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Scorpio Tankers Inc. Announces Financial Results for the Second Quarter of 2013 and Declares a Dividend
MONACO — (Marketwired) — 07/29/13 — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three and six months ended June 30, 2013.
Results for the three months ended June 30, 2013 and 2012
For the three months ended June 30, 2013, the Company had an adjusted net income of $3.6 million (see Non-GAAP Measure section below), or $0.03 basic and diluted earnings per share, excluding a $0.3 million, or $0.00 per share of unrealized gain on derivative financial instruments. Including the unrealized gain on derivative financial instruments, the Company had net income of $4.0 million, or $0.03 basic and diluted earnings per share.
For the three months ended June 30, 2012, the Company had a net loss of $4.0 million, or $0.10 basic and diluted loss per share.
Results for the six months ended June 30, 2013 and 2012
For the six months ended June 30, 2013, the Company had an adjusted net income of $10.2 million (see Non-GAAP Measure section below), or $0.09 basic and diluted earnings per share, excluding a $0.4 million, or $0.00 per share unrealized gain on derivative financial instruments. Including the unrealized gain on derivative financial instruments, the Company had net income of $10.6 million or $0.09 basic and diluted earnings per share.
For the six months ended June 30, 2012, the Company had an adjusted net loss of $4.6 million, or $0.12 basic and diluted loss per share, excluding a $4.5 million, or $0.11 basic and diluted loss per share relating to the loss from sales of STI Conqueror, STI Matador, and STI Gladiator. Including the loss from the sales of vessels, the Company had a net loss of $9.1 million or $0.23 basic and diluted loss per share.
Declaration of Dividend
On July 29, 2013, the Scorpio Tankers’ board of directors declared a quarterly cash dividend of $0.035 per share, payable on September 25, 2013 to all shareholders as of September 10, 2013 (the record date). There are currently 164,656,424 shares outstanding.
Emanuele Lauro, chief executive officer and chairman of the board, commented, “Our year-over-year performance continues to improve both as a result of stronger market fundamentals and a stronger Company. The seasonal weakness which we typically experience in the second and third quarter has been particularly short-lived in the Atlantic basin this year. Burgeoning exports of refined products from the United States has contributed to a significant counter-seasonal swing in MR vessel freight rates since the end of June, reaching levels in excess of $20,000 per day.
“We are confident in the outlook for freight markets in the Eastern hemisphere and as well for the LPG trade as major global infrastructure develops. Finally, our conviction in sustained profitability for the Company has led our Board of Directors to authorize an increase in our quarterly dividend by 40%.”
Summary of Recent and Second Quarter Significant Events:
- Executed the previously announced $525.0 million 2013 Credit Facility in July 2013 (see additional information below).
- Reached agreements with Hyundai Samho Heavy Industries (“HSHI”) and Daewoo Shipbuilding and Marine Engineering Co., Ltd. (“DSME”) in July 2013 for the construction of a minimum of five and up to 10 Very Large Gas Carriers (“VLGCs”) for approximately $75.0 million each, with deliveries scheduled in 2015.
- Declared and paid a quarterly cash dividend on the Company’s common stock of $0.025 per share in June 2013.
- Took delivery of the eighth, ninth and tenth MR tankers under the Company’s Newbuilding Program, STI Beryl, STI Le Rocher and STI Larvotto in April, June and July 2013, respectively. After delivery, each vessel began a time charter for up to 120 days at approximately $19,000 per day.
- Closed on a registered direct placement of common shares in May 2013, raising aggregate net proceeds of $289.1 million.
- Reached agreements in May 2013 with two shipyards to construct four 114,000 dwt LR2 product tankers for approximately $50.5 million each, two at HSHI and two at DSME. These vessels are scheduled to be delivered in the first and second quarters of 2015.
- Reached an agreement in May 2013 with SPP Shipbuilding Co., Ltd. of South Korea (“SPP”) to construct four 52,000 dwt MR product tankers for approximately $32.5 million each. These vessels are scheduled to be delivered in the first and second quarters of 2015.
- Reached agreements in May 2013 with Hyundai Mipo Dockyard Co. Ltd. of South Korea (“HMD”) for the construction of six Handymax ice class-1A tankers for approximately $31.6 million each with expected deliveries in the third quarter of 2014.
- Reached an agreement in April 2013 with an unaffiliated third party for the purchase of four MR tankers currently under construction at HMD for approximately $36.5 million each. The first two vessels under this agreement, STI Le Rocher and STI Larvotto were delivered in June and July 2013, respectively and the third and fourth vessels are expected to be delivered in August and September 2013.
VLGC Newbuilding Agreements
In July 2013, the Company reached agreements with HSHI and DSME for the construction of a minimum of five and up to 10 VLGCs for approximately $75.0 million each. The vessels are 84,000 cubic meter tankers designed for the carriage of liquefied petroleum gas (“LPG”). Of the first five vessels, two are scheduled to be delivered in the second quarter of 2015, one in the third quarter of 2015, and two in the fourth quarter of 2015. These agreements replace the previously announced agreement to construct four LR2 vessels at Samsung Heavy Industries.
