1) Handymax
15 STI Amber 2012 52,000 - SMRP(2) MR
16 STI Topaz 2012 52,000 - SMRP(2) MR
17 STI Ruby 2012 52,000 - SMRP(2) MR
18 STI Garnet 2012 52,000 - SMRP(2) MR
19 STI Onyx 2012 52,000 - SMRP(2) MR
20 STI Sapphire 2013 52,000 - SMRP(2) MR
21 STI Emerald 2013 52,000 - SMRP(2) MR
22 STI Beryl 2013 52,000 - SMRP(2) MR
23 STI Le Rocher 2013 52,000 - SMRP(2) MR
24 STI Larvotto 2013 52,000 - SMRP(2) MR
25 STI Fontvieille 2013 52,000 - SMRP(2) MR
26 STI Ville 2013 52,000 - SMRP(2) MR
27 STI Duchessa 2014 52,000 - SMRP(2) MR
28 STI Opera 2014 52,000 - SMRP(2) MR
29 STI Texas City 2014 52,000 - Time Charter (6) MR
30 STI Meraux 2014 52,000 - SMRP(2) MR
31 STI Chelsea 2014 52,000 - SMRP(2) MR
32 STI Lexington 2014 52,000 - SMRP(2) MR
33 STI San Antonio 2014 52,000 - SMRP(2) MR
34 STI Venere 2014 52,000 - SMRP(2) MR
35 STI Virtus 2014 52,000 - SMRP(2) MR
36 STI Powai 2014 52,000 - SMRP(2) MR
37 STI Aqua 2014 52,000 - SMRP(2) MR
38 STI Dama 2014 52,000 - SMRP(2) MR
39 STI Olivia 2014 52,000 - SMRP(2) MR
40 STI Mythos 2014 52,000 - SMRP(2) MR
41 STI Benicia 2014 52,000 - SMRP(2) MR
42 STI Regina 2014 52,000 - SMRP(2) MR
43 STI St. Charles 2014 52,000 - SMRP(2) MR
44 STI Mayfair 2014 52,000 - SMRP(2) MR
45 STI Yorkville 2014 52,000 - SMRP(2) MR
46 STI Milwaukee 2014 52,000 - SMRP(2) MR
47 STI Battery 2014 52,000 - SMRP(2) MR
48 STI Soho 2014 52,000 - SMRP(2) MR
49 STI Memphis 2014 52,000 SMRP(2) MR
50 STI Tribeca 2015 52,000 - SMRP(2) MR
51 STI Gramercy 2015 52,000 - SMRP(2) MR
52 STI Bronx 2015 52,000 - SMRP(2) MR
53 STI Pontiac 2015 52,000 - SMRP(2) MR
54 STI Manhattan 2015 52,000 - SMRP(2) MR
55 STI Queens 2015 52,000 - SMRP(2) MR
56 STI Osceola 2015 52,000 - SMRP(2) MR
57 STI Notting Hill 2015 52,000 1B Time Charter (7) MR
58 STI Seneca 2015 52,000 - SMRP(2) MR
59 STI Westminster 2015 52,000 1B Time Charter (7) MR
60 STI Brooklyn 2015 52,000 - SMRP(2) MR
61 STI Black Hawk 2015 52,000 - SMRP(2) MR
62 STI Elysees 2014 109,999 - SLR2P (4) LR2
63 STI Madison 2014 109,999 - SLR2P (4) LR2
64 STI Park 2014 109,999 - SLR2P (4) LR2
65 STI Orchard 2014 109,999 - SLR2P (4) LR2
66 STI Sloane 2014 109,999 - SLR2P (4) LR2
67 STI Broadway 2014 109,999 - SLR2P (4) LR2
68 STI Condotti 2014 109,999 - SLR2P (4) LR2
69 STI Rose 2015 109,999 - Time Charter (8) LR2
70 STI Veneto 2015 109,999 - SLR2P (4) LR2
71 STI Alexis 2015 109,999 - SLR2P (4) LR2
72 STI Winnie 2015 109,999 - SLR2P (4) LR2
73 STI Oxford 2015 109,999 - SLR2P (4) LR2
74 STI Lauren 2015 109,999 - SLR2P (4) LR2
75 STI Connaught 2015 109,999 - SLR2P (4) LR2
76 STI Spiga 2015 109,999 - SLR2P (4) LR2
77 STI Savile Row 2015 109,999 - SLR2P (4) LR2
78 STI Kingsway 2015 109,999 - SLR2P (4) LR2
79 STI Carnaby 2015 109,999 - SLR2P (4) LR2
---------
Total owned DWT 4,955,982
=========
Daily
Year Ice Vessel Base Expiry
Vessel Name Built DWT class Employment type Rate (9)
------------ ---- ------- ----- --------- -------- ------- ---------
Time or
bareboat
chartered-in
vessels
80 Kraslava 2007 37,258 1B SHTP (1) Handymax $14,150 18-May-16
