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Scorpio Tankers Inc. Announces Financial Results for the Second Quarter of 2015, Agreements for Four Newbuilding Contracts, and Declaration of a Quarterly Dividend
MONACO — (Marketwired) — 07/29/15 — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three and six months ended June 30, 2015.
Results for the three months ended June 30, 2015 and 2014
For the three months ended June 30, 2015, the Company’s adjusted net income was $57.5 million, or $0.35 basic and $0.32 diluted earnings per share, which excludes an unrealized gain on derivative financial instruments of $0.1 million, or $0.00 per basic and diluted shares (see non-GAAP Measures section below). For the three months ended June 30, 2015, the Company had net income of $57.6 million, or $0.35 basic and $0.32 diluted earnings per share.
For the three months ended June 30, 2015, the Company’s basic and diluted weighted average number of shares were 162,457,319 and 199,202,256, respectively. The diluted weighted average number of shares includes the potentially dilutive shares relating to our Convertible Senior Notes due 2019 (the “Convertible Notes”) representing 31,094,568 potential common shares (see below for further information).
For the three months ended June 30, 2014, the Company had an adjusted net loss of $11.2 million (see Non-GAAP Measures section below), or $0.06 basic and diluted loss per share, which excludes (i) a gain of $10.9 million, or $0.06 per share, resulting from the acquisition of 7,500,000 common shares of the Company in exchange for 3,422,665 shares of Dorian LPG Ltd. (“Dorian”), (ii) a write-off of deferred financing fees of $0.3 million, or $0.00 per share and (iii) an unrealized gain on derivative financial instruments of $64,769, or $0.00 per share. For the three months ended June 30, 2014, the Company had a net loss of $0.6 million, or $0.00 basic and diluted loss per share.
Results for the six months ended June 30, 2015 and 2014
For the six months ended June 30, 2015, the Company’s adjusted net income was $96.8 million, or $0.62 basic and $0.55 diluted earnings per share, which excludes (i) a gain of $2.0 million, or $0.01 per basic and diluted shares, related to the closing of the sales of Venice, STI Harmony and STI Heritage and (ii) an unrealized loss on derivative financial instruments of $0.5 million, or $0.00 per basic and diluted shares (see non-GAAP Measures section below). For the six months ended June 30, 2015, the Company had net income of $98.3 million, or $0.63 basic and $0.56 diluted earnings per share.
For the six months ended June 30, 2014, the Company had an adjusted net loss of $9.4 million (see Non-GAAP Measures section below), or a $0.05 basic and diluted loss per share, which excludes (i) a gain of $51.4 million, or $0.27 per share, resulting from the sales of seven Very Large Crude Carriers (“VLCCs”) under construction, (ii) a gain of $10.9 million, or $0.06 per share, resulting from the acquisition of 7,500,000 common shares of the Company in exchange for 3,422,665 shares of Dorian, (iii) a write-off of $0.3 million of deferred financing fees, or $0.00 per share and (iv) an unrealized gain on derivative financial instruments of $0.1 million or $0.00 per share. For the six months ended June 30, 2014, the Company had net income of $52.8 million, or $0.28 basic and diluted earnings per share.
Newbuilding Agreements
The Company reached agreements to have two MR product tankers and two Handymax product tankers constructed at Hyundai Mipo Dockyard Co. Ltd. of South Korea (“HMD”). The contract price for the MR product tankers is approximately $34.5 million, and these vessels are scheduled for delivery in the first and second quarters of 2017. The contract price for the Handymax product tankers is approximately $32.5 million, and these vessels are scheduled for delivery in the second and third quarters of 2017. As part of the agreements, the Company holds certain options to construct up to six more MR product tankers and six more Handymax product tankers with fixed delivery dates and at fixed prices.
Declaration of Dividend
On July 29, 2015, the Scorpio Tankers’ Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on September 4, 2015 to all shareholders as of August 14, 2015 (the record date). As of July 29, 2015 there were 182,592,121 shares outstanding.
Diluted Weighted Number of Shares
Diluted earnings per share for the three and six months ended June 30, 2015 includes the potentially dilutive shares relating to the Convertible Notes representing 31,094,568 potential common shares. The Convertible Notes were issued in June 2014. The dilutive impact of the Convertible Notes is determined using the if-converted method. Under this method, we assume that the Convertible Notes are converted into common shares during the period and the interest and non-cash amortization expense associated with these notes of $5.3 million and $10.6 million during the three and six months ended June 30, 2015, respectively, is not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive. The Convertible Notes are currently ineligible for conversion.
Summary of Recent and Second Quarter Significant Events:
- Below is a summary of the voyages fixed thus far in the third quarter of 2015:
- For the LR2s: approximately $38,000 per day for 50% of the days
- For the LR1s: approximately $27,000 per day for 40% of the days
- For the MRs: approximately $25,000 per day for 43% of the days
- For the Handymaxes: approximately $21,500 per day for 36% of the days
- Reached an agreement with an unrelated third party to purchase a 2014 built MR product tanker for approximately $37.1 million. The vessel is expected to be delivered in August 2015.
- Reached agreements with two unrelated third parties to sell the Company’s investment in Dorian LPG Ltd. (“Dorian”) consisting of 6 million common shares to BW Euroholdings Limited, a wholly owned subsidiary of BW Group Limited, for a purchase price of $15.34 per share and 3,392,083 common shares to Sino Energy Holdings LLC, for a purchase price of $16.16 per share.
- Purchased 270,349 shares of the Company’s common shares that are being held as treasury shares at an average price of $10.06 per share.
- Purchased face value of $1.5 million of the Company’s 2.375% Convertible Bonds Due 2019 at 1.0881 or $1.6 million.
- Reached an agreement with an unrelated third party to purchase an LR2 product tanker that is currently under construction at Daehan Shipbuilding Co., Ltd (“DHSC”) for approximately $58.5 million. This vessel is scheduled to be delivered in August 2015 whereupon the Company will bareboat charter-in the vessel for $10,000 per day for up to nine months. The Company will take ownership of the vessel at the conclusion of the bareboat charter.