2013 Credit Facility
In July 2013, we executed final documentation for the previously announced $525.0 million 2013 Credit Facility. The 2013 Credit Facility consists of a $260.0 million delayed draw term loan facility and a $265.0 million revolving credit facility. Drawdowns under the 2013 Credit Facility will be secured by certain vessels for which we have entered into newbuilding contracts (“Collateral”).
A single drawdown of the term loan may occur in connection with the delivery of each newbuilding vessel that provides security for this credit facility in an amount equal to the lesser of 60% of (i) the contract price for such vessel or (ii) its fair market value. The drawdowns under the revolving loan may occur in connection with the delivery of certain newbuilding vessels and is also capped at the lesser of 60% of the loan amount or fair market value, with such amount, once drawn, available on a revolving basis. In general, drawdowns under the term loan are available until January 31, 2015 and drawdowns under the revolving loan are available until July 31, 2015 and each will bear interest at LIBOR plus an applicable margin of 3.50%.
The term loan is payable and the revolving loans reduced, in each case, in an amount equal to 1/60th of such loan on a consecutive quarterly basis until final maturity on the sixth anniversary of the facility.
The 2013 Credit Facility includes financial covenants that are similar to the covenants in the other credit facilities.
Time chartered-in update
In July 2013, the Company agreed to time charter-in and took delivery of a 2008 built, 73,666 dwt, LR1 product tanker for one year for approximately $14,000 per day. This agreement contains an option for the Company to extend the charter for an additional year at $15,000 per day.
In July 2013, the Company entered into new agreements on two vessels that are currently time chartered-in. The agreements are for two Handymax product tankers for one year at $12,800 per day (2005 built, 40,471 dwt and 2006 built, 40,426 dwt). These agreements commenced in July 2013 upon expiration of the prior agreements. These agreements also contain options for the Company to extend the charters for an additional year at $13,550 per day.
Conference Call
The Company will have a conference call on July 29, 2013 at 2:30 PM Eastern Daylight Time and 8:30 PM Central European Time
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(888)-211-4495 (U.S.) or 1(913) 312-0949 (International). The conference participant passcode is 2139106. 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=95304
Current Liquidity
As of July 26, 2013, the Company had $431.9 million in cash and $78.5 million available to draw down from its 2010 Revolving Credit Facility.
Debt
As of July 29, 2013, the Company’s outstanding debt balance is as follows:
2010 Revolving Credit Facility $ - million
2011 Credit Facility 66.3 million
STI Spirit Credit Facility 23.4 million
Newbuilding Credit Facility 86.8 million
2013 Credit Facility - million
-----------
Total $ 176.5 million
===========
2010 Revolving Credit Facility
In June 2013, the Company repaid $17.2 million into its 2010 Revolving Credit Facility. There is currently $78.5 million available to draw down under this facility.
STI Spirit Credit Facility
The credit facility with DVB Bank SE requires that the charter-free market value of STI Spirit shall be no less than 140% of the then outstanding loan balance. The Company posted additional cash collateral of $2.8 million into an escrow account in June 2013 to maintain compliance with this covenant. The amount held in escrow will be re-evaluated at the next measurement date, December 31, 2013.
2011 Credit Facility
In April 2013, the Company drew down $17.7 million from the 2011 Credit Facility to partially finance the delivery of the Company’s eighth newbuilding vessel, STI Beryl.
Newbuilding Program
During the second quarter of 2013, the Company made $162.3 million of installment payments on its newbuilding vessels. The Company currently has 53 newbuilding vessel orders with HMD, SPP, HSHI and DSME (24 MRs, 12 Handymaxes, 12 LR2s and five VLGCs). The estimated future payment dates and amounts are as follows*:
Q3 2013 $ 256.2 million**
Q4 2013 157.3 million
Q1 2014 182.5 million
Q2 2014 288.2 million
Q3 2014 403.6 million
Q4 2014 269.6 million
Q1 2015 127.3 million
Q2 2015 207.3 million
Q3 2015 67.5 million
Q4 2015 15.0 million
-----------
Total $ 1,974.5 million
*These are estimates only and are subject to change as construction progresses.
**$63.2 million has been paid prior to the date of this press release, including the final installment payment of $18.4 million relating to the delivery of STI Larvotto.
Explanation of Variances on the Second Quarter of 2013 Financial Results Compared to the Second Quarter of 2012
For the three months ended June 30, 2013, the Company recorded net income of $4.0 million compared to a net loss of $4.0 million in the three months ended June 30, 2012. The following were the significant changes between the two periods:
- Time charter equivalent, or TCE revenues, a non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is also included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management. The following table depicts TCE revenue for the three months ended June 30, 2013 and 2012:
For the three months ended
June 30,
--------------------------
In thousands of U.S. dