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Scorpio Tankers Inc. Announces Financial Results for the Third Quarter of 2013, Makes Further Progress on Financing, and Increases Its Quarterly Dividend
MONACO — (Marketwired) — 10/28/13 — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three and nine months ended September 30, 2013.
Results for the three months ended September 30, 2013 and 2012
For the three months ended September 30, 2013, the Company had an adjusted net income of $0.6 million (see Non-GAAP Measure section below), or $0.00 basic and diluted earnings per share, excluding a $0.1 million, or $0.00 per share unrealized gain on derivative financial instruments. Including the unrealized gain on derivative financial instruments, the Company had net income of $0.7 million, or $0.00 basic and diluted earnings per share.
For the three months ended September 30, 2012, the Company had an adjusted net loss of $3.7 million (see Non-GAAP Measure section below), or $0.09 basic and diluted loss per share, excluding a $5.9 million, or $0.14 per share, loss from sales of vessels and a $3.0 million, or $0.07 per share, write-off of deferred financing fees. Including the aforementioned adjustments, the Company had a net loss of $12.5 million, or $0.30 basic and diluted loss per share for the three months ended September 30, 2012.
Results for the nine months ended September 30, 2013 and 2012
For the nine months ended September 30, 2013, the Company had an adjusted net income of $10.8 million (see Non-GAAP Measure section below), or $0.08 basic and diluted earnings per share, excluding a $0.5 million, or $0.00 per share unrealized gain on derivative financial instruments. Including the unrealized gain on derivative financial instruments, the Company had net income of $11.2 million or $0.08 basic and diluted earnings per share.
For the nine months ended September 30, 2012, the Company had an adjusted net loss of $8.3 million (see Non-GAAP Measure section below), or $0.21 basic and diluted loss per share, excluding a $10.4 million, or $0.26 per share, loss from sales of vessels and a $3.0 million, or $0.07 per share, write-off of deferred financing fees. Including the aforementioned adjustments, the Company recorded a net loss of $21.7 million, or $0.54 basic and diluted loss per share for the nine months ended September 30, 2012.
Declaration of Dividend
On October 28, 2013, the Scorpio Tankers’ board of directors declared a quarterly cash dividend of $0.07 per share, payable on December 18, 2013 to all shareholders as of December 3, 2013 (the record date). There are currently 191,656,422 shares outstanding.
Emanuele Lauro, chief executive officer and chairman of the board commented, “The past few months have been very exciting for us with the delivery of vessels and additional construction contracts for our Newbuilding Program, as well as a successful equity raising. I am pleased that we have made progress on financing our growth, having secured substantial commitments from KEXIM and KSURE.”
Summary of Recent and Third Quarter Significant Events:
- Received loan commitments from a group of financial institutions led by DNB Bank ASA and Skandinaviska Enskilda Banken AB (publ) and from the Export-Import Bank of Korea (“KEXIM”) for a total loan facility of up to $429.6 million (the “KEXIM Financing”). The KEXIM Financing incorporates an optional guarantee from KEXIM for the issuance by the Company, at the option of the Company, of a five year $125.3 million amortizing bond facility; the proceeds of which will reduce KEXIM’s direct loan commitment in the KEXIM Financing.
- Received an Acceptance of Insurance Agreement from Korea Trade Insurance Corporation (“KSURE”) covering 95% of an up to $358.3 million KSURE tranche as part of a credit facility of up to $458.3 million (the “KSURE Financing”) that is currently being finalized with a group of financial institutions.
- Exercised options with Hyundai Samho Heavy Industries (“HSHI”) for the construction of two Very Large Gas Carriers (“VLGC”) for approximately $75.0 million each, with deliveries scheduled in the first quarter of 2016.
- Reached agreements with certain unaffiliated third parties to issue shares in exchange for the transfer of ownership of four MR product tankers currently under construction in South Korea. The aggregate purchase price of the four vessels is $151.0 million with approximately 30% of the consideration consisting of the newly issued common shares. Deliveries of vessels are scheduled in the first and second quarters of 2014.
- Reached agreements with HSHI and Daewoo Shipbuilding and Marine Engineering Co., Ltd. (“DSME”) for the construction of a total of nine VLGC for approximately $75.6 million each with deliveries scheduled in the second, third and fourth quarters of 2015.
- Reached an agreement with Hyundai Mipo Dockyard (“HMD”) to construct four product tankers consisting of two 52,000 dwt MR product tankers for approximately $35.0 million each (deliveries in the second quarter of 2015) and two Handymax ice class-1A (38,000 dwt) product tankers for approximately $32.0 million each (deliveries in the fourth quarter of 2014).
- Closed on an underwritten offering of 23 million common shares in August 2013 which includes the full exercise of the underwriters’ overallotment of 3 million shares, raising aggregate net proceeds of $209.8 million.
- Declared and paid a quarterly cash dividend on the Company’s common stock of $0.035 per share in September 2013.
