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Scorpio Tankers Inc. Announces Financial Results for the Fourth Quarter of 2021 and Declaration of a Quarterly Dividend

Feb 14, 2022

MONACO, Feb. 14, 2022 (GLOBE NEWSWIRE) — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers” or the “Company”) today reported its results for the three months and year ended December 31, 2021. The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.10 per share on the Company’s common stock.

Results for the three months ended December 31, 2021 and 2020        

For the three months ended December 31, 2021, the Company had a net loss of $46.0 million, or $0.83 basic and diluted loss per share.

For the three months ended December 31, 2021, the Company had an adjusted net loss (see Non-IFRS Measures section below) of $43.7 million, or $0.79 basic and diluted loss per share, which excludes from the net loss a $2.3 million, or $0.04 per basic and diluted share, write-off of deferred financing fees and unamortized fair value discounts on credit facilities that were refinanced during the period.

For the three months ended December 31, 2020, the Company had a net loss of $76.3 million, or $1.41 basic and diluted loss per share.

For the three months ended December 31, 2020, the Company had an adjusted net loss (see Non-IFRS Measures section below) of $56.6 million, or $1.04 basic and diluted loss per share, which excludes from the net loss (i) $2.8 million, or $0.05 per basic and diluted share, of losses recorded on the extinguishment of debt during the period, which resulted from the refinancing of certain credit facilities and lease financing arrangements, and (ii) impairment charges of $16.8 million, or $0.31 per basic and diluted share.

Results for the year ended December 31, 2021 and 2020  

For the year ended December 31, 2021, the Company had a net loss of $234.4 million, or $4.28 basic and diluted loss per share.

For the year ended December 31, 2021, the Company had an adjusted net loss (see Non-IFRS Measures section below) of $228.2 million, or $4.17 basic and diluted loss per share, which excludes from the net loss (i) a $2.9 million, or $0.05 per basic and diluted share, gain recorded as part of the refinancing of the lease financing for five vessels, (ii) $5.5 million, or $0.10 per basic and diluted share, of aggregate losses recorded on the March 2021 and June 2021 transactions to exchange the Company’s existing Convertible Notes due 2022 for new Convertible Notes due 2025, and (iii) a $3.6 million, or $0.07 per basic and diluted share, write-off of deferred financing fees related to the refinancing of certain credit facilities.

For the year ended December 31, 2020, the Company had net income of $94.1 million, or $1.72 basic and $1.67 diluted earnings per share.

For the year ended December 31, 2020, the Company had adjusted net income (see Non-IFRS Measures section below) of $114.0 million, or $2.09 basic and $2.02 diluted earnings per share, which excludes from net income (i) a $1.0 million, or $0.02 per basic and diluted share, gain recorded on the Company’s repurchase of its Convertible Notes due 2022 during the third quarter of 2020, (ii) $4.1 million, or $0.07 per basic and diluted share, of losses recorded on the extinguishment of debt during the year, which resulted from the refinancing of certain credit facilities and lease financing arrangements, and (iii) impairment charges of $16.8 million, or $0.31 per basic and $0.30 per diluted share.

Declaration of Dividend

On February 11, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about March 15, 2022 to all shareholders of record as of March 2, 2022 (the record date). As of February 11, 2022, there were 58,369,516 common shares of the Company outstanding.

Summary of Fourth Quarter and Other Recent Significant Events

  • In January 2022, the Company entered into agreements to sell two MRs (2013 built STI Fontvieille and 2019 built STI Majestic) and 12 LR1s. The sales prices of STI Fontvieille, STI Majestic, and the 12 LR1s are $23.5 million, $34.9 million, and $413.8 million, respectively, and the Company is expected to raise additional liquidity of approximately $189 million from these transactions. These sales have not closed yet as of the date of this press release, but are expected to close in the first and second quarters of 2022.
  • Below is a summary of the average daily Time Charter Equivalent (“TCE”) revenue (see Non-IFRS Measures section below) and duration of contracted voyages and time charters in the pools (excluding voyages outside of the pools) for the Company’s vessels thus far in the first quarter of 2022 as of the date hereof (See footnotes to “Other operating data” table below for the definition of daily TCE revenue):
  Total
Pool Average daily TCE revenue % of Days
LR2 $ 13,900 51 %
LR1 $ 12,750 60 %
MR $ 13,750 53 %
Handymax $ 14,200 53 %
  • Below is a summary of the average daily TCE revenue earned by the Company’s vessels in each of the pools (excluding voyages outside of the pools) during the fourth quarter of 2021:
Pool Average daily TCE revenue
LR2 $ 13,982
LR1 $ 14,145
MR $ 11,597
Handymax $ 12,069
  • During the fourth quarter of 2021, the Company closed on the refinancing of the outstanding debt on 10 vessels (six LR2s, two LR1s, and two Handymax vessels), raising $74.3 million in aggregate new liquidity.
  • The Company has received a commitment to refinance the existing indebtedness on two LR2s and two MRs, which is expected to raise $27.0 million in aggregate new liquidity (after the repayment of existing debt). These refinancings are expected to close before the end of the second quarter of 2022.
  • The Company also has $14.8 million of additional liquidity available from previously announced financings that have been committed. These drawdowns are expected to occur at varying points in the future as these financings are tied to scrubber installations on the Company’s vessels.
  • In January 2021, the Company entered into a note distribution agreement with B. Riley Securities, Inc., as sales agent, pursuant to which the Company may offer and sell, from time to time, up to $75.0 million of additional aggregate principal amount of its 7.00% Senior Unsecured Notes due 2025 (the “Senior Notes due 2025”). Since October 1, 2021 and through the date of this press release, the Company issued $2.3 million ($1.9 million in the fourth quarter of 2021) aggregate principal amount of additional Senior Notes due 2025 for aggregate net proceeds (net of sales agent commissions and offering expenses) of $2.2 million ($1.9 million in the fourth quarter of 2021). There is $32.6 million of remaining availability under this program as of February 11, 2022.
  • The Company has $225.8 million in cash and cash equivalents as of February 11, 2022.

