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Scorpio Tankers Inc. Announces Financial Results for the Fourth Quarter of 2016 and Declaration of a Quarterly Dividend

MONACO — (Marketwired) — 02/13/17 — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three months and year ended December 31, 2016 and declaration of a quarterly dividend.

Results for the three months ended December 31, 2016 and 2015

For the three months ended December 31, 2016, the Company’s adjusted net loss (see Non-IFRS Measures section below) was $29.4 million, or $0.18 basic and diluted loss per share, which excludes a $0.2 million, or $0.00 per basic and diluted share, unrealized loss on derivative financial instruments. For the three months ended December 31, 2016, the Company had a net loss of $29.7 million, or $0.18 basic and diluted loss per share.

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 resulted in an aggregate increase of the Company’s 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.

Results for the years ended December 31, 2016 and 2015

For the year ended December 31, 2016, the Company’s adjusted net loss (see Non-IFRS Measures section below) was $10.7 million, or $0.07 basic and diluted loss per share, which excludes (i) a $2.1 million loss on sales of vessels, (ii) an aggregate write-off of $14.5 million of deferred financing fees, (iii) a $1.4 million unrealized gain on derivative financial instruments and (iv) a $1.0 million aggregate gain recorded on the repurchase of $10.0 million aggregate principal amount of the Company’s Convertible Notes. The adjustments resulted in an aggregate decrease of the Company’s net loss by $14.2 million, or $0.08 per basic and diluted share. For the year ended December 31, 2016, the Company had a net loss of $24.9 million, or $0.15 basic and diluted loss per share.

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 gain of $1.2 million resulting from the sale of the Company’s investment in Dorian, (ii) a gain of $1.4 million resulting from the early termination of a contract on a time chartered-in vessel, (iii) a reserve of $1.4 million 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 net loss of $35,000 related to the gains and losses on the sales of four vessels(vii) a $1.3 million unrealized loss on derivative financial instruments and (viii) a gain of $46,000 resulting from the repurchase of $1.5 million aggregate principal amount of the Company’s Convertible Notes. The adjustments resulted in an aggregate increase of the Company’s 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.

Declaration of Dividend

On February 13, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.01 per share, payable on or about March 30, 2017 to all shareholders as of February 23, 2017 (the record date). As of February 10, 2017, there were 174,629,755 shares outstanding.

Diluted Weighted Number of Shares

Diluted earnings per share is determined using the if-converted method. Under this method, the Company assumes that the Convertible Notes (which were issued in June 2014) 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 $21.7 million during the three months and year ended December 31, 2016, respectively, are not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.

For the three months and year ended December 31, 2016, the Company’s basic weighted average number of shares were 161,868,161 and 161,118,654, respectively. The weighted average number of shares, both diluted and under the if-converted method, were anti-dilutive for the three months and year ended December 31, 2016 as the Company incurred a net loss. As of the date hereof, the Convertible Notes are not eligible for conversion.

Summary of Recent and Fourth Quarter Significant Events

  • Below is a summary of the average daily TCE revenue and duration for voyages fixed thus far in the first quarter of 2017 as of the date hereof:
    • For the LR2s in the pool: approximately $16,000 per day for 61% of the days
    • For the LR1 in the pool: approximately $14,500 per day for 50% of the days
    • For the MRs in the pool: approximately $14,300 per day for 53% of the days
    • For the ice-class 1A and 1B Handymaxes in the pool: approximately $16,500 per day for 51% of the days
  • Below is a summary of the average daily TCE revenue earned during the fourth quarter of 2016:
    • For the LR2s in the pool: $13,966 per revenue day
    • For the LR1 in the pool: $14,856 per revenue day
    • For the MRs in the pool: $11,677 per revenue day
    • For the Handymaxes in the pool: $10,461 per revenue day
  • Signed a non-binding term sheet to sell and leaseback three MR tankers to an unaffiliated third party. Upon completion, the Company’s liquidity is expected to increase by approximately $29.0 million after the repayment of debt.
  • Received a commitment for a credit facility of up to $81.4 million with a final maturity of December 2021 from DVB Bank SE to refinance a previous facility with DVB Bank SE, which financed four product tankers.
  • Received loan commitments from Macquarie Bank Limited (London Branch), DekaBank Deutsche Girozentrale, The Export-Import Bank of Korea (“KEXIM”) and Garanti-Instituttet for Eksportkreditt (“GIEK”) for a total loan facility of up to $172.0 million. The proceeds of the facility are expected to be used to partially finance eight MR product tankers that are currently under construction at Hyundai Mipo Dockyard Co., Ltd. (“HMD”).
  • Took delivery of STI Selatar, an LR2 product tanker that was under construction at Sungdong Shipbuilding and Marine Engineering Co., Ltd. (“SSME”), in February 2017.
  • Upsized the Company’s BNP Paribas Credit Facility by $27.6 million, the proceeds of which were used to refinance the existing indebtedness on two MR product tankers.
  • Executed a loan facility with HSH Nordbank AG which was used to refinance the existing indebtedness on two MR product tankers in February 2017.
  • Entered into an agreement to bareboat-in seven Handymax ice-class 1A product tankers for up to two years.
  • Paid a quarterly cash dividend on the Company’s common stock of $0.125 per share in December 2016.

DVB 2017 Credit Facility

In January 2017, the Company received a commitment for a credit facility of up to $81.4 million from DVB Bank SE (the “DVB 2017 Credit Facility”) to refinance its previous facility with DVB Bank SE. The new credit facility will be used to refinance the existing indebtedness on four product tankers, has a final maturity of December 2021, and bears interest at LIBOR plus a margin of 2.75% per annum. The available borrowings may be used to finance up to 63% of the fair market value of the respective vessels.

