UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2020
Commission File Number: 001-34677

SCORPIO TANKERS INC.
(Translation of registrant’s name into English)

9, Boulevard Charles III, Monaco 98000
(Address of principal executive office)


Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F [X] Form 40-F [  ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b) (1): [  ]

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [  ]

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

















INFORMATION CONTAINED IN THIS FORM 6-K REPORT

This Report on Form 6-K contains the unaudited interim condensed consolidated financial statements and the accompanying notes thereto, for the three-month period ended March 31, 2020 of Scorpio Tankers Inc. (the “Company”), which is attached hereto as Exhibit 99.1.

The information contained in this Report on Form 6-K is hereby incorporated by reference into the Company's registration statement on Form F-3 (File No. 333-230469) that was filed with the U.S. Securities and Exchange Commission with an effective date of March 22, 2019.









































SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
 
 
 
 
 
 
 
 
 
 
SCORPIO TANKERS INC.
 
 
 
 
(registrant)
Dated: May 26, 2020
 
 
 
 
 
 
 
 
 
 
By:
 
/s/ Brian Lee
 
 
 
 
 
 
Brian Lee
 
 
 
 
 
 
Chief Financial Officer






Document

Exhibit 99.1
SCORPIO TANKERS INC. AND SUBSIDIARIES
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 
Page
Unaudited Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019
Unaudited Condensed Consolidated Statements of Income or Loss for the three months ended March 31, 2020 and 2019
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2020 and 2019
Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019
Notes to the Unaudited Condensed Consolidated Financial Statements


F-1

Table of Contents

Scorpio Tankers Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
March 31, 2020 and December 31, 2019
 
 
 
As of
In thousands of U.S. dollars
Notes
 
March 31, 2020
 
December 31, 2019
Assets
 
 

 
 

Current assets
 
 
 
 
 

Cash and cash equivalents
 
 
$
119,825

 
$
202,303

Accounts receivable
 
148,537

 
78,174

Prepaid expenses and other current assets
 
11,774

 
13,855

Inventories
 
 
9,867

 
8,646

Total current assets
 
 
290,003

 
302,978

Non-current assets
 
 
 
 
 

Vessels and drydock
 
4,051,604

 
4,008,158

Right of use assets
 
804,726

 
697,903

Other assets
 
96,977

 
131,139

Goodwill
 
 
11,539

 
11,539

Restricted cash
 
12,293

 
12,293

Total non-current assets
 
 
4,977,139

 
4,861,032

Total assets
 
 
$
5,267,142

 
$
5,164,010

Current liabilities
 
 
 
 
 

Current portion of long-term debt
 
263,889

 
235,482

Lease liability - sale and leaseback vessels
 
122,599

 
122,229

Lease liability - IFRS 16
 
69,711

 
63,946

Accounts payable
 
21,552

 
23,122

Accrued expenses
 
45,622

 
41,452

Total current liabilities
 
 
523,373

 
486,231

Non-current liabilities
 
 
 
 
 

Long-term debt
 
968,914

 
999,268

Lease liability - sale and leaseback vessels
 
1,165,025

 
1,195,494

Lease liability - IFRS 16
 
584,237

 
506,028

Total non-current liabilities
 
 
2,718,176

 
2,700,790

Total liabilities
 
 
3,241,549

 
3,187,021

Shareholders’ equity
 
 
 
 
 

Issued, authorized and fully paid-in share capital:
 
 
 
 
 

Common stock, $0.01 par value per share; 150,000,000 shares authorized; 58,672,080 and 58,202,400 issued and outstanding shares as of March 31, 2020 and December 31, 2019, respectively.
 
650

 
646

Additional paid-in capital
 
2,844,419

 
2,842,446

Treasury shares
 
(467,057
)
 
(467,057
)
Accumulated deficit
 
(352,419
)
 
(399,046
)
Total shareholders’ equity
 
 
2,025,593

 
1,976,989

Total liabilities and shareholders’ equity
 
 
$
5,267,142

 
$
5,164,010

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents

Scorpio Tankers Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Income or Loss
For the three months ended March 31, 2020 and 2019
 
 
 
 
For the three months ended March 31
In thousands of U.S. dollars except per share and share data
 
Notes
 
2020
 
2019
Revenue
 
 
 
 

 
 

Vessel revenue
 
 
$
254,167

 
$
195,830

Operating expenses
 
 
 
 

 
 

Vessel operating costs
 
 
(81,463
)
 
(69,376
)
Voyage expenses
 
 
 
(4,220
)
 
(295
)
Charterhire
 
 
 

 
(4,399
)
Depreciation - owned or sale and leaseback
 
 
(46,841
)
 
(43,814
)
Depreciation - right of use assets under IFRS 16
 
 
(13,197
)
 
(2,135
)
General and administrative expenses
 
 
(17,261
)
 
(15,712
)
Total operating expenses
 
 
 
(162,982
)
 
(135,731
)
Operating income
 
 
 
91,185

 
60,099

Other (expense) and income, net
 
 
 
 
 
 
Financial expenses
 
 
(44,765
)
 
(48,756
)
Financial income
 
 
 
565

 
3,119

Other expenses, net
 
 
 
(358
)
 
14

Total other expense, net
 
 
 
(44,558
)
 
(45,623
)
Net income
 
 
 
$
46,627

 
$
14,476

Attributable to:
 
 
 
 

 
 

Equity holders of the parent
 
 
 
$
46,627

 
$
14,476

Earnings per share
 
 
 
 

 
 

Basic
 
 
$
0.85

 
$
0.30

Diluted
 
 
$
0.82

 
$
0.30

Basic weighted average shares outstanding
 
 
54,667,211

 
48,070,530

Diluted weighted average shares outstanding
 
 
61,692,830

 
48,556,887


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



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Table of Contents

Scorpio Tankers Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity
For the three months ended March 31, 2020 and 2019
In thousands of U.S. dollars except share data
Number of shares outstanding
 
Share capital
 
Additional paid-in capital
 
Treasury shares
 
Accumulated deficit
 
Total
Balance as of January 1, 2019
51,397,562

 
$
5,776

 
$
2,648,599

 
$
(467,056
)
 
$
(348,307
)
 
$
1,839,012

Adoption of accounting standards(1)

 

 

 

 
(2,249
)
 
(2,249
)
Net income for the period

 

 

 

 
14,476

 
14,476

Reverse stock split - impact of fractional shares and change in total par value (2)
(62
)
 
(5,198
)
 
5,196

 

 

 
(2
)
Amortization of restricted stock, net of forfeitures
(500
)
 
(1
)
 
7,186

 

 

 
7,185

Dividends paid, $0.10 per share (3)

 

 
(5,140
)
 

 

 
(5,140
)
Purchase of treasury shares
(30
)
 

 

 
(1
)
 

 
(1
)
Equity issuance costs


 

 
(19
)
 

 

 
(19
)
Balance as of March 31, 2019
51,396,970

 
$
577

 
$
2,655,822

 
$
(467,057
)
 
$
(336,080
)
 
$
1,853,262

 
 
 
 
 
 
 
 
 
 
 
 
Balance as of January 1, 2020
58,202,400

 
$
646

 
$
2,842,446

 
$
(467,057
)
 
$
(399,046
)
 
$
1,976,989

Net income for the period

 

 

 

 
46,627

 
46,627

Issuance of restricted stock, net of forfeitures
469,680

 
4

 
(4
)
 

 

 

Amortization of restricted stock, net of forfeitures

 

 
7,845

 

 

 
7,845

Dividends paid, $0.10 per share (3)

 

 
(5,868
)
 

 

 
(5,868
)
Balance as of March 31, 2020
58,672,080

 
$
650

 
$
2,844,419

 
$
(467,057
)
 
$
(352,419
)
 
$
2,025,593

(1) Reflects the impact of the adoption of IFRS 16 - Leases, which was effective for annual periods beginning on January 1, 2019. Refer to Note 1 for further discussion.
(2) On January 18, 2019, the Company effected a one-for-ten reverse stock split. The Company's shareholders approved the reverse stock split and change in authorized common shares at the Company's special meeting of shareholders held on January 15, 2019. Pursuant to this reverse stock split, the total number of authorized common shares was reduced to 150.0 million shares.
(3) The Company's policy is to distribute dividends from available retained earnings first and then from additional paid in capital.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


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Table of Contents

Scorpio Tankers Inc. and Subsidiaries
Unaudited Condensed Consolidated Cash Flow Statements
For the three months ended March 31, 2020 and 2019

 
 
 
For the three months ended March 31,
In thousands of U.S. dollars
Notes
 
2020
 
2019
Operating activities
 
 
 
 
 

Net income
 
 
$
46,627

 
$
14,476

Depreciation - owned or sale and leaseback vessels
 
46,841

 
43,814

Depreciation - right of use assets under IFRS 16
 
13,197

 
2,135

Amortization of restricted stock
 
7,845

 
7,185

Amortization of deferred financing fees
 
1,458

 
2,215

Write-off of deferred financing fees
 

 
275

Accretion of Convertible Notes
 
2,258

 
3,493

Accretion of fair value measurement on debt assumed from historical acquisitions
 
878

 
920

 
 
 
119,104

 
74,513

Changes in assets and liabilities:
 
 
 
 
 

Increase in inventories
 
 
(1,221
)
 