Sales of Vessels

In January 2022, the Company entered into agreements with unrelated third parties to sell two MRs (2013 built STI Fontvieille and 2019 built STI Majestic) and 12 LR1s. The sales prices of STI Fontvieille, STI Majestic, and the 12 LR1s are $23.5 million, $34.9 million, and $413.8 million, respectively. The Company is expected to raise additional liquidity of approximately $189 million after the repayment of debt and payment of estimated selling costs as a result of these transactions. The Company is also expected to record an aggregate loss of approximately $48.0 million during the first quarter of 2022 relating to these sales. These sales have not closed yet as of the date of this press release, but are expected to close in the first and second quarters of 2022.

Diluted Weighted Number of Shares

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

The impact of the Convertible Notes due 2022 and Convertible Notes due 2025 on earnings or loss per share is computed using the if-converted method. Under this method, the Company first includes the potentially dilutive impact of restricted shares issued under the Company’s equity incentive plan, and then assumes that its Convertible Notes due 2022 and Convertible Notes due 2025, which were issued in March and June 2021 were converted into common shares at the beginning of each period. The if-converted method also assumes that the interest and non-cash amortization expense associated with these notes of $6.3 million and $20.7 million during the three months and year ended December 31, 2021, respectively, were not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.

For the three months and year ended December 31, 2021, the Company’s basic weighted average number of shares outstanding were 55,329,821 and 54,718,709, respectively. There were 56,851,751 and 56,957,396 weighted average shares outstanding including the potentially dilutive impact of restricted shares issued under the Company’s equity incentive plan, for the three months and year ended December 31, 2021, respectively. There were 64,135,517 and 63,175,667 weighted average shares outstanding for the three months and year ended December 31, 2021, respectively, under the if-converted method. Since the Company was in a net loss position in both periods, the potentially dilutive shares arising from both the Company’s restricted shares issued under the Company’s equity incentive plan and under the if-converted method were anti-dilutive for purposes of calculating the loss per share. Accordingly, basic weighted average shares outstanding were used to calculate both basic and diluted loss per share for this period.

COVID-19

Initially, the onset of the COVID-19 pandemic in March 2020 resulted in a sharp reduction in economic activity and a corresponding reduction in the global demand for oil and refined petroleum products. This period of time was marked by extreme volatility in the oil markets and the development of a steep contango in the prices of oil and refined petroleum products. Consequently, an abundance of arbitrage and floating storage opportunities opened up, which resulted in record increases in spot TCE rates late in the first quarter of 2020 and throughout the second quarter of 2020. These market dynamics, which were driven by arbitrage trading rather than underlying consumption, led to a build-up of global oil and refined petroleum product inventories. In June 2020, as underlying oil markets stabilized and global economies began to recover, the excess inventories that built up during this period began to slowly unwind thus causing demand for the seaborne transportation of refined petroleum products to decline.

These market conditions, coupled with underlying oil consumption that has yet to reach pre-pandemic levels, have had an adverse impact on spot TCE rates throughout 2021. Nevertheless, the easing of restrictive measures and successful roll-out of vaccines in certain countries during 2021 served as a catalyst for an economic recovery in many countries throughout the world. Consequently, oil prices continue to push upward on the back of steadily increasing consumption, recently reaching highs not seen since 2014, and existing inventories of refined petroleum products have fallen below multi-year averages. Though these dynamics have set the stage for a long-term recovery, spot TCE rates have remained subdued as demand has yet to reach pre-pandemic levels.

The Company expects that the COVID-19 virus will continue to cause volatility in the commodities markets. The scale and duration of these circumstances is unknowable but could continue to have a material impact on the Company’s earnings, cash flow and financial condition. An estimate of the impact on the Company’s results of operations and financial condition cannot be made at this time.

$250 Million Securities Repurchase Program

In September 2020, the Company’s Board of Directors authorized a new Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company’s securities which, in addition to its common shares, currently consist of its Senior Notes due 2025 (NYSE: SBBA), Convertible Notes due 2022, and Convertible Notes due 2025. No securities have been repurchased under the new program since its inception through the date of this press release.

Conference Call

The Company has scheduled a conference call on February 14, 2022 at 8:30 AM Eastern Standard Time and 2:30 PM Central European Time. The dial-in information is as follows:

US Dial-In Number: 1 (855) 861-2416
International Dial-In Number: +1 (703) 736-7422
Conference ID: 8248054

Participants should dial into the call 10 minutes before the scheduled time. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.

There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Webcast URL: https://edge.media-server.com/mmc/p/hwaoexcc

Current Liquidity

As of February 11, 2022, the Company had $225.8 million in unrestricted cash and cash equivalents.

Drydock, Scrubber and Ballast Water Treatment Update

Set forth below is a table summarizing the drydock, scrubber, and ballast water treatment system activity that occurred during the fourth quarter of 2021 and that is in progress as of January 1, 2022.