The remaining terms and conditions, including financial covenants, are similar to those set forth above in the Company’s existing credit facilities. The loan facility is subject to customary conditions precedent and the execution of definitive documentation.

2017 Credit Facility

In January 2017, the Company received commitments from a group of financial institutions led by Macquarie Bank Limited (London Branch) for a total loan facility of up to $172.0 million (the “2017 Credit Facility”). The facility includes two commercial tranches for $15.0 million and $25.0 million, a KEXIM Guaranteed Tranche for $48.0 million, a KEXIM Funded Tranche for $52.0 million, and a GIEK Guaranteed Tranche for $32.0 million.

The loan facility is expected to be used to partially finance the purchase of eight MR product tankers that are currently under construction at HMD. Drawdowns will be available at an amount equal to the lower of 60% of the contract price and 60% of the fair market value of each respective vessel. Other key terms are as follows:

The first commercial tranche of $15.0 million has a final maturity of six years from the drawdown date of each vessel, bears interest at LIBOR plus a margin of 2.25% per annum, and has a 15 year repayment profile.

The second commercial tranche of $25.0 million has a final maturity of nine years from the drawdown date of each vessel (assuming KEXIM or GIEK have not exercised their option to call for prepayment of the KEXIM and GIEK funded and guaranteed tranches by the date falling two months prior to the maturity of the first commercial tranche and in the event that the first commercial tranche has not been extended), bears interest at LIBOR plus a margin of 2.25% per annum, and has a 15 year repayment profile.

The KEXIM Funded Tranche and GIEK Guaranteed Tranche have a final maturity of 12 years from the drawdown date of each vessel (assuming the commercial tranches are refinanced through that date), bear interest at LIBOR plus a margin of 2.15% per annum, and have a 12 year repayment profile.

The KEXIM Guaranteed Tranche has a final maturity of 12 years from the drawdown date of each vessel (assuming the commercial tranches are refinanced through that date), bears interest at LIBOR plus a margin of 1.60% per annum, and has a 12 year repayment profile.

The remaining terms and conditions, including financial covenants, are similar to those set forth above in the Company’s existing credit facilities. The loan facility is subject to customary conditions precedent and the execution of definitive documentation.

Upsizing of BNP Paribas Credit Facility

In December 2016, the Company upsized its existing credit facility with BNP Paribas by $27.6 million. The $27.6 million increase of the bilateral financing bears interest at LIBOR plus a margin of 2.30% per annum and was used to refinance the existing indebtedness on two MR product tankers (2013 built). In addition, the maturity date of the facility was extended to December 2021. The terms and conditions, including covenants, of the credit facility are similar to those in the Company’s existing credit facilities.

HSH Credit Facility

In January 2017, the Company executed a loan facility with HSH Nordbank AG which was fully drawn in February 2017, and the proceeds of $31.1 million were used to refinance the existing indebtedness on two MR product tankers. The facility has a final maturity of five years from the first drawdown date, and bears interest at LIBOR plus a margin of 2.50% per annum. The remaining terms and conditions, including financial covenants, are similar to those in the Company’s existing credit facilities.

2011 Credit Facility

As of December 31, 2016, the 2011 Credit Facility, which is scheduled to mature in May 2017, had seven MR product tankers as collateral. Since January 2017, the Company has refinanced two vessels in the BNP Paribas Credit Facility, two vessels in the HSH Credit Facility, and the Company is in discussions to refinance the remaining three vessels.

Time and Bareboat Charter-in Update

In December 2016, the Company entered into agreements to bareboat-in seven Handymax ice-class 1A product tankers. The agreements include purchase options, which can be exercised through December 31, 2018. If the purchase options are not exercised, the bareboat-in agreements expire on March 31, 2019.

Three of the vessels were previously time chartered-in by the Company for $15,600 per day. These time charter-in contracts were cancelled in January 2017 and replaced by the new bareboat contracts at a rate of $7,500 per day. The remaining four vessels will be chartered-in, on a bareboat basis, for $6,000 per day. Two of these vessels were delivered in February 2017 and the remaining two are expected to be delivered within the first quarter of 2017.

In November 2016, the Company extended the time charter-in agreement for an MR product tanker that is currently time chartered-in for an additional year at $13,050 per day effective January 2017. The Company also has an option to extend the charter for an additional year at $15,000 per day.

In October 2016, the Company time chartered-in a 2006 built MR product tanker for one year at $13,500 per day. The Company also has an option to extend the charter for an additional year at $15,000 per day.

$250 Million Securities Repurchase Program

In May 2015, the Company’s Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company’s securities, 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. As of the date hereof, the Company has the authority to purchase up to an additional $153.3 million of its securities under its Securities Repurchase Program. The Company expects to repurchase its 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 Securities Repurchase Program to repurchase any of its securities.

Since January 1, 2016 through the date of this press release, the Company has repurchased its securities as follows:

  • An aggregate of 2,956,760 of its common shares at an average price of $5.58 per share; the repurchased shares are being held as treasury shares. There were 174,629,755 shares outstanding as of February 10, 2017.
  • $10.0 million aggregate principal amount of its Convertible Notes at an average price of $839.28 per $1,000 principal amount.

Conference Call

The Company will have a conference call on February 13, 2017 at 9:00 AM Eastern Standard Time and 3:00 PM Central European Time.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 888-417-8527 (U.S.) or 719-325-2439 (International). The conference participant passcode is 5057068. 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/610/19558

Current Liquidity

As of February 10, 2017, the Company had $91.5 million in cash.