(390
)
(Increase) / decrease in accounts receivable
 
 
(70,363
)
 
4,208

Decrease / (increase) in prepaid expenses and other current assets
 
 
2,080

 
(580
)
Decrease / (increase) in other assets
 
 
46

 
(2,676
)
Decrease in accounts payable
 
 
(675
)
 
(1,543
)
(Decrease) / increase accrued expenses
 
 
(4,869
)
 
1,035

 
 
 
(75,002
)
 
54

Net cash inflow from operating activities
 
 
44,102

 
74,567

Investing activities
 
 
 
 
 

Drydock, scrubber and BWTS payments
 
 
(63,486
)
 
(18,240
)
Net cash outflow from investing activities
 
 
(63,486
)
 
(18,240
)
Financing activities
 
 
 
 
 

Principal repayments on debt and sale and leaseback obligations
 
 
(108,617
)
 
(120,360
)
Issuance of debt
 
 
73,946

 

Debt issuance costs
 
 
(1,783
)
 
(1,284
)
Principal repayments on IFRS 16 lease liabilities
 
 
(20,772
)
 
(1,726
)
Increase in restricted cash
 
 

 
(9
)
Repayment of Convertible Notes
 
 

 
(2,292
)
Equity issuance costs
 
 

 
(285
)
Dividends paid
 
 
(5,868
)
 
(5,140
)
Repurchase of common stock
 
 

 
(1
)
Net cash outflow from financing activities
 
 
(63,094
)
 
(131,097
)
Decrease in cash and cash equivalents
 
 
(82,478
)
 
(74,770
)
Cash and cash equivalents at January 1,
 
 
202,303

 
593,652

Cash and cash equivalents at March 31,
 
 
$
119,825

 
$
518,882

Supplemental information:
 
 
 
 
 

Interest paid (which includes $0.6 million, and $0.6 million of interest capitalized during the three months ended March 31, 2020 and 2019, respectively)
 
 
$
40,830

 
$
45,267


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Table of Contents

Additionally, we completed the following non-cash transactions during the three months ended March 31, 2020 and 2019:
During the three months ended March 31, 2020, the Company took delivery of three MR vessels as part of the Trafigura Transaction (defined in Note 5), which included the assumption of obligations under bareboat charter agreements of $103.6 million (whose obligations are recorded as part of the Company's $670.0 Million Lease Financing). This transaction is described in Note 5.
During the three months ended March 31, 2019, the Company recognized a $24.2 million right of use asset and a corresponding $24.2 million lease liability (the obligations under these agreements are described as "IFRS 16 - Leases - seven Handymax") at the commencement date of seven bareboat charter agreements. This transaction is described in Note 5.
During the three months ended March 31, 2020, the Company recognized a $1.1 million right of use asset and a corresponding $1.1 million lease liability upon the modification of three bareboat charter-in agreements that are part of the IFRS 15 - seven Handymax transaction. This transaction is described in Note 5.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


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Table of Contents

Notes to the unaudited condensed consolidated financial statements
 
1.
General information and significant accounting policies
Company
Scorpio Tankers Inc. and its subsidiaries (together “we”, “our” or the “Company”) are engaged in the seaborne transportation of refined petroleum products in the international shipping markets. Scorpio Tankers Inc. was incorporated in the Republic of the Marshall Islands on July 1, 2009. On April 6, 2010, we closed on our initial public offering, and our common stock currently trades on the New York Stock Exchange under the symbol STNG.
Our fleet as of March 31, 2020 consisted of 137 owned, finance leased or bareboat chartered-in product tankers (21 Handymax, 62 MR, 12 LR1 and 42 LR2). In addition, we will bareboat charter-in one MR tanker that is currently under construction and is scheduled to be delivered in September 2020.
Our vessels are commercially managed by Scorpio Commercial Management S.A.M., or SCM, which is majority owned by the Lolli-Ghetti family of which Mr. Emanuele Lauro, our founder, Chairman and Chief Executive Officer, and Mr. Filippo Lauro, our Vice President, are members. SCM’s services include securing employment for the vessels in our fleet, in pools, in the spot market, and on time charters.
Our vessels are technically managed by Scorpio Ship Management S.A.M., or SSM, which is majority owned by the Lolli-Ghetti family. SSM facilitates vessel support such as crew, provisions, deck and engine stores, insurance, maintenance and repairs, and other services necessary to operate the vessels such as drydocks and vetting/inspection under a technical management agreement.
We also have an administrative services agreement with Scorpio Services Holding Limited, or SSH, which is majority owned by the Lolli-Ghetti family. The administrative services provided under this agreement primarily include accounting, legal compliance, financial, information technology services, and the provision of administrative staff and office space, which are contracted to subsidiaries of SSH. We pay our managers fees for these services and reimburse them for direct or indirect expenses that they incur in providing these services. 
Basis of accounting
The unaudited condensed consolidated financial statements have been presented in United States dollars (“USD” or “$”), which is the functional currency of Scorpio Tankers Inc. and all of its subsidiaries.
The unaudited condensed consolidated financial statements for the three months ended March 31, 2020 have been prepared in accordance with International Accounting Standard, or IAS 34, Interim Financial Statements, as issued by the International Accounting Standards Board, or IASB, using the same accounting policies as adopted in the preparation of the consolidated financial statements for the year ended December 31, 2019. These unaudited condensed consolidated interim financial statements do not include all of the information required for full annual financial statements prepared in accordance with International Financial Reporting Standards or IFRS.
Going concern
The unaudited condensed consolidated financial statements have been prepared in accordance with the going concern basis of accounting as described further in the "Liquidity risk" section of Note 18.
Adoption of new and amended IFRS and International Financial Reporting Interpretations Committee interpretations from January 1, 2020
Standards and interpretations adopted during the three months ended March 31, 2019
IFRS 16 - Leases, was issued by the IASB on January 13, 2016. IFRS 16 - Leases applies to an entity's first annual IFRS financial statements for a period beginning on or after January 1, 2019. IFRS 16 - Leases amends the definition of what constitutes a lease to be a contract that conveys the right to control the use of an identified asset if the lessee has both (i) the right to obtain substantially all of the economic benefits from the use of the identified asset and (ii) the right to direct the use of the identified asset throughout the period of use. We have determined that our existing pool and time charter-out arrangements meet the definition of leases under IFRS 16 - Leases , with the Company as lessor, on the basis that the pool or charterer enters into transportation contracts with their customers, and thereby enjoys the economic benefits derived from such arrangements. Furthermore, the pool or charterer can direct the use of a vessel (subject to certain limitations in the pool or charter agreement) throughout the period of the contract.

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Table of Contents

Moreover, under IFRS 16 - Leases, we are also required to identify the lease and non-lease components of revenue and account for each component in accordance with the applicable accounting standard. In time charter-out or pool arrangements, we have determined that the lease component is the vessel and the non-lease component is the technical management services provided to operate the vessel. Each component is quantified on the basis of the relative stand-alone price of each lease component; and on the aggregate stand-alone price of the non-lease components.
IFRS 16 - Leases also amends the existing accounting standards to require lessees to recognize, on a discounted basis, the rights and obligations created by the commitment to lease assets on the balance sheet, unless the term of the lease is 12 months or less. Accordingly, the standard resulted in the recognition of right-of-use assets and corresponding liabilities, on the basis of the discounted remaining future minimum lease payments, relating to the bareboat chartered-in vessel commitments for three bareboat chartered-in vessels, that were in place on the transition date, which are scheduled to expire in April 2025.  Upon transition, a lessee shall apply IFRS 16- Leases to its leases either retrospectively to each prior reporting period presented (the ‘full retrospective approach’) or retrospectively with the cumulative effect of initially applying IFRS 16 - Leases recognized at the date of initial application (the ‘modified retrospective approach’).  We applied the modified retrospective approach upon transition. The impact of the application of this standard on the opening balance sheet as of January 1, 2019 was the recognition of a $48.5 million right of use asset, a $50.7 million operating lease liability and a $2.2 million reduction in retained earnings relating to these three vessels.
Standards and Interpretation issued during the three months ended March 31, 2020 and early adopted
In October 2018, the International Accounting Standards Board ("IASB") issued amendments to the definition of a business in IFRS 3 - Business Combinations. The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. The amendments to IFRS 3 are effective for annual reporting periods beginning on or after January 1, 2020 and apply prospectively, however earlier application is permitted.
As part of these amendments, the IASB introduced an optional fair value concentration test. The purpose of this test is to permit a simplified assessment of whether an acquired set of activities and assets is a business or an asset. Entities may elect whether or not to apply the concentration test on a transaction-by-transaction basis. The concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. The test is based on gross assets, not net assets, as the IASB concluded that whether a set of activities and assets includes a substantive process does not depend on how the set is financed. In addition, certain assets are excluded from the gross assets considered in the test. If the test is met, the set of activities and assets is determined not to be a business and no further assessment is needed. If the test is not met, or if an entity elects not to apply the test, a detailed assessment must be performed applying the original requirements in IFRS 3.
We early adopted these amendments to IFRS 3 in September 2019, and applied them to the Trafigura Transaction, which is described in Note 5.
Standards and Interpretations issued and adopted during the three months ended March 31, 2020

Amendments to IAS 1, ‘Presentation of financial statements’, and IAS 8, ‘Accounting policies, changes in accounting estimates and errors’ - Definition of material.
Amendments to IFRS 9, IAS 39 and IFRS 17 - Interest rate benchmark reform
Amendments to the Conceptual framework.

