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Scorpio Tankers Inc. Announces Financial Results for the First Quarter of 2018, Declaration of a Quarterly Dividend, and New Financing Initiatives
MONACO, April 25, 2018 (GLOBE NEWSWIRE) — Scorpio Tankers Inc. (NYSE:STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three months ended March 31, 2018.
Results for the three months ended March 31, 2018 and 2017
For the three months ended March 31, 2018, the Company’s adjusted net loss (see Non-IFRS Measures section below) was $31.5 million, or $0.10 basic and diluted loss per share, which excludes from the net loss $0.3 million, or $0.00 per basic and diluted share, of transaction costs related to the Company’s previously announced merger with Navig8 Product Tankers Inc (“NPTI”). For the three months ended March 31, 2018, the Company had a net loss of $31.8 million, or $0.10 basic and diluted loss per share.
For the three months ended March 31, 2017, the Company’s adjusted net loss (see Non-IFRS Measures section below) was $11.5 million, or $0.07 basic and diluted loss per share, which excludes from the net loss $0.1 million, or $0.00 per basic and diluted share, write-off of deferred financing fees. For the three months ended March 31, 2017, the Company had a net loss of $11.5 million, or $0.07 basic and diluted loss per share.
Declaration of Dividend
On April 25, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.01 per share, payable on or about June 28, 2018 to all shareholders of record as of June 6, 2018 (the record date). As of April 24, 2018, there were 331,629,992 shares outstanding.
New Financing Initiatives
The Company has signed term sheets or agreed main terms for a series of bank loans and sale leasebacks to refinance certain of its outstanding secured indebtedness. These transactions, if consummated, would be expected to raise $334 million in aggregate of new liquidity after the repayment of the existing secured debt related to these vessels. The Company expects to make detailed announcements for the individual transactions in the coming weeks.
The terms and conditions of the credit facilities and lease financing arrangements, including covenants, pricing, and advance rates, are similar to those in the Company’s existing credit facilities and lease financing arrangements. These new credit facilities and lease financing arrangements are subject to credit approval, customary conditions precedent and the execution of definitive documentation.
The Company continuously evaluates potential financing transactions that it believes will enhance shareholder value or are in the best interests of the Company, including the repayment or refinancing of its existing indebtedness.
Summary of Other Recent and First Quarter Significant Events
• Below is a summary of the average daily Time Charter Equivalent (TCE) revenue (see Non-IFRS Measures section below) and duration for voyages fixed for the Company’s vessels thus far in the second quarter of 2018 as of the date hereof (See footnotes to ‘Other operating data’ table below for the definition of daily TCE revenue):
- For the LR2s in the pool: approximately $14,000 per day for 37% of the days.
- For the LR1s in the pool: approximately $13,500 per day for 43% of the days.
- For the MRs in the pool: approximately $13,800 per day for 38% of the days.
- For the ice-class 1A and 1B Handymaxes in the pool: approximately $11,400 per day for 35% of the days.
• Below is a summary of the average daily TCE revenue earned on the Company’s vessels during the first quarter of 2018:
- For the LR2s in the pool: $14,517 per revenue day.
- For the LR1s in the pool: $10,540 per revenue day.
- For the MRs in the pool: $13,264 per revenue day.
- For the ice-class 1A and 1B Handymaxes in the pool: $12,453 per revenue day.
• Took delivery of STI Esles II and STI Jardins, two MR product tankers that were under construction, from Hyundai Mipo Dockyard Co. Ltd. of South Korea (“HMD”) in January 2018. As part of these deliveries, the Company drew down $21.5 million in December 2017 and $21.5 million in January 2018 from its 2017 Credit Facility to partially finance the purchase of these vessels.
• Entered into agreements to time charter-in two vessels, a 2013 built LR2 product tanker for six months at $14,300 per day, and a 2012 built MR product tanker for one year at $14,000 per day. These vessels were delivered in February and March 2018, respectively.
• Paid a quarterly cash dividend with respect to the fourth quarter of 2017 on the Company’s common stock of $0.01 per share in March 2018.
Time Charter-in Update
In February 2018, the Company entered into a new time charter-in agreement on a 2013 built LR2 product tanker for six months at $14,300 per day. The Company has an option to extend the charter for an additional six months at $15,310 per day. This vessel was delivered in February 2018.
In January 2018, the Company entered into a new time charter-in agreement on a 2012 built MR product tanker for one year at $14,000 per day. The Company has an option to extend the charter for an additional year at $14,400 per day. This vessel was delivered in March 2018.
$250 Million Securities Repurchase Program
In May 2015, the Company’s Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company’s securities which, in addition to its common shares, currently consist of its (i) Convertible Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE:SBNA), which were issued in May 2014 and (iii) Unsecured Senior Notes Due 2019 (NYSE:SBBC), which were issued in March 2017.
No securities were repurchased under this program during the period commencing January 1, 2018 and ending on the date of this press release.
As of the date hereof, the Company has the authority to purchase up to an additional $147.1 million of its securities under its Securities Repurchase Program. The Company expects to repurchase its securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the Securities Repurchase Program to repurchase any of its securities.
Diluted Weighted Number of Shares
Diluted earnings per share is determined using the if-converted method. Under this method, the Company assumes that the Convertible Notes (which were issued in June 2014) were converted into common shares at the beginning of each period and the interest and non-cash amortization expense associated with these notes of $5.7 million and $5.5 million during the three months ended March 31, 2018 and 2017, respectively, were not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.
For the three months ended March 31, 2018 and 2017, the Company’s basic weighted average number of shares was 307,905,015 and 162,711,256, respectively. The weighted average number of shares, both diluted and under the if-converted method, were anti-dilutive for the three months ended March 31, 2018 and 2017, respectively, as the Company incurred net losses.
As of the date hereof, the Convertible Notes are not eligible for conversion.