Debt

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

             ----------           -----------           --------------------
                                                                  Availabil-
             Outstand-  Drawdowns  Outstand-  Drawdowns  Outstand- ity as of
In millions   ing as of    and      ing as of    and     ing as of  February
 of U.S.     September   repaym-   December    repaym-   February   10, 2017
 dollars      30, 2016  ents, net  31, 2016   ents, net   10, 2017     (5)
             ---------------------------------------------------------------
2011 Credit
 Facility
 (1)         $    95.0$    (2.0)$     93.0     (50.0) $     43.0         -
K-Sure
 Credit
 Facility        317.4      (3.3)      314.1     (14.9)      299.2         -
KEXIM Credit
 Facility        366.6         -       366.6      (4.3)      362.3         -
ING Credit
 Facility        126.5      (2.2)      124.3      (1.1)      123.2         -
ABN AMRO
 Credit
 Facility        132.7      (6.4)      126.3      (1.7)      124.6         -
BNP Paribas
 Credit
 Facility
 (2)              32.8      (0.6)       32.2      27.6        59.8         -
Credit
 Suisse
 Credit
 Facility
 (3)                 -         -           -      29.4        29.4      30.6
Scotiabank
 Credit
 Facility         32.7      (0.6)       32.1         -        32.1         -
NIBC Credit
 Facility         40.8      (1.0)       39.8      (1.0)       38.8         -
2016 Credit
 Facility        288.0      (6.8)      281.2         -       281.2         -
DVB Credit
 Facility         90.0      (1.6)       88.4         -        88.4         -
HSH Credit
 Facility
 (4)                 -         -           -      31.1        31.1         -
2020 senior
 unsecured
 notes            53.8         -        53.8         -        53.8         -
2017 senior
 unsecured
 notes            51.8         -        51.8         -        51.8         -
Convertible
 Notes           348.5         -       348.5         -       348.5         -
             -------------------  --------------------  --------------------
             $ 1,976.6$   (24.5)$  1,952.1$    15.1$  1,967.2$    30.6
             ===================  ====================  ====================

(1) Activity for the 2011 Credit Facility includes the following repayments
    in connection with the refinancing of outstanding borrowings thereunder
    (i) $13.0 million related to STI Sapphire, which was refinanced in
    January 2017, (ii) $13.3 million related to STI Emerald, which was
    refinanced in February 2017, (iii) $13.7 million related to STI
    Duchessa, which was refinanced in February 2017, and (iv) $10.1 million
    related to STI Onyx, which was refinanced in February 2017.
(2) In December 2016, the Company upsized its existing credit facility with
    BNP Paribas by $27.6 million. The upsized loan facility was fully drawn
    in January and February 2017, and the aggregate proceeds of $27.6
    million were used to refinance the existing indebtedness on STI Sapphire
    and STI Emerald, which were previously financed under the 2011 Credit
    Facility.
(3) In February 2017, the Company took delivery of STI Selatar, an LR2
    product tanker from SSME. The Company drew down $29.4 million from this
    credit facility to partially finance the delivery of the vessel.
(4) In January 2017, the Company executed a loan facility with HSH Nordbank
    AG. The facility has a maturity of five years from the agreement date
    and bears interest at LIBOR plus a margin of 2.50% per annum. This
    facility was fully drawn in February 2017, and the proceeds were used to
    refinance the existing indebtedness on STI Duchessa and STI Onyx, which
    were previously financed under the 2011 Credit Facility.
(5) The 2017 Credit Facility and the DVB 2017 Credit Facility will be
    included in the schedule upon the execution of the loan documentation.

Newbuilding Program

The Company currently has nine newbuilding vessel orders (eight MRs and one LR2) with HMD and SSME, which the Company refers to as its Newbuilding Program.

During the fourth quarter of 2016, the Company made installment payments of $12.7 million relating to vessels under its Newbuilding Program.

Set forth below are the installment payments that have been made and are expected to be made in the first quarter of 2017 and future installment payments *:

                                               In millions of U.S. dollars
                                             -------------------------------
Q1 2017 - installment payments made to date  $                          29.2
Q1 2017 - remaining installment payments                                56.3
Q2 2017                                                                 32.3
Q3 2017                                                                 68.2
Q4 2017                                                                 50.5
Q1 2018                                                                 21.6

                                             -------------------------------
                                             $                         258.1
                                             ===============================

*These are estimates only and are subject to change as construction progresses.

Explanation of Variances on the Fourth Quarter of 2016 Financial Results Compared to the Fourth Quarter of 2015

For the three months ended December 31, 2016, the Company recorded a net loss of $29.7 million compared to net income of $34.2 million for the three months ended December 31, 2015. 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, 2016 and 2015:
                                    For the three months ended December 31,
                                    ---------------------------------------
In thousands of U.S. dollars                2016                2015
                                    -------------------  ------------------
  Vessel revenue                    $           106,068  $          178,398
  Voyage expenses                                  (420)               (293)
                                    -------------------  ------------------
  TCE revenue                       $           105,648  $          178,105
                                    ===================  ==================