Krisjanis
81 Valdemars 2007 37,266 1B SHTP (1) Handymax $14,150 01-May-16
Iver
82 Prosperity 2007 37,412 - SHTP (1) Handymax $13,500 03-Apr-16
Miss
83 Mariarosaria 2011 47,499 - SMRP(2) MR $15,250 26-May-16 (10)
84 Vukovar 2015 49,990 - SMRP(2) MR $17,034 01-May-18
85 Targale 2007 49,999 - SMRP(2) MR $15,200 17-May-16 (11)
86 Gan-Trust 2013 51,561 - SMRP(2) MR $17,500 06-Jan-17 (12)
Hellespont
87 Progress 2006 73,728 - SPTP (3) LR1 $16,250 18-Mar-17 (13)
Densa
88 Crocodile 2015 105,408 - SLR2P (4) LR2 $22,600 07-Feb-17 (14)
Densa
89 Alligator 2013 105,708 - SLR2P (4) LR2 $24,875 17-Sep-16 (15)
90 STI Lombard 2015 109,999 - SLR2P (4) LR2 $10,000 03-May-16 (16)
-------
Total time
chartered-in 705,828
DWT
=======
Newbuildings currently under
construction
Vessel Name Yard DWT Vessel type
------------------------------------- ---- ------------ -----------
91 Hull 2601 - TBN STI Galata HMD (17) 52,000 MR
92 Hull 2602 - TBN STI Taskim HMD (17) 52,000 MR
93 Hull 2603 - TBN STI Leblon HMD (17) 52,000 MR
94 Hull 2604 - TBN STI La Boca HMD (17) 52,000 MR
95 Hull 2605 - TBN STI San Telmo HMD (17) 52,000 MR
96 Hull 2606 - TBN STI Jurere HMD (17) 52,000 MR
97 Hull 2607 - TBN STI Esles II HMD (17) 52,000 MR
98 Hull 2608 - TBN STI Jardins HMD (17) 52,000 MR
99 Hull S3120 - TBN STI Selatar SSME (18) 109,999 LR2
100 Hull S3121 - TBN STI Rambla SSME (18) 109,999 LR2
101 Hull 5003 - TBN STI Grace DHSC (19) 109,999 LR2
102 Hull 5004 - TBN STI Jermyn DHSC (19) 109,999 LR2
------------
Total newbuilding product tankers DWT 855,996
============
------------
Total Fleet DWT 6,517,806
============
(1) This vessel operates in or is expected to operate in the Scorpio
Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial
Management (SCM). SHTP and SCM are related parties to the Company.
(2) This vessel operates in or is expected to operate in the Scorpio MR
Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the
Company.
(3) This vessel operates in or is expected to operate in the Scorpio
Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related
party to the Company.
(4) This vessel operates in or is expected to operate in the Scorpio LR2
Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the
Company.
(5) This vessel is currently time chartered-out to an unrelated third party
for three years at $18,000 per day. This time charter is scheduled to
expire in January 2019.
(6) This vessel is currently time chartered-out to an unrelated third party
for two years. The agreement expires in March 2016, and contains a 50%
profit sharing provision whereby we split all of the vessel's profits
above the daily base rate with the charterer.
(7) This vessel is currently time chartered-out to an unrelated third party
for three years at $20,500 per day. This time charter is scheduled to
expire in December 2018.
(8) This vessel is currently time chartered-out to an unrelated third party
for three years at $28,000 per day. This time charter is scheduled to
expire in February 2019.