  Number of Vessels Drydock Ballast Water
Treatment Systems
Scrubbers Aggregate Costs
(in millions of U.S. Dollars)
(1)
Aggregate Off-hire
Days in Q4 2021
Completed in the fourth quarter of 2021            
LR2 2 2 $2.8 87
LR1 2 2 2.7 83
MR
Handymax
  4 4 $5.5 170
             
In progress as of January 1, 2022            
LR2 2 2 $2.4 29
LR1 2 2 5.0 63
MR
Handymax
  4 2 2 $7.4 92

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

Set forth below are the estimated expected payments to be made for the Company’s drydocks, ballast water treatment system installations, and scrubber installations through 2023 (which also include actual payments made during the first quarter of 2022 and through February 11, 2022): 

In millions of U.S. dollars As of December 31, 2021 (1) (2)
   
Q1 2022 – payments made through February 11, 2021 $ 4.4
Q1 2022 – remaining payments   11.2
Q2 2022   10.2
Q3 2022   15.6
Q4 2022   5.9
FY 2023   16.8

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

(2) Based upon the commitments received to date, which include the remaining availability under certain financing transactions that have been previously announced, the Company expects to raise approximately $14.8 million of aggregate additional liquidity to finance the purchase and installations of scrubbers once all of the agreements are closed and drawn.  These drawdowns are expected to occur at varying points in the future as these financings are tied to scrubber installations on the Company’s vessels.

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

  Q1 2022  
  Vessels Scheduled for (2): Off-hire
  Drydock Ballast Water Treatment Systems Scrubbers Days (3)
LR2 2 1 121
LR1 3 165
MR 1 20
Handymax
         
Total Q1 2022 3 4 306
         
  Q2 2022  
  Vessels Scheduled for (2): Off-hire
  Drydock Ballast Water Treatment Systems Scrubbers Days (3)
LR2 1 29
LR1
MR 1 1 40
Handymax
         
Total Q2 2022 2 1 69
         
  Q3 2022  
  Vessels Scheduled for (2): Off-hire
  Drydock Ballast Water Treatment Systems Scrubbers Days (3)
LR2
LR1
MR 7 5 1 160
Handymax
         
Total Q3 2022 7 5 1 160
         
  Q4 2022  
  Vessels Scheduled for (2): Off-hire
  Drydock Ballast Water Treatment Systems Scrubbers Days (3)
LR2
LR1
MR 2 2 80
Handymax
         
Total Q4 2022 2 2 80
         
  FY 2023  
  Vessels Scheduled for (2): Off-hire
  Drydock Ballast Water Treatment Systems Scrubbers Days (3)
LR2
LR1
MR 6 6 240
Handymax
         
Total FY 2023 6 6 240
         

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

Debt

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

  In thousands of U.S. Dollars Outstanding Principal as of September 30, 2021 Outstanding Principal as of December 31, 2021 Outstanding Principal as of February 11, 2022
1 ING Credit Facility (1)   31,350    
2 Credit Agricole Credit Facility   75,734   73,591   73,591
3 ABN AMRO / K-Sure Credit Facility (2)   38,938    
4 Citibank / K-Sure Credit Facility   80,506   78,401   78,401
5 ABN AMRO / SEB Credit Facility (1)   73,634    
6 Hamburg Commercial Credit Facility   37,847   37,024   37,024
7 Prudential Credit Facility   46,219   44,832   43,908
8 2019 DNB / GIEK Credit Facility   47,229   45,450   45,450
9 BNPP Sinosure Credit Facility   91,481   86,314   86,314
10 2020 $225.0 Million Credit Facility (3)   193,139   145,636   145,636
11 2021 $21.0 Million Credit Facility   19,830   19,245   19,245
12 2021 $43.6 Million Credit Facility (2)     43,550   43,550
13 Ocean Yield Lease Financing   130,148   127,263   126,281
14 BCFL Lease Financing (LR2s)   82,063   79,321   78,398
15 CSSC Lease Financing   139,486   135,843   134,629
16 BCFL Lease Financing (MRs)   72,659   68,888   67,584
17 2018 CMBFL Lease Financing   115,237   111,986   109,457
18 $116.0 Million Lease Financing   98,336   95,789   94,901
19 AVIC Lease Financing   109,737   106,405   106,405
20 China Huarong Lease Financing   107,625   103,416   103,416
21 $157.5 Million Lease Financing   113,193   109,657   109,657
22 COSCO Lease Financing   62,975   61,050   61,050
23 2020 CMBFL Lease Financing   42,142   41,332   41,332
24 2020 TSFL Lease Financing   44,759   43,928   43,928
25 2020 SPDBFL Lease Financing   91,629   90,006   90,006
26 2021 AVIC Lease Financing   93,699   91,886   91,886
27 2021 CMBFL Lease Financing   76,195   74,565   74,160
28 2021 TSFL Lease Financing   55,472   54,377   54,377
29 2021 CSSC Lease Financing   55,208   53,893   53,455
30 2021 $146.3 Million Lease Financing (1)     146,250   143,583
31 2021 Ocean Yield Lease Financing (3)     69,783   69,286
32 IFRS 16 – Leases – 3 MR   31,221   29,268   28,593
33 $670.0 Million Lease Financing   558,430   546,730   542,803
34 Unsecured Senior Notes Due 2025 (4)   68,271   70,209   70,565
35 Convertible Notes Due 2022   69,695   69,695   69,695
36 Convertible Notes Due 2025 (5)   205,394   208,133   209,357
  Gross debt outstanding $ 3,159,481 $ 3,163,716 $ 3,147,923
  Cash and cash equivalents   192,420   230,415   225,838
  Net debt $ 2,967,061 $ 2,933,301 S 2,922,085

(1) In November 2021, the Company closed on the sale and leaseback transactions for four LR2 product tankers (STI Connaught, STI Winnie, STI Lauren and STI Broadway) and two Handymax product tankers (STI Rotherhithe and STI Hammersmith) with an international financial institution (the “2021 $146.3 Million Lease Financing”). The borrowing amount under the agreement was $146.3 million in aggregate and part of the proceeds were used to repay the aggregate outstanding indebtedness of $105.0 million relating to these vessels under the ING Credit Facility and ABN AMRO / SEB Credit Facility.