The adoption of these standards did not have a significant impact on these unaudited condensed consolidated financial statements.


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Table of Contents

2.
Prepaid expenses and other assets
The following is a table summarizing our prepaid expenses and other current assets as of March 31, 2020 and December 31, 2019:

 
As of
 In thousands of U.S. dollars
March 31, 2020
 
December 31, 2019
SSM - prepaid vessel operating expenses
$
2,178

 
$
1,624

Prepaid interest
4,749

 
6,596

Prepaid vessel operating expenses - third parties
1,551

 
2,123

Prepaid insurance
311

 
760

Other prepaid expenses
2,985

 
2,752

 
$
11,774

 
$
13,855


3.
Accounts receivable
The following is a table summarizing our accounts receivable as of March 31, 2020 and December 31, 2019:
 
As of
In thousands of U.S. dollars
March 31, 2020
 
December 31, 2019
Scorpio MR Pool Limited
$
71,346

 
$
44,739

Scorpio LR2 Pool Limited
48,410

 
17,689

Scorpio LR1 Pool Limited
13,804

 
9,000

Scorpio Handymax Tanker Pool Limited
2,612

 
2,984

Scorpio Services Holding Limited (SSH)
1,277

 

Receivables from the related parties
137,449

 
74,412

 
 
 
 
Insurance receivables
5,940

 
1,322

Freight and time charter receivables
3,400

 
962

Other receivables
1,748

 
1,478

 
$
148,537

 
$
78,174

Scorpio MR Pool Limited, Scorpio LR2 Pool Limited, Scorpio Handymax Tanker Pool Limited, and Scorpio LR1 Pool Limited or the Scorpio Pools, are related parties, as described in Note 12. Amounts due from the Scorpio Pools relate to income receivables and receivables for working capital contributions which are expected to be collected within one year. The increase in accounts receivable from December 31, 2019 to March 31, 2020 relates to the timing of cash receipts from the Scorpio Pools. Approximately $67.0 million of pool distributions related to March 2020 were received during the first week of April 2020.
Receivables from SSH primarily represent amounts due from vessels operating in the spot market on voyages chartered through SSH.
Insurance receivables primarily represent amounts collectible on our insurance policies in relation to vessel repairs.
Freight and time charter receivables represent amounts collectible from customers for our vessels operating on time charter or in the spot market.
We consider that the carrying amount of accounts receivable approximates their fair value due to the relative short maturity thereof. Accounts receivable are non-interest bearing. At March 31, 2020 and December 31, 2019, no material receivable balances were either past due or impaired.
4.
Vessels
Operating vessels and drydock
The following is a rollforward of the activity within Vessels and drydock from January 1, 2020 through March 31, 2020. Amounts capitalized as part of the vessel component are depreciated over the remaining useful life of the vessel. Amounts capitalized as part of drydock component are depreciated until each vessel's next scheduled drydock.

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Table of Contents

 In thousands of U.S. dollars
 Vessels
 
 Drydock
 
 Total
 Cost
 
 
 
 
 
 
 
As of January 1, 2020
4,611,945

 
108,523

 
4,720,468

 
Additions (1)
77,169

 
13,118

 
90,287

 
As of March 31, 2020
4,689,114

 
121,641

 
4,810,755

 
 
 
 
 
 
 
 Accumulated depreciation
 
 
 
 
 
 
As of January 1, 2020
(665,586
)
 
(46,724
)
 
(712,310
)
 
Charge for the period
(41,428
)
 
(5,413
)
 
(46,841
)
 
As of March 31, 2020
(707,014
)
 
(52,137
)
 
(759,151
)
 Net book value
 
 
 
 
 
 
As of March 31, 2020
$
3,982,100

 
$
69,504

 
$
4,051,604

 
 
 
 
 
 
 
 Net book value
 
 
 
 
 
 
As of December 31, 2019
$
3,946,359

 
$
61,799

 
$
4,008,158


(1) 
Additions during the three months ended March 31, 2020 primarily relates to the various costs relating to BWTS, scrubber and drydock installations.

The following is a summary of the cost types that were capitalized during the three months ended March 31, 2020:
In thousands of U.S. dollars
Drydock
Notional component of scrubber
Total drydock additions
 
Scrubber
BWTS
Other equipment
Capitalized interest
Total vessel additions
Handymax
$
1,404

$

$
1,404

 
$

$
2,002

$
159

$

$
2,161

MR
5,037

900

5,937

 
23,681

8,265

382

281

32,609

LR1
13

150

163

 
5,262


65

92

5,419

LR2
4,714

900

5,614

 
27,883

8,367

485

245

36,980

 
$
11,168

$
1,950

$
13,118

 
$
56,826

$
18,634

$
1,091

$
618

$
77,169

Ballast Water Treatment Systems
In July 2018, we executed an agreement to purchase 55 ballast water treatment systems, or BWTS, from an unaffiliated third-party supplier for total consideration of $36.2 million. These systems have been, or are expected to be installed from 2018 to 2023, as each respective vessel under the agreement is due for its International Oil Pollution Prevention, or IOPP, renewal survey. Costs capitalized for these systems include the cost of the base equipment that we have contracted to purchase in addition to directly attributable installation costs. Costs capitalized during the three months ended March 31, 2020 include costs incurred for systems that were installed during this period, and installation costs incurred in advance of installations that are expected to occur in subsequent periods. We estimate the useful life of these systems to be for the duration of each vessel's remaining useful life and are depreciating the equipment and related installation costs on this basis.

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Exhaust Gas Cleaning Systems or Scrubbers
We have commenced a program to retrofit the majority of our vessels with exhaust gas cleaning systems, or scrubbers. The scrubbers will enable our vessels to use high sulfur fuel oil, which is less expensive than low sulfur fuel oil, in certain parts of the world. From August 2018 through November 2018, we entered into agreements with two separate unaffiliated third party suppliers to retrofit a total of 77 of our vessels with such systems for total consideration of $116.1 million (which excludes installation costs). We also obtained options to retrofit additional tankers under these agreements. In June and September 2019, we exercised the option to retrofit an additional 14 and seven of our vessels, respectively, with scrubbers for total consideration of $30.3 million (which excludes installation costs).
Costs capitalized for these systems include the cost of the base equipment that the Company has contracted to purchase in addition to directly attributable installation costs. Costs capitalized during the three months ended March 31, 2020 include costs incurred for systems that have been installed and installation costs incurred in advance of installations that are expected to occur in subsequent periods. We estimate the useful life of these systems to be for the duration of each vessel's remaining useful life, with the exception of approximately 10% of the equipment cost, which is estimated to require replacement at each vessel's next scheduled drydock. This amount has been allocated as a notional component upon installation. The carrying value of the equipment, related installation costs, and notional component will be depreciated on this basis.
As of March 31, 2020, we retrofitted a total of 45 of our vessels with scrubbers and 39 vessels with BWTS. The following table is a timeline of future expected payments and dates for our commitments to purchase scrubbers and BWTS as of March 31, 2020 (1):
 
As of March 31,
In thousands of U.S. dollars
2020
Less than 1 month
$
10,007

1-3 months
14,007

3 months to 1 year
20,633

1-5 years
2,495

5+ years

Total
$
47,142

(1) 
These amounts are subject to change as installation times are finalized. The amounts presented exclude installation costs.  
Carrying values of vessels
At each balance sheet date, we review the carrying amounts of our vessels and related drydock costs to determine if there is any indication that those vessels and related drydock costs have suffered an impairment loss. If such indication exists, the recoverable amount of the vessels and related drydock costs is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs to sell and value in use. As part of this evaluation, we consider certain indicators of potential impairment, such as market conditions including forecast time charter rates and values for second-hand product tankers, discounted projected vessel operating cash flows, and the Company’s overall business plans.
At March 31, 2020, we reviewed the carrying amount of our vessels to determine whether there was an indication that these assets had suffered an impairment. At this date, travel restrictions and other preventive measures to control the spread of the COVID-19 pandemic resulted in a precipitous decline in oil demand. However, a lack of corresponding production and refinery cuts has resulted in a supply glut of oil and refined petroleum products, which has been exacerbated by extreme oil price volatility from the Russia-Saudi Arabia oil price war. The oversupply of petroleum products and contango in oil prices led to record floating storage and arbitrage opportunities of both crude and refined petroleum products.  This dynamic resulted in an increase in spot market rates to historically high levels.
Nevertheless, the continued impact of these production increases is uncertain.  We expect that the impact of the COVID-19 virus and the uncertainty in the supply of oil will continue to cause volatility in the commodity markets.  The scale and duration of the impact of these factors remain unknowable but could have a material impact on our earnings, cash flow and financial condition for the remainder of 2020. An estimate of the impact on the Company’s results of operations and financial condition cannot be made at this time. On this basis, we have determined that indications of impairment existed as of March 31, 2020 and performed value in use calculations for each of our cash generating units where we estimated each vessel’s future cash flows.