- Reached an agreement with an unrelated third party to purchase an MR product tanker that is currently under construction at HMD for approximately $37.0 million. This vessel is scheduled to be delivered in September 2015.
- Executed a Senior Secured Term Loan Facility for up to $142.2 million to partially finance four LR2s. The facility bears interest at LIBOR plus a margin of 2.15% per annum and the proceeds will be used to finance up to 60% of the purchase price of the vessels specified in the facility.
- Took delivery of eleven vessels under the Company’s Newbuilding Program, five LR2s and five MRs during the second quarter of 2015 and one MR in July 2015.
- Approved a new securities buyback program to purchase up to an aggregate of $250 million of the Company’s common stock and bonds.
- Reached agreements with two unrelated third parties to purchase an aggregate of four LR2 product tankers under construction at Sungdong Shipbuilding and Marine Engineering Co., Ltd. (“SSME”) and DHSC for approximately $60.0 million each.
- Closed on an underwritten offering of 17,177,123 common shares, raising aggregate net proceeds of $152.1 million.
- Paid a quarterly cash dividend on the Company’s common stock of $0.125 per share in June 2015.
Sale of investment in Dorian LPG Ltd.
In July 2015, the Company announced that it agreed to sell its investment in Dorian to two unrelated third parties in two separate transactions. The Company sold 6 million shares in Dorian to BW Euroholdings Limited, a wholly owned subsidiary of BW Group Limited, for a purchase price of $15.34 per share. The Company agreed to sell 3,392,083 shares to SINO Energy Holdings LLC, for a purchase price of $16.16 per share. The sale to SINO Energy Holdings LLC is expected to close at the end of July 2015. All shares were sold pursuant to an effective resale registration statement filed by Dorian on July 8, 2015.
Vessel purchases
In July 2015, the Company reached an agreement with an unrelated third party to purchase an MR product tanker that was built in 2014 at SPP Shipbuilding Co., Ltd. of South Korea (“SPP”) for approximately $37.1 million. The vessel is expected to be delivered in August 2015.
In July 2015, the Company reached an agreement to purchase an LR2 product tanker that is currently under construction at DHSC for a purchase price of $58.5 million. The vessel is scheduled for delivery in August 2015. Upon delivery, the Company will bareboat charter-in the vessel for up to nine months at $10,000 per day. The Company will take ownership of the vessel at the conclusion of the bareboat charter.
In June 2015, the Company purchased an MR product tanker that is under construction at HMD for $37.0 million. This vessel is scheduled for delivery in September 2015.
In May 2015, the Company reached agreements with two unrelated third parties to purchase an aggregate of four LR2 product tankers under construction at SSME and DHSC for approximately $60.0 million each. Two of these vessels, STI Spiga and STI Savile Row, were delivered in June 2015. The remaining two are expected to be delivered in August and September 2015, respectively.
$142.2 million credit facility
In July 2015, the Company executed a Term Loan Facility with ABN AMRO Bank N.V. and DVB Bank SE for up to $142.2 million to partially finance four LR2s. The facility bears interest at LIBOR plus a margin of 2.15% per annum and the proceeds will be used to finance up to 60% of the purchase price of the vessels specified in the facility.
The facility has a 15 year repayment profile and a final maturity of five years from the drawdown date of the loan for each vessel. The terms and conditions, including covenants, are similar to those in the Company’s existing credit facilities.
$250 million securities buyback program
In May 2015, the Company’s Board of Directors authorized a new securities buyback program to purchase up to an aggregate of $250 million of the Company’s common stock and bonds, which currently consist of its (i) Convertible Senior Notes Due 2019, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 2017 (NYSE: SBNB), which were issued in October 2014. This program replaces the Company’s stock buyback program that was previously announced in July 2014 and was terminated in conjunction with this new repurchase program.
During 2015 (through the date of this press release), the Company has acquired the following:
- an aggregate of 1,016,988 of its common shares that are being held as treasury shares at an average price of $8.48 per share (270,349 shares were purchased at an average price at $10.06 under the May 2015$250 million securities buyback program; the remaining shares were purchased in the first quarter of 2015 under the previous buyback program) . There are 182,592,121 shares outstanding as of July 29, 2015.
- $1.5 million face value of its Convertible Senior Notes Due 2019 at an average price of $1,088.10 per $1,000 principal amount (all of the Convertible Notes were purchased under the May 2015$250 million securities buyback program).
The Company has $245.6 million remaining under its securities buyback program as of the date of this press release. The Company expects to repurchase any securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any securities.
Equity offering
In May 2015, the Company closed on the sale of 17,177,123 newly issued shares of common stock in an underwritten public offering at an offering price of $9.30 per share. We received aggregate net proceeds of approximately $152.1 million, after deducting underwriters’ discounts and estimated offering expenses of $7.6 million.
Newbuilding Vessel deliveries
The Company has taken delivery of 11 vessels under its Newbuilding Program with HMD, DHSC, SSME, SPP and Hyundai Samho Heavy Industries Co., Ltd (“HSHI”) since March 31, 2015. These deliveries are summarized as follows:
Month
Name Delivered Type Shipyard
-------------------- --------------- --------------- ---------------
1 STI Oxford April 2015 LR2 HSHI
2 STI Queens April 2015 MR SPP
3 STI Osceola April 2015 MR HMD
4 STI Lauren April 2015 LR2 DHSC
5 STI Connaught May 2015 LR2 HSHI
6 STI Notting Hill May 2015 MR HMD
7 STI Spiga June 2015 LR2 DHSC
8 STI Seneca June 2015 MR HMD
9 STI Savile Row June 2015 LR2 SSME
10 STI Westminster June 2015 MR HMD
11 STI Brooklyn July 2015 MR SPP
Fleet update
At the end of June 2015, one of the Company’s Handymax tankers, STI Pimlico, was involved in a collision with a passenger vessel in the Dardanelles Strait in Turkey. There were no reports of injuries on either vessel; however, STI Pimlico sustained damage. The incident and the costs to repair are currently under investigation however we expect these costs to be covered by insurance, less customary deductibles. The vessel is currently being repaired and is expected to be offhire for approximately 60 days in the third quarter of 2015.