Under this lease financing arrangement, each vessel is subject to a seven-year bareboat charter-in agreement. The lease financings bear interest at LIBOR plus a margin of 3.30% per annum and are scheduled to be repaid in equal quarterly principal installments of approximately $0.7 million on three LR2 vessels, $0.6 million on one LR2 vessel and $0.4 million per Handymax vessel. In addition, the Company has purchase options beginning at the end of the second year of each agreement, and a purchase obligation for each vessel upon the expiration of each agreement. The remaining terms and conditions, including financial covenants, are similar to those set forth in the Company’s existing lease financing arrangements.

(2) In November 2021, the Company closed on a senior secured term loan facility for two LR1 product tankers (STI Precision and STI Prestige) with an international financial institution (the “2021 $43.6 Million Credit Facility”). The borrowing amount under the agreement was $43.6 million and part of the proceeds were used to repay the aggregate outstanding indebtedness of $38.9 million relating to these vessels under the ABN AMRO / K-Sure Credit Facility.

The credit facility is scheduled to mature five years from its drawdown date, bears interest at LIBOR plus an initial margin of 2.50% per annum, and is scheduled to be repaid in equal quarterly principal installments of approximately $1.1 million in aggregate for both vessels with a balloon payment at maturity. The margin for each vessel tranche may be adjusted on each anniversary of its drawdown date based upon the preceding calendar year’s performance of that vessel’s Annual Efficiency Ratio (“AER”) as calculated pursuant to the Poseidon Principles, where the margin may be reduced to a minimum of 2.35% per annum or increased to a maximum of 2.55% per annum. The remaining terms and conditions, including financial covenants, are similar to those set forth in the Company’s existing credit facilities.

Additionally, $0.5 million was released from restricted cash that was required to be held under the ABN AMRO / K-Sure Credit Facility as a result of this transaction.

(3) In December 2021, the Company closed on the sale and leaseback transactions for two LR2 product tankers (STI Gallantry and STI Guard) with Ocean Yield ASA (the “2021 Ocean Yield Lease Financing”). The borrowing amount under the agreements was $70.2 million in aggregate, and part of the proceeds were used to repay the aggregate outstanding indebtedness of $42.3 million relating to these vessels under the 2020 $225.0 Million Credit Facility.

Under this lease financing arrangement, each vessel is subject to a ten-year bareboat charter-in agreement. The lease financings bear interest at LIBOR plus a margin per annum and are scheduled to be repaid in equal monthly principal installments of approximately $0.2 million per vessel. In addition, the Company has purchase options to re-acquire each of the subject vessels on the fourth, fifth, and seventh anniversary dates from the effective date of each agreement, with a purchase obligation for each vessel upon the expiration of each agreement. The remaining terms and conditions, including financial covenants, are similar to those set forth in the Company’s existing lease financing arrangements.

(4) In January 2021, the Company entered into a note distribution agreement with B. Riley Securities, Inc., as sales agent, under which the Company may offer and sell, from time to time, up to an additional $75.0 million aggregate principal amount of its Senior Notes due 2025 (the “Additional Notes”). The Additional Notes will have the same terms as (other than date of issuance), form a single series of debt securities with and have the same CUSIP number and are fungible with, the initial notes which were issued on May 29, 2020. Sales of the Additional Notes may be made over a period of time, and from time to time, through the sales agent, in transactions involving an offering of the Senior Notes due 2025 into the existing trading market at prevailing market prices. During the fourth quarter of 2021, the Company issued $1.9 million aggregate principal amount of Additional Notes for aggregate net proceeds (net of sales agent commissions and offering expenses and including premiums, discounts) of $1.9 million. Since the inception of this program and through the date of this press release, the Company issued $42.5 million aggregate principal amount of Additional Notes for aggregate net proceeds (net of sales agent commissions and offering expenses and including premiums, discounts) of $41.5 million.

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

Set forth below are the estimated expected future principal repayments on the Company’s outstanding indebtedness as of December 31, 2021, which includes principal amounts due under the Company’s secured credit facilities, Convertible Notes due 2022, Convertible Notes due 2025, lease financing arrangements, Senior Notes due 2025, and lease liabilities under IFRS 16 (which also include actual scheduled payments made during the first quarter of 2022 through February 11, 2022):

    As of December 31, 2021 (1)
In millions of U.S. dollars   Total Less: scheduled repayments on vessels to be sold (2) Pro forma total – excluding scheduled repayments vessels to be sold Maturities of unsecured debt Vessel financings – 2022 and 2023 maturities, excluding vessels to be sold Vessel financings – scheduled repayments, in addition to maturities in 2024 and thereafter, excluding vessels to be sold
Q1 2022 – principal payments made through February 11, 2022   $ 17.4 $ 0.2 $ 17.2 $ $ $ 17.2
Q1 2022     74.1   25.9   48.2       48.2
Q2 2022 (3)     204.1   62.8   141.3   69.7     71.6
Q3 2022     72.0   5.3   66.7       66.7
Q4 2022 (4)     110.0   21.2   88.8     17.5   71.3
Q1 2023     118.3   52.2   66.1       66.1
Q2 2023     74.9   3.1   71.8       71.8
Q3 2023     69.3   3.1   66.2       66.2
Q4 2023     74.0   3.1   70.9       70.9
2024 and thereafter     2,349.6   100.6   2,249.0   278.3     1,970.7
    $ 3,163.7 $ 277.5 $ 2,886.2 $ 348.0 $ 17.5 $ 2,520.7

(1) Amounts represent the principal payments due on the Company’s outstanding indebtedness as of December 31, 2021 and do not incorporate the impact of any of the Company’s new financing initiatives which have not closed as of that date.