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The estimates used for our value in use calculations were primarily based on (i) a combination of the latest forecast, published time charter rates for the next three years and a 2.39% growth rate (which is based on published historical and forecast inflation rates) in freight rates in each period through the vessel's 15th year of useful life and by the growth in expenses thereafter, (ii) our best estimate of vessel operating expenses and drydock costs, which are based on our most recent forecasts for the next three years and a 2.39% growth rate in each period thereafter, and (iii) the evaluation of other inputs such as the vessel's remaining useful life, residual value and utilization rate. These cash flows were then discounted to their present value using a pre-tax discount rate of 7.02%. The pre-tax discount rate is determined by the evaluation of internal and external inputs such as the Company's cost of debt, capital structure, the risk-free rate, market risk premium and industry volatility in relation to the overall market. Furthermore, this discount rate reflects a reduction from the discount rate used in our impairment testing as of December 31, 2019. This reduction is attributable to dramatic decreases in both the risk free rate of interest and in our borrowing costs, with benchmark interest rates falling over 100 basis points during this period. In spite of this, as part of our analysis, we have increased the risk premium embedded in our discount rate to account for the market uncertainty arising from the COVID-19 pandemic. This increase in the risk premium partially offset the decreases resulting from the fall in benchmark interest rates.
At March 31, 2020, our operating fleet consisted of 137 owned, finance leased or right of use vessels ("ROU vessels"). Value in use calculations were performed on all 137 vessels in operation, which resulted in no instances where the present value of the operating cash flows was less than the carrying value. Therefore, no impairment was recorded.
The impairment test that we conduct is most sensitive to variances in the discount rate and future time charter rates. Based on the sensitivity analysis performed for March 31, 2020, a 1.0% increase in the discount rate would result in twenty-six Handymax, MR and LR2 vessels being impaired for an aggregate $40.1 million loss. Alternatively, a 5.0% decrease in forecasted time charter rates would result in thirty-one Handymax, MR and LR2 vessels being impaired for an aggregate $70.9 million loss.
Capitalized interest
In accordance with IAS 23 - Borrowing Costs, applicable interest costs are capitalized during the period that vessels that are having BWTS and/or scrubber installations. For the three months ended March 31, 2020 and 2019, we capitalized interest expense for the respective vessels of $0.6 million and $0.6 million, respectively. The annualized capitalization rate used to determine the amount of borrowing costs eligible for capitalization was 5.3% for the three months ended March 31, 2020. We cease capitalizing interest when the vessels reach the location and condition necessary to operate in the manner intended by management.

5.
Right of use assets and related lease liabilities
During the three months ended March 31, 2020, we had bareboat charter-in commitments on 10 vessels under fixed rate bareboat agreements and 18 vessels under variable rate bareboat agreements. All of these agreements are being accounted for under IFRS 16 - Leases which amended the previous accounting standards to require lessees to recognize, on a discounted basis, the rights and obligations created by the commitment to lease assets on the balance sheet, unless the term of the lease is 12 months or less. The rights and obligations under the bareboat charter-in agreements for the vessels under the variable rate bareboat agreements were acquired in September 2019 as part of the transaction to acquire three subsidiaries of Trafigura Maritime Logistics Pte. Ltd., (“Trafigura”), that collectively held leasehold interests in 19 product tankers for an aggregate value of $803 million (the “Trafigura Transaction”). 
The following is the activity of the Right of use assets from January 1, 2020 through March 31, 2020:


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In thousands of U.S. dollars
Vessels
 
Drydock (1)
 
Total
Cost
 
 
 
 
 
 
 
As of January 1, 2020
705,857

 
18,962

 
724,819

 
Additions
116,570

 
3,450

 
120,020

 
As of March 31, 2020
822,427

 
22,412

 
844,839

 
 
 
 
 
 
 
Accumulated depreciation and impairment
 
 
 
 
 
 
As of January 1, 2020
(25,374
)
 
(1,542
)
 
(26,916
)
 
Charge for the period
(12,045
)
 
(1,152
)
 
(13,197
)
 
As of March 31, 2020
(37,419
)
 
(2,694
)
 
(40,113
)
 
 
 
 
 
 
 
Net book value
 
 
 
 
 
 
 
As of March 31, 2020
$
785,008

 
$
19,718

 
$
804,726

 
 
 
 
 
 
 
Net book value
 
 
 
 
 
 
As of December 31, 2019
$
680,483

 
$
17,420

 
$
697,903

(1)  
Drydock costs for bareboat chartered-in vessels are depreciated over the shorter of the lease term or the period until the next scheduled drydock. On this basis, the drydock costs incurred for these vessels is being depreciated separately.
Vessels recorded as Right of use assets derive income from subleases through time charter-out and pool arrangements. For the three months ended March 31, 2020 and 2019, sublease income of $50.4 million and $14.2 million, respectively, is included in Vessel revenue.
The following table summarizes the payments made for the three months ended March 31, 2020 and March 31, 2019 relating to lease liabilities accounted for under IFRS 16 - Leases:
 
For the three months ended March 31,
In thousands of U.S. dollars
2020
 
2019
Interest expense recognized in consolidated statements of income or loss
$
8,298

 
746

Principal repayments recognized in consolidated cash flow statements
20,772

 
1,726

Net decrease in accrued interest expense
(177
)
 
4

Net increase in prepaid interest expense
(144
)
 

Total payments on lease liabilities under IFRS 16
$
28,749

 
$
2,476

The undiscounted remaining future minimum lease payments under bareboat charter-in arrangements that are accounted as lease liabilities under IFRS 16 - Leases as of March 31, 2020 are $798.9 million. The obligations under these agreements will be repaid as follows:
 
 
As of
In thousands of U.S. dollars
March 31, 2020
Less than 1 year
$
96,475

1 - 5 years
287,465

5+ years
414,941

Total
$
798,881

Discounting effect
(144,933
)
Lease liability
$
653,948


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The total expense recognized under time and bareboat charterhire agreements that are accounted for as operating leases during the three months ended March 31, 2020 and 2019 was $0.0 million and $4.4 million, respectively. These lease payments include payments for the non-lease elements in our time chartered-in arrangements.
Bareboat chartered-in vessel commitments with fixed payments
In March 2020, we extended the terms of the bareboat agreements for three Handymax vessels, Silent, Single and Star I, through May 2020 at the rate of $6,300 per day. These extensions were determined to be lease modifications under IFRS 16. Accordingly, the Company recognized a $1.1 million right of use asset and a corresponding $1.1 million lease liability as of March 31, 2020 based upon a two-month incremental borrowing rate of 4.03%.
The obligations on the bareboat agreements for these seven Handymax vessels are secured by, among other things, assignments of earnings and insurances and stock pledges and account charges in respect of the subject vessels and contain customary events of default, including cross-default provisions.
Bareboat chartered-in vessel commitments with variable payments
During the three months ended March 31, 2020, we recorded lease liabilities and corresponding right of use assets upon the delivery of three MR vessels, whose leasehold interests were acquired as part of the Trafigura Transaction (STI Miracle, STI Maestro and STI Mighty). The right of use assets were measured based on (i) the present value of the minimum lease payments under each lease (which assumes the exercise of the purchase options at expiration) of $103.6 million, (ii) the value of the equity issued for each lease (as an initial direct cost) of $13.3 million, and (iii) other initial direct costs of $3.1 million (which, in addition to costs incurred as part of the transaction, includes certain capitalized costs incurred as part of the construction of the each vessel).
These leases are secured by, among other things, assignments of earnings and insurances and stock pledges and account charges in respect of the subject vessels and contain customary events of default, including cross-default provisions as well as subjective acceleration clauses under which the lessor could cancel the lease in the event of a material adverse change in the Company’s business. The leased vessels are required to maintain a fair value, as determined by an annual appraisal from an approved third-party broker, of 111% of the outstanding principal balance as of the last banking day of the year. We were in compliance with this covenant as of March 31, 2020.
The estimated lease commitment at March 31, 2020 is $35.2 million relating to the remaining undelivered vessel.
Time Chartered-Out Vessels
In accordance with IFRS 16 - Leases, we are required to identify the lease and non-lease components of revenue and account for each component in accordance with the applicable accounting standard. In time charter-out or pool arrangements, we have determined that the lease component is the vessel and the non-lease component is the technical management services provided to operate the vessel. Each component is quantified on the basis of the relative stand-alone price of each lease component; and on the aggregate stand-alone price of the non-lease components.
These components are accounted for as follows:
All fixed lease revenue earned under these time charter-out arrangements is recognized on a straight-line basis over the term of the lease.
Lease revenue earned under our pool arrangements is recognized as it is earned, since it is 100% variable.
The non-lease component is accounted for as services revenue under IFRS 15. This revenue is recognized “over time” as the customer (i.e. the pool or the charterer) is simultaneously receiving and consuming the benefits of the service.
The following table summarizes the lease and non-lease components of revenue from time charter-out and pool revenue during the three months ended March 31, 2020 and 2019. These figures are not readily quantifiable as our contracts (with the Scorpio pools or under time charter-out arrangements) do not separate these components. We do not view our pool and time charter-out revenue as two separate streams of revenue. Nevertheless, we have estimated these amounts by reference to (i) third party, published time charter rates for the lease component, and (ii) an approximation of the fair market value of vessel operating expenses for the non-lease component.

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For the three months ended March 31,
In thousands of U.S. dollars
2020
 
2019
Lease component of revenue from time charter-out and pool revenue
$
157,834

 
$
115,153

Non-lease component of revenue from time charter-out and pool revenue
88,560

 
80,618

 
$
246,394

 
$
195,771

The following table summarizes the terms of our time chartered-out vessels that were in place during the three months ended March 31, 2020 and 2019.
 