Conference Call
The Company has scheduled a conference call on April 25, 2018 at 8:00 AM Eastern Daylight Time and 2:00 PM Central European Summer Time. The dial-in information is as follows:
US Dial-In Number: +1 (855) 861-2416
International Dial-In Number: +1 (703) 736-7422
Conference ID: 3478179
Participants should dial into the call 10 minutes before the scheduled time. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.
Slides and Audio Webcast:
There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Webcast URL: https://edge.media-server.com/m6/p/5hmnuuc3
Current Liquidity
As of April 24, 2018, the Company had $150.9 million in unrestricted cash and cash equivalents.
Drydock Update
The Company has five MRs that are scheduled for drydock during the remainder of 2018 and estimates that these vessels will be offhire for an aggregate of 100 days with estimated aggregate drydock costs of approximately $4.0 million. Three of these vessels are currently operating under operating lease bareboat charter-in arrangements.
Debt
Set forth below is a summary of the Company’s outstanding indebtedness as of the dates presented:
| In millions of U.S. dollars | Outstanding as of December 31, 2017 |
Drawdowns and (repayments), net |
Outstanding as of March 31, 2018 |
Repayments | Outstanding as of April 24, 2018 |
|||||||||||
| K-Sure Credit Facility | $ | 240.0 | $ | — | $ | 240.0 | $ | — | $ | 240.0 | ||||||
| KEXIM Credit Facility | 333.0 | (16.9 | ) | 316.1 | — | 316.1 | ||||||||||
| Credit Suisse Credit Facility | 53.5 | — | 53.5 | — | 53.5 | |||||||||||
| ABN AMRO Credit Facility | 113.3 | (2.2 | ) | 111.1 | (0.6 | ) | 110.5 | |||||||||
| ING Credit Facility | 109.9 | — | 109.9 | — | 109.9 | |||||||||||
| BNP Paribas Credit Facility | 42.6 | — | 42.6 | — | 42.6 | |||||||||||
| Scotiabank Credit Facility | 28.8 | — | 28.8 | — | 28.8 | |||||||||||
| NIBC Credit Facility | 34.7 | — | 34.7 | (1.0 | ) | 33.7 | ||||||||||
| 2016 Credit Facility | 196.0 | (5.3 | ) | 190.7 | — | 190.7 | ||||||||||
| HSH Nordbank Credit Facility | 15.4 | (0.4 | ) | 15.0 | — | 15.0 | ||||||||||
| 2017 Credit Facility (1) | 141.8 | 18.6 | 160.4 | (1.2 | ) | 159.2 | ||||||||||
| DVB 2017 Credit Facility | 78.4 | (1.5 | ) | 76.9 | (1.5 | ) | 75.4 | |||||||||
| Credit Agricole Credit Facility | 107.9 | (2.2 | ) | 105.7 | — | 105.7 | ||||||||||
| ABN AMRO/K-Sure Credit Facility | 53.4 | (1.0 | ) | 52.4 | — | 52.4 | ||||||||||
| Citi/K-Sure Credit Facility | 112.1 | (2.1 | ) | 110.0 | — | 110.0 | ||||||||||
| Ocean Yield Lease Financing | 170.6 | (2.5 | ) | 168.1 | (0.8 | ) | 167.3 | |||||||||
| CMBFL Lease Financing | 66.9 | (1.2 | ) | 65.7 | — | 65.7 | ||||||||||
| BCFL Lease Financing (LR2s) | 108.1 | (1.8 | ) | 106.3 | (0.6 | ) | 105.7 | |||||||||
| CSSC Lease Financing | 263.8 | (4.3 | ) | 259.5 | (1.4 | ) | 258.1 | |||||||||
| BCFL Lease Financing (MRs) | 109.2 | (2.5 | ) | 106.7 | (0.9 | ) | 105.8 | |||||||||
| 2020 senior unsecured notes | 53.8 | — | 53.8 | — | 53.8 | |||||||||||
| 2019 senior unsecured notes | 57.5 | — | 57.5 | — | 57.5 | |||||||||||
| Convertible Notes | 348.5 | — | 348.5 | — | 348.5 | |||||||||||
| $ | 2,839.2 | $ | (25.3 | ) | $ | 2,813.9 | $ | (8.0 | ) | $ | 2,805.9 | |||||
(1) In January 2018, the Company drew down $21.5 million from the 2017 Credit Facility to partially finance the purchase of STI Jardins, which was subsequently delivered.
Set forth below are the expected, estimated future principal repayments on the Company’s outstanding indebtedness which includes amounts due under sale and finance leaseback arrangements:
| In millions of U.S. dollars |
|||
| Q2 2018 – principal payments made to date | $ | 8.0 | |
| Q2 2018 – remaining principal payments | 25.1 | ||
| Q3 2018 | 51.1 | ||
| Q4 2018 | 39.0 | ||
| Q1 2019 | 63.6 | ||
| Q2 2019 | 123.2 | ||
| Q3 2019 | 411.8 | ||
| Q4 2019 | 38.7 | ||
| 2020 and thereafter | 2,053.4 | ||
| $ | 2,813.9 | ||
Newbuilding Program
In January 2018, the Company took delivery of STI Esles II and STI Jardins from HMD, which were the final vessels to be delivered under the Company’s newbuilding program. The final installment payment for STI Esles II was made in December 2017 in advance of its delivery, and the Company paid $23.5 million as the final installment payment for the delivery of STI Jardins in January 2018.
As part of these deliveries, the Company drew down $21.5 million in December 2017 and $21.5 million in January 2018 from its 2017 Credit Facility to partially finance the purchase of these vessels.