(2) The repayments of debt set forth in this column represent the previously scheduled repayments due on vessels that have been agreed to be sold during the first quarter of 2022. These credit facilities and lease financing arrangements are expected to be repaid in full prior to the closing of each vessel sale, which are expected to occur during the remainder of the first quarter of 2022 and the second quarter of 2022. The repayments include four LR1s under the Citi K-Sure Credit Facility, two LR1s under the 2020 $225 Million Credit Facility, four LR1s under the Credit Agricole Credit Facility, two LR1s under the 2021 $43.6 Million Credit Facility, one MR under the AVIC Lease Financing, and one MR under the $670.0 Million Lease Financing.

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

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

Explanation of Variances on the Fourth Quarter of 2021 Financial Results Compared to the Fourth Quarter of 2020

For the three months ended December 31, 2021, the Company recorded a net loss of $46.0 million compared to a net loss of $76.3 million for the three months ended December 31, 2020. The following were the significant changes between the two periods:

  • TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot voyages, time charters, and pool charters), and it provides useful information to investors and management. The following table sets forth TCE revenue for the three months ended December 31, 2021 and 2020:   
      For the three months ended December 31,
In thousands of U.S. dollars     2021       2020  
  Vessel revenue   $ 147,908     $ 138,236  
  Voyage expenses     (13 )     (241 )
  TCE revenue   $ 147,895     $ 137,995  
  • TCE revenue for the three months ended December 31, 2021 increased by $9.9 million to $147.9 million, from $138.0 million for the three months ended December 31, 2020. Overall average TCE revenue per day increased to $12,615 per day during the three months ended December 31, 2021, from $11,608 per day during the three months ended December 31, 2020.

    TCE revenue for the three months ended December 31, 2021 remained weak, but showed a slight overall improvement as compared to the three months ended December 31, 2020. This is a mixed reflection of both the positive progress made during 2021 to mitigate the impact of the COVID-19 pandemic (through the introduction of vaccines and the easing of travel restrictions and other restrictive measures) offset by the lingering negative impacts of the virus, which have arisen through the spread of more contagious and vaccine resistant variants and have hampered a full re-opening of the global economy, preventing demand for refined petroleum products from reaching pre-pandemic levels.

  • Vessel operating costs for the three months ended December 31, 2021 decreased by $1.7 million to $85.1 million, from $86.8 million for the three months ended December 31, 2020 primarily as a result of a reduction in the average number of vessels operating in the fleet to 131 from 135. Vessel operating costs per day increased to $7,058 per day for the three months ended December 31, 2021 from $6,987 per day for the three months ended December 31, 2020. This increase was primarily attributable to repairs undertaken on some of the Company’s Handymax vessels during the period.
  • Depreciation expense – right of use assets for the three months ended December 31, 2021 decreased by $2.2 million to $10.3 million from $12.6 million for the three months ended December 31, 2020. Depreciation expense – right of use assets reflects the straight-line depreciation expense recorded under IFRS 16Leases. Right of use asset depreciation expense was impacted by the expiration of the bareboat charter-in agreements on four Handymax vessels at the end of the first quarter of 2021. The Company had four LR2s and 18 MRs that were accounted for under IFRS 16 – Leases during the three months ended December 31, 2021.
  • General and administrative expenses for the three months ended December 31, 2021, decreased by $1.5 million to $12.8 million, from $14.3 million for the three months ended December 31, 2020. This decrease was due to an overall reduction in costs during the three months ended December 31, 2021, including reductions in restricted stock amortization and compensation expenses.
  • Financial expenses for the three months ended December 31, 2021 increased by $2.4 million to $38.3 million, from $35.9 million for the three months ended December 31, 2020. This increase was primarily attributable to the increase in the accretion of convertible notes, which increased to $4.1 million from $1.8 million for the three months ended December 31, 2021 and 2020, respectively. This increase was due to the issuance of the Convertible Notes due 2025 in March and June 2021.

Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statements of Income or Loss
(unaudited)

    For the three months ended December 31,   For the year ended December 31,
In thousands of U.S. dollars except per share and share data   2021       2020       2021       2020  
Revenue              
  Vessel revenue $ 147,908     $ 138,236     $ 540,786     $ 915,892  
                 
Operating expenses              
  Vessel operating costs   (85,059 )     (86,775 )     (334,840 )     (333,748 )
  Voyage expenses   (13 )     (241 )     (3,455 )     (7,959 )
  Depreciation – owned or sale leaseback vessels   (49,754 )     (49,948 )     (197,467 )     (194,268 )
  Depreciation – right of use assets   (10,337 )     (12,578 )     (42,786 )     (51,550 )
  Impairment of vessels         (14,207 )           (14,207 )
  Impairment of goodwill         (2,639 )           (2,639 )
  General and administrative expenses   (12,808 )     (14,318 )     (52,746 )     (66,187 )
  Total operating expenses   (157,971 )     (180,706 )     (631,294 )     (670,558 )
Operating (loss) / income   (10,063 )     (42,470 )     (90,508 )     245,334  
Other (expense) and income, net              
  Financial expenses   (38,321 )     (35,888 )     (144,104 )     (154,971 )
  Loss on Convertible Notes exchange               (5,504 )      
  Gain on repurchase of Convertible Notes                     1,013  
  Financial income   170       181       3,623       1,249  
  Other income and (expense), net   2,222       1,916       2,058       1,499  
  Total other expense, net   (35,929 )     (33,791 )     (143,927 )     (151,210 )
Net (loss) / income $ (45,992 )   $ (76,261 )   $ (234,435 )   $ 94,124  
                 