- Took delivery of four MR tankers under the Company’s Newbuilding Program, STI Le Rocher and STI Larvotto in July, STI Fontvieille in August and STI Ville in September 2013. After delivery, each vessel began a time charter for up to 120 days at approximately $19,000 per day.
KEXIM Financing
In September 2013, the Company received loan commitments from a group of financial institutions led by DNB Bank ASA and Skandinaviska Enskilda Banken AB (publ) for loan commitments of up to $429.6 million, including a commitment from KEXIM for a commitment of up to $300.6 million (the “KEXIM Tranche”).
The KEXIM Financing will be used to finance up to 60% of the contract price of 18 newbuilding product tankers upon delivery. The covenants are similar to those in the Company’s existing credit facilities, and other terms and conditions of the loan are in accordance with OECD Guidelines. The KEXIM Financing is subject to executed documentation and is expected to close within the fourth quarter of 2013.
In addition to KEXIM’s commitment of up to $300.6 million, KEXIM has also provided an optional guarantee for a five year amortizing note of $125.3 million (the “KEXIM Guaranteed Note”) that may be issued by the Company at the Company’s discretion in 2014; the proceeds of which will be used to reduce the $300.6 million KEXIM Tranche.
KSURE Credit Facility
In October 2013, the Company received an Acceptance of Insurance Agreement from KSURE covering 95% of an up to $358.3 million KSURE tranche which will be a component of a credit facility of up to $458.3 million that is in the process of being finalized. The KSURE Financing will also include a commercial tranche (the “Commercial Tranche”) of up to $100.0 million.
The KSURE Financing will be used to finance up to 60% of the contract price of up to 21 newbuilding product tankers upon delivery. The covenants are similar to those in the Company’s existing credit facilities, and other terms and conditions of the loan are in accordance with OECD Guidelines. The facility is subject to credit approval from participating financial institutions as well as executed documentation, and is expected to close within the fourth quarter of 2013.
Newbuilding agreements
In September 2013, the Company reached agreements with certain unaffiliated third parties to issue shares in exchange for the transfer of ownership of four MR product tankers that are currently under construction with SPP Shipbuilding Co., Ltd. of South Korea (“SPP”). The aggregate purchase price of the four vessels is $151.0 million with approximately 30% of the consideration consisting of the newly issued shares having a valuation based on the fair market value of the shares at the time of issuance. The new common shares will be issued to Ceres, Valero and a group of institutional investors advised by JP Morgan Asset Management; the remainder of the purchase price will be paid to the shipyard from cash on hand and bank debt. Deliveries of the vessels are scheduled in the first and the second quarters of 2014.
The transaction also includes a time charter-out agreement for each vessel for a fixed daily revenue amount at current market levels plus a profit sharing arrangement whereby earnings in excess of the base time charter rate will be split between the Company and charterer, Valero. The first vessel delivered will be time chartered-out for 24 months, and the remaining three will each be time chartered-out for 12 months. The transactions will be completed by way of novation of the existing shipbuilding agreements and remain subject to final documentation.
In August 2013, the Company reached an agreement with HMD to construct four product tankers consisting of two 52,000 dwt MR product tankers for approximately $35.0 million each and two Handymax ice class-1A (38,000 dwt) product tankers for approximately $32.0 million each. The MR tankers are scheduled to be delivered in the second quarter of 2015, and the Handymax ice class-1A tankers are scheduled to be delivered in the fourth quarter of 2014.
VLGC Newbuilding agreements
In October 2013, the Company exercised options with HSHI for the construction of two VLGC for approximately $75.0 million each. These vessels are expected to be delivered in the first quarter of 2016.
In July and August 2013, the Company reached agreements with HSHI and DSME for the construction of nine VLGC for approximately $75.6 million each. These vessels are expected to be delivered in the second, third and fourth quarters of 2015.
These vessels are 84,000 cubic meter tankers designed for the carriage of liquefied petroleum gas (“LPG”).
Underwritten offering and full exercise of underwriters’ over-allotment
In August 2013, the Company closed on the sale of 20 million shares of common stock at an offering price of $9.50 per share. The underwriters also fully exercised their over-allotment option to purchase 3 million additional common shares at the offering price. The Company received aggregate net proceeds of $209.8 million after deducting underwriters’ discounts and offering expenses.
Time charter-in update
In October 2013, the Company entered into a new time charter-in agreement on an LR1 vessel that is currently time chartered-in. The new agreement is for two years at $14,525 per day and commenced upon the expiration of the existing charter in September 2013.
In August 2013, the Company agreed to time charter-in and took delivery of two 2007 built Handymax product tankers (37,412 dwt and 37,455 dwt, respectively). The first vessel is time chartered-in for 18 months at $12,500 per day with an option for the Company to extend the charter for an additional year at $13,500 per day. The second vessel is time chartered-in for one year at $12,500 per day with an option for the Company to extend the charter for an additional year at $13,250 per day.