Explanation of Variances on the First Quarter of 2018 Financial Results Compared to the First Quarter of 2017
For the three months ended March 31, 2018, the Company recorded a net loss of $31.8 million compared to a net loss of $11.5 million for the three months ended March 31, 2017. The following were the significant changes between the two periods:
- TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot 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 March 31, 2018 and 2017:
| For the three months ended March 31, | |||||||||
| In thousands of U.S. dollars | 2018 | 2017 | |||||||
| Vessel revenue | $ | 156,446 | $ | 122,801 | |||||
| Voyage expenses | (3,339 | ) | (2,532 | ) | |||||
| TCE revenue | $ | 153,107 | $ | 120,269 | |||||
- TCE revenue for the three months ended March 31, 2018 increased $32.8 million to $153.1 million, from $120.3 million for the three months ended March 31, 2017. This increase was driven by the growth of the Company’s fleet to an average of 128.0 operating vessels during the three months ended March 31, 2018 from an average of 92.9 operating vessels during the three months ended March 31, 2017. This growth was the result of the merger with NPTI, which resulted in the delivery of four vessels in June 2017 and 23 vessels in September 2017. In addition, the Company took delivery of eight vessels under its newbuilding program throughout 2017 and two vessels under its newbuilding program during the first quarter of 2018. The increase in TCE revenue resulting from the increase in the size of the Company’s fleet was partially offset by a reduction in TCE revenue per day, which decreased to $13,331 per day during the three months ended March 31, 2018, from $14,408 per day during the three months ended March 31, 2017. This reduction reflects the challenging market conditions, driven by an unfavorable global supply and demand imbalance, that have persisted throughout 2017 and the first quarter of 2018.
- Vessel operating costs for the three months ended March 31, 2018 increased $22.3 million to $70.4 million, from $48.1 million for the three months ended March 31, 2017. This increase was the result of an increase in the average number of owned and bareboat chartered-in vessels for the three months ended March 31, 2018 to 118.6 vessels from 80.6 vessels for the three months ended March 31, 2017. This growth was the result of (i) the merger with NPTI, which resulted in the delivery of four vessels in June 2017 and 23 vessels in September 2017, (ii) the delivery of eight vessels under the Company’s newbuilding program throughout 2017 and two vessels under the Company’s newbuilding program during the first quarter of 2018, and (iii) the delivery of seven Handymax vessels under bareboat charter-in agreements, which operated for a portion of the three months ended March 31, 2017 and for the entire three months ended March 31, 2018. These additions were offset by the sales of two MR tankers in June and July 2017.
- Voyage expenses for the three months ended March 31, 2018 increased $0.8 million to $3.3 million, from $2.5 million for the three months ended March 31, 2017. This increase was primarily the result of certain vessels acquired from NPTI that traded in the spot market during the first quarter of 2018 as these vessels transitioned technical managers or transitioned from trading crude oil to clean products.
- Charterhire expenses for the three months ended March 31, 2018 decreased $1.4 million to $18.0 million, from $19.4 million for the three months ended March 31, 2017. This decrease was driven by lower average daily base rates on the Company’s time chartered-in fleet during the three months ended March 31, 2018 to an average of $14,035 per vessel per day from an average of $15,601 per vessel per day for the three months ended March 31, 2017. The Company’s time and bareboat chartered-in fleet for the three months ended March 31, 2018 increased to an average of 19.4 vessels, (9.4 time chartered-in vessels and 10.0 bareboat chartered-in vessels) from an average of 15.6 vessels (12.3 time chartered-in vessels and 3.3 bareboat chartered-in vessels) for the three months ended March 31, 2017. The average daily base rate for the Company’s bareboat chartered-in fleet was $6,797 per vessel per day for the three months ended March 31, 2018 and $7,013 per vessel per day for the three months ended March 31, 2017.
- Depreciation expense for the three months ended March 31, 2018 increased $13.0 million to $43.5 million, from $30.5 million for the three months ended March 31, 2017. This increase was primarily driven by (i) the delivery of two LR2 and six MR vessels under the Company’s newbuilding program during 2017, (ii) the delivery of the four LR1 vessels acquired from NPTI in June 2017, (iii) the delivery of eight LR1 and 15 LR2 vessels acquired from NPTI in September 2017, and (iv) the delivery of two MR vessels under the Company’s newbuilding program during the three months ended March 31, 2018. These deliveries were offset by the sales of five MR vessels throughout 2017, of which three were leased back under bareboat charter-in operating lease arrangements.
- Financial expenses for the three months ended March 31, 2018 increased $17.8 million to $39.4 million, from $21.7 million for the three months ended March 31, 2017. The increase in financial expenses was primarily a result of (i) increased interest expense incurred as a result of the assumption of $924.8 million of indebtedness as part of the Company’s merger with NPTI ($118.3 million in June 2017 and $806.4 million in September 2017) and (ii) increases in LIBOR rates when compared to the first quarter of 2017.