(9) Redelivery from the charterer is plus or minus 30 days from the expiry
date.
(10) We have an option to extend the charter for an additional year at
$16,350 per day.
(11) We have an option to extend the charter for an additional year at
$16,200 per day.
(12) In October 2015, we extended the charter for an additional year at
$17,500 per day effective January 2016. We have an option to extend the
charter for an additional year at $18,000 per day.
(13) In February 2016, we extended the charter for an additional year at
$17,250 per day effective March 2016.
(14) In November 2015, we declared an option to extend the charter for an
additional year at $22,600 per day effective February 2016. We have
entered into an agreement with a third party whereby we split all of
the vessel's profits and losses above or below the daily base rate.
(15) We have an option to extend the charter for an additional year at
$26,925 per day.
(16) This vessel was delivered in August 2015 under a bareboat charter-in
agreement for $10,000 per day for up to nine months. We are obligated
to take ownership of the vessel and pay the remaining 90% of the
contract price, at the conclusion of the bareboat charter (or at any
point prior, at our discretion).
(17) These newbuilding vessels are being constructed at HMD (Hyundai Mipo
Dockyard Co. Ltd. of South Korea). All eight vessels are expected to be
delivered throughout 2017.
(18) These newbuilding vessels are being constructed at SSME (Sungdong
Shipbuilding & Marine Engineering Co., Ltd). One vessel is expected to
be delivered in the third quarter of 2016 and one in the fourth quarter
of 2016.
(19) These newbuilding vessels are being constructed at DHSC (Daehan
Shipbuilding Co. Ltd). These two vessels are expected to be delivered
in the first and second quarters of 2016.
Dividend Policy and Securities Repurchase Program
Dividend Policy
The declaration and payment of dividends is subject at all times to the discretion of the Company’s Board of Directors. The timing and amount of dividends, if any, depends on the Company’s earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.
The Company’s dividend history is as follows:
Dividends per
Date paid share
--------------------------------------------------------
June 2013$0.025September 2013$0.035December 2013$0.070March 2014$0.080June 2014$0.090September 2014$0.100December 2014$0.120March 2015$0.120June 2015$0.125September 2015$0.125December 2015$0.125
On February 25, 2016, the Scorpio Tankers’ Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on March 30, 2016 to all shareholders as of March 10, 2016 (the record date). As of February 26, 2016 there were 173,035,794 shares outstanding.
Securities Repurchase Program
In May 2015, the Company’s Board of Directors authorized a new Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company’s common stock and bonds, which currently consist of its (i) Convertible Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 2017 (NYSE: SBNB), which were issued in October 2014. This program replaces the Company’s stock buyback program that was previously announced in July 2014 and was terminated in conjunction with this new repurchase program.
During 2015 (through the date of this press release), the Company has acquired the following:
- an aggregate of 10,573,315 of its common shares that are being held as treasury shares at an average price of $8.49 per share (9,826,676 shares were purchased at an average price at $8.53 under the May 2015$250 million Securities Repurchase Program; the remaining shares were purchased in the first quarter of 2015 under the previous buyback program). There are 173,035,794 shares outstanding as of February 26, 2016.
- $1.5 million face value of its Convertible Notes at an average price of $1,088.10 per $1,000 principal amount (all of the Convertible Notes were purchased under the May 2015$250 million Securities Repurchase Program).