In August 2013, the Company declared an option on an LR2 vessel that is currently time chartered-in. The option period is for six months at $15,000 per day and commences upon the expiration of the existing charter in November 2013.
In July 2013, the Company agreed to time charter-in and took delivery of a 2008 built, 73,666 dwt LR1 product tanker for one year at $14,000 per day. This agreement contains an option for the Company to extend the charter for an additional year at $15,000 per day.
Conference Call
The Company will have a conference call on October 28, 2013 at 12:00 PM Eastern Daylight Time and 5:00 PM Central European Time.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (888)-215-7046 (U.S.) or 1 (913)-312-0659 (International). The conference participant passcode is 6328598. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.
Slides and Audio Webcast:
There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Webcast URL:http://www.visualwebcaster.com/event.asp?id=96603
Current Liquidity
As of October 25, 2013, the Company had $381.9 million in cash and $75.5 million available to draw down from its 2010 Revolving Credit Facility.
Debt
As of October 28, 2013, the Company’s outstanding debt balance is as follows:
2010 Revolving Credit Facility $ - million
2011 Credit Facility 65.2 million
STI Spirit Credit Facility 23.4 million
Newbuilding Credit Facility 85.3 million
2013 Credit Facility - million
----------------------
Total $ 173.9 million
======================
Newbuilding Program
During the third quarter of 2013, the Company made $255.0 million of installment payments on its newbuilding vessels. The Company currently has 65 newbuilding vessel orders with HMD, SPP, HSHI and DSME (28 MRs, 14 Handymaxes, 12 LR2s and 11 VLGC). The estimated future payment dates and amounts are as follows*:
Q4 2013 $ 215.7 million**
Q1 2014 250.3 million
Q2 2014 397.5 million
Q3 2014 394.8 million
Q4 2014 323.1 million
Q1 2015 134.6 million
Q2 2015 249.2 million
Q3 2015 151.1 million
Q4 2015 197.3 million
Q1 2016 105.0 million
----------
Total $ 2,418.6 million***
*These are estimates only and are subject to change as construction progresses.
**$47.0 million has been paid prior to the date of this press release.
***Excludes the consideration of newly issued common shares of approximately 30% of the purchase price for four MRs currently under construction with first and second quarter 2014 deliveries.
Explanation of Variances on the Third Quarter of 2013 Financial Results Compared to the Third Quarter of 2012
For the three months ended September 30, 2013, the Company recorded net income of $0.7 million compared to a net loss of $12.5 million in the three months ended September 30, 2012. The following were the significant changes between the two periods:
- Time charter equivalent, or TCE revenues, a non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is also 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 September 30, 2013 and 2012:
For the three months ended
September 30,
------------------------------
In thousands of U.S. dollars 2013 2012
-------------- --------------
Vessel revenue $ 57,756$ 28,667
Voyage expenses (1,249) (6,304)
-------------- --------------
TCE revenue $ 56,507$ 22,363
============== ==============
- TCE revenue increased by $34.1 million to $56.5 million as a result of an increase in the average number of operating vessels (owned and time chartered-in) to 42.3 from 20.4 for the three months ended September 30, 2013 and 2012, respectively. Additionally, the Company experienced an overall increase in time charter equivalent revenue per day to $14,557 per day from $11,926 per day for the three months ended September 30, 2013 and 2012, respectively (see the breakdown of daily TCE averages below).
- Vessel operating costs increased $4.7 million to $11.1 million from $6.4 million for the three months ended September 30, 2013 and 2012, respectively. This increase was primarily driven by an increase in the Company’s owned fleet to an average of 17.3 vessels from 9.9 vessels for the three months ended September 30, 2013 and 2012, respectively.
- Charterhire expense increased $19.3 million to $31.9 million as a result of an increase in the average number of time chartered-in vessels to 25.0 from 10.5 for the three months ended September 30, 2013 and 2012, respectively. See the Company’s Fleet List below for the terms of these agreements.
- Depreciation expense increased $3.0 million to $6.4 million primarily as a result of an increase in the average number of owned vessels to 17.3 from 9.9 for the three months ended September 30, 2013 and 2012.
- General and administrative expenses increased $3.7 million to $6.5 million. This increase was driven by (i) a $3.0 million increase in restricted stock amortization (non-cash) and (ii) an overall increase in other general and administrative expenses due to the significant growth in the Company’s fleet and Newbuilding program.