| Scorpio Tankers Inc. and Subsidiaries | ||||||||
| Condensed Consolidated Statements of Income or Loss | ||||||||
| (unaudited) | ||||||||
| For the three months ended March 31, |
||||||||
| In thousands of U.S. dollars except per share and share data | 2018 | 2017 | ||||||
| Revenue | ||||||||
| Vessel revenue | $ | 156,446 | $ | 122,801 | ||||
| Operating expenses | ||||||||
| Vessel operating costs | (70,430 | ) | (48,148 | ) | ||||
| Voyage expenses | (3,339 | ) | (2,532 | ) | ||||
| Charterhire | (18,012 | ) | (19,431 | ) | ||||
| Depreciation | (43,455 | ) | (30,502 | ) | ||||
| General and administrative expenses | (13,626 | ) | (11,910 | ) | ||||
| Merger transaction related costs | (264 | ) | — | |||||
| Total operating expenses | (149,126 | ) | (112,523 | ) | ||||
| Operating income | 7,320 | 10,278 | ||||||
| Other (expense) and income, net | ||||||||
| Financial expenses | (39,418 | ) | (21,664 | ) | ||||
| Realized loss on derivative financial instruments | — | (116 | ) | |||||
| Financial income | 385 | 52 | ||||||
| Other expenses, net | (81 | ) | (83 | ) | ||||
| Total other expense, net | (39,114 | ) | (21,811 | ) | ||||
| Net loss | $ | (31,794 | ) | $ | (11,533 | ) | ||
| Loss per share | ||||||||
| Basic | $ | (0.10 | ) | $ | (0.07 | ) | ||
| Diluted | $ | (0.10 | ) | $ | (0.07 | ) | ||
| Basic weighted average shares outstanding | 307,905,015 | 162,711,256 | ||||||
| Diluted weighted average shares outstanding (1) | 307,905,015 | 162,711,256 | ||||||
(1) The dilutive effect of (i) unvested shares of restricted stock and (ii) the potentially dilutive securities relating to the Company’s Convertible Notes were excluded from the computation of diluted earnings per share for the three months ended March 31, 2018 and 2017, respectively because their effect would have been anti-dilutive. Weighted average shares under the if-converted method (which includes the potential dilutive effect of both the unvested shares of restricted stock and the Convertible Notes) were 345,539,088 for the three months ended March 31, 2018.
| Scorpio Tankers Inc. and Subsidiaries | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (unaudited) | |||||||
| As of | |||||||
| In thousands of U.S. dollars | March 31, 2018 | December 31, 2017 | |||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 163,379 | $ | 186,462 | |||
| Accounts receivable | 55,773 | 65,458 | |||||
| Prepaid expenses and other current assets | 10,289 | 17,720 | |||||
| Inventories | 8,953 | 9,713 | |||||
| Total current assets | 238,394 | 279,353 | |||||
| Non-current assets | |||||||
| Vessels and drydock | 4,128,250 | 4,090,094 | |||||
| Vessels under construction | — | 55,376 | |||||
| Other assets | 52,871 | 50,684 | |||||
| Goodwill | 11,727 | 11,482 | |||||
| Restricted cash | 12,156 | 11,387 | |||||
| Total non-current assets | 4,205,004 | 4,219,023 | |||||
| Total assets | $ | 4,443,398 | $ | 4,498,376 | |||
| Current liabilities | |||||||
| Current portion of long-term debt | $ | 130,403 | $ | 113,036 | |||
| Finance lease liability | 50,363 | 50,146 | |||||
| Accounts payable | 10,780 | 13,044 | |||||
| Accrued expenses | 28,011 | 32,838 | |||||
| Total current liabilities | 219,557 | 209,064 | |||||
| Non-current liabilities | |||||||
| Long-term debt | 1,912,627 | 1,937,018 | |||||
| Finance lease liability | 654,320 | 666,993 | |||||
| Total non-current liabilities | 2,566,947 | 2,604,011 | |||||
| Total liabilities | 2,786,504 | 2,813,075 | |||||
| Shareholders’ equity | |||||||
| Issued, authorized and fully paid-in share capital: | |||||||
| Share capital | 3,817 | 3,766 | |||||
| Additional paid-in capital | 2,286,922 | 2,283,591 | |||||
| Treasury shares | (443,816 | ) | (443,816 | ) | |||
| Accumulated deficit (1) | (190,029 | ) | (158,240 | ) | |||
| Total shareholders’ equity | 1,656,894 | 1,685,301 | |||||
| Total liabilities and shareholders’ equity | $ | 4,443,398 | $ | 4,498,376 | |||
(1) Accumulated deficit reflects the impact of the adoption of IFRS 15, Revenue from Contracts with Customers, which is effective for annual periods beginning on January 1, 2018. The standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption (the “modified retrospective method”). We have applied the modified retrospective method upon the date of transition. Accordingly, the cumulative effect of the application of this standard resulted in a $3,888 reduction in the opening balance of Accumulated deficit on January 1, 2018.
| Scorpio Tankers Inc. and Subsidiaries | |||||||
| Condensed Consolidated Statement of Cash Flows | |||||||
| (unaudited) | |||||||
| For the three months ended March 31, | |||||||
| In thousands of U.S. dollars | 2018 | 2017 | |||||
| Operating activities | |||||||
| Net loss | $ | (31,794 | ) | $ | (11,533 | ) | |
| Depreciation | 43,455 | 30,502 | |||||
| Amortization of restricted stock | 6,650 | 6,289 | |||||
| Amortization of deferred financing fees | 3,306 | 3,251 | |||||
| Write-off of deferred financing fees | — | 66 | |||||
| Accretion of Convertible Notes | 3,200 | 3,004 | |||||
| Accretion of fair value measurement on debt assumed from NPTI | 960 | — | |||||
| 25,777 | 31,579 | ||||||
| Changes in assets and liabilities: | |||||||
| Decrease / (increase) in inventories | 882 | (652 | ) | ||||
| Decrease in accounts receivable | 9,514 | 4,053 | |||||
| Decrease in prepaid expenses and other current assets | 7,608 | 734 | |||||
| Increase in other assets | (3,071 | ) | (1,745 | ) | |||
| (Decrease) / increase in accounts payable | (2,323 | ) | 2,326 | ||||
| Decrease in accrued expenses | (3,538 | ) | (2,754 | ) | |||
| 9,072 | 1,962 | ||||||
| Net cash inflow from operating activities | 34,849 | 33,541 | |||||
| Investing activities | |||||||
| Acquisition of vessels and payments for vessels under construction | (25,851 | ) | (83,303 | ) | |||
| Drydock payments (owned and bareboat-in vessels) | (438 | ) | — | ||||
| Net cash outflow from investing activities | (26,289 | ) | (83,303 | ) | |||