  • TCE revenue decreased $72.5 million to $105.6 million from $178.1 million for the three months ended December 31, 2016 and 2015, respectively. This decrease was driven by a decrease in overall time charter equivalent revenue per day to $12,465 per day from $21,057 for the three months ended December 31, 2016 and 2015, respectively (see the breakdown of daily TCE below). TCE revenue per day decreased across all of our operating segments as persistently high refined product inventories along with a lack of arbitrage opportunities have resulted in reduced global product tanker demand.
  • Vessel operating costs decreased $4.0 million to $46.9 million from $50.9 million for the three months ended December 31, 2016 and 2015, respectively. This decrease was driven by a reduction in the number of owned vessels in our fleet to an average of 77.0 vessels from an average of 80.3 vessels for the three months ended December 31, 2016 and 2015, respectively. Additionally, overall vessel operating costs per day decreased to $6,623 per day from $6,891 per day for the three months ended December 31, 2016 and 2015, respectively. This decrease was driven by improvements in our LR2 and MR operating segments (see the breakdown of daily vessel operating costs below).
  • Charterhire expense increased $5.3 million to $23.5 million from $18.2 million for the three months ended December 31, 2016 and 2015, respectively. This increase was primarily driven by an increase in the Company’s time chartered-in fleet to an average of 15.7 vessels from an average of 11.9 vessels for the three months ended December 31, 2016 and 2015, respectively.
  • Depreciation expense decreased slightly by $0.2 million to $30.7 million from $30.9 million for the three months ended December 31, 2016 and 2015, respectively. This decrease was primarily driven by the mix of the Company’s vessels as the average number of owned MRs decreased to 42.0 from 47.0 for the three months ended December 31, 2016 and 2015, respectively, as a result of the sales of five MRs during the first and second quarters of 2016. This decrease was partially offset by an increase in the average number of owned LR2s to 21.0 from 19.0 for the three months ended December 31, 2016 and 2015, respectively, as a result of the deliveries of two LR2s under our Newbuilding Program during the first and second quarters of 2016.
  • General and administrative expenses decreased $5.9 million to $12.3 million from $18.2 million for the three months ended December 31, 2016 and 2015, respectively. This decrease was primarily driven by reductions in compensation expense (which includes a reduction in restricted stock amortization).
  • Financial expenses decreased $2.5 million to $21.7 million from $24.1 million for the three months ended December 31, 2016 and 2015, respectively. The decrease was primarily the result of a decrease in interest expense as the average debt outstanding decreased to $1.9 billion from $2.1 billion for the three months ended December 31, 2016 and 2015, respectively. Additionally, we recorded a $0.7 million write-off of deferred financing fees during the three months ended December 31, 2015. We did not record any write-offs of deferred financing fees during the three months ended December 31, 2016.
  • Unrealized gains and losses on derivative financial instruments relate to the change in the fair value of the profit or loss agreement on one of the Company’s time chartered-in vessels with a third party who neither owns nor operates the vessel.
                   Scorpio Tankers Inc. and Subsidiaries
                 Condensed Consolidated Statement of Income
                                (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                    2016          2015          2016          2015
                     ------------  ------------  ------------  ------------
Revenue
  Vessel revenue     $    106,068$    178,398$    522,747$    755,711

Operating expenses
  Vessel operating
   costs                  (46,933)      (50,916)     (187,120)     (174,556)
  Voyage expenses            (420)         (293)       (1,578)       (4,432)
  Charterhire             (23,521)      (18,206)      (78,862)      (96,865)
  Depreciation            (30,686)      (30,874)     (121,461)     (107,356)
  General and
   administrative
   expenses               (12,306)      (18,245)      (54,899)      (65,831)
  Loss on sales of
   vessels                      -             -        (2,078)          (35)
  Write-off of
   vessel purchase
   options                      -          (731)            -          (731)
  Gain on sale of
   Dorian shares                -             -             -         1,179
                     ------------  ------------  ------------  ------------
  Total operating
   expenses              (113,866)     (119,265)     (445,998)     (448,627)
                     ------------  ------------  ------------  ------------
Operating (loss) /
 income                    (7,798)       59,133        76,749       307,084
                     ------------  ------------  ------------  ------------
Other (expense) and
 income, net
  Financial expenses      (21,667)      (24,149)     (104,048)      (89,596)
  Realized gain on
   derivative
   financial
   instruments                  -             -             -            55
  Unrealized (loss)
   / gain on
   derivative
   financial
   instruments               (229)         (678)        1,371        (1,255)
  Financial income             50            18         1,213           145
  Other income
   (expenses), net            (22)         (112)         (188)        1,316
                     ------------  ------------  ------------  ------------
  Total other
   expense, net           (21,868)      (24,921)     (101,652)      (89,335)
                     ------------  ------------  ------------  ------------
Net (loss) / income  $    (29,666)$     34,212$    (24,903)$    217,749
                     ------------  ------------  ------------  ------------

(Loss) /earnings per
 share

  Basic              $      (0.18)$       0.21$      (0.15)$       1.35
  Diluted            $      (0.18)$       0.20$      (0.15)$       1.20
  Basic weighted
   average shares
   outstanding        161,868,161   163,792,076   161,118,654   161,436,449
  Diluted weighted
   average shares
   outstanding (1)    161,868,161   202,210,591   161,118,654   199,739,326

(1) The dilutive effect of (i) unvested shares of restricted stock and (ii)
the potentially dilutive securities relating to our Convertible Notes were
excluded from the computation of diluted earnings per share for the three
months and year ended December 31, 2016 because their effect would have been
anti-dilutive. Weighted average shares under the if-converted method (which
includes the potential dilutive effect of both the unvested shares of
restricted stock and our Convertible Notes) were 199,834,980 and 199,965,014
for the three months and year ended December 31, 2016, respectively.
                   Scorpio Tankers Inc. and Subsidiaries
                   Condensed Consolidated Balance Sheets
                                (unaudited)