- Financial expenses decreased $3.7 million to $0.4 million primarily as a result of the one-time write-off of deferred financing fees during the three months ended September 30, 2012 of $3.0 million relating to the amendment signed in July 2012 to extend the availability period of the 2011 Credit Facility to January 2014.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Profit or Loss
(unaudited)
For the three months For the nine months
ended September 30, ended September 30,
-------------------- --------------------
In thousands of U.S. dollars
except per share and share data 2013 2012 2013 2012
--------- --------- --------- ---------
Revenue
Vessel revenue $ 57,756$ 28,667$ 154,213$ 85,278
Operating expenses:
Vessel operating costs (11,137) (6,374) (27,635) (22,158)
Voyage expenses (1,249) (6,304) (3,782) (19,950)
Charterhire (31,877) (12,588) (79,345) (29,479)
Depreciation (6,377) (3,389) (16,665) (10,213)
Loss from sale of vessels - (5,879) - (10,404)
General and administrative
expenses (6,522) (2,815) (14,572) (8,404)
--------- --------- --------- ---------
Total operating expenses (57,162) (37,349) (141,999) (100,608)
--------- --------- --------- ---------
Operating income / (loss) 594 (8,682) 12,214 (15,330)
--------- --------- --------- ---------
Other (expense) and income, net
Financial expenses (448) (4,108) (2,323) (6,583)
Realized gain on derivative
financial instruments 3 286 25 286
Unrealized gain on derivative
financial instruments 118 38 483 38
Financial income 400 4 950 6
Other expenses, net - (49) (106) (73)
--------- --------- --------- ---------
Total other expense, net 73 (3,829) (971) (6,326)
--------- --------- --------- ---------
Net income / (loss) $ 667$ (12,511)$ 11,243$ (21,656)
========= ========= ========= =========
Earnings / (loss) per share
Basic and diluted $ 0.00$ (0.30)$ 0.08$ (0.54)
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
As of
----------------------------------
September 30, December 31,
In thousands of U.S. dollars 2013 2012
---------------- ----------------
Assets
Current assets
Cash and cash equivalents $ 447,368 $ 87,165
Accounts receivable 73,961 36,438
Prepaid expenses and other current assets 3,871 956
Inventories 3,498 2,169
---------------- ----------------
Total current assets 528,698 126,728
---------------- ----------------
Non-current assets
Vessels and drydock 640,855 395,412
Vessels under construction 371,236 50,251
Other assets 14,045 889
---------------- ----------------
Total non-current assets 1,026,136 446,552
---------------- ----------------
Total assets $ 1,554,834$ 573,280
================ ================
Current liabilities
Bank loans 13,754 7,475
Accounts payable 9,194 11,387
Accrued expenses 3,254 3,057
Derivative financial instruments 675 844
---------------- ----------------
Total current liabilities 26,877 22,763
---------------- ----------------
Non-current liabilities
Bank loans 157,543 134,984
Derivative financial instruments 309 743
---------------- ----------------
Total non-current liabilities 157,852 135,727
---------------- ----------------
Total liabilities 184,729 158,490
---------------- ----------------
Shareholders' equity
Issued, authorized and fully paid in
share capital:
Share capital 1,888 650
Additional paid in capital 1,462,232 519,493
Treasury shares (7,938) (7,938)
Hedging reserve (236) (329)
Accumulated deficit (85,841) (97,086)
---------------- ----------------
Total shareholders' equity 1,370,105 414,790
---------------- ----------------
Total liabilities and shareholders'
equity $ 1,554,834$ 573,280
================ ================
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
For the nine months ended
September 30,
----------------------------------
In thousands of U.S. dollars 2013 2012
---------------- ----------------
Operating activities
Net income / (loss) $ 11,243 $ (21,656)
Loss from sale of vessels - 10,404
Depreciation 16,665 10,213
Amortization of restricted stock 6,738 2,598
Amortization of deferred financing fees 538 3,844
Straight-line adjustment for charterhire
expense 7 225
Unrealized gain on derivative financial
instruments (483) (38)
---------------- ----------------
34,708 5,590
---------------- ----------------
Changes in assets and liabilities:
Drydock payments (1,448) (150)
Increase in inventories (1,328) (77)