| Financing activities | |||||||
| Debt repayments | (46,703 | ) | (97,182 | ) | |||
| Issuance of debt | 21,450 | 187,475 | |||||
| Debt issuance costs | (2,354 | ) | (7,435 | ) | |||
| Increase in restricted cash | (768 | ) | (1,778 | ) | |||
| Equity issuance costs | (4 | ) | — | ||||
| Dividends paid | (3,264 | ) | (1,746 | ) | |||
| Net cash (outflow) / inflow from financing activities | (31,643 | ) | 79,334 | ||||
| (Decrease) / increase in cash and cash equivalents | (23,083 | ) | 29,572 | ||||
| Cash and cash equivalents at January 1, | 186,462 | 99,887 | |||||
| Cash and cash equivalents at March 31, | $ | 163,379 | $ | 129,459 | |||
| Scorpio Tankers Inc. and Subsidiaries | ||||||||
| Other operating data for the three months ended March 31, 2018 and 2017 | ||||||||
| (unaudited) | ||||||||
| For the three months ended March 31, | ||||||||
| 2018 | 2017 | |||||||
| Adjusted EBITDA(1) (in thousands of U.S. dollars) | $ | 57,608 | $ | 46,870 | ||||
| Average Daily Results | ||||||||
| Time charter equivalent per day(2) | $ | 13,331 | $ | 14,408 | ||||
| Vessel operating costs per day(3) | $ | 6,624 | $ | 6,519 | ||||
| LR2 | ||||||||
| TCE per revenue day (2) | $ | 14,302 | $ | 16,543 | ||||
| Vessel operating costs per day(3) | $ | 6,866 | $ | 6,555 | ||||
| Average number of owned or finance leased vessels | 38.0 | 21.3 | ||||||
| Average number of time chartered-in vessels | 1.4 | 1.2 | ||||||
| LR1 | ||||||||
| TCE per revenue day (2) | $ | 10,121 | $ | 13,545 | ||||
| Vessel operating costs per day(3) | $ | 6,999 | $ | — | ||||
| Average number of owned or finance leased vessels | 12.0 | — | ||||||
| Average number of time chartered-in vessels | — | 1.0 | ||||||
| MR | ||||||||
| TCE per revenue day (2) | $ | 13,534 | $ | 13,429 | ||||
| Vessel operating costs per day(3) | $ | 6,376 | $ | 6,318 | ||||
| Average number of owned or finance leased vessels | 44.6 | 42.0 | ||||||
| Average number of time chartered-in vessels | 6.2 | 8.0 | ||||||
| Average number of bareboat chartered-in vessels | 3.0 | — | ||||||
| Handymax | ||||||||
| TCE per revenue day (2) | $ | 12,875 | $ | 14,497 | ||||
| Vessel operating costs per day(3) | $ | 6,533 | $ | 6,939 | ||||
| Average number of owned or finance leased vessels | 14.0 | 14.0 | ||||||
| Average number of time chartered-in vessels | 1.8 | 2.2 | ||||||
| Average number of bareboat chartered-in vessels | 7.0 | 3.3 | ||||||
| Fleet data | ||||||||
| Average number of owned or finance leased vessels | 108.6 | 77.3 | ||||||
| Average number of time chartered-in vessels | 9.4 | 12.3 | ||||||
| Average number of bareboat chartered-in vessels | 10.0 | 3.3 | ||||||
| Drydock | ||||||||
| Drydock payments for owned or bareboat-in vessels (in thousands of U.S. dollars) | $ | 438 | $ | — | ||||
| (1 | ) | See Non-IFRS Measures section below. |
| (2 | ) | Freight rates are commonly measured in the shipping industry in terms of time charter equivalent per day (or TCE per day), which is calculated by subtracting voyage expenses, including bunkers and port charges, from vessel revenue and dividing the net amount (time charter equivalent revenues) by the number of revenue days in the period. Revenue days are the number of days the vessel is owned or chartered-in less the number of days the vessel is off-hire for drydock and repairs. |
| (3 | ) | Vessel operating costs per day represent vessel operating costs divided by the number of operating days during the period. Operating days are the total number of available days in a period with respect to the owned or bareboat chartered-in vessels, before deducting available days due to off-hire days and days in drydock. Operating days is a measurement that is only applicable to our owned, finance leased or bareboat chartered-in vessels, not our time chartered-in vessels. |
| Fleet list as of April 24, 2018 | |||||||||||||
| Vessel Name | Year Built |
DWT | Ice class |
Employment | Vessel type |
||||||||
| Owned or finance leased vessels | |||||||||||||
| 1 | STI Brixton | 2014 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 2 | STI Comandante | 2014 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 3 | STI Pimlico | 2014 | 38,734 | 1A | Time Charter (5) | Handymax | |||||||
| 4 | STI Hackney | 2014 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 5 | STI Acton | 2014 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 6 | STI Fulham | 2014 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 7 | STI Camden | 2014 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 8 | STI Battersea | 2014 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 9 | STI Wembley | 2014 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 10 | STI Finchley | 2014 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 11 | STI Clapham | 2014 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 12 | STI Poplar | 2014 | 38,734 | 1A | Time Charter (5) | Handymax | |||||||
| 13 | STI Hammersmith | 2015 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 14 | STI Rotherhithe | 2015 | 38,734 | 1A | SHTP (1) | Handymax | |||||||
| 15 | STI Amber | 2012 | 49,990 | — | SMRP (2) | MR | |||||||
| 16 | STI Topaz | 2012 | 49,990 | — | SMRP (2) | MR | |||||||
| 17 | STI Ruby | 2012 | 49,990 | — | SMRP (2) | MR | |||||||
| 18 | STI Garnet | 2012 | 49,990 | — | SMRP (2) | MR | |||||||
| 19 | STI Onyx | 2012 | 49,990 | — | SMRP (2) | MR | |||||||
| 20 | STI Fontvieille | 2013 | 49,990 | — | SMRP (2) | MR | |||||||
| 21 | STI Ville | 2013 | 49,990 | — | SMRP (2) | MR | |||||||