                                                            As of
                                                 --------------------------
                                                 December 31,  December 31,
In thousands of U.S. dollars                         2016          2015
                                                 ------------  ------------
Assets
Current assets
Cash and cash equivalents                        $     99,887$    200,970
Accounts receivable                                    42,329        69,017
Prepaid expenses and other current assets               9,067         3,585
Derivative financial instruments                          116             -
Inventories                                             6,122         6,575
                                                 ------------  ------------
Total current assets                                  157,521       280,147
                                                 ------------  ------------
Non-current assets
Vessels and drydock                                 2,913,254     3,087,753
Vessels under construction                            137,917       132,218
Other assets                                           21,495        23,337
                                                 ------------  ------------
Total non-current assets                            3,072,666     3,243,308
                                                 ------------  ------------
Total assets                                     $  3,230,187$  3,523,455
                                                 ============  ============
Current liabilities
Current portion of long-term debt                $    353,012$    124,503
Finance lease liability                                     -        53,372
Accounts payable                                        9,282        25,683
Accrued expenses                                       23,024        32,643
Derivative financial instruments                            -         1,175
                                                 ------------  ------------
Total current liabilities                             385,318       237,376
                                                 ------------  ------------
Non-current liabilities
Long-term debt                                      1,529,669     1,872,114
Derivative financial instruments                            -            80
                                                 ------------  ------------
Total non-current liabilities                       1,529,669     1,872,194
                                                 ------------  ------------
Total liabilities                                   1,914,987     2,109,570
                                                 ------------  ------------
Shareholders' equity
Issued, authorized and fully paid-in share
 capital:
Share capital                                           2,247         2,224
Additional paid-in capital                          1,756,769     1,729,314
Treasury shares                                      (443,816)     (427,311)
Retained earnings                                           -       109,658
                                                 ------------  ------------
Total shareholders' equity                          1,315,200     1,413,885
                                                 ------------  ------------
Total liabilities and shareholders' equity       $  3,230,187$  3,523,455
                                                 ============  ============

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

                                                     For the year ended
                                                        December 31,
                                                 --------------------------
In thousands of U.S. dollars                         2016          2015
                                                 ------------  ------------
Operating activities
Net (loss) / income                              $    (24,903)$    217,749
Gain on sale of Dorian shares                               -        (1,179)
Loss on sales of vessels                                2,078            35
Write-off of vessel purchase options                        -           731
Depreciation                                          121,461       107,356
Amortization of restricted stock                       30,207        33,687
Amortization of deferred financing fees                28,628        17,418
Unrealized (gain)/loss on derivative financial
 instruments                                           (1,371)        1,255
Amortization of acquired time charter contracts            65           513
Accretion of Convertible Notes                         11,562        11,096
Gain on repurchase of Convertible Notes                  (994)          (46)
                                                 ------------  ------------
                                                      166,733       388,615
                                                 ------------  ------------
Changes in assets and liabilities:
Decrease / (increase) in inventories                      564        (1,909)
Decrease in accounts receivable                        26,688         9,184
Increase in prepaid expenses and other current
 assets                                                (5,546)       (1,615)
Decrease / (increase) in other assets                   2,045       (14,153)
(Decrease) / increase in accounts payable              (2,487)          775
(Decrease) / increase in accrued expenses              (9,486)       11,206
Interest rate swap termination payment                      -          (128)
                                                 ------------  ------------
                                                       11,778         3,360
                                                 ------------  ------------
Net cash inflow from operating activities             178,511       391,975
                                                 ------------  ------------
Investing activities
Acquisition of vessels and payments for vessels
 under construction                                  (126,842)     (905,397)
Proceeds from disposal of vessels                     158,175        90,820
Proceeds from sale of Dorian shares                         -       142,436
Deposit returned for vessel purchases                       -       (31,277)
                                                 ------------  ------------
Net cash inflow / (outflow) from investing
 activities                                            31,333      (703,418)
                                                 ------------  ------------
Financing activities
Debt repayments                                      (753,431)     (226,260)
Issuance of debt                                      565,028       643,550
Debt issuance costs                                   (10,679)       (8,497)
Repayment of Convertible Notes                         (8,393)       (1,632)
Gross proceeds from issuance of common stock                -       159,747
Equity issuance costs                                     (24)       (7,554)
Dividends paid                                        (86,923)      (87,056)
Repurchase of common stock                            (16,505)      (76,028)
                                                 ------------  ------------
Net cash (outflow) / inflow from financing
 activities                                          (310,927)      396,270
                                                 ------------  ------------
(Decrease) / increase in cash and cash
 equivalents                                         (101,083)       84,827
Cash and cash equivalents at January 1,               200,970       116,143
                                                 ------------  ------------
Cash and cash equivalents at December 31,        $     99,887$    200,970
                                                 ============  ============

                   Scorpio Tankers Inc. and Subsidiaries
 Other operating data for the three months and year ended December 31, 2016
                                  and 2015
                                (unaudited)

                                  For the three months   For the year ended
                                   ended December 31,       December 31,
                                 --------------------- ---------------------
                                    2016       2015       2016       2015
                                 ---------- ---------- ---------- ----------
Adjusted EBITDA(1) (in thousands
 of U.S. dollars)                $   29,997$   99,520$  230,307$  449,084

Average Daily Results
Time charter equivalent per
 day(2)                          $   12,465$   21,057$   15,783$   23,163
Vessel operating costs per
 day(3)                          $    6,623$    6,891$    6,576$    6,564

Aframax/LR2
TCE per revenue day (2)          $   14,523$   26,464$   20,280$   30,544
Vessel operating costs per
 day(3)                          $    6,916$    7,330$    6,734$    6,865
Average number of owned vessels        21.0       19.0       20.3       14.6
Average number of time
 chartered-in vessels                   2.0        2.1        2.0        4.0

Panamax/LR1
TCE per revenue day (2)          $   14,856$   21,013$   17,277$   21,804
Vessel operating costs per
 day(3)                                   -          -          - $    8,440
Average number of owned vessels           -          -          -        0.7
Average number of time
 chartered-in vessels                   1.0        2.2        0.9        3.9

MR
TCE per revenue day (2)          $   11,981$   19,681$   14,898$   21,803
Vessel operating costs per
 day(3)                          $    6,510$    6,838$    6,555$    6,461
Average number of owned vessels        42.0       47.0       43.4       42.6
Average number of time
 chartered-in vessels                   7.7        4.0        5.2        3.6