Increase in accounts receivable (37,523) (5,575)
(Increase)/decrease in prepaid expenses
and other current assets (2,942) 129
(Increase)/decrease in other assets (394) 2,442
Increase in accounts payable 1,337 4,413
(Decrease)/increase in accrued expenses (29) 598
---------------- ----------------
(42,327) 1,780
---------------- ----------------
Net cash (outflow) / inflow from
operating activities (7,169) 7,370
---------------- ----------------
Investing activities
Acquisition of vessels and payments for
vessels under construction (585,182) (176,556)
Proceeds from disposal of vessels - 101,335
---------------- ----------------
Net cash outflow from investing
activities (585,182) (75,221)
---------------- ----------------
Financing activities
Bank loan repayment (24,102) (75,989)
Bank loan drawdown 52,050 124,173
Debt issuance costs (12,266) (2,944)
Gross proceeds from issuance of common
stock 983,537 27,000
Equity issuance costs (35,531) (1,137)
Purchase of treasury shares - (2,440)
Dividends paid (10,684) -
---------------- ----------------
Net cash inflow from financing activities 953,004 68,663
---------------- ----------------
Increase in cash and cash equivalents 360,203 812
Cash and cash equivalents at January 1, 87,165 36,833
---------------- ----------------
Cash and cash equivalents at September
30, $ 447,368 $ 37,645
================ ================
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three and nine months ended September 30, 2013
and 2012
(unaudited)
For the three months For the nine months
ended September 30, ended September 30,
--------------------- ---------------------
2013 2012 2013 2012
---------- ---------- ---------- ----------
Adjusted EBITDA(1) (in thousands
of U.S. dollars) $ 10,830$ 1,715$ 35,536$ 8,098
Average Daily Results
Time charter equivalent per
day(2) $ 14,557$ 11,926$ 15,388$ 12,719
Vessel operating costs per
day(3) 6,851 6,935 6,656 7,690
Aframax/LR2
TCE per revenue day (2) $ 10,876$ 15,809$ 12,803$ 10,940
Vessel operating costs per
day(3) 9,112 7,645 7,799 8,622
Panamax/LR1
TCE per revenue day (2) $ 13,349$ 13,613$ 13,519$ 14,609
Vessel operating costs per
day(3) 8,174 7,271 7,570 7,783
MR
TCE per revenue day (2) $ 17,304$ 10,972$ 17,706$ 11,195
Vessel operating costs per
day(3) 5,956 6,593 5,930 7,338
Handymax
TCE per revenue day (2) $ 13,029$ 11,106$ 14,246$ 12,804
Vessel operating costs per
day(3) 7,157 5,524 6,690 7,414
Fleet data
Average number of owned vessels 17.3 9.9 14.9 10.4
Average number of time
chartered-in vessels 25.0 10.5 21.1 8.4
Drydock
Expenditures for drydock (in
thousands of U.S. dollars) - - - -
(1) See Non-GAAP Measure section below
(2) Freight rates are commonly measured in the shipping industry in terms
of time charter equivalent per day (or TCE per day), which is
calculated by subtracting voyage expenses, including bunkers and port
charges, from vessel revenue and dividing the net amount (time charter
equivalent revenues) by the number of revenue days in the period.
Revenue days are the number of days the vessel is owned less the number
of days the vessel is off-hire for drydock and repairs.
(3) Vessel operating costs per day represent vessel operating costs
excluding non-recurring expenses (for example insurance deductible
expenses for repairs) divided by the number of days the vessel is owned
during the period.
Fleet List as of October 28, 2013
Year Ice Employ Vessel
Vessel Name Built DWT class ment type
----------- ----- ------- ----- ------ --------
Owned
vessels
1 STI SHTP
Highlander 2007 37,145 1A (1) Handymax
2 STI Amber SMRP
2012 52,000 - (4) MR
3 STI Topaz SMRP
2012 52,000 - (4) MR
4 STI Ruby SMRP
2012 52,000 - (4) MR
5 STI Garnet SMRP
2012 52,000 - (4) MR
6 STI Onyx SMRP
2012 52,000 - (4) MR
7 STI SMRP
Sapphire 2013 52,000 - (4) MR
8 STI Emerald SMRP
2013 52,000 - (4) MR
9 STI Beryl SMRP
2013 52,000 - (4) MR
10 STI Le SMRP
Rocher 2013 52,000 - (4) MR
11 STI SMRP
Larvotto 2013 52,000 - (4) MR
12 STI SMRP
Fontvieille 2013 52,000 - (4) MR
13 STI Ville 2013 52,000 - Spot MR
14 Noemi SPTP
2004 72,515 - (2) LR1
15 Senatore SPTP
2004 72,514 - (2) LR1
16 STI Harmony SPTP
2007 73,919 1A (2) LR1
17 STI SPTP
Heritage 2008 73,919 1A (2) LR1
18 Venice SPTP Post-
2001 81,408 1C (2) Panamax
19 STI Spirit SLR2P
2008 113,100 - (3) LR2
-------
Total owned DWT 1,148,5
20
=======
Daily Exp
Year Ice Employ Vessel Base iry