Name
 
Year built
 
Type
 
Delivery Date to the Charterer
 
Charter Expiration
 
Rate ($/ day)
1

STI Pimlico
 
2014
 
Handymax
 
February-16
 
February-19
 
$
18,000

2

STI Poplar
 
2014
 
Handymax
 
January-16
 
January-19
 
$
18,000

3

STI Rose
 
2015
 
LR2
 
February-16
 
February-19
 
$
28,000

Payments received include payments for the non-lease elements in these time chartered-out arrangements.

6.    Other assets
 
As of
In thousands of U.S. dollars
March 31, 2020
 
December 31, 2019
Scorpio LR2 Pool Ltd. pool working capital contributions (1)
$
35,700

 
$
35,700

Scorpio Handymax Tanker Pool Ltd. pool working capital contributions (1)
6,794

 
6,794

Scorpio LR1 Pool Ltd. pool working capital contributions (1)
6,600

 
6,600

Working capital contributions to Scorpio Pools
49,094

 
49,094

 
 
 
 
Deposits for scrubbers (2)
22,458

 
35,846

Seller's credit on sale leaseback vessels (3)
9,763

 
9,624

Deposits for BWTS (4)
5,808

 
12,699

Capitalized loan fees (5)
4,106

 
4,039

Equity consideration issued for the leasehold interest acquired from Trafigura for vessels under construction (6)
3,997

 
18,086

Investment in BWTS supplier (4)
1,751

 
1,751

Other assets
$
96,977

 
$
131,139

 
(1)
Upon entrance into the Scorpio LR2, LR1, and Handymax Tanker Pools, all vessels are required to make initial working capital contributions of both cash and bunkers. Initial working capital contributions are repaid, without interest, upon a vessel's exit from each pool no later than six months after the exit date. Bunkers on board a vessel exiting the pool are credited against such repayment at the actual invoice price of the bunkers. For all owned vessels, we assume that these contributions will not be repaid within 12 months and are thus classified as non-current within other assets on the unaudited condensed consolidated balance sheets. For time chartered-in vessels we classify the amounts as current (within Accounts Receivable) or non-current (within Other Assets) according to the expiration of the contract.

(2) From August 2018 through September 2019, we entered into agreements with two separate suppliers to retrofit a total of 98 of our vessels with scrubbers for total consideration of $146.4 million (which excludes installation costs). These scrubbers are expected to be installed throughout the next two years. Deposits paid for these systems are reflected as investing cash flows within the unaudited condensed consolidated statement of cash flows.


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(3)
The seller's credit on lease financed vessels represents the present value of the deposits of $4.35 million per vessel ($13.1 million in aggregate) that was retained by the buyer as part of the sale and operating leasebacks of STI Beryl, STI Le Rocher and STI Larvotto which occurred in April 2017. This deposit will either be applied to the purchase price of the vessel if a purchase option is exercised, or refunded to us at the expiration of the agreement. The present value of this deposit has been calculated based on the interest rate that is implied in the lease, and the carrying value will accrete over the life of the lease, through interest income, until expiration. $0.1 million and $0.1 million was recorded as interest income as part of these agreements during the three months ended March 31, 2020 and 2019, respectively.

(4)
In July 2018, we executed an agreement to purchase 55 BWTS from an unaffiliated third-party supplier for total consideration of $36.2 million. These systems have been, or are expected to be installed between 2018 and 2023, as each respective vessel under the agreement is due for its IOPP renewal survey. Upon entry into this agreement, we also obtained a minority equity interest in this supplier for no additional consideration. We have determined that of the total consideration of $36.2 million, $1.8 million is attributable to the minority equity interest.

Since July 2018, aggregate deposits of $32.8 million were made, of which $7.6 million was recorded to "Other assets" for systems that have not yet been installed and we have recorded $1.8 million of this amount as the aforementioned minority equity interest, which is being accounted for as a financial asset under IFRS 9.  Deposits paid for these systems are reflected as investing cash flows within the unaudited condensed consolidated statement of cash flows.  Under the terms of the agreement, we were granted a put option, exercisable after one year following the date of the agreement, whereby we can put the shares back to the supplier at a predetermined price. The supplier was also granted a call option, exercisable two years following the date of the agreement, whereby it can buy the shares back from us at a predetermined price, which is greater than the strike price of the put option. Given that the value of this investment is contractually limited to the strike prices set forth in these options, we have recorded the value of the investment at the put option strike price, or $1.8 million in aggregate. The difference in the aggregate value of the investment, based on the spread between the exercise prices of the put and call options, is $0.6 million. We consider this value to be a Level 3 fair value measurement as this supplier is a private company, and the value has been determined based on unobservable market data (i.e. the proceeds that we would receive if we exercised our put option in full).

(5) Represents upfront loan fees on credit facilities that are expected to be used to partially finance the purchase and installation of scrubbers or refinance the indebtedness on certain vessels. These fees are reclassified as deferred financing fees (net of Debt) when the tranche of the loan to which the vessel relates is drawn.

(6) On September 26, 2019, we acquired subsidiaries of Trafigura as part of the Trafigura Transaction, which have leasehold interests in 19 product tankers under bareboat charter agreements with subsidiaries of an international financial institution.  Of the 19 vessels, 15 were delivered on September 26, 2019 and four were under construction. For the four vessels under construction, we issued 591,254 shares of common stock at $29.00 per share to Trafigura with an aggregate market value of $17.1 million and will assume commitments on the bareboat charter agreements of approximately $138.9 million upon each vessel's delivery from the shipyard. The value of the equity issued of $17.1 million plus certain initial direct costs of approximately $0.6 million (which is a pro-rated portion of the legal and professional fees incurred as part of the Trafigura Transaction) and $0.4 million of lease liability fees relating to these four vessels under construction were recorded within "Other Non-current assets" as of December 31, 2019. 
    
In January 2020, we took delivery of two of these vessels (STI Miracle and STI Maestro), and in March 2020, we took delivery of a third vessel (STI Mighty) which resulted in the reclassification of $14.1 million of these initial direct costs to the caption on our balance sheet entitled Right of use assets.  The remaining vessel is expected to be delivered from the shipyard within 2020. The Trafigura Transaction is described in Note 5. The value of the equity issued of $3.8 million plus certain initial direct costs of approximately $0.1 million (which is a pro-rated portion of the legal and professional fees incurred as part of the Trafigura Transaction) relating to this remaining vessel under construction are recorded within "Other assets" as of March 31, 2020.

7.
Restricted cash
Restricted cash for the three months ended March 31, 2020 primarily represents debt service reserve accounts that must be maintained as part of the terms and conditions of our 2017 Credit Facility, Citibank/K-Sure Credit Facility, ABN AMRO/K-Sure Credit Facility, and the lease financing arrangements with CMB Financial Leasing Co. Ltd and Bank of Communications Financial Leasing (LR2s). The funds in these accounts will be applied against the principal balance of these facilities upon maturity.

8.
Accounts payable

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The following is a table summarizing our accounts payable as of March 31, 2020 and December 31, 2019:
 
As of
In thousands of U.S. dollars
March 31, 2020
 
December 31, 2019
Scorpio Ship Management S.A.M. (SSM)
$
2,326

 
$
2,454

Scorpio LR2 Pool Limited
1,912

 

Scorpio Handymax Tanker Pool Limited
747

 
116

Scorpio Services Holding Limited (SSH)
511

 
353

Scorpio LR1 Pool Limited
238

 
325

Amounts due to a related party port agent
165

 
58

Scorpio Commercial Management S.A.M. (SCM)
119

 
14

Amounts due to a related party bunker supplier
103

 

Scorpio MR Pool Limited
50

 
19

Accounts payable to related parties
6,171

 
3,339

 
 
 
 
Suppliers
15,381

 
19,783

 
$
21,552

 
$
23,122

The majority of accounts payable is settled with a cash payment within 90 days. No interest is charged on accounts payable. We consider that the carrying amount of accounts payable approximates fair value.  
9.
Accrued expenses
The following is a table summarizing our accrued expenses as of March 31, 2020 and December 31, 2019:
 
As of
In thousands of U.S. dollars
March 31, 2020
 
December 31, 2019
Scorpio LR2 Pool Limited
$
472

 
$
794

Accrued expenses to a related party port agent
406

 
302

Scorpio MR Pool Limited
154

 
1,361

Scorpio LR1 Pool Limited
137

 
874

Scorpio Ship Management S.A.M (SSM)
82

 
213

Scorpio Handymax Tanker Pool Limited
14

 
229

Accrued expenses to related parties
1,265

 
3,773

 
 
 
 
Suppliers
32,136

 
22,170

Accrued interest
6,960

 
5,739

Accrued short-term employee benefits
5,170

 
9,728

Other accrued expenses
91

 
42

 
$
45,622

 
$
41,452

10.
Current and long-term debt
The following is a roll forward of the activity within debt (current and non-current), by facility, for the three months ended March 31, 2020:

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Table of Contents


 
 
 
 
Activity
 
 
Balance as of March 31, 2020 consists of:
In thousands of U.S. dollars
 
Carrying Value as of December 31, 2019
 
Drawdowns
 
Repayments
 
Other Activity(1)
 