Time charter-in update
In May 2015, the Company time chartered-in an MR product tanker for six months at $15,250 per day. The Company also has two consecutive options to extend the charter for additional six month and one year periods at $15,250 per day and $16,350 per day, respectively.
In May 2015, the Company declared an option to extend the charter on an LR1 product tanker that is currently time chartered-in for one year at $12,500 per day. The agreement also contains a provision whereby the Company splits all of the vessel’s profits above the daily base rate with the vessel’s owner.
In April 2015, the Company agreed to time charter-in an MR product tanker that was under construction in South Korea. The vessel was delivered in May 2015 and is being time chartered-in for three years at $17,034 per day.
In April 2015, the Company extended the time charter on an LR2 product tanker that is currently time chartered-in. The term of the agreement is for one year at $24,875 per day beginning in September 2015. The Company also has an option to extend the charter for an additional year at $26,925 per day.
Conference Call
The Company will have a conference call on Wednesday, July 29, 2015 at 10:00 AM Eastern Daylight Time and 4:00 PM Central European Summer Time.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-800-289-0438 (U.S.) or 1-913-312-0845 (International). The conference participant passcode is 6711816. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.
Slides and Audio Webcast:
There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Webcast URL: http://www.visualwebcaster.com/event.asp?id=102648
Current Liquidity
As of July 28, 2015, the Company had $247.3 million in cash. The cash balance does not include the $54.8 million proceeds from the sale of 3.4 million shares of Dorian; the sale is scheduled to close on July 29, 2015.
Debt
We made the following drawdowns from our credit facilities since March 31, 2015 and through the date of this press release:
Drawdown amount Drawdown
Credit facility (in $ millions) date Collateral
--------------------------- ----------------- ---------- ----------------
1 K-Sure Credit Facility 30.3 April 2015 STI Oxford
2 K-Sure Credit Facility 19.5 April 2015 STI Queens
3 2013 Credit Facility 19.3 April 2015 STI Osceola
4 K-Sure Credit Facility 30.3 April 2015 STI Lauren
5 K-Sure Credit Facility 30.3 April 2015 STI Connaught
6 K-Sure Credit Facility 21.0 May 2015 STI Notting Hill
7 2013 Credit Facility 35.1 June 2015 STI Spiga
8 2013 Credit Facility 18.5 June 2015 STI Seneca
9 K-Sure Credit Facility 21.0 June 2015 STI Westminster
10 K-Sure Credit Facility 19.5 July 2015 STI Brooklyn
11 ABN AMRO Term Loan Facility 35.7 July 2015 STI Savile Row
As of July 29, 2015, the Company’s outstanding debt balance, and amount available to draw, is as follows:
Amount
Amount Outstanding Availability
outstanding as of the as of the
at June 30, date of this date of this
In thousands of U.S. dollars 2015 report report
------------- ------------- -------------
2010 Revolving Credit Facility $ - $ - - (1)
2011 Credit Facility 104,944 104,944 -
Newbuilding Credit Facility 74,842 74,842 -
2013 Credit Facility 498,136 498,136 -
K-Sure Credit Facility 438,760 458,260 - (2)
KEXIM Credit Facility 417,075 417,075 -
Nomura Term Margin Facility 30,000 - - (3)
Credit Suisse Credit Facility - - 61,200 (4)
ING Credit Facility - - 52,000 (5)
ABN AMRO Term Loan Facility - 35,700 106,500 (6)
Senior Unsecured Notes 105,500 105,500 -
Convertible Senior Notes 360,000 358,500 - (7)
------------- ------------- -------------
Total $ 2,029,257$ 2,052,957$ 219,700
============= ============= =============
(1) In June 2015, the 2010 Revolving Credit Facility matured and we made an
$8.0 million principal payment to settle all amounts outstanding. The
mortgage on STI Highlander (the vessel collateralized under this
facility) was released, and the vessel is now debt free.
(2) The amount outstanding as of the date of this report includes a drawdown
of $19.5 million to partially finance the delivery of STI Brooklyn,
which was delivered in July 2015.
(3) We repaid the outstanding amount to this facility in July 2015 as a
result of the sale of 6 million shares that are owned in Dorian to BW
Euroholdings Limited.
(4) We received a commitment for a senior secured term loan facility with
Credit Suisse AG in March 2015. Availability can be used to finance the
lesser of $30.6 million and 60% of each vessel's fair market value at
the respective drawdown dates.
(5) We entered into a Term Loan Facility for two LR2 product tankers with
ING Bank N.V. in June 2015. Availability can be used to finance the
lesser of $26.0 million and 47.5% of the fair market value of the
respective vessels.
(6) We entered into a Term Loan Facility with ABN AMRO Bank N.V. and DVB
Bank SE for up to $142.2 million to partially finance four LR2s.
Availability can be used to finance up to 60% of the purchase price of
the vessels specified in the facility. The amount outstanding as of the
date of this report includes a drawdown of $35.7 million that was made
in July 2015. STI Savile Row, which was delivered in June 2015, was
provided as collateral for this drawdown.
(7) As of June 30, 2015, $50.5 million of this amount has been attributed to
the conversion feature of the Convertible Senior Notes and recorded
within additional paid in capital on the consolidated balance sheet. In
July 2015, the Company repurchased $1.5 million face value of its
Convertible Senior Notes Due 2019 at an average price of $1,088.10 per
$1,000 principal amount.
Newbuilding Program
During the second quarter of 2015, the Company made $345.6 million of installment payments on its newbuilding vessels.
The Company currently has 12 newbuilding vessel orders with HMD, DHSC, and SSME (three MRs, seven LR2s and two Handymaxes) in addition to the expected delivery of a 2014 built MR product tanker in August 2015. The estimated third quarter of 2015 and future payments are as follows*:
$ in millions of U.S. dollars
-----------------------------
Q3 2015 - installment payments made $ 62.0
Q3 2015 - remaining installment payments** 204.8
Q4 2015 24.8
Q1 2016 60.6
Q2 2016 78.5
Q3 2016 33.0
Q4 2016 39.7
Q1 2017 27.3
Q2 2017 43.4
Q3 2017 3.3
Q4 2017 19.5
-----------------------------
Total $ 596.9
=============================
*These are estimates only and are subject to change as construction progresses.
** Includes the 2014 built MR product tanker at SPP that is expected to be delivered in August 2015.
Explanation of Variances on the Second Quarter of 2015 Financial Results Compared to the Second Quarter of 2014
For the three months ended June 30, 2015, the Company recorded net income of $57.6 million compared to a net loss of $0.6 million for the three months ended June 30, 2014. The following were the significant changes between the two periods:
- Time charter equivalent, or TCE revenue, a non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management. The following table depicts TCE revenue for the three months ended June 30, 2015 and 2014:
For the three months ended June 30,
------------------------------------
In thousands of U.S. dollars 2015 2014
----------------- -----------------
Vessel revenue $ 188,464 $ 57,445
Voyage expenses (1,112) (551)
----------------- -----------------
TCE revenue $ 187,352 $ 56,894
================= =================
- TCE revenue increased $130.5 million to $187.4 million. This increase was driven by an increase in the average number of operating vessels (owned and time chartered-in) to 88.2 from 49.3 for the three months ended June 30, 2015 and 2014, respectively, along with an increase in time charter equivalent revenue per day to $23,469 per day from $12,733 per day for the three months ended June 30, 2015 and 2014, respectively (see the breakdown of daily TCE averages below). Spot rates across all of our operating segments improved during the second quarter as fundamentals in the product tanker market remained strong. These fundamentals were driven by increased refining capacity in the Middle East and India along with improved refining margins worldwide which have had a resultant, positive impact on the demand for our vessels.
- Vessel operating costs increased $27.4 million to $41.1 million from $13.7 million for the three months ended June 30, 2015 and 2014, respectively. This increase was primarily driven by an increase in the Company’s owned fleet to an average of 69.6 vessels from 21.5 vessels for the three months ended June 30, 2015 and 2014, respectively. The increase was offset by an overall decrease in vessel operating costs per day to $6,487 per day from $6,960 per day for the three months ended June 30, 2015 and 2014, respectively (see the breakdown of daily TCE averages below)
- Charterhire expense decreased $10.3 million to $25.9 million from $36.2 million for the three months ended June 30, 2015 and 2014, respectively. This difference was driven by a decrease in the Company’s time chartered-in fleet to an average of 18.6 vessels from 27.8 vessels for the three months ended June 30, 2015 and 2014, respectively.
- Depreciation expense increased $18.1 million to $25.5 million from $7.4 million for the three months ended June 30, 2015 and 2014, respectively. This change was the result of an increase in the average number of owned vessels to 69.6 from 21.5 for the three months ended June 30, 2015 and 2014, respectively.
- General and administrative expenses increased $3.8 million to $15.4 million from $11.6 million for the three months ended June 30, 2015 and 2014, respectively. This increase is due to the significant growth in the Company’s fleet.
- Gain on sale of Dorian shares during the three months ended June 30, 2014 resulted from the acquisition of 7,500,000 common shares of the Company in exchange for 3,422,665 shares of Dorian in June 2014.
- Financial expenses increased $21.4 million to $21.8 million from $0.4 million primarily as a result of an increase in the Company’s debt balance in addition to a decrease in the amount of interest capitalized for the three months ended June 30, 2015 and 2014, respectively. Total debt outstanding, net of deferred financing fees, was $1.9 billion at June 30, 2015 compared to $807.5 million at June 30, 2014.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Income or Loss
(unaudited)
For the three months ended For the six months ended
June 30, June 30,
-------------------------- --------------------------
In thousands of U.S.
dollars except per
share and share
data 2015 2014 2015 2014
------------ ------------ ------------ ------------
Revenue
Vessel revenue $ 188,464$ 57,445$ 349,170$ 134,179
Operating expenses
Vessel operating
costs (41,147) (13,680) (78,622) (26,750)
Voyage expenses (1,112) (551) (3,206) (4,525)
Charterhire (25,915) (36,220) (54,646) (76,393)
Depreciation (25,550) (7,369) (46,958) (13,322)
General and
administrative
expenses (15,451) (11,649) (29,153) (22,615)
Gain on sale of
VLCCs - - - 51,419
Gain on sale of
Dorian shares - 10,924 - 10,924
Gain on sale of
vessels 11 - 2,019 -
------------ ------------ ------------ ------------
Total operating
expenses (109,164) (58,545) (210,566) (81,262)
------------ ------------ ------------ ------------
Operating income /
(loss) 79,300 (1,100) 138,604 52,917
------------ ------------ ------------ ------------
Other (expense) and
income, net
Financial expenses (21,840) (472) (39,898) (871)
Realized gain on
derivative
financial
instruments 15 - 55 17
Unrealized gain /
(loss) on
derivative
financial
instruments 64 65 (542) 112
Financial income 53 42 78 69
Share of income
from associate - 898 - 573
Other expenses,
net (4) (6) (14) (53)
------------ ------------ ------------ ------------
Total other
expense, net (21,712) 526 (40,321) (153)
------------ ------------ ------------ ------------
Net income / (loss) $ 57,588$ (574)$ 98,283$ 52,764
============ ============ ============ ============
Earnings / (loss)
per share
Basic $ 0.35$ (0.00)$ 0.63$ 0.28
Diluted $ 0.32$ (0.00)$ 0.56$ 0.28
Basic weighted
average shares
outstanding 162,457,319 185,856,086 157,177,056 187,563,892
Diluted weighted
average shares
outstanding 199,202,256 185,856,086 193,533,559 190,793,888
*Diluted earnings per share for the three months ended June 30, 2015 primarily includes the potentially dilutive shares relating to our Convertible Senior Notes due 2019 (the “Convertible Notes”) representing 31,094,568 potential common shares. The dilutive impact of the Convertible Notes is determined using the if-converted method. Under this method, we assume that the Convertible Notes are converted into common shares during the period and the interest and non-cash amortization expense associated with these notes of $5.3 million and $10.6 million for the three and six months ended June 30, 2015, respectively, is not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive. The Convertible Notes are currently ineligible for conversion.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
As of
--------------------------
In thousands of U.S. dollars June 30, December 31,
2015 2014
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 226,863$ 116,143
Accounts receivable 77,491 78,201
Prepaid expenses and other current assets 9,807 2,420
Inventories 6,869 6,075
Vessels held for sale - 70,865
------------ ------------
Total current assets 321,030 273,704
------------ ------------
Non-current assets
Vessels and drydock 2,876,519 1,971,878
Vessels under construction 26,788 404,877
Other assets 19,087 23,728
Available for sale investment 156,660 130,456
------------ ------------
Total non-current assets 3,079,054 2,530,939
------------ ------------
Total assets $ 3,400,084$ 2,804,643
============ ============
Current liabilities
Current portion of long term debt 143,181 87,163
Debt related to vessels held for sale - 32,932
Accounts payable 22,811 14,929
Accrued expenses 53,087 55,139
Derivative financial instruments 542 205
------------ ------------
Total current liabilities 219,621 190,368
------------ ------------
Non-current liabilities
Long term debt 1,773,958 1,451,427
------------ ------------
Total non-current liabilities 1,773,958 1,451,427
------------ ------------
Total liabilities 1,993,579 1,641,795
------------ ------------
Shareholders' equity
Issued, authorized and fully paid in share
capital:
Share capital 2,205 2,033
Additional paid in capital 1,711,120 1,550,956
Treasury shares (357,189) (351,283)
Accumulated other comprehensive income / (loss) 15,403 (10,878)
Retained earnings / (accumulated deficit) 34,966 (27,980)
------------ ------------
Total shareholders' equity 1,406,505 1,162,848
------------ ------------
Total liabilities and shareholders' equity $ 3,400,084$ 2,804,643
============ ============
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
For the six months
ended June 30,
--------------------
In thousands of U.S. dollars 2015 2014
--------- ---------
Operating activities
Net income $ 98,283$ 52,764
Gain on sale of VLCCs - (51,419)
Gain on sale of Dorian shares - (10,924)
Gain on sale of vessels (2,019) -
Depreciation 46,958 13,322
Amortization of restricted stock 15,140 14,436
Amortization of deferred financing fees 7,088 468
Straight-line adjustment for charterhire expense - 3
Share of income from associate - (573)
Unrealized loss / (gain) on derivative financial
instruments 542 (112)
Amortization of acquired time charter contracts 346 114
Accretion of convertible senior notes 5,471 29
--------- ---------
171,809 18,108
--------- ---------
Changes in assets and liabilities:
Drydock payments - (953)
Increase in inventories (1,075) (246)
Increase in accounts receivable (3,626) (3,563)
Increase in prepaid expenses and other current assets (7,668) (1,230)
Increase in other assets (5,607) -
Increase in accounts payable 7,481 5,036
(Decrease)/increase in accrued expenses (2,641) 1,736
Interest rate swap termination payment (128) (274)
--------- ---------
(13,264) 506
--------- ---------
Net cash inflow from operating activities 158,545 18,614
--------- ---------
Investing activities
Acquisition of vessels and payments for vessels under
construction (575,467) (455,010)
Proceeds from disposal of vessels 72,884 213,670
--------- ---------
Net cash outflow from investing activities (502,583) (241,340)
--------- ---------
Financing activities
Debt repayments (75,034) (56,056)
Issuance of debt 429,600 417,782
Debt issuance costs (3,969) (36,252)
Proceeds from issuance of convertible senior notes - 360,000
Convertible senior notes issuance costs - (10,803)
Proceeds from issuance of common stock 159,747 -
Equity issuance costs (7,394) (42)
Dividends paid (42,285) (33,860)
Repurchase of common stock (5,907) (139,581)
--------- ---------
Net cash inflow from financing activities 454,758 501,188
--------- ---------
Increase in cash and cash equivalents 110,720 278,462
Cash and cash equivalents at January 1, 116,143 78,845
--------- ---------
Cash and cash equivalents at June 30, $ 226,863$ 357,307
========= =========
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three and six months ended June 30, 2015 and
2014
(unaudited)
For the three months For the six months
ended June 30, ended June 30,
-------------------- -------------------
2015 2014 2015 2014
--------- ---------- --------- ---------
Adjusted EBITDA(1)(in thousands of
U.S. dollars) $ 112,314$ 4,316$ 198,724$ 20,212
Average Daily Results
Time charter equivalent per day(2) $ 23,469$ 12,733$ 22,331$ 14,339
Vessel operating costs per day(3) 6,487 6,960 6,534 7,052
Aframax/LR2
TCE per revenue day (2) 30,116 15,745 27,876 14,986
Vessel operating costs per day(3) 6,751 12,881 6,797 8,233
Panamax/LR1
TCE per revenue day (2) 23,243 12,516 22,317 16,556
Vessel operating costs per day(3) * 9,306 8,362 8,729
MR
TCE per revenue day (2) 22,599 11,977 21,402 13,066
Vessel operating costs per day(3) 6,352 6,491 6,375 6,462
Handymax
TCE per revenue day (2) 19,774 12,013 19,909 14,421
Vessel operating costs per day(3) 6,422 6,847 6,586 8,464
Fleet data
Average number of owned vessels 69.6 21.5 66.3 20.9
Average number of time chartered-in
vessels 18.6 27.8 19.8 29.1
Drydock
Expenditures for drydock (in
thousands of U.S. dollars) - $ 1,290 - $ 1,290
*In early April 2015, the Company sold STI Harmony and STI Heritage, which were the last two owned LR1 tankers in this segment. As there were only four total operating days in this segment, operating costs per day are not a meaningful metric during the three months ended June 30, 2015.
(1) See Non-GAAP Measure section below.
(2) Freight rates are commonly measured in the shipping industry in terms of
time charter equivalent per day (or TCE per day), which is calculated by
subtracting voyage expenses, including bunkers and port charges, from
vessel revenue and dividing the net amount (time charter equivalent
revenues) by the number of revenue days in the period. Revenue days are
the number of days the vessel is owned less the number of days the
vessel is off-hire for drydock and repairs.
(3) Vessel operating costs per day represent vessel operating costs
excluding non-recurring expenses (for example insurance deductible
expenses for repairs) divided by the number of days the vessel is owned
during the period.