Vessel Name Built DWT class ment type Rate (5)
----------- ----- ------- ----- ------ -------- ------- ---
Time Chartered-In
vessels
20 Freja 14-
Polaris 2004 37,217 1B SHTP Handymax $12,700 Apr (6)
(1) -14
21 Kraslava 18-
2007 37,258 1B SHTP Handymax $12,800 May (7)
(1) -14
22 Krisjanis 14-
Valdemars 2007 37,266 1B SHTP Handymax $12,800 Apr (8)
(1) -14
23 Jinan 28-
2003 37,285 - SHTP Handymax $12,600 Apr
(1) -15
24 Iver 03-
Progress 2007 37,412 - SHTP Handymax $12,500 Mar (9)
(1) -15
25 Iver 20-
Prosperity 2007 37,455 - SHTP Handymax $12,500 Oct (10)
(1) -14
26 Histria 04-
Azure 2007 40,394 - SHTP Handymax $12,600 Apr (11)
(1) -14
27 Histria 17-
Coral 2006 40,426 - SHTP Handymax $12,800 Jul (12)
(1) -14
28 Histria 15-
Perla 2005 40,471 - SHTP Handymax $12,800 Jul (12)
(1) -14
29 STX Ace 6 17-
2007 46,161 - SMRP MR $14,150 May (13)
(4) -14
30 Targale 17-
2007 49,999 - SMRP MR $14,500 May (14)
(4) -14
31 Ugale 15-
2007 49,999 1B SMRP MR $14,000 Jan (15)
(4) -14
32 Gan Triumph 20-
2010 49,999 - SMRP MR $14,150 May
(4) -14
33 Nave Orion 25-
2013 49,999 - SMRP MR $14,300 Mar (16)
(4) -15
34 Freja Lupus 26-
2012 50,385 - SMRP MR $14,760 Apr (17)
(4) -14
35 Gan-Trust 06-
2013 51,561 - SMRP MR $16,250 Jan (18)
(4) -16
36 Usma 03-
2007 52,684 1B SMRP MR $13,500 Jan (19)
(4) -14
37 SN Federica 15-
2003 72,344 - SPTP LR1 $11,250 May (20)
(2) -15
38 King 08-
Douglas 2008 73,666 Spot LR1 $14,000 Aug (21)
-14
39 Hellespont 16-
Promise 2007 73,669 - SPTP LR1 $12,500 Dec (22)
(2) -13
40 FPMC P 09-
Eagle 2009 73,800 - SPTP LR1 $14,525 Sep
(2) -15
41 FPMC P Hero 02-
2011 99,995 - SLR2P LR2 $14,750 May (23)
(3) -14
42 FPMC P 09-
Ideal 2012 99,993 - SLR2P LR2 $15,000 Jan (24)
(3) -14
43 Densa 17-
Alligator 2013 105,708 - SLR2P LR2 $16,500 Sep (25)
(3) -14
44 Khawr 11-
Aladid 2006 106,003 - SLR2P LR2 $15,400 Jul
(3) -15
45 Fair Seas 31-
2008 115,406 - SLR2P LR2 $16,250 Jan (26)
(3) -14
46 Pink Stars 10-
2010 115,592 - SLR2P LR2 $16,125 Apr
(3) -14
47 Four Sky 02-
2010 115,708 - SLR2P LR2 $16,250 Sep
(3) -14
48 Orange 06-
Stars 2011 115,756 - SLR2P LR2 $16,125 Apr
(3) -14
-------
Total time 1,913,6
chartered-in DWT 11
=======
Newbuildings currently
under construction
Ice Vessel
Vessel Name Yard DWT class type
----------- ----- ------- ----- --------
Product
tankers
49 Hull 2451 HMD (27) 38,000 1A Handymax
50 Hull 2452 HMD (27) 38,000 1A Handymax
51 Hull 2453 HMD (27) 38,000 1A Handymax
52 Hull 2454 HMD (27) 38,000 1A Handymax
53 Hull 2462 HMD (27) 38,000 1A Handymax
54 Hull 2463 HMD (27) 38,000 1A Handymax
55 Hull 2464 HMD (27) 38,000 1A Handymax
56 Hull 2465 HMD (27) 38,000 1A Handymax
57 Hull 2476 HMD (27) 38,000 1A Handymax
58 Hull 2477 HMD (27) 38,000 1A Handymax
59 Hull 2478 HMD (27) 38,000 1A Handymax
60 Hull 2479 HMD (27) 38,000 1A Handymax
61 Hull 2499 HMD (27) 38,000 1A Handymax
62 Hull 2500 HMD (27) 38,000 1A Handymax
63 Hull 2389 HMD (27) 52,000 MR
64 Hull 2390 HMD (27) 52,000 MR
65 Hull 2391 HMD (27) 52,000 MR
66 Hull 2392 HMD (27) 52,000 MR
67 Hull 2449 HMD (27) 52,000 MR
68 Hull 2450 HMD (27) 52,000 MR
69 Hull 2458 HMD (27) 52,000 MR
70 Hull 2459 HMD (27) 52,000 MR
71 Hull 2460 HMD (27) 52,000 MR
72 Hull 2461 HMD (27) 52,000 MR
73 Hull 2492 HMD (27) 52,000 MR
74 Hull 2493 HMD (27) 52,000 MR
75 Hull S1138 SPP (28) 52,000 MR
76 Hull S1139 SPP (28) 52,000 MR
77 Hull S1140 SPP (28) 52,000 MR
78 Hull S1141 SPP (28) 52,000 MR
79 Hull S1142 SPP (28) 52,000 MR
80 Hull S1143 SPP (28) 52,000 MR
81 Hull S1144 SPP (28) 52,000 MR
82 Hull S1145 SPP (28) 52,000 MR
83 Hull S1167 SPP (28) 52,000 MR
84 Hull S1168 SPP (28) 52,000 MR
85 Hull S1169 SPP (28) 52,000 MR
86 Hull S1170 SPP (28) 52,000 MR
87 Hull S5122 SPP (28) 52,000 MR
88 Hull S5123 SPP (28) 52,000 MR
89 Hull S5124 SPP (28) 52,000 MR
90 Hull S5125 SPP (28) 52,000 MR
91 Hull S703 HSHI (29) 114,000 LR2
92 Hull S704 HSHI (29) 114,000 LR2
93 Hull S705 HSHI (29) 114,000 LR2
94 Hull S706 HSHI (29) 114,000 LR2
95 Hull S709 HSHI (29) 114,000 LR2
96 Hull S710 HSHI (29) 114,000 LR2
97 Hull S715 HSHI (29) 114,000 LR2
98 Hull S716 HSHI (29) 114,000 LR2
99 Hull 5394 DSME (30) 114,000 LR2
100 Hull 5395 DSME (30) 114,000 LR2
101 Hull 5398 DSME (30) 114,000 LR2
102 Hull 5399 DSME (30) 114,000 LR2
-------
Total product 3,356,0
tankers DWT 00
=======
Vessel
size Vessel
Vessel Name Yard (cbm) type
----------- ----- ------- --------
LPG
Carriers
103 Hull 2336 DSME (31) 84,000 VLGC