(Loss) / Earnings per share              
                 
  Basic $ (0.83 )   $ (1.41 )   $ (4.28 )   $ 1.72  
  Diluted $ (0.83 )   $ (1.41 )   $ (4.28 )   $ 1.67  
  Basic weighted average shares outstanding   55,329,821       54,265,313       54,718,709       54,665,898  
  Diluted weighted average shares outstanding (1)   55,329,821       54,265,313       54,718,709       56,392,311  

(1) The computation of diluted loss per share for the three months and year ended December 31, 2021 excludes the effect of potentially dilutive unvested shares of restricted stock and the Convertible Notes due 2022 and Convertible Notes due 2025 because their effect would have been anti-dilutive. The computation of diluted loss per share for the three months ended December 31, 2020 excludes the effect of potentially dilutive unvested shares of restricted stock and the Convertible Notes due 2022 because their effect would have been anti-dilutive. The computation of diluted earnings per share for the year ended December 31, 2020 includes the effect of potentially dilutive unvested shares of restricted stock but excludes the effect of the Convertible Notes due 2022 under the if-converted method because their effect would have been anti-dilutive.

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

  As of
In thousands of U.S. dollars December 31, 2021   December 31, 2020
Assets      
Current assets      
Cash and cash equivalents $ 230,415     $ 187,511  
Accounts receivable   38,069       33,017  
Prepaid expenses and other current assets   7,954       12,430  
Inventories   8,781       9,261  
Total current assets   285,219       242,219  
Non-current assets      
Vessels and drydock   3,842,071       4,002,888  
Right of use assets   764,025       807,179  
Other assets   108,963       92,145  
Goodwill   8,900       8,900  
Restricted cash   4,791       5,293  
Total non-current assets   4,728,750       4,916,405  
Total assets $ 5,013,969     $ 5,158,624  
Current liabilities      
Current portion of long-term debt $ 235,278     $ 172,705  
Lease liability – sale and leaseback vessels   178,062       131,736  
Lease liability – IFRS 16   54,515       56,678  
Accounts payable   35,080       12,863  
Accrued expenses   24,906       32,193  
Total current liabilities   527,841       406,175  
Non-current liabilities      
Long-term debt   666,409       971,172  
Lease liability – sale and leaseback vessels   1,461,929       1,139,713  
Lease liability – IFRS 16   520,862       575,796  
Total non-current liabilities   2,649,200       2,686,681  
Total liabilities   3,177,041       3,092,856  
Shareholders’ equity      
Issued, authorized and fully paid-in share capital:      
Share capital   659       656  
Additional paid-in capital   2,855,798       2,850,206  
Treasury shares   (480,172 )     (480,172 )
Accumulated deficit   (539,357 )     (304,922 )
Total shareholders’ equity   1,836,928       2,065,768  
Total liabilities and shareholders’ equity $ 5,013,969     $ 5,158,624  


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

  For the year ended December 31, 2021
In thousands of U.S. dollars   2021       2020  
Operating activities      
Net (loss) / income $ (234,435 )   $ 94,124  
Depreciation – owned or finance leased vessels   197,467       194,268  
Depreciation – right of use assets   42,786       51,550  
Amortization of restricted stock   22,931       28,506  
Impairment of vessels and goodwill         16,846  
Amortization of deferred financing fees   7,570       6,657  
Write-off of deferred financing fees and unamortized discounts on sale and leaseback facilities   3,604       2,025  
Accretion of convertible notes   13,265       8,413  
Gain on sale and leaseback amendment   (2,851 )      
Accretion of fair value measurement on debt assumed in business combinations   3,682       3,422  
Loss / (gain) on Convertible Notes transactions   5,504       (1,013 )
Share of income from dual fuel tanker joint venture   (560 )      
    58,963       404,798  
Changes in assets and liabilities:      
Decrease / (increase) in inventories   480       (615 )
(Increase) / decrease in accounts receivable   (5,052 )     19,957  
Decrease in prepaid expenses and other current assets   4,476       1,424  
(Increase) / decrease in other assets   (601 )     856  
Increase / (decrease) in accounts payable   20,716       (5,094 )
Decrease in accrued expenses   (5,682 )     (1,945 )
    14,337       14,583  
Net cash inflow from operating activities   73,300       419,381  
Investing activities      
Investment in dual fuel tanker joint venture   (6,701 )      
Distributions from dual fuel tanker joint venture   1,525        
Drydock, scrubber, ballast water treatment system and other vessel related payments (owned, finance leased and bareboat-in vessels)   (47,102 )     (174,477 )
Net cash outflow from investing activities   (52,278 )     (174,477 )
Financing activities      
Debt repayments   (650,927 )     (800,072 )
Issuance of debt   650,804       705,390  
Debt issuance costs   (17,820 )     (13,523 )
Principal repayments on lease liability – IFRS 16   (56,729 )     (77,913 )
Repurchase / repayment of convertible notes         (46,737 )
Issuance of convertible notes   119,419        
Decrease in restricted cash   502       7,001  
Gross proceeds from issuance of common stock         2,601  
Equity issuance costs   (47 )     (26 )
Dividends paid   (23,320 )     (23,302 )
Repurchase of common stock         (13,115 )
Net cash inflow / (outflow) from financing activities   21,882       (259,696 )
Increase in cash and cash equivalents   42,904       (14,792 )
Cash and cash equivalents at January 1,   187,511       202,303  
Cash and cash equivalents at December 31, $ 230,415     $ 187,511  


Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three months and year ended December 31, 2021 and 2020
(unaudited)

    For the three months ended December 31,   For the year ended December 31,
      2021     2020     2021     2020
Adjusted EBITDA(1) (in thousands of U.S. dollars except Fleet Data)   $ 56,949   $ 45,190   $ 174,734   $ 538,003
                 