| 22 | STI Duchessa | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 23 | STI Opera | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 24 | STI Texas City | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 25 | STI Meraux | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 26 | STI San Antonio | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 27 | STI Venere | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 28 | STI Virtus | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 29 | STI Aqua | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 30 | STI Dama | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 31 | STI Benicia | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 32 | STI Regina | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 33 | STI St. Charles | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 34 | STI Mayfair | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 35 | STI Yorkville | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 36 | STI Milwaukee | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 37 | STI Battery | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 38 | STI Soho | 2014 | 49,990 | — | SMRP (2) | MR | |||||||
| 39 | STI Memphis | 2014 | 49,995 | — | SMRP (2) | MR | |||||||
| 40 | STI Tribeca | 2015 | 49,990 | — | SMRP (2) | MR | |||||||
| 41 | STI Gramercy | 2015 | 49,990 | — | SMRP (2) | MR | |||||||
| 42 | STI Bronx | 2015 | 49,990 | — | SMRP (2) | MR | |||||||
| 43 | STI Pontiac | 2015 | 49,990 | — | SMRP (2) | MR | |||||||
| 44 | STI Manhattan | 2015 | 49,990 | — | SMRP (2) | MR | |||||||
| 45 | STI Queens | 2015 | 49,990 | — | SMRP (2) | MR | |||||||
| 46 | STI Osceola | 2015 | 49,990 | — | SMRP (2) | MR | |||||||
| 47 | STI Notting Hill | 2015 | 49,687 | 1B | Time Charter (6) | MR | |||||||
| 48 | STI Seneca | 2015 | 49,990 | — | SMRP (2) | MR | |||||||
| 49 | STI Westminster | 2015 | 49,687 | 1B | Time Charter (6) | MR | |||||||
| 50 | STI Brooklyn | 2015 | 49,990 | — | SMRP (2) | MR | |||||||
| 51 | STI Black Hawk | 2015 | 49,990 | — | SMRP (2) | MR | |||||||
| 52 | STI Galata | 2017 | 49,990 | — | SMRP (2) | MR | |||||||
| 53 | STI Bosphorus | 2017 | 49,990 | — | SMRP (2) | MR | |||||||
| 54 | STI Leblon | 2017 | 49,990 | — | SMRP (2) | MR | |||||||
| 55 | STI La Boca | 2017 | 49,990 | — | SMRP (2) | MR | |||||||
| 56 | STI San Telmo | 2017 | 49,990 | 1B | SMRP (2) | MR | |||||||
| 57 | STI Donald C Trauscht | 2017 | 49,990 | 1B | SMRP (2) | MR | |||||||
| 58 | STI Esles II | 2018 | 49,990 | 1B | SMRP (2) | MR | |||||||
| 59 | STI Jardins | 2018 | 49,990 | 1B | SMRP (2) | MR | |||||||
| 60 | STI Excel | 2015 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 61 | STI Excelsior | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 62 | STI Expedite | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 63 | STI Exceed | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 64 | STI Executive | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 65 | STI Excellence | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 66 | STI Experience | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 67 | STI Express | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 68 | STI Precision | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 69 | STI Prestige | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 70 | STI Pride | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 71 | STI Providence | 2016 | 74,000 | — | SLR1P (3) | LR1 | |||||||
| 72 | STI Elysees | 2014 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 73 | STI Madison | 2014 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 74 | STI Park | 2014 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 75 | STI Orchard | 2014 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 76 | STI Sloane | 2014 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 77 | STI Broadway | 2014 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 78 | STI Condotti | 2014 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 79 | STI Rose | 2015 | 109,999 | — | Time Charter (7) | LR2 | |||||||
| 80 | STI Veneto | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 81 | STI Alexis | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 82 | STI Winnie | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 83 | STI Oxford | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 84 | STI Lauren | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 85 | STI Connaught | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 86 | STI Spiga | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 87 | STI Savile Row | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 88 | STI Kingsway | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 89 | STI Carnaby | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 90 | STI Solidarity | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 91 | STI Lombard | 2015 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 92 | STI Grace | 2016 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 93 | STI Jermyn | 2016 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 94 | STI Sanctity | 2016 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 95 | STI Solace | 2016 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 96 | STI Stability | 2016 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 97 | STI Steadfast | 2016 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 98 | STI Supreme | 2016 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 99 | STI Symphony | 2016 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 100 | STI Gallantry | 2016 | 113,000 | — | SLR2P (4) | LR2 | |||||||
| 101 | STI Goal | 2016 | 113,000 | — | SLR2P (4) | LR2 | |||||||
| 102 | STI Nautilus | 2016 | 113,000 | — | SLR2P (4) | LR2 | |||||||
| 103 | STI Guard | 2016 | 113,000 | — | SLR2P (4) | LR2 | |||||||
| 104 | STI Guide | 2016 | 113,000 | — | SLR2P (4) | LR2 | |||||||
| 105 | STI Selatar | 2017 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 106 | STI Rambla | 2017 | 109,999 | — | SLR2P (4) | LR2 | |||||||
| 107 | STI Gauntlet | 2017 | 113,000 | — | SLR2P (4) | LR2 | |||||||
| 108 | STI Gladiator | 2017 | 113,000 | — | SLR2P (4) | LR2 | |||||||
| 109 | STI Gratitude | 2017 | 113,000 | — | SLR2P (4) | LR2 | |||||||
| Total owned or finance leased DWT | 7,883,195 | ||||||||||||
| Vessel Name | Year Built |
DWT | Ice class |
Employment | Vessel type | Charter type |