104 Hull 2337 DSME (31) 84,000 VLGC
105 Hull 2338 DSME (31) 84,000 VLGC
106 Hull S749 HSHI (32) 84,000 VLGC
107 Hull S750 HSHI (32) 84,000 VLGC
108 Hull S751 HSHI (32) 84,000 VLGC
109 Hull S752 HSHI (32) 84,000 VLGC
110 Hull S755 HSHI (32) 84,000 VLGC
111 Hull S756 HSHI (32) 84,000 VLGC
112 Hull S753 HSHI (32) 84,000 VLGC
113 Hull S754 HSHI (32) 84,000 VLGC
-------
Total LPG carriers
(cbm) 924,000
=======
(1) This vessel operates in or is expected to operate in the Scorpio
Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial
Management (SCM). SHTP and SCM are related parties to the Company.
(2) This vessel operates in or is expected to operate in the Scorpio
Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related
party to the Company.
(3) This vessel operates in or is expected to operate in the Scorpio LR2
Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the
Company.
(4) This vessel operates in or is expected to operate in the Scorpio MR
Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the
Company.
(5) Redelivery from the charterer is plus or minus 30 days from the expiry
date.
(6) We have an option to extend the charter for an additional year at
$14,000 per day.
(7) We have an option to extend the charter for an additional year at
$13,650 per day.
(8) We have an option to extend the charter for an additional year at
$13,650 per day. The agreement also contains a 50% profit and loss
sharing provision whereby we split all of the vessel's profits and
losses above or below the daily base rate with the vessel's owner.
(9) We have an option to extend the charter for an additional year at
$13,500 per day.
(10) We have an option to extend the charter for an additional year at
$13,250 per day.
(11) We have an option to extend the charter for an additional year at
$13,550 per day.
(12) We have options to extend each charter for an additional year at
$13,550 per day.
(13) We have an option to extend the charter for an additional year at
$15,150 per day.
(14) We have options to extend the charter for up to three consecutive one
year periods at $14,850 per day, $15,200 per day and $16,200 per day,
respectively.
(15) We have an option to extend the charter for an additional year at
$15,000 per day.
(16) We have an option to extend the charter for an additional year at
$15,700 per day.
(17) We have an option to extend the charter for an additional year at
$16,000 per day.
(18) The daily base rate represents the average rate for the three year
duration of the agreement. The rate for the first year is $15,750 per
day, the rate for the second year is $16,250 per day, and the rate for
the third year is $16,750 per day. We have options to extend the
charter for up to two consecutive one year periods at $17,500 per day
and $18,000 per day, respectively.
(19) We have an option to extend the charter for an additional year at
$14,500 per day.
(20) We have an option to extend the charter for an additional year at
$12,500 per day. We have also entered into an agreement with the
vessel's owner whereby we split all of the vessel's profits above the
daily base rate.
(21) We have an option to extend the charter for an additional year at
$15,000 per day.
(22) We have an option to extend the charter for an additional six months at
$14,250 per day.
(23) We have extended the charter for six months at $15,000 per day
beginning in November 2013. Subsequent to that, we have options to
extend the charter for two consecutive six month periods at $15,250 per
day, and $15,500 per day respectively.
(24) We have options to extend the charter for two consecutive six month
periods at $15,250 per day and $15,500 per day respectively.
(25) We have an option to extend the charter for one year at $17,550 per
day.
(26) We have options to extend the charter for two consecutive six month
periods at $16,500 per day and $16,750 per day, respectively.
(27) These newbuilding vessels are being constructed at HMD (Hyundai Mipo
Dockyard Co. Ltd. of South Korea). 24 vessels are expected to be
delivered in 2014 and two vessels in the second quarter of 2015.
(28) These newbuilding vessels are being constructed at SPP (SPP
Shipbuilding Co., Ltd. of South Korea ). 12 vessels are expected to be
delivered during the second, third and fourth quarters of 2014 and four
in the first and second quarters of 2015.