Handymax
TCE per revenue day (2)          $   11,129$   18,562$   12,615$   19,686
Vessel operating costs per
 day(3)                          $    6,522$    6,483$    6,404$    6,473
Average number of owned vessels        14.0       14.3       14.0       14.8
Average number of time
 chartered-in vessels                   5.0        3.6        4.6        5.4

Fleet data
Average number of owned vessels        77.0       80.3       77.7       72.7
Average number of time
 chartered-in vessels                  15.7       11.9       12.7       16.9

Drydock
Expenditures for drydock (in
 thousands of U.S. dollars)               -          -          -          -

(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 10, 2017

                      Year                Ice
      Vessel Name     Built     DWT      class     Employment    Vessel type
    --------------- -------- --------- -------- ---------------- -----------
     Owned vessels
1   STI Brixton       2014     38,734     1A        SHTP (1)       Handymax
2   STI Comandante    2014     38,734     1A        SHTP (1)       Handymax
3   STI Pimlico       2014     38,734     1A    Time Charter (5)   Handymax
4   STI Hackney       2014     38,734     1A        SHTP (1)       Handymax
5   STI Acton         2014     38,734     1A        SHTP (1)       Handymax
6   STI Fulham        2014     38,734     1A        SHTP (1)       Handymax
7   STI Camden        2014     38,734     1A        SHTP (1)       Handymax
8   STI Battersea     2014     38,734     1A        SHTP (1)       Handymax
9   STI Wembley       2014     38,734     1A        SHTP (1)       Handymax
10  STI Finchley      2014     38,734     1A        SHTP (1)       Handymax
11  STI Clapham       2014     38,734     1A        SHTP (1)       Handymax
12  STI Poplar        2014     38,734     1A    Time Charter (5)   Handymax
13  STI Hammersmith   2015     38,734     1A        SHTP (1)       Handymax
14  STI Rotherhithe   2015     38,734     1A        SHTP (1)       Handymax
15  STI Amber         2012     49,990      -         SMRP(2)          MR
16  STI Topaz         2012     49,990      -         SMRP(2)          MR
17  STI Ruby          2012     49,990      -         SMRP(2)          MR
18  STI Garnet        2012     49,990      -         SMRP(2)          MR
19  STI Onyx          2012     49,990      -         SMRP(2)          MR
20  STI Sapphire      2013     49,990      -         SMRP(2)          MR
21  STI Emerald       2013     49,990      -         SMRP(2)          MR
22  STI Beryl         2013     49,990      -         SMRP(2)          MR
23  STI Le Rocher     2013     49,990      -         SMRP(2)          MR
24  STI Larvotto      2013     49,990      -         SMRP(2)          MR
25  STI Fontvieille   2013     49,990      -         SMRP(2)          MR
26  STI Ville         2013     49,990      -         SMRP(2)          MR
27  STI Duchessa      2014     49,990      -         SMRP(2)          MR
28  STI Opera         2014     49,990      -         SMRP(2)          MR
29  STI Texas City    2014     49,990      -         SMRP(2)          MR
30  STI Meraux        2014     49,990      -         SMRP(2)          MR
31  STI San Antonio   2014     49,990      -         SMRP(2)          MR
32  STI Venere        2014     49,990      -         SMRP(2)          MR
33  STI Virtus        2014     49,990      -         SMRP(2)          MR
34  STI Aqua          2014     49,990      -         SMRP(2)          MR
35  STI Dama          2014     49,990      -         SMRP(2)          MR
36  STI Benicia       2014     49,990      -         SMRP(2)          MR
37  STI Regina        2014     49,990      -         SMRP(2)          MR
38  STI St. Charles   2014     49,990      -         SMRP(2)          MR
39  STI Mayfair       2014     49,990      -         SMRP(2)          MR
40  STI Yorkville     2014     49,990      -         SMRP(2)          MR
41  STI Milwaukee     2014     49,990      -         SMRP(2)          MR
42  STI Battery       2014     49,990      -         SMRP(2)          MR
43  STI Soho          2014     49,990      -         SMRP(2)          MR
44  STI Memphis       2014     49,995      -         SMRP(2)          MR
45  STI Tribeca       2015     49,990      -         SMRP(2)          MR
46  STI Gramercy      2015     49,990      -         SMRP(2)          MR
47  STI Bronx         2015     49,990      -         SMRP(2)          MR
48  STI Pontiac       2015     49,990      -         SMRP(2)          MR
49  STI Manhattan     2015     49,990      -         SMRP(2)          MR
50  STI Queens        2015     49,990      -         SMRP(2)          MR
51  STI Osceola       2015     49,990      -         SMRP(2)          MR
52  STI Notting
    Hill              2015     49,687     1B    Time Charter (6)      MR
53  STI Seneca        2015     49,990      -         SMRP(2)          MR
54  STI Westminster   2015     49,687     1B    Time Charter (6)      MR
55  STI Brooklyn      2015     49,990      -         SMRP(2)          MR
56  STI Black Hawk    2015     49,990      -         SMRP(2)          MR
57  STI Elysees       2014    109,999      -        SLR2P (4)        LR2
58  STI Madison       2014    109,999      -        SLR2P (4)        LR2
59  STI Park          2014    109,999      -        SLR2P (4)        LR2
60  STI Orchard       2014    109,999      -        SLR2P (4)        LR2
61  STI Sloane        2014    109,999      -        SLR2P (4)        LR2
62  STI Broadway      2014    109,999      -        SLR2P (4)        LR2
63  STI Condotti      2014    109,999      -        SLR2P (4)        LR2
64  STI Rose          2015    109,999      -    Time Charter (7)     LR2
65  STI Veneto        2015    109,999      -        SLR2P (4)        LR2
66  STI Alexis        2015    109,999      -        SLR2P (4)        LR2
67  STI Winnie        2015    109,999      -        SLR2P (4)        LR2
68  STI Oxford        2015    109,999      -        SLR2P (4)        LR2
69  STI Lauren        2015    109,999      -        SLR2P (4)        LR2
70  STI Connaught     2015    109,999      -        SLR2P (4)        LR2
71  STI Spiga         2015    109,999      -        SLR2P (4)        LR2
72  STI Savile Row    2015    109,999      -        SLR2P (4)        LR2
73  STI Kingsway      2015    109,999      -        SLR2P (4)        LR2
74  STI Carnaby       2015    109,999      -        SLR2P (4)        LR2
75  STI Lombard       2015    109,999      -        SLR2P (4)        LR2
76  STI Grace         2016    109,999      -        SLR2P (4)        LR2
77  STI Jermyn        2016    109,999      -        SLR2P (4)        LR2
78  STI Selatar       2017    109,999      -        SLR2P (4)        LR2