The Company has $164.5 million remaining under its Securities Repurchase Program as of the date of this press release. The Company expects to repurchase any securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any securities.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 79 product tankers (18 LR2, 14 Handymax, and 47 MR tankers) with an average age of 1.4 years and time or bareboat charters-in 11 product tankers (three LR2, one LR1, four MR and three Handymax tankers). The Company has contracted for 12 newbuilding product tankers (eight MR and four LR2 tankers). The four LR2s are expected to be delivered in 2016 (one per quarter), and the eight MRs are expected to be delivered throughout 2017. The Company has also reached an agreement to sell five of its 2014 built MR product tankers. 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
This press release describes adjusted net income and adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. “Non-IFRS” measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
Adjusted net income for the three months ended December 31, 2015 and 2014
For the three months ended
December 31, 2015
-----------------------------------
In thousands of U.S. dollars except Per share Per share
per share data Amount basic diluted
--------- --------- ---------
Net income $ 34,212$ 0.21$ 0.20
Adjustments:
Deferred financing fees write-
off 720 0.00 0.00
Write-off of vessel purchase
options 731 0.00 0.00
Unrealized loss on derivative
financial instruments 678 0.00 0.00
--------- --------- ---------
Adjusted net income $ 36,341$ 0.22 (1) $ 0.21 (1)
========= ========= =========
For the three months ended
December 31, 2014
-----------------------------------
In thousands of U.S. dollars except Per share Per share
per share data Amount basic diluted
--------- --------- ---------
Net income $ 495$ 0.00$ 0.00
Adjustments:
Unrealized gain on derivative
financial instruments (77) (0.00) (0.00)
Write down of vessel held for
sale 3,978 0.03 0.03
Write down of investment in
Dorian 13,895 0.09 0.09
--------- --------- ---------
Adjusted net income $ 18,291$ 0.12$ 0.12
========= ========= =========
(1) Summation differences due to rounding.
Adjusted net income for the years ended December 31, 2015 and 2014
For the year ended
December 31, 2015
-------------------------------
In thousands of U.S. dollars except per Per share Per share
share data Amount basic diluted
--------- --------- ---------
Net income $ 217,749$ 1.35 1.20
Adjustments:
Deferred financing fees write-off 2,730 0.02 0.01
Gain on sale of Dorian shares (1,179) (0.01) (0.01)
Write-down of vessel held for sale/gain
on sales of vessels 35 0.00 0.00
Gain on early termination of time
chartered-in contract (1,397) (0.01) (0.01)
Reserve for pool bunker supplier in
bankruptcy 1,396 0.01 0.01
Unrealized loss on derivative financial
instruments 1,255 0.01 0.01
Gain on repurchase of Convertible Notes (46) (0.00) (0.00)
Write-off of vessel purchase options 731 0.00 0.00
--------- --------- ---------
Adjusted net income $ 221,274$ 1.37 1.21
========= ========= =========
For the year ended
December 31, 2014
-------------------------------
In thousands of U.S. dollars except per Per share Per share
share data Amount basic diluted
--------- --------- ---------
Net income $ 52,091$ 0.30$ 0.30
Adjustments:
Deferred financing fees write-off 317 0.00 0.00
Unrealized gain on derivative financial
instruments (264) (0.00) (0.00)
Write down of vessels held for sale 3,978 0.02 0.02
Gain on sale of VLCCs (51,419) (0.30) (0.30)
Gain on sale of Dorian shares (10,924) (0.06) (0.06)
Re-measurement of investment in Dorian 13,895 0.08 0.08
--------- --------- ---------
Adjusted net income $ 7,674$ 0.04$ 0.04
========= ========= =========
Adjusted EBITDA
For the three months For the year ended
ended December 31, December 31,
---------------------- ----------------------
In thousands of U.S. dollars 2015 2014 2015 2014
---------- ---------- ---------- ----------
Net income $ 34,212$ 495$ 217,749$ 52,091
Financial expenses 24,149 13,216 89,596 20,770
Unrealized (gain) / loss
on derivative financial
instruments 678 (77) 1,255 (264)
Financial income (18) (32) (145) (203)
Depreciation 30,874 17,721 107,356 42,617
Depreciation component of
our net profit from
associate - 206 - 2,075
Amortization of
restricted stock 8,894 7,659 33,687 29,726
Gain on sale of VLCCs - - - (51,419)
Gain on sale of Dorian
shares - - (1,179) (10,924)
Re-measurement of
investment in Dorian - 13,895 - 13,895
Write-down of vessel held
for sale and gain on
sales of vessels - 3,978 35 3,978
Write-off of vessel
purchase options 731 - 731 -
Gain on early termination
of time chartered-in
contract - - (1,397) -
Reserve for pool bunker
supplier in bankruptcy - - 1,396 -
---------- ---------- ---------- ----------
Adjusted EBITDA $ 99,520$ 57,061$ 449,084$ 102,342
========== ========== ========== ==========
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.