Fleet List as of July 29, 2015
Vessel Name Year Ice Vessel
Built DWT class Employment type
---------------------- ----- --------- ----- ------------------ --------
Owned vessels
1 STI Highlander 2007 37,145 1A SHTP (1) Handymax
2 STI Brixton 2014 38,000 1A SHTP (1) Handymax
3 STI Comandante 2014 38,000 1A SHTP (1) Handymax
4 STI Pimlico 2014 38,000 1A SHTP (1) Handymax
5 STI Hackney 2014 38,000 1A SHTP (1) Handymax
6 STI Acton 2014 38,000 1A SHTP (1) Handymax
7 STI Fulham 2014 38,000 1A SHTP (1) Handymax
8 STI Camden 2014 38,000 1A SHTP (1) Handymax
9 STI Battersea 2014 38,000 1A SHTP (1) Handymax
10 STI Wembley 2014 38,000 1A SHTP (1) Handymax
11 STI Finchley 2014 38,000 1A SHTP (1) Handymax
12 STI Clapham 2014 38,000 1A SHTP (1) Handymax
13 STI Poplar 2014 38,000 1A SHTP (1) Handymax
14 STI Hammersmith 2015 38,000 1A SHTP (1) Handymax
15 STI Rotherhithe 2015 38,000 1A SHTP (1) Handymax
16 STI Amber 2012 52,000 - SMRP(4) MR
17 STI Topaz 2012 52,000 - SMRP(4) MR
18 STI Ruby 2012 52,000 - SMRP(4) MR
19 STI Garnet 2012 52,000 - SMRP(4) MR
20 STI Onyx 2012 52,000 - SMRP(4) MR
21 STI Sapphire 2013 52,000 - SMRP(4) MR
22 STI Emerald 2013 52,000 - SMRP(4) MR
23 STI Beryl 2013 52,000 - SMRP(4) MR
24 STI Le Rocher 2013 52,000 - SMRP(4) MR
25 STI Larvotto 2013 52,000 - SMRP(4) MR
26 STI Fontvieille 2013 52,000 - SMRP(4) MR
27 STI Ville 2013 52,000 - SMRP(4) MR
28 STI Duchessa 2014 52,000 - SMRP(4) MR
29 STI Opera 2014 52,000 - SMRP(4) MR
30 STI Texas City 2014 52,000 - Time Charter (5) MR
31 STI Meraux 2014 52,000 - SMRP(4) MR
32 STI Chelsea 2014 52,000 - SMRP(4) MR
33 STI Lexington 2014 52,000 - SMRP(4) MR
34 STI San Antonio 2014 52,000 - SMRP(4) MR
35 STI Venere 2014 52,000 - SMRP(4) MR
36 STI Virtus 2014 52,000 - SMRP(4) MR
37 STI Powai 2014 52,000 - SMRP(4) MR
38 STI Aqua 2014 52,000 - SMRP(4) MR
39 STI Dama 2014 52,000 - SMRP(4) MR
40 STI Olivia 2014 52,000 - SMRP(4) MR
41 STI Mythos 2014 52,000 - SMRP(4) MR
42 STI Benicia 2014 52,000 - Time Charter (6) MR
43 STI Regina 2014 52,000 - SMRP(4) MR
44 STI St. Charles 2014 52,000 - SMRP(4) MR
45 STI Mayfair 2014 52,000 - SMRP(4) MR
46 STI Yorkville 2014 52,000 - SMRP(4) MR
47 STI Milwaukee 2014 52,000 - SMRP(4) MR
48 STI Battery 2014 52,000 - SMRP(4) MR
49 STI Soho 2014 52,000 - SMRP(4) MR
50 STI Tribeca 2015 52,000 - SMRP(4) MR
51 STI Gramercy 2015 52,000 - SMRP(4) MR
52 STI Bronx 2015 52,000 - SMRP(4) MR
53 STI Pontiac 2015 52,000 - SMRP(4) MR
54 STI Manhattan 2015 52,000 - Spot MR
55 STI Queens 2015 52,000 - Spot MR
56 STI Osceola 2015 52,000 - Spot MR
57 STI Notting Hill 2015 52,000 1B Spot MR
58 STI Seneca 2015 52,000 - Spot MR
59 STI Westminster 2015 52,000 1B Spot MR
60 STI Brooklyn 2015 52,000 - Spot MR
61 STI Elysees 2014 109,999 - SLR2P (3) LR2
62 STI Madison 2014 109,999 - SLR2P (3) LR2
63 STI Park 2014 109,999 - SLR2P (3) LR2
64 STI Orchard 2014 109,999 - SLR2P (3) LR2
65 STI Sloane 2014 109,999 - SLR2P (3) LR2
66 STI Broadway 2014 109,999 - SLR2P (3) LR2
67 STI Condotti 2014 109,999 - SLR2P (3) LR2
68 STI Rose 2015 109,999 - SLR2P (3) LR2
69 STI Veneto 2015 109,999 - SLR2P (3) LR2
70 STI Alexis 2015 109,999 - SLR2P (3) LR2
71 STI Winnie 2015 109,999 - SLR2P (3) LR2
72 STI Oxford 2015 109,999 - SLR2P (3) LR2
73 STI Lauren 2015 109,999 - SLR2P (3) LR2
74 STI Connaught 2015 109,999 - SLR2P (3) LR2
75 STI Spiga 2015 109,999 - SLR2P (3) LR2
76 STI Savile Row 2015 109,999 - SLR2P (3) LR2
---------
Total owned DWT 4,669,129
=========
Daily
Year Ice Employ- Vessel Base Expiry
Vessel Name Built DWT class ment type Rate (7)
------------ ----- --------- ----- ------- -------- ------- ---------
Time
chartered-in
vessels
77 Kraslava 2007 37,258 1B SHTP Handymax $14,150 18-May-16(8)
(1)
78 Krisjanis 2007 37,266 1B SHTP Handymax $14,150 01-May-16(9)
Valdemars (1)
79 Iver 2007 37,412 - SHTP Handymax $13,500 03-Apr-16(10)
Prosperity (1)
80 Histria 2006 40,426 - SHTP Handymax $13,550 31-Aug-15
Coral (1)
81 Histria 2005 40,471 - SHTP Handymax $13,550 31-Oct-15
Perla (1)
82 Miss 2011 47,499 - SMRP(4) MR $15,250 26-Nov-15(11)
Mariarosaria
83 Vukovar 2015 49,990 - Spot MR $17,034 01-May-18
84 Targale 2007 49,999 - SMRP(4) MR $15,200 17-May-16(12)
85 Gan-Trust 2013 51,561 - SMRP(4) MR $16,250 06-Jan-16(13)
86 SN Federica 2003 72,344 - SPTP LR1 $12,500 15-May-16(14)
(2)
87 King Douglas 2008 73,666 - SPTP LR1 $15,000 08-Nov-15
(2)
88 Hellespont 2006 73,728 - SPTP LR1 $16,250 18-Mar-16(15)
Progress (2)
89 FPMC P Eagle 2009 73,800 - SPTP LR1 $14,525 01-Oct-15
(2)
90 Swarna 2010 104,895 - SLR2P LR2 $16,250 15-Sep-15
Jayanti (3)
91 Densa 2015 105,408 - SLR2P LR2 $21,050 07-Feb-16(16)
Crocodile (3)
92 Densa 2013 105,708 - SLR2P LR2 $17,550 17-Sep-16(17)
Alligator (3)
93 Khawr Aladid 2006 106,003 - SLR2P LR2 $15,400 05-Aug-15
(3)
---------
Total time
chartered-in