                             ---------
     Total owned
    DWT                      5,061,233
                             =========
                                                        Daily
                 Year         Ice  Employ-     Vessel    Base     Expiry
    Vessel Name Built   DWT  class   ment       type     Rate      (8)
   ------------ ------------------ -------- ------------------ ---------
   Time or
   bareboat
   chartered-in
   vessels
79 Kraslava      2007 37,258   1B  SHTP (1)  Handymax $ 17,000 02-Jun-17
80 Krisjanis
   Valdemars     2007 37,266   1B  SHTP (1)  Handymax $ 17,000 02-Apr-17
81 Silent        2007 37,847   1A  SHTP (1)  Handymax $ 7,500  21-Mar-19 (9)
82 Single        2007 37,847   1A  SHTP (1)  Handymax $ 7,500  24-Mar-19 (9)
83 Star I        2007 37,847   1A  SHTP (1)  Handymax $ 7,500  27-Mar-19 (9)
84 Sky           2008 37,879   1A  SHTP (1)  Handymax $ 6,000  31-Mar-19(10)
85 Style         2008 37,923   1A  SHTP (1)  Handymax $ 6,000  31-Mar-19(10)
86 Miss
   Mariarosaria  2011 47,499   -    SMRP(2)     MR    $ 16,350 26-May-17
87 Vukovar       2015 49,990   -    SMRP(2)     MR    $ 17,034 01-May-18
88 Targale       2007 49,999   -    SMRP(2)     MR    $ 16,200 17-May-17
89 Zefyros       2013 49,999   -    SMRP(2)     MR    $ 15,800 08-Jul-17(11)
90 Gan-Trust     2013 51,561   -    SMRP(2)     MR    $ 13,050 06-Jan-18(12)
91 CPO New
   Zealand       2011 51,717   -    SMRP(2)     MR    $ 15,250 12-Sep-18(12)
92 CPO
   Australia     2011 51,763   -    SMRP(2)     MR    $ 15,250 01-Sep-18(13)
93 Ance          2006 52,622   -    SMRP(2)     MR    $ 13,500 12-Oct-17(14)
94 Hellespont
   Progress      2006 73,728   -   SPTP (3)     LR1   $ 17,250 13-Apr-17
95 Densa                             SLR2P
   Alligator     2013 105,708  -      (4)       LR2   $ 18,500 17-Feb-17(15)

                     --------
   Total time
   chartered-in
   DWT                848,453
                     ========

 

    Newbuildings currently
    under construction
    Vessel Name                  Yard           DWT    Vessel type
    ------------------------- ---------      --------- -----------
96  Hull 2601 - TBN STI
    Galata                       HMD    (16)   52,000       MR
97  Hull 2602 - TBN STI
    Bosphorus                    HMD    (16)   52,000       MR
98  Hull 2603 - TBN STI
    Leblon                       HMD    (16)   52,000       MR
99  Hull 2604 - TBN STI La
    Boca                         HMD    (16)   52,000       MR
100 Hull 2605 - TBN STI San
    Telmo                        HMD    (16)   52,000       MR
101 Hull 2606 - TBN STI
    Jurere                       HMD    (16)   52,000       MR
102 Hull 2607 - TBN STI Esles
    II                           HMD    (16)   52,000       MR
103 Hull 2608 - TBN STI
    Jardins                      HMD    (16)   52,000       MR
104 Hull S3121 - TBN STI
    Rambla                       SSME   (17)  109,999      LR2

                                             ---------
    Total newbuilding product
    tankers DWT                               525,999
                                             =========

                                             ---------
    Total Fleet DWT                          6,435,685
                                             =========

(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 three years at $20,500 per day. This time charter is scheduled to
     expire in December 2018.
(7)  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.
(8)  Redelivery from the charterer is plus or minus 30 days from the expiry
     date.
(9)  In December 2016, we entered into an agreement to bareboat-in this
     vessel, which was previously time chartered-in by the Company for
     $15,600 per day. The time charter-in contract was cancelled in January
     2017 and replaced by the new bareboat contract at a rate of $7,500 per
     day. The agreement includes a purchase option which can be exercised
     through December 31, 2018. If the purchase option is not exercised, the
     bareboat-in agreement will expire on March 31, 2019. This vessel was
     delivered under the bareboat agreement in January 2017.
(10) In December 2016, we entered into an agreement to bareboat-in this
     vessel at a rate of $6,000 per day. The agreement includes a purchase
     option which can be exercised through December 31, 2018. If the
     purchase option is not exercised, the bareboat-in agreement will expire
     on March 31, 2019. This vessel was delivered under the bareboat
     agreement in February 2017.
(11) We have an option to extend the charter for an additional year at
     $17,000 per day.
(12) In November 2016, we entered into a new charter agreement for one year
     at $13,050 per day effective January 2017. We have an option to extend
     the charter for an additional year at $15,000 per day.
(13) We have an option to extend the charter for an additional year at
     $16,000 per day.
(14) We have an option to extend the charter for an additional year at
     $15,000 per day.
(15) We have an option to extend the charter for an additional six months at
     $20,550 per day.
(16) These newbuilding vessels are being constructed at HMD (Hyundai Mipo
     Dockyard Co. Ltd. of South Korea). Seven vessels are expected to be
     delivered throughout 2017 and one vessel is expected to be delivered in
     the first quarter of 2018.
(17) This newbuilding vessel is being constructed at SSME (Sungdong
     Shipbuilding & Marine Engineering Co., Ltd). This vessel is expected to
     be delivered in the first quarter of 2017.