Carrying Value as of March 31, 2020
Current
Non-Current
KEXIM Credit Facility
 
$
199,014

 
$

 
$
(58,823
)
 
$

 
$
140,191

$
19,134

$
121,057

ABN AMRO Credit Facility
 
91,954

 

 
(2,138
)
 

 
89,816

89,816


ING Credit Facility
 
131,439

 

 
(3,185
)
 

 
128,254

41,321

86,933

2018 NIBC Credit Facility
 
31,621

 

 
(808
)
 

 
30,813

3,230

27,583

2017 Credit Facility
 
131,499

 

 
(3,316
)
 

 
128,183

13,265

114,918

Credit Agricole Credit Facility
 
88,466

 

 
(2,142
)
 
199

 
86,523

7,802

78,721

ABN AMRO / K-Sure Credit Facility
 
43,726

 

 
(963
)
 
181

 
42,944

3,147

39,797

Citibank / K-Sure Credit Facility
 
91,086

 

 
(2,104
)
 
459

 
89,441

6,629

82,812

ABN AMRO / SEB Credit Facility
 
103,325

 

 
(2,875
)
 

 
100,450

10,375

90,075

Hamburg Commercial Bank Credit Facility
 
42,150

 

 
(795
)
 

 
41,355

3,181

38,174

Prudential Credit Facility
 
55,463

 

 
(925
)
 

 
54,538

5,546

48,992

2019 DNB / GIEK Credit Facility
 

 
31,850

 

 

 
31,850

3,916

27,934

BNPP Sinosure Credit Facility
 

 
42,096

 

 

 
42,096

4,210

37,886

Ocean Yield Lease Financing
 
148,235

 

 
(2,716
)
 
48

 
145,567

10,854

134,713

CMBFL Lease Financing
 
56,473

 

 
(1,227
)
 
45

 
55,291

4,736

50,555

BCFL Lease Financing (LR2s)
 
90,384

 

 
(2,025
)
 
139

 
88,498

7,873

80,625

CSSC Lease Financing
 
233,727

 

 
(4,327
)
 
(193
)
 
229,207

18,064

211,143

CSSC Scrubber Lease Financing
 
10,976

 

 
(1,372
)
 

 
9,604

5,488

4,116

BCFL Lease Financing (MRs)
 
87,810

 

 
(2,845
)
 

 
84,965

11,852

73,113

2018 CMBFL Lease Financing
 
126,429

 

 
(2,529
)
 

 
123,900

10,114

113,786

$116.0 Million Lease Financing
 
106,040

 

 
(1,718
)
 

 
104,322

7,202

97,120


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AVIC Lease Financing
 
127,309

 

 
(2,948
)
 

 
124,361

11,794

112,567

China Huarong Lease Financing
 
123,750

 

 
(3,375
)
 

 
120,375

13,500

106,875

$157.5 Million Lease Financing
 
137,943

 

 
(3,536
)
 

 
134,407

14,143

120,264

COSCO Lease Financing
 
76,450

 

 
(1,925
)
 

 
74,525

7,700

66,825

IFRS 16 - Leases - 3 MRs
 
44,192

 

 
(1,761
)
 

 
42,431

7,337

35,094

IFRS 16 - Leases - 7 Handymax
 
12,778

 
1,145

 
(3,852
)
 

 
10,071

10,071


$670.0 Million Lease Financing
 
513,004

 
103,601

 
(15,159
)
 

 
601,446

52,303

549,143

Unsecured Senior Notes Due 2020
 
53,750

 

 

 

 
53,750

53,750


Convertible Notes Due 2022
 
180,050

 

 

 
2,258

 
182,308


182,308

 
 
$
3,139,043

 
$
178,692

 
$
(129,389
)
 
$
3,136

 
$
3,191,482

$
458,353

$
2,733,129

Less: deferred financing fees
 
(16,596
)
 
(1,969
)
 

 
1,458

 
(17,107
)
(2,154
)
(14,953
)
Total
 
$
3,122,447

 
$
176,723

 
$
(129,389
)
 
$
4,594

 
$
3,174,375

$
456,199

$
2,718,176


(1) 
Relates to non-cash accretion or amortization of (i) debt or lease obligations assumed as part of the 2017 merger with Navig8 Product Tankers Inc., which were recorded at fair value on the closing dates, (ii) accretion of our Convertible Notes due 2022 and (iii) amortization and write-offs of deferred financing fees.
Interest expense on all of our borrowings that has been incurred and is unpaid as of March 31, 2020 is accrued within Accrued Expenses (see Note 9).
We were in compliance with all of the financial covenants set forth under the above borrowing arrangements as of March 31, 2020.
Secured Debt
2019 DNB / GIEK Credit Facility
In November 2019, we executed a $55.5 million term loan facility with DNB Bank ASA and the Norwegian Export Credit Guarantee Agency (“GIEK”). In March 2020, we drew $31.9 million from this facility to refinance the existing debt on one of our vessels that was previously financed under the KEXIM Credit Facility. $17.4 million was repaid on the KEXIM Credit Facility as a result of this transaction.
The remaining availability under this credit facility is expected to be utilized to refinance the existing debt on an additional vessel that is currently financed under the KEXIM Credit Facility. The loan is comprised of two facilities: (i) an ECA facility of $47.2 million (which is comprised of a $41.6 million tranche which is guaranteed by GIEK, or the “GIEK Tranche”, and a $5.6 million commercial tranche or the “Commercial Bank Tranche”) and (ii) a commercial facility of $8.3 million, or the “Commercial Facility".

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These facilities are collectively referred to as the 2019 DNB/GIEK Credit Facility. The remaining amount available under the 2019 DNB / GIEK Credit Facility is expected to be drawn within 2020, the timing of which will align with the installation of scrubbers on certain of the Company's vessels. The 2019 DNB / GIEK Credit Facility matures in July 2024 and the GIEK tranche bears interest at LIBOR plus a margin of 2.5% and the Commercial Bank and Commercial Facility tranches bear interest at LIBOR plus a margin of 2.5% per annum. The amount drawn as of March 31, 2020 under the 2019 DNB / GIEK Credit Facility will be repaid in equal quarterly installments of $1.0 million. Once fully drawn, the 2019 DNB / GIEK Credit Facility is expected to be repaid in equal quarterly installments of approximately $1.6 million per quarter in aggregate, with a balloon payment due at maturity.
Our 2019 DNB / GIEK Credit Facility includes financial covenants that require us to maintain:
The ratio of net debt to total capitalization no greater than 0.60 to 1.00.
Consolidated tangible net worth of no less than $1.0 billion plus (i) 25% of the cumulative positive net income (on a consolidated basis) for each fiscal quarter commencing on or after January 1, 2016 and (ii) 50% of the net proceeds of new equity issues occurring on or after January 1, 2016.
Minimum liquidity of not less than the greater of $25.0 million or $500,000 per each owned vessel and $250,000 per each time chartered-in vessel.
The aggregate of the fair market value of the vessels provided as collateral under the facility shall at all times be no less than 130% of the then aggregate outstanding principal amount of the loans under the credit facility through the second anniversary of date of the agreement and 135% at all times thereafter.
BNPP Sinosure Credit Facility
In December 2019, we executed a senior secured term loan facility with BNP Paribas and Skandinaviska Enskilda Banken AB for up to$134.1 million. In March 2020, we drew $42.1 million from this facility to refinance the existing debt on two of our vessels that were previously financed under the KEXIM Credit Facility. $28.8 million was repaid on the KEXIM Credit Facility as a result of this transaction. The remaining availability under this credit facility is expected to be utilized to refinance four vessels that are currently financed under the KEXIM Credit Facility.
The loan is split into two facilities, (i) a commercial facility for up to $67.0 million (the "Commercial Facility"), and (ii) a Sinosure facility for up to $67.0 million (the "Sinosure Facility"), which is expected to be funded by the lenders under the commercial facility and insured by the China Export & Credit Insurance Corporation ("Sinosure"). The amount drawn in March 2020 was split evenly between the two facilities. These facilities are collectively referred to as the BNPP Sinosure Credit Facility.
The BNPP Sinosure Credit Facility is split into 70 tranches each of which will represent the lesser of 85% of the purchase and installation price of 70 scrubbers, or $1.9 million per scrubber (not to exceed 65% of the fair value of the collateral vessels). The Sinosure Facility and the Commercial Facility bear interest at LIBOR plus a margin of 1.80% and 2.80% per annum, respectively. The loan facility is available for future en bloc drawdowns on June 15, 2020, September 15, 2020, December 15, 2020 and March 15, 2021. Based on the amounts borrowed as of March 31, 2020, the Sinosure Facility is expected to be repaid in 10 semi-annual installments of $2.1 million, with the repayment amounts gradually expected to increase to $6.7 million as the facility is drawn in future periods (with separate repayment periods as each tranche of the loan is drawn down). The Commercial Facility is expected to be repaid at the final maturity date of the facility, or October 2025.
Our BNPP Sinosure Credit Facility includes financial covenants that require us to maintain:
The ratio of net debt to total capitalization no greater than 0.60 to 1.00.
Consolidated tangible net worth of no less than $1.0 billion plus (i) 25% of the cumulative positive net income (on a consolidated basis) for each fiscal quarter commencing on or after January 1, 2016 and (ii) 50% of the net proceeds of new equity issues occurring on or after January 1, 2016.
Minimum liquidity of not less than the greater of $25.0 million or $500,000 per each owned vessel and $250,000 per each time chartered-in vessel.
The aggregate of the fair market value of the vessels provided as collateral under the facility shall at all times be no less than 130% of the then aggregate outstanding principal amount of the loans under the credit facility through December 31, 2022 and 135% at all times thereafter.
Lease Financing