Daily Base Rate |
Expiry (8) | |||||||||||||||
| Time or bareboat chartered-in vessels | |||||||||||||||||||||||
| 110 | Kraslava | 2007 | 37,258 | 1B | SHTP (1) | Handymax | Time charter | $ | 11,250 | 13-May-18 | (9 | ) | |||||||||||
| 111 | Silent | 2007 | 37,847 | 1A | SHTP (1) | Handymax | Bareboat | $ | 7,500 | 31-Mar-19 | (10 | ) | |||||||||||
| 112 | Single | 2007 | 37,847 | 1A | SHTP (1) | Handymax | Bareboat | $ | 7,500 | 31-Mar-19 | (10 | ) | |||||||||||
| 113 | Star I | 2007 | 37,847 | 1A | SHTP (1) | Handymax | Bareboat | $ | 7,500 | 31-Mar-19 | (10 | ) | |||||||||||
| 114 | Sky | 2007 | 37,847 | 1A | SHTP (1) | Handymax | Bareboat | $ | 6,000 | 31-Mar-19 | (10 | ) | |||||||||||
| 115 | Steel | 2008 | 37,847 | 1A | SHTP (1) | Handymax | Bareboat | $ | 6,000 | 31-Mar-19 | (10 | ) | |||||||||||
| 116 | Stone I | 2008 | 37,847 | 1A | SHTP (1) | Handymax | Bareboat | $ | 6,000 | 31-Mar-19 | (10 | ) | |||||||||||
| 117 | Style | 2008 | 37,847 | 1A | SHTP (1) | Handymax | Bareboat | $ | 6,000 | 31-Mar-19 | (10 | ) | |||||||||||
| 118 | Miss Benedetta | 2012 | 47,499 | — | SMRP (2) | MR | Time charter | $ | 14,000 | 16-Mar-19 | (11 | ) | |||||||||||
| 119 | STI Beryl | 2013 | 49,990 | — | SMRP (2) | MR | Bareboat | $ | 8,800 | 18-Apr-25 | (12 | ) | |||||||||||
| 120 | STI Le Rocher | 2013 | 49,990 | — | SMRP (2) | MR | Bareboat | $ | 8,800 | 21-Apr-25 | (12 | ) | |||||||||||
| 121 | STI Larvotto | 2013 | 49,990 | — | SMRP (2) | MR | Bareboat | $ | 8,800 | 28-Apr-25 | (12 | ) | |||||||||||
| 122 | Zefyros | 2013 | 49,999 | — | SMRP (2) | MR | Time charter | $ | 13,250 | 08-Jun-18 | (13 | ) | |||||||||||
| 123 | Gan-Trust | 2013 | 51,561 | — | SMRP (2) | MR | Time charter | $ | 13,950 | 06-Jan-19 | (14 | ) | |||||||||||
| 124 | CPO New Zealand | 2011 | 51,717 | — | SMRP (2) | MR | Time charter | $ | 15,250 | 12-Sep-18 | (15 | ) | |||||||||||
| 125 | CPO Australia | 2011 | 51,763 | — | SMRP (2) | MR | Time charter | $ | 15,250 | 01-Sep-18 | (15 | ) | |||||||||||
| 126 | Ance | 2006 | 52,622 | — | SMRP (2) | MR | Time charter | $ | 13,500 | 12-Oct-18 | (16 | ) | |||||||||||
| 127 | Densa Alligator | 2013 | 105,708 | — | SLR2P (4) | LR2 | Time charter | $ | 14,300 | 21-Aug-18 | (17 | ) | |||||||||||
| 128 | Densa Crocodile | 2015 | 105,408 | — | SLR2P (4) | LR2 | Time charter | $ | 15,750 | 06-Jul-18 | (18 | ) | |||||||||||
| Total time or bareboat chartered-in DWT | 968,434 | ||||||||||||||||||||||
| Total Fleet DWT | 8,851,629 | ||||||||||||||||||||||
| (1 | ) | This vessel operates in the Scorpio Handymax Tanker Pool, or SHTP. SHTP is a Scorpio Group Pool and is operated by Scorpio Commercial Management S.A.M., or SCM. SHTP and SCM are related parties to the Company. |
| (2 | ) | This vessel operates in the Scorpio MR Pool, or SMRP. SMRP is a Scorpio Group Pool and is operated by SCM. SMRP and SCM are related parties to the Company. |
| (3 | ) | This vessel operates in or is expected to operate in the Scorpio LR1 Pool, or SLR1P. SLR1P is a Scorpio Group Pool and is operated by SCM. SLR1P and SCM are related parties to the Company. |
| (4 | ) | This vessel operates in or is expected to operate in the Scorpio LR2 Pool, or SLR2P. SLR2P is a Scorpio Group Pool and is operated by SCM. SLR2P and SCM are related parties to the Company. |
| (5 | ) | This vessel is currently time chartered-out to an unrelated third-party for three years at $18,000 per day. This time charter is scheduled to expire in January 2019. |
| (6 | ) | This vessel is currently time chartered-out to an unrelated third-party for three years at $20,500 per day. This time charter is scheduled to expire in December 2018. |
| (7 | ) | This vessel is currently time chartered-out to an unrelated third-party for three years at $28,000 per day. This time charter is scheduled to expire in February 2019. |
| (8 | ) | Redelivery from the charterer is plus or minus 30 days from the expiry date. |
| (9 | ) | We have an option to extend this charter for an additional year at $13,250 per day. |
| (10 | ) | This agreement includes a purchase option which can be exercised through December 31, 2018. If the purchase option is not exercised, the bareboat-in agreement will expire on March 31, 2019. |
| (11 | ) | In January 2018, we entered into a time charter-in agreement for one year at $14,000 per day. We have an option to extend the charter for an additional year at $14,400 per day. We took delivery of this vessel in March 2018. |
| (12 | ) | In April 2017, we sold and leased back this vessel, on a bareboat basis, for a period of up to eight years for $8,800 per day. The sales price was $29.0 million and we have the option to purchase this vessel beginning at the end of the fifth year of the agreement through the end of the eighth year of the agreement, at market based prices. Additionally, a deposit of $4.35 million was retained by the buyer and 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. |
| (13 | ) | We have an option to extend the charter for an additional year at $14,500 per day. |
| (14 | ) | We have an option to extend the charter for an additional year at $15,750 per day. |
| (15 | ) | We have an option to extend this charter for an additional year at $16,000 per day. |
| (16 | ) | We have an option to extend this charter for an additional year at $15,000 per day. |
| (17 | ) | In February 2018, we entered into a time charter-in agreement for six months at $14,300 per day. We also have an option to extend the charter for an additional six months at $15,310 per day. We took delivery of this vessel in February 2018. |
| (18 | ) | In November 2017, we exercised our option extend this charter for an additional six months at $15,750 per day, effective January 2018. |
Dividend Policy
The declaration and payment of dividends is subject at all times to the discretion of the Company’s Board of Directors. The timing and amount of dividends, if any, depends on the Company’s earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.