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 dividends paid during 2015 and 2016 were as follows:

      Date paid       Dividends per share
-----------------------------------------
     March 2015$0.120June 2015$0.125September 2015$0.125December 2015$0.125March 2016$0.125June 2016$0.125September 2016$0.125December 2016$0.125

On February 13, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.01 per share, payable on or about March 30, 2017 to all shareholders as of February 23, 2017 (the record date). As of February 10, 2017, there were 174,629,755 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 securities, 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. As of the date hereof, the Company has the authority to purchase up to an additional $153.3 million of its securities under its Securities Repurchase Program. 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 Securities Repurchase Program to repurchase any securities.

Since January 1, 2016 through the date of this press release, the Company has repurchased its securities as follows:

  • An aggregate of 2,956,760 of its common shares at an average price of $5.58 per share; the repurchased shares are being held as treasury shares. There were 174,629,755 shares outstanding as of February 10, 2017.
  • $10.0 million aggregate principal amount of its Convertible Notes at an average price of $839.28 per $1,000 principal amount.

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 78 product tankers (22 LR2, 14 Handymax, and 42 MR tankers) with an average age of 2.2 years and time or bareboat charters-in 17 product tankers (one LR2, one LR1, eight MR and seven Handymax tankers). The Company has contracted for nine newbuilding product tankers (eight MR and a LR2 tanker). The LR2 is expected to be delivered in the first quarter of 2017 and the eight MRs are expected to be delivered throughout 2017 and the first quarter of 2018. 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 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.

The Company believes that the presentation of adjusted net income with adjusted earnings per share, basic and diluted, and adjusted EBITDA are useful to investors because they facilitate the comparability and the evaluation of companies in the Company’s industry. In addition, the Company believes that adjusted net income with adjusted earnings 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 adjusted net income with the adjusted earnings 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.

Reconciliation of Net Income to Adjusted Net Income

                                               For the three months ended
                                                   December 31, 2016
                                            -------------------------------

In thousands of U.S. dollars except per                Per share  Per share
 share data                                   Amount     basic     diluted
                                            ---------  ---------  ---------
  Net loss                                  $ (29,666)$   (0.18)$   (0.18)
  Adjustments:
    Unrealized loss on derivative financial
     instruments                                  229       0.00       0.00
                                            ---------  ---------  ---------
  Adjusted net loss                         $ (29,437)$   (0.18)$   (0.18)
                                            =========  =========  =========

                                               For the three months ended
                                                    December 31, 2015
                                            --------------------------------

In thousands of U.S. dollars except per                 Per share  Per share
 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)
                                            ========== ========== ==========

(1) Summation differences due to rounding

                                            For the year ended December 31,
                                                          2016
                                            -------------------------------

In thousands of U.S. dollars except per                Per share  Per share
 share data                                   Amount     basic     diluted
                                            ---------  ---------  ---------
  Net loss                                  $ (24,903)$   (0.15)$   (0.15)
  Adjustments:
    Deferred financing fees write-off          14,479       0.09       0.09
    Unrealized gain on derivative financial
     instruments                               (1,371)     (0.01)     (0.01)
    Gain on repurchase of Convertible Notes      (994)     (0.01)     (0.01)
    Loss on sales of vessels                    2,078       0.01       0.01
                                            ---------  ---------  ---------
  Adjusted net loss                         $ (10,711)$   (0.07)$   (0.07)
                                            =========  =========  =========

                                            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 and
     loss 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
                                            =========  =========  =========

Reconciliation of Net Income to Adjusted EBITDA

                                For the three months    For the year ended
                                 ended December 31,        December 31,
                               ----------------------  --------------------
In thousands of U.S. dollars      2016        2015        2016       2015
                               ----------  ----------  ---------  ---------
  Net (loss) / income          $  (29,666)$   34,212$ (24,903)$ 217,749
    Financial expenses             21,667      24,149    104,048     89,596
    Unrealized loss / (gain)
     on derivative financial
     instruments                      229         678     (1,371)     1,255
    Financial income                  (50)        (18)      (219)      (145)
    Depreciation                   30,686      30,874    121,461    107,356
    Amortization of restricted
     stock                          7,131       8,894     30,207     33,687
    Write-off of vessel
     purchase options                   -         731          -        731
    Gain on sale of Dorian
     shares                             -           -          -     (1,179)
    Loss on sales of vessels            -           -      2,078         35
    Gain on repurchase of
     Convertible Notes                  -           -       (994)         -
    Gain on early termination
     of time chartered-in
     contract                           -           -          -     (1,397)
    Reserve for pool bunker
     supplier in bankruptcy             -           -          -      1,396
                               ----------  ----------  ---------  ---------
  Adjusted EBITDA              $   29,997$   99,520$ 230,307$ 449,084
                               ==========  ==========  =========  =========

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.

Contact Information

Scorpio Tankers Inc.
(212) 542-1616

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