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AVIC Lease Financing
In February 2020, we executed an agreement to upsize the AVIC lease financing arrangement by $8.0 million to finance the purchase and installation of scrubbers on the two MRs and two LR2 product tankers. The upsized portion of the lease financing will be used to finance up to the lesser 80% of the purchase and installation price of the scrubbers or 80% of the appreciated value of the vessel. The upsized portion of the lease financing is expected to have final maturity of 3.0 years after the first drawdown, bears interest at LIBOR plus a margin of 4.20% per annum and is expected be repaid in quarterly principal payments of approximately $0.2 million per vessel.
Unsecured debt
Convertible Notes due 2022
The conversion rate of our Convertible Senior Notes due 2022 ("Convertible Notes due 2022") is subject to change upon the issuance of a dividend. The table below details the dividends declared during the three months ended March 31, 2020 and the corresponding effect to the conversion rate of the Convertible Notes due 2022:
Record Date
 
Dividends per share
 
Share Adjusted Conversion Rate (1)
March 2, 2020
 
$
0.10

 
25.8763

(1) Per $1,000 principal amount of the Convertible Notes due 2022.
The carrying value of the liability component of the Convertible Notes due 2022 as of March 31, 2020 and December 31, 2019, were $182.3 million and $180.1 million, respectively. We incurred $1.5 million of coupon interest and $2.3 million of non-cash accretion during the three months ended March 31, 2020. We were in compliance with the covenants related to the Convertible Notes due 2022 as of March 31, 2020 and December 31, 2019.

11.
Common shares
 
2013 Equity Incentive Plan, or the Plan

In January 2020, we issued 469,680 shares of restricted stock to our employees for no cash consideration. The share price on the issuance date was $36.73 per share. The vesting schedule of the restricted stock issued to our employees is (i) one-third of the shares vest on September 8, 2022, (ii) one-third of the shares vest on September 7, 2023, and (iii) one-third of the shares vest on September 5, 2024.
The following is a summary of activity for awards of restricted stock that have been granted under our equity incentive plan during the three months ended March 31, 2020.
 
 
 
 Number of Shares
 
 Weighted Average Grant Date Fair Value
 Outstanding and non-vested, December 31, 2019
 
3,561,742

 
$
26.45

 
 Granted
 
469,680

 
36.73

 
 Vested
 
(73,819
)
 
30.64

 
 Forfeited
 

 

 Outstanding and non-vested, March 31, 2020
 
3,957,603

 
$
27.59


As of March 31, 2020, there were 3,957,603 unvested shares of restricted stock outstanding. Assuming that all the restricted stock will vest, the stock compensation expense in future periods, including that related to restricted stock issued in prior periods will be:

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Table of Contents

In thousands of U.S. dollars
 
Employees
 
Directors
 
Total
 For the period April 1, 2020 through December 31, 2020
 
$
19,077

 
$
1,245

 
$
20,322

 For the year ending December 31, 2021
 
19,485

 
659

 
20,144

 For the year ending December 31, 2022
 
11,450

 
208

 
11,658

 For the year ending December 31, 2023
 
4,730

 

 
4,730

 For the year ending December 31, 2024
 
1,162

 

 
1,162

 
 
$
55,904

 
$
2,112

 
$
58,016

 Dividend Payments
In February 2020, our Board of Directors declared a quarterly cash dividend of $0.10 per common share, which was paid on March 13, 2020 to all shareholders of record as of March 2, 2020.
Securities Repurchase Program
In May 2015, our Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $250 million of our common stock and bonds, the latter of which consists of our (i) Unsecured Senior Notes Due 2020 (NYSE: SBNA) and (ii) Convertible Notes due 2022.
No shares were purchased under this program during the three months ended March 31, 2020,
We had $121.6 million remaining under our Securities Repurchase Program as of March 31, 2020. We expect to repurchase any securities in the open market, at times and prices that are considered to be appropriate, but we are not obligated under the terms of the program to repurchase any securities.
There were 6,349,324 common shares held in treasury at March 31, 2020 and December 31, 2019.
Shares outstanding 
As of March 31, 2020, we had 58,672,080 common shares outstanding. These shares provide the holders with rights to dividends and voting rights.
12.
Related party transactions
Transactions with entities controlled by the Lolli-Ghetti family (herein referred to as related party affiliates) in the unaudited condensed consolidated statements of income or loss and balance sheets are as follows:    
 
For the three months ended March 31,
In thousands of U.S. dollars
2020
 
2019
Pool revenue (1)
 

 
 

Scorpio MR Pool Limited
$
101,102

 
$
67,435

Scorpio LR2 Pool Limited
84,551

 
75,187

Scorpio Handymax Tanker Pool Limited
42,340

 
31,210

Scorpio LR1 Pool Limited
18,401

 
19,319

Voyage revenue (2)
1,867

 

Voyage expenses (3)
(2,257
)
 
(53
)
Vessel operating costs (4)
(8,320
)
 
(8,069
)
Administrative expenses (5)
(3,525
)
 
(2,944
)
 
(1)
These transactions relate to revenue earned in the Scorpio Pools. The Scorpio Pools are related party affiliates. When our vessels are in the Scorpio Pools, SCM, the pool manager, charges fees of $300 per vessel per day with respect to our LR1/Panamax and Aframax vessels, $250 per vessel per day with respect to our LR2 vessels, and $325 per vessel per day with respect to each of our Handymax and MR vessels, plus a commission of 1.50% on gross revenue per charter fixture.  These are the same fees that SCM charges other vessels in these pools, including third party owned vessels. In September 2018, we entered into an agreement with SCM whereby SCM reimbursed a portion of the commissions that SCM charges the Company’s vessels to effectively reduce such to 0.85% of gross revenue per charter fixture, effective from September 1, 2018 and ending on June 1, 2019.

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Table of Contents

(2)
These transactions relate to revenue earned in the spot market on voyages chartered through SSH, a related party affiliate.
(3)
Related party expenditures included within voyage expenses in the unaudited condensed consolidated statements of income or loss consist of the following:
Expenses due to SCM, a related party affiliate, for commissions related to the commercial management services provided by SCM under the commercial management agreement for vessels that are not in one of the Scorpio Pools. SCM’s services include securing employment, in the spot market and on time charters, for our vessels. When not in one of the Scorpio Pools, each vessel pays (i) flat fees of $250 per day for LR1/Panamax and LR2/Aframax vessels and $300 per day for Handymax and MR vessels and (ii) commissions of 1.25% of their gross revenue per charter fixture.  These expenses are included in voyage expenses in the unaudited condensed consolidated statements of income or loss. In September 2018, we entered into an agreement with SCM whereby SCM reimbursed a portion of the commissions that SCM charged the Company’s vessels to effectively reduce such to 0.85% of gross revenue per charter fixture, effective from September 1, 2018 and ending on June 1, 2019.
Expenses of $0.8 million paid to SSH, a related party affiliate, for voyage expenses incurred in the fulfillment of certain spot market voyages during the three months ended March 31, 2020. No voyage expenses were charged by SSH during the three months ended March 31, 2019.
Bunker consumption of $1.4 million was purchased from a related party bunker provider (who is engaged in the procurement of bunkers on behalf of the Company and the Scorpio Pools) during the three months ended March 31, 2020. No bunkers purchased from this provider during the three months ended March 31, 2019.
(4)
Related party expenditures included within vessel operating costs in the unaudited condensed consolidated statements of income or loss consist of the following:
Technical management fees of $7.8 million and $7.5 million charged by SSM, a related party affiliate, during the three months ended March 31, 2020 and 2019, respectively. SSM’s services include day-to-day vessel operations, performing general maintenance, monitoring regulatory and classification society compliance, customer vetting procedures, supervising the maintenance and general efficiency of vessels, arranging the hiring of qualified officers and crew, arranging and supervising drydocking and repairs, purchasing supplies, spare parts and new equipment for vessels, appointing supervisors and technical consultants, and providing technical support. SSM administers the payment of salaries to our crew on our behalf. The crew wages that were administered by SSM (and disbursed through related party subcontractors of SSM) were $36.7 million and $31.2 million during the three months ended March 31, 2020 and 2019, respectively. SSM's fixed annual technical management fee is $175,000 per vessel plus certain itemized expenses in the technical management agreement.
Vessel operating expenses of $0.5 million and $0.6 million charged by a related party port agent during the three months ended March 31, 2020 and 2019, respectively. SSH has a majority equity interest in a port agent that provides supply and logistical services for vessels operating in its regions.
(5)
We have an Amended Administrative Services Agreement with SSH for the provision of administrative staff, office space, and administrative services, including accounting, legal compliance, financial and information technology services. SSH is a related party to us. We reimburse SSH for direct or indirect expenses that are incurred on our behalf. SSH also arranges vessel sales and purchases for us. The services provided to us by SSH may be sub-contracted to other entities within the Scorpio group of companies, or Scorpio.  The expenses incurred under this agreement were recorded in general and administrative expenses in the unaudited condensed consolidated statement of income or loss and consisted of the following:
The expense for the three months ended March 31, 2020 of $3.5 million included (i) administrative fees of $3.1 million charged by SSH, (ii) restricted stock amortization of $0.4 million, which relates to the issuance of an aggregate of 221,900 shares of restricted stock to SSH employees for no cash consideration pursuant to the Plan, and (iii) the reimbursement of expenses of $30,762 to SSH.
The expense for the three months ended March 31, 2019 of $2.9 million included (i) administrative fees of $2.7 million charged by SSH, (ii) restricted stock amortization of $0.2 million, which relates to the issuance of an aggregate of 114,400 shares of restricted stock to SSH employees for no cash consideration pursuant to the Plan, and (iii) the reimbursement of expenses of $11,322.