The Company’s dividends paid during 2017 and 2018 were as follows:
| Date paid | Dividends per share |
||
| March 2017 | $0.010 | ||
| June 2017 | $0.010 | ||
| September 2017 | $0.010 | ||
| December 2017 | $0.010 | ||
| March 2018 | $0.010 | ||
On April 25, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.01 per share, payable on or about June 28, 2018 to all shareholders of record as of June 6, 2018 (the record date). As of April 24, 2018, there were 331,629,992 shares outstanding.
Securities Repurchase Program
In May 2015, the Company’s Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company’s securities which, in addition to its common shares, currently consist of its (i) Convertible Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 2019 (NYSE: SBBC), which were issued in March 2017.
No securities were repurchased under this program during the period commencing January 1, 2018 through and ending on the date of this press release.
As of the date hereof, the Company has the authority to purchase up to an additional $147.1 million of its securities under its Securities Repurchase Program. The Company expects to repurchase its securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the Securities Repurchase Program to repurchase any of its securities.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns or finance leases 109 product tankers (38 LR2 tankers, 12 LR1 tankers, 45 MR tankers, 14 Handymax tankers) with an average age of 2.7 years and time or bareboat charters-in 19 product tankers (two LR2 tankers, nine MR tankers and eight Handymax tankers). Additional information about the Company is available at the Company’s website www.scorpiotankers.com, which is not a part of this press release.
Non-IFRS Measures
Reconciliation of IFRS Financial Information to Non-IFRS Financial Information
This press release describes time charter equivalent revenue, or TCE revenue, adjusted net income or loss and adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. “Non-IFRS” measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors and other users of our financial statements, such as our lenders, with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
The Company believes that the presentation of time charter equivalent revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful to investors or other users of our financial statements, such as our lenders, because they facilitate the comparability and the evaluation of companies in the Company’s industry. In addition, the Company believes that time charter equivalent revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful in evaluating its operating performance compared to that of other companies in the Company’s industry. The Company’s definitions of time charter equivalent revenue, adjusted net income or loss with the adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA may not be the same as reported by other companies in the shipping industry or other industries.
Time charter equivalent revenue is reconciled above in the section entitled ‘Explanation of Variances on the First Quarter of 2018 Financial Results Compared to the First Quarter of 2017’.
Reconciliation of Net Loss to Adjusted Net Loss
| For the three months ended March 31, 2018 | |||||||||||||
| Per share | Per share | ||||||||||||
| In thousands of U.S. dollars except per share data | Amount | basic | diluted | ||||||||||
| Net loss | $ | (31,794 | ) | $ | (0.10 | ) | $ | (0.10 | ) | ||||
| Adjustment: | |||||||||||||
| Merger transaction related costs | 264 | 0.00 | 0.00 | ||||||||||
| Adjusted net loss | $ | (31,530 | ) | $ | (0.10 | ) | $ | (0.10 | ) | ||||
| For the three months ended March 31, 2017 | |||||||||||||
| Per share | Per share | ||||||||||||
| In thousands of U.S. dollars except per share data | Amount | basic | diluted | ||||||||||
| Net loss | $ | (11,533 | ) | $ | (0.07 | ) | $ | (0.07 | ) | ||||
| Adjustment: | |||||||||||||
| Deferred financing fees write-off | 66 | 0.00 | 0.00 | ||||||||||
| Adjusted net loss | $ | (11,467 | ) | $ | (0.07 | ) | $ | (0.07 | ) | ||||
Reconciliation of Net Loss to Adjusted EBITDA
| For the three months ended March 31, | |||||||||
| In thousands of U.S. dollars | 2018 | 2017 | |||||||
| Net loss | $ | (31,794 | ) | $ | (11,533 | ) | |||
| Financial expenses | 39,418 | 21,664 | |||||||
| Financial income | (385 | ) | (52 | ) | |||||
| Depreciation | 43,455 | 30,502 | |||||||
| Merger transaction related costs | 264 | — | |||||||
| Amortization of restricted stock | 6,650 | 6,289 | |||||||
| Adjusted EBITDA | $ | 57,608 | $ | 46,870 | |||||
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of our operations, risks relating to the integration of the operations of Navig8 Product Tankers Inc. (“NPTI”) and the possibility that the anticipated synergies and other benefits of the acquisition of NPTI will not be realized or will not be realized within the expected timeframe, the outcome of any legal proceedings related to the merger with NPTI and the related transactions, 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 Scorpio Tankers’ filings with the U.S. Securities and Exchange Commission for a more complete discussion of certain of these and other risks and uncertainties.
Contact Information
Scorpio Tankers Inc.
(212) 542-1616