DWT 1,107,434
=========
Newbuildings currently under
construction
Vessel Name Yard DWT Vessel type
-------------------------------------- ---- --------- -----------
94 Hull 2473 - TBN STI Black Hawk HMD (18) 52,000 MR
95 Hull S3120 - TBN STI Selatar SSME (19) 109,999 LR2
96 Hull S3121 - TBN STI Rambla SSME (19) 109,999 LR2
97 Hull S3094 - TBN STI Kingsway SSME (19) 109,999 LR2
98 Hull S3079 - TBN STI Carnaby SSME (19) 109,999 LR2
99 Hull 5003 - TBN STI Grace DHSC (20) 109,999 LR2
100 Hull 5004 - TBN STI Jermyn DHSC (20) 109,999 LR2
101 Hull 5024 - TBN STI Lombard DHSC (21) 109,999 LR2
102 HMD Handymax #1 HMD (18) 38,000 Handymax
103 HMD Handymax #2 HMD (18) 38,000 Handymax
104 HMD MR #1 HMD (18) 52,000 MR
105 HMD MR #2 HMD (18) 52,000 MR
---------
Total newbuilding product tankers DWT 1,001,993
=========
---------
Total Fleet DWT 6,778,556
=========
(1) This vessel operates in or is expected to operate in the Scorpio
Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial
Management (SCM). SHTP and SCM are related parties to the Company.
(2) This vessel operates in or is expected to operate in the Scorpio
Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related
party to the Company.
(3) This vessel operates in or is expected to operate in the Scorpio LR2
Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the
Company.
(4) This vessel operates in or is expected to operate in the Scorpio MR
Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the
Company.
(5) This vessel is on a time charter agreement for two years expiring in
March 2016, which also contains a 50% profit sharing provision whereby
we split all of the vessel's profits above the daily base rate with the
charterer.
(6) This vessel is on a one-year time charter agreement that expires in
September 2015. This agreement contains a 50% profit sharing provision
whereby we split all of the vessel's profits above the daily base rate
with the charterer.
(7) Redelivery from the charterer is plus or minus 30 days from the expiry
date.
(8) In April 2015, we declared an option to extend the charter for an
additional year at $14,150 per day effective May 2015.
(9) In April 2015, we declared an option to extend the charter for an
additional year at $14,150 per day effective May 2015.
(10) In September 2014, we declared an option to extend the charter for an
additional year at $13,500 per day effective April 3, 2015.
(11) We have two consecutive options to extend the charter for an additional
six month and one year periods at $15,250 per day and $16,350 per day,
respectively.
(12) In March 2015, we declared an option to extend the charter for an
additional year at $15,200 per day effective May 2015. We have an
option to extend the charter for an additional year at $16,200 per day.
(13) The rate for the first year of this agreement was $15,750 per day, the
rate for the second year is $16,250 per day, and the rate for the third
year is $16,750 per day. We have options to extend the charter for up
to two consecutive one year periods at $17,500 per day and $18,000 per
day, respectively.
(14) In May 2015, we declared an option to extend the charter for an
additional year at $12,500 per day. We have also entered into an
agreement with the vessel's owner whereby we split all of the vessel's
profits above the daily base rate.
(15) We have an option to extend the charter for an additional year at
$17,250 per day.
(16) We have entered into an agreement with a third party whereby we split
all of the vessel's profits and losses above or below the daily base
rate. We also have an option to extend the charter for an additional
year at $22,600 per day.
(17) In April 2015, we extended the charter for an additional year at
$24,875 per day effective September 2015. We have an option to extend
the charter for an additional year at $26,925 per day.
(18) These newbuilding vessels are being constructed at HMD (Hyundai Mipo
Dockyard Co. Ltd. of South Korea). One vessel is expected to be
delivered in the third quarter of 2015 and the remaining four vessels
throughout 2017.
(19) These newbuilding vessels are being constructed at SSME (Sungdong
Shipbuilding & Marine Engineering Co., Ltd). Two vessels are expected
to be delivered in the third quarter of 2015, one in the third quarter
of 2016 and one in the fourth quarter of 2016.
(20) These newbuilding vessels are being constructed at DHSC (Daehan
Shipbuilding Co. Ltd). These two vessels are expected to be delivered
in the first and second quarter of 2016.
(21) This newbuilding vessel is being constructed at DHSC. This vessel is
scheduled to be delivered in August 2015, whereupon the Company will
bareboat charter-in the vessel for up to nine months and purchase the
vessel at the conclusion of the bareboat charter.