Average Daily Results                
TCE per revenue day(2)   $ 12,615   $ 11,608   $ 11,466   $ 19,655
Vessel operating costs per day (3)   $ 7,058   $ 6,987   $ 6,959   $ 6,734
                 
LR2                
TCE per revenue day (2)   $ 13,982   $ 15,995   $ 12,189   $ 26,786
Vessel operating costs per day (3)   $ 7,036   $ 7,396   $ 6,896   $ 7,007
Average number of vessels     42.0     42.0     42.0     42.0
                 
LR1                
TCE per revenue day (2)   $ 14,145   $ 11,739   $ 11,713   $ 21,579
Vessel operating costs per day (3)   $ 7,005   $ 7,178   $ 6,823   $ 6,921
Average number of vessels     12.0     12.0     12.0     12.0
                 
MR                
TCE per revenue day (2)   $ 11,597   $ 9,962   $ 11,396   $ 16,224
Vessel operating costs per day (3)   $ 6,981   $ 6,658   $ 7,005   $ 6,520
Average number of vessels     63.0     63.0     63.0     62.0
                 
Handymax                
TCE per revenue day (2)   $ 12,069   $ 7,769   $ 9,523   $ 14,835
Vessel operating costs per day (3)   $ 7,511   $ 7,055   $ 7,055   $ 6,710
Average number of vessels     14.0     18.0     14.8     19.5
                 
Fleet data                
Average number of vessels     131.0     135.0     131.8     135.4
                 
Drydock                
Drydock, scrubber, ballast water treatment system and other vessel related payments for owned, sale leaseback and bareboat chartered-in vessels (in thousands of U.S. dollars)   $ 6,094   $ 21,863   $ 47,102   $ 174,477

(1) See Non-IFRS Measures section below.
(2) Freight rates are commonly measured in the shipping industry in terms of time charter equivalent per day (or TCE per day), which is calculated by subtracting voyage expenses, including bunkers and port charges, from vessel revenue and dividing the net amount (time charter equivalent revenues) by the number of revenue days in the period. Revenue days are the number of days the vessel is owned, sale leasebacked, or chartered-in less the number of days the vessel is off-hire for drydock and repairs.
(3) Vessel operating costs per day represent vessel operating costs divided by the number of operating days during the period. Operating days are the total number of available days in a period with respect to the owned, sale leasebacked or bareboat chartered-in vessels, before deducting available days due to off-hire days and days in drydock. Operating days is a measurement that is only applicable to owned, sale leasebacked, or bareboat chartered-in vessels, not time chartered-in vessels.


Fleet list as of February 11, 2022

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

(1 ) This vessel operates in the Scorpio Handymax Tanker Pool, or SHTP. SHTP is a Scorpio Pool and is operated by Scorpio Commercial Management S.A.M. (SCM). SHTP and SCM are related parties to the Company.
(2 ) This vessel operates in the Scorpio MR Pool, or SMRP. SMRP is a Scorpio Pool and is operated by SCM. SMRP and SCM are related parties to the Company.
(3 ) This vessel operates in the Scorpio LR1 Pool, or SLR1P. SLR1P is a Scorpio Pool and is operated by SCM. SLR1P and SCM are related parties to the Company.
(4 ) This vessel operates in the Scorpio LR2 Pool, or SLR2P. SLR2P is a Scorpio Pool and is operated by SCM. SLR2P and SCM are related parties to the Company.
(5 ) Vessel held for sale in January 2022.

Dividend Policy

The declaration and payment of dividends is subject at all times to the discretion of the Company’s Board of Directors. The timing and the amount of dividends, if any, depends on the Company’s earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.

The Company’s dividends paid during 2020 and 2021 were as follows:

Date paid Dividends per common
share
March 2020 $0.10
June 2020 $0.10
September 2020 $0.10
December 2020 $0.10
March 2021 $0.10
June 2021 $0.10
September 2021 $0.10
December 2021 $0.10

On February 11, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about March 15, 2022 to all shareholders of record as of March 2, 2022 (the record date). As of February 11, 2022, there were 58,369,516 common shares of the Company outstanding.

$250 Million Securities Repurchase Program

In September 2020, the Company’s Board of Directors authorized a new Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company’s securities which, in addition to its common shares, currently consist of its Senior Notes due 2025 (NYSE: SBBA), which were originally issued in May 2020, Convertible Notes due 2022, which were issued in May and July 2018, and Convertible Notes due 2025, which were issued in March and June 2021. No securities have been repurchased under the new program since its inception through the date of this press release.

At the Market Equity Offering Program

In November 2019, the Company entered into an “at the market” offering program (the “ATM Equity Program”) pursuant to which it may sell up to $100 million of its common shares, par value $0.01 per share. As part of the ATM Equity Program, the Company entered into an equity distribution agreement dated November 7, 2019 (the “Sales Agreement”), with BTIG, LLC, as sales agent (the “Equity ATM Agent”). In accordance with the terms of the Sales Agreement, the Company may offer and sell its common shares from time to time through the Equity ATM Agent by means of ordinary brokers’ transactions on the NYSE at market prices, in block transactions, or as otherwise agreed upon by the Equity ATM Agent and the Company.

We did not sell any common shares pursuant to the ATM Equity Program during the fourth quarter of 2021. There is $97.4 million of remaining availability under the ATM Equity Program as of February 11, 2022.

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns, finance leases or bareboat charters-in 131 product tankers (42 LR2 tankers, 12 LR1 tankers, 63 MR tankers and 14 Handymax tankers) with an average age of 6.1 years. The Company has recently agreed to sell its 12 LR1 tankers and two of its MR tankers. These sales are expected to close before the end of the second quarter of 2022. Additional information about the Company is available at the Company’s website www.scorpiotankers.com, which is not a part of this press release.