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Table of Contents

We had the following balances with related party affiliates, which have been included in the unaudited condensed consolidated balance sheets:
 
 
As of
In thousands of U.S. dollars
March 31, 2020
 
December 31, 2019
Assets:
 

 
 

Accounts receivable (due from the Scorpio Pools) (1)
$
136,172

 
$
74,412

Accounts receivable and prepaid expenses (SSM) (2)
2,178

 
1,624

Accounts receivable and prepaid expenses (SSH) (3)
1,277

 

Other assets (pool working capital contributions) (4)
49,094

 
49,094

Liabilities:
 

 
 

Accounts payable and accrued expenses (owed to the Scorpio Pools)
3,723

 
3,717

Accounts payable and accrued expenses (SSM) (5)
2,409

 
2,667

Accounts payable and accrued expenses (related party port agent)
571

 
361

Accounts payable and accrued expenses (SSH)
511

 
353

Accounts payable and accrued expenses (SCM)
119

 
14

Accounts payable and accrued expenses (related party bunker supplier) (6)
103

 


(1)
Accounts receivable due from the Scorpio Pools relate to hire receivables for revenues earned and receivables from working capital contributions. The amounts as of March 31, 2020 and December 31, 2019 include $25.2 million and $24.3 million, respectively, of working capital contributions made on behalf of our vessels to the Scorpio Pools. Upon entrance into such pools, all vessels are required to make working capital contributions of both cash and bunkers. Additional working capital contributions can be made from time to time based on the operating needs of the Scorpio pools. These amounts are accounted for and repaid as follows:
For vessels in the Scorpio LR2 Pool, Scorpio LR1 Pool, and Scorpio Handymax Tanker Pool, the initial contribution amount is repaid, without interest, upon a vessel’s exit from the pool no later than six months after the exit date. Bunkers on board a vessel exiting the pool are credited against such repayment at the actual invoice price of the bunkers. For all owned or finance leased vessels we assume that these contributions will not be repaid within 12 months and are thus classified as non-current within other assets on the unaudited condensed consolidated balance sheets. For time or bareboat chartered-in vessels we classify the initial contributions as current (within accounts receivable) or non-current (within other assets) according to the expiration of the contract. Any additional working capital contributions are repaid when sufficient net revenues become available to cover such amounts.
For vessels in the Scorpio MR Pool and Scorpio Panamax Tanker Pool, any contributions are repaid, without interest, when such vessel has earned sufficient net revenues to cover the value of such working capital contributed.  Accordingly, we classify such amounts as current (within accounts receivable).
(2)
Accounts receivable and prepaid expenses from SSM relate to advances made for vessel operating expenses (such as crew wages) that will either be reimbursed or applied against future costs.
(3) Accounts receivable and prepaid expenses from SSH relate to spot market voyages that were chartered through SSH, a related party affiliate.
(4)
Represents the non-current portion of working capital receivables as described above.
(5)
Represents accounts payable and accrued expenses related to vessel operating expenses that are due to SSM.
(6)
Represents accounts payable and accrued expenses due to a related party bunker provider who is engaged in the procurement of bunkers on behalf of the Company and the Scorpio Pools.
Other agreements
As of March 31, 2020, we provided guarantees in respect of the payment obligations of a related party bunker provider (who is engaged in the procurement of bunkers on behalf of the Company and the Scorpio Pools) toward its physical suppliers for a maximum amount of $12.5 million in aggregate.
Key management remuneration
The table below shows key management remuneration for the three months ended March 31, 2020 and 2019:

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Table of Contents

 
For the three months ended March 31,
In thousands of U.S. dollars
2020
 
2019
Short-term employee benefits (salaries)
$
2,802

 
$
2,656

Share-based compensation (1)
6,120

 
5,656

Total
$
8,922

 
$
8,312


(1) 
Represents the amortization of restricted stock issued under the Plan as described in Note 11.
For the purpose of the table above, key management are those persons who have authority and responsibility for making strategic decisions, and managing operating, financial and legal activities.
We have entered into employment agreements with the majority of our executives. These employment agreements remain in effect until terminated in accordance with their terms upon not less than between 24 months' and 36 months' prior written notice, depending on the terms of the employment agreement applicable to each executive. Pursuant to the terms of their respective employment agreements, our executives are prohibited from disclosing or unlawfully using any of our material confidential information.
Upon a change in control of us, the annual bonus provided under the employment agreement becomes a fixed bonus of between 150% and 250% of the executive’s base salary, and the executive may receive an assurance bonus equal to the fixed bonus, depending on the terms of the employment agreement applicable to each executive.
Any such executive may be entitled to receive upon termination an assurance bonus equal to such fixed bonus and an immediate lump-sum payment in an amount equal to three times the sum of the executive’s then current base salary and the assurance bonus, and he will continue to receive all salary, compensation payments and benefits, including additional bonus payments, otherwise due to him, to the extent permitted by applicable law, for the remaining balance of his then-existing employment period. If an executive’s employment is terminated for cause or voluntarily by the employee, he shall not be entitled to any salary, benefits or reimbursements beyond those accrued through the date of his termination, unless he voluntarily terminated his employment in connection with certain conditions. Those conditions include a change in control combined with a significant geographic relocation of his office, a material diminution of his duties and responsibilities, and other conditions identified in the employment agreement.
There are no material post-employment benefits for our executive officers or directors. By law, our employees in Monaco are entitled to a one-time payment of up to two months salary upon retirement if they meet certain minimum service requirements.
There are no post-employment benefits.


F-25


Table of Contents

13.
Segment reporting

Information about our reportable segments for the three months ended March 31, 2020 and 2019 is as follows:

For the three months ended March 31, 2020
 In thousands of U.S. dollars
 
LR1
 
 Handymax
 
LR2
 
 MR
 
 Reportable segments subtotal
 
 Corporate and eliminations
 
 Total
 Vessel revenue
 
$
18,398

 
$
42,338

 
$
90,334

 
$
103,097

 
$
254,167

 
$

 
$
254,167

 Vessel operating costs
 
(7,292
)
 
(12,868
)
 
(25,769
)
 
(35,534
)
 
(81,463
)
 

 
(81,463
)
 Voyage expenses
 
(4
)
 
(115
)
 
(3,248
)
 
(853
)
 
(4,220
)
 

 
(4,220
)
 Depreciation - owned or sale and leaseback vessels
 
(4,978
)
 
(5,310
)
 
(19,046
)
 
(17,507
)
 
(46,841
)
 

 
(46,841
)
 Depreciation - right of use assets under IFRS 16
 

 
(3,833
)
 
(2,134
)
 
(7,230
)
 
(13,197
)
 

 
(13,197
)
 General and administrative expenses
 
(288
)
 
(535
)
 
(813
)
 
(1,453
)
 
(3,089
)
 
(14,172
)
 
(17,261
)
 Financial expenses
 

 

 

 

 

 
(44,765
)
 
(44,765
)
 Financial income
 
75

 
9

 
2

 
139

 
225

 
340

 
565

 Other expenses, net
 

 

 

 

 

 
(358
)
 
(358
)
 Segment income or loss
 
$
5,911

 
$
19,686

 
$
39,326

 
$
40,659

 
$
105,582

 
$
(58,955
)
 
$
46,627


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For the three months ended March 31, 2019

 In thousands of U.S. dollars
 
LR1
 
 Handymax
 
LR2
 
 MR
 
 Reportable segments subtotal
 
 Corporate and eliminations
 
 Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Vessel revenue
 
$
19,351

 
$
32,988

 
$
76,048

 
$
67,443

 
$
195,830

 
$

 
$
195,830

 Vessel operating costs
 
(7,125
)
 
(11,643
)
 
(23,289
)
 
(27,319
)
 
(69,376
)
 

 
(69,376
)
 Voyage expenses
 
(5
)
 
(92
)
 
(146
)
 
(52
)
 
(295
)
 

 
(295
)
 Charterhire
 

 
(4,256
)
 
271

 
(414
)
 
(4,399
)
 

 
(4,399
)
 Depreciation - owned or sale and leaseback vessels
 
(4,772
)
 
(4,499
)
 
(17,982
)
 
(16,561
)
 
(43,814
)
 

 
(43,814
)
 Depreciation - right of use assets under IFRS 16
 

 
(96
)
 

 
(2,039
)
 
(2,135
)
 

 
(2,135
)
 General and administrative expenses
 
(289
)
 
(487
)
 
(925
)
 
(1,150
)
 
(2,851
)
 
(12,861
)
 
(15,712
)
 Financial expenses