Business Strategy, Dividend Policy, and Stock Buyback Program
Business Strategy
The Company’s primary objectives are to profitably grow the business and emerge as a major operator of product tanker vessels. The Company intends to acquire modern, high-quality tankers through timely and selective acquisitions. The Company is currently concentrating on these sectors because of their attractive fundamentals which the Company believes includes:
- increasing demand for refined products.
- increasing ton miles (distance between production and areas of demand), and
- reduced order book.
Dividend Policy
The declaration and payment of dividends is subject at all times to the discretion of the Company’s Board of Directors. The timing and amount of dividends, if any, depends on the Company’s earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.
The Company’s dividend history is as follows:
On July 29, 2015, the Scorpio Tankers’ Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on September 4, 2015 to all shareholders as of August 14, 2015 (the record date). As of July 29, 2015 there were 182,592,121 shares outstanding.
Date paid Dividends per share
---------------- -------------------
June 2013 $ 0.025
September 2013 $ 0.035
December 2013 $ 0.070
March 2014 $ 0.080
June 2014 $ 0.090
September 2014 $ 0.100
December 2014 $ 0.120
March 2015 $ 0.120
June 2015 $ 0.125
Securities Buyback Program
In May 2015, the Company’s Board of Directors authorized a new securities buyback program to purchase up to an aggregate of $250 million of the Company’s common stock and bonds, which currently consist of its (i) Convertible Senior Notes Due 2019, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 2017 (NYSE: SBNB), which were issued in October 2014. This program replaces the Company’s stock buyback program that was previously announced in July 2014 and was terminated in conjunction with this new repurchase program.
During 2015 (through the date of this press release), the Company has acquired the following:
- an aggregate of 1,016,988 of its common shares that are being held as treasury shares at an average price of $8.46 per share. There are 182,592,121 shares outstanding as of July 29, 2015.
- $1.5 million face value of its Convertible Senior Notes Due 2019 at an average price of $1,088.10 per $1,000 principal amount.
The Company has $245.6 million remaining under its securities buyback program as of the date of this press release. The Company expects to repurchase any securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any securities.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 76 tankers (16 LR2 tankers, 15 Handymax tankers, and 45 MR tankers) with an average age of 1.0 years, and time charters-in 17 product tankers (four LR2, four LR1, four MR and five Handymax tankers). The Company has reached an agreement to acquire an MR product tanker in August 2015 and has contracted for 12 newbuilding product tankers (two Handymax, three MR and seven LR2), four of which are expected to be delivered in the third quarter of 2015, four throughout 2016 and four throughout 2017. Additional information about the Company is available at the Company’s website www.scorpiotankers.com, which is not a part of this press release.
Non-GAAP Measures
This press release describes adjusted net income and adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. “Non-GAAP” measure). The Non-GAAP measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
Adjusted net income
For the three months ended June 30,
2015
-------------------------------------
In thousands of U.S. dollars except Per share Per share
per share and share data Amount basic diluted
----------- ----------- -----------
Net income $ 57,588$ 0.35$ 0.32
Adjustments:
Unrealized gain on derivative
financial instruments (64) (0.00) (0.00)
Gain on sale of vessels (11) (0.00) (0.00)
----------- ----------- -----------
Total adjustments (75) (0.00) (0.00)
----------- ----------- -----------
Adjusted net income $ 57,513$ 0.35$ 0.32
=========== =========== ===========
For the three months ended June 30,
2014
-------------------------------------
Per share Per share
Amount basic diluted
----------- ----------- -----------
Net loss $ (574)$ (0.00)$ (0.00)
Adjustments:
Deferred financing fees write-off
- STI Spirit 317 0.00 0.00
Unrealized gain on derivative
financial instruments (65) (0.00) (0.00)
Gain on sale of Dorian shares (10,924) (0.06) (0.06)
----------- ----------- -----------
Total adjustments (10,672) (0.06) (0.06)
----------- ----------- -----------
Adjusted net loss $ (11,246)$ (0.06)$ (0.06)
=========== =========== ===========
For the six months ended June 30,
2015
-------------------------------------
Per share Per share
Amount basic diluted
----------- ----------- -----------
Net income $ 98,283$ 0.63$ 0.56
Adjustments:
Unrealized loss on derivative
financial instruments 542 0.00 0.00
Gain on sale of vessels (2,019) (0.01) (0.01)
----------- ----------- -----------
Total adjustments (1,477) (0.01) (0.01)
----------- ----------- -----------
Adjusted net income $ 96,806$ 0.62$ 0.55
=========== =========== ===========
For the six months ended June 30,
2014
-------------------------------------
Per share Per share
Amount basic diluted
----------- ----------- -----------
Net income $ 52,764$ 0.28$ 0.28
Adjustments:
Deferred financing fees write-off
- STI Spirit 317 0.00 0.00
Unrealized gain on derivative
financial instruments (112) (0.00) (0.00)
Gain on sale of VLCCs (51,419) (0.27) (0.27)
Gain on sale of Dorian shares (10,924) (0.06) (0.06)
----------- ----------- -----------
Total adjustments (62,138) (0.33) (0.33)
----------- ----------- -----------
Adjusted net loss $ (9,374)$ (0.05)$ (0.05)
=========== =========== ===========
Adjusted EBITDA
For the three months For the six months
ended June 30, ended June 30,
-------------------- ------------------
In thousands of U.S. dollars 2015 2014 2015 2014
--------- --------- -------- --------
Net (loss) / income $ 57,588$ (574)$ 98,283$ 52,764
Financial expenses 21,840 472 39,898 871
Unrealized (gain) / loss on
derivative financial
instruments (64) (65) 542 (112)
Financial income (53) (42) (78) (69)
Depreciation 25,550 7,369 46,958 13,322
Depreciation component of our
net profit from associate - 599 - 1,343
Amortization of restricted stock 7,464 7,481 15,140 14,436
Gain on sale of VLCCs - - - (51,419)
Gain on sale of Dorian shares - (10,924) - (10,924)
Gain on sale of vessels (11) - (2,019) -
--------- --------- -------- --------
Adjusted EBITDA $ 112,314$ 4,316$198,724$ 20,212
========= ========= ======== ========
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.