Non-IFRS Measures

Reconciliation of IFRS Financial Information to Non-IFRS Financial Information

This press release describes time charter equivalent revenue, or TCE revenue, adjusted net income or loss, and adjusted EBITDA, which are not measures prepared in accordance with IFRS (“Non-IFRS” measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors and other users of our financial statements, such as our lenders, with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.

The Company believes that the presentation of TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful to investors or other users of our financial statements, such as our lenders, because they facilitate the comparability and the evaluation of companies in the Company’s industry. In addition, the Company believes that TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful in evaluating its operating performance compared to that of other companies in the Company’s industry. The Company’s definitions of TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA may not be the same as reported by other companies in the shipping industry or other industries.

TCE revenue, on a historical basis, is reconciled above in the section entitled “Explanation of Variances on the Fourth Quarter of 2021 Financial Results Compared to the Fourth Quarter of 2020”. The Company has not provided a reconciliation of forward-looking TCE revenue because the most directly comparable IFRS measure on a forward-looking basis is not available to the Company without unreasonable effort.

Reconciliation of Net Loss to Adjusted Net Loss

      For the three months ended December 31, 2021
 
          Per share   Per share
 
In thousands of U.S. dollars except per share data   Amount   basic   diluted
 
  Net loss   $ (45,992 )   $ (0.83 )   $ (0.83 )  
  Adjustments:                  
  Write-off of deferred financing fees and unamortized discounts on credit facilities     2,278       0.04       0.04    
  Adjusted net loss   $ (43,714 )   $ (0.79 )   $ (0.79 )  

      For the three months ended December 31, 2020
 
          Per share   Per share
 
In thousands of U.S. dollars except per share data   Amount   basic   diluted
 
  Net loss   $ (76,261 )   $ (1.41 )   $ (1.41 )  
  Adjustment:                  
  Loss on extinguishment of debt     2,788       0.05       0.05    
  Impairment of vessels     14,207       0.26       0.26    
  Impairment of goodwill     2,639       0.05       0.05    
  Adjusted net loss   $ (56,627 )   $ (1.04 ) (1) $ (1.04 ) (1)

      For the year ended December 31, 2021
 
          Per share   Per share
 
In thousands of U.S. dollars except per share data   Amount   basic   diluted
 
  Net loss   $ (234,435 )   $ (4.28 )   $ (4.28 )  
  Adjustments:            
  Loss on Convertible Notes exchange     5,504       0.10       0.10    
  Write-off of deferred financing fees and unamortized discounts on credit facilities     3,604       0.07       0.07    
  Gain on sale and leaseback amendment     (2,851 )     (0.05 )     (0.05 )  
  Adjusted net loss   $ (228,178 )   $ (4.17 ) (1) $ (4.17 ) (1)

      For the year ended December 31, 2020
 
          Per share   Per share
 
In thousands of U.S. dollars except per share data   Amount   basic   diluted
 
  Net income   $ 94,124     $ 1.72     $ 1.67    
  Adjustments:                  
  Loss on extinguishment of debt     4,056       0.07       0.07    
  Gain on repurchase of Convertible Notes     (1,013 )     (0.02 )     (0.02 )  
  Impairment of vessels     14,207       0.26       0.25    
  Impairment of goodwill     2,639       0.05       0.05    
  Adjusted net income   $ 114,013     $ 2.09   (1) $ 2.02    

(1) Summation difference due to rounding.

Reconciliation of Net (Loss) / Income to Adjusted EBITDA

      For the three months ended December 31,   For the year ended December 31,
In thousands of U.S. dollars     2021       2020       2021       2020  
  Net (loss) / income   $ (45,992 )   $ (76,261 )   $ (234,435 )   $ 94,124  
  Financial expenses     38,321       35,888       144,104       154,971  
  Financial income     (170 )     (181 )     (3,623 )     (1,249 )
  Depreciation – owned or finance leased vessels     49,754       49,948       197,467       194,268  
  Depreciation – right of use assets     10,337       12,578       42,786       51,550  
  Impairment of vessels           14,207             14,207  
  Impairment of goodwill           2,639             2,639  
  Amortization of restricted stock     4,699       6,372       22,931       28,506  
  Loss on Convertible Notes exchange                 5,504        
  Gain on repurchase of Convertible Notes                       (1,013 )
  Adjusted EBITDA   $ 56,949     $ 45,190     $ 174,734     $ 538,003  

Forward-Looking Statements

Matters discussed in this press release may constitute forward‐looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward‐looking statements in order to encourage companies to provide prospective information about their business. Forward‐looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “target,” “project,” “likely,” “may,” “will,” “would,” “could” and similar expressions identify forward‐looking statements.

The forward‐looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although management believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, there can be no assurance that the Company will achieve or accomplish these expectations, beliefs or projections. The Company undertakes no obligation, and specifically declines any obligation, except as required by law, to publicly update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.

In addition to these important factors, other important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward‐looking statements include unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, length and severity of the ongoing novel coronavirus (COVID-19) outbreak, including its effect on demand for petroleum products and the transportation thereof, expansion and growth of the Company’s operations, risks relating to the integration of assets or operations of entities that it has or may in the future acquire and the possibility that the anticipated synergies and other benefits of such acquisitions may not be realized within expected timeframes or at all, the failure of counterparties to fully perform their contracts with the Company, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in the Company’s operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company’s vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off‐hires, and other factors. Please see the Company’s filings with the SEC for a more complete discussion of certain of these and other risks and uncertainties.

Scorpio Tankers Inc.
212-542-1616