(29) These newbuilding vessels are being constructed at HSHI (Hyundai Samho
Heavy Industries Co., Ltd.). Six vessels are expected to be delivered
in the third and fourth quarters of 2014 and two in the first quarter
of 2015.
(30) These newbuilding vessels are being constructed at DSME (Daewoo
Shipbuilding and Marine Engineering). Two vessels are expected to be
delivered in the fourth quarter of 2014 and two in the second quarter
of 2015.
(31) These newbuilding vessels are being constructed at DSME (Daewoo
Shipbuilding and Marine Engineering). One vessel is expected to be
delivered in the third quarter and two in the fourth quarter of 2015.
(32) These newbuilding vessels are being constructed at HSHI (Hyundai Samho
Heavy Industries Co., Ltd.). Two vessels are expected to be delivered
each in the second quarter, third and fourth quarters of 2015 and two
in the first quarter of 2016.
Business Strategy, Dividend Policy, and Stock Buyback Program
Business Strategy
The Company’s primary objectives are to profitably grow the business and emerge as a major operator of medium-sized tanker vessels and gas carriers. The Company intends to acquire modern, high-quality tankers and gas carriers through timely and selective acquisitions. The Company is currently concentrating on product or coated tankers and gas carriers because of the fundamentals of these segments, which the Company believes includes:
- increasing demand for refined products and LPG,
- increasing ton miles (distance between new refiners and areas of demand), and
- reduced order book.
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.
On October 28, 2013, the Company’s board of directors declared a quarterly cash dividend of $0.07 per share, payable on December 18, 2013 to all shareholders as of December 3, 2013 (the record date). On September 25, 2013, the Company paid a quarterly cash dividend on its common stock of $0.035 per share to all shareholders as of September 10, 2013 (the record date).
Share Buyback Program
On July 9, 2010, the Company’s board of directors authorized a share buyback program of up to $20 million. The Company expects to repurchase these shares in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any shares.
As of October 28, 2013, the Company has purchased $7.9 million of shares in the open market at an average price of $6.78.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 19 tankers (one LR2 tanker, four LR1 tankers, one Handymax tanker, 12 MR tankers, and one post-Panamax tanker) with an average age of 4.0 years, time charters-in 29 product tankers (eight LR2, four LR1, eight MR and nine Handymax tankers), and has contracted for 65 newbuilding vessels (28 MR, 12 LR2, and 14 Handymax ice class-1A product tankers, and 11 Very Large Gas Carriers), 44 of which are expected to be delivered within 2014, 19 within 2015 and the remaining two in the first quarter of 2016. 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-GAAP Measures
This press release describes adjusted net income and Adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. “Non-GAAP” measure). The Non-GAAP measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
Adjusted net income / (loss)
For the three months ended September 30,
------------------------------------------
2013 2012
-------------------- --------------------
In thousands of U.S. dollars
except per share and share data Amount Per share Amount Per share
--------- --------- --------- ---------
Net income / (loss) $ 667$ 0.00$ (12,511)$ (0.30)
Adjustments:
Loss from sale of vessels - 0.00 5,879 0.14
Write off of deferred
financing fees - 0.00 2,977 0.07
Unrealized gain on
derivative financial
instruments (118) (0.00) (38) (0.00)
--------- --------- --------- ---------
Total adjustments (118) (0.00) 8,818 0.21
--------- --------- --------- ---------
Adjusted net income/ (loss) $ 549$ 0.00$ (3,693)$ (0.09)
========= ========= ========= =========
For the nine months ended September 30,
------------------------------------------
2013 2012
-------------------- --------------------
Amount Per share Amount Per share
--------- --------- --------- ---------
Net income / (loss) $ 11,243$ 0.08$ (21,656)$ (0.54)
Adjustments:
Loss from sale of vessels - 0.00 10,404 0.26
Write off of deferred
financing fees - 0.00 2,977 0.07
Unrealized gain on
derivative financial
instruments (483) (0.00) (38) (0.00)
--------- --------- --------- ---------
Total adjustments (483) (0.00) 13,343 0.33
--------- --------- --------- ---------
Adjusted net income/ (loss) $ 10,760$ 0.08$ (8,313)$ (0.21)
========= ========= ========= =========
Adjusted EBITDA
For the three months For the nine months
ended September 30, ended September 30,
-------------------- --------------------
In thousands of U.S. dollars 2013 2012 2013 2012
--------- --------- --------- ---------
Net income / (loss) $ 667$ (12,511)$ 11,243$ (21,656)
Financial expenses 448 4,108 2,323 6,583
Unrealized gain on derivative
financial instruments (118) (38) (483) (38)
Financial income (400) (4) (950) (6)
Depreciation 6,377 3,389 16,665 10,213
Amortization of restricted
stock 3,856 892 6,738 2,598
Loss from sale of vessels - 5,879 0 10,404
--------- --------- --------- ---------
Adjusted EBITDA $ 10,830$ 1,715$ 35,536$ 8,098
========= ========= ========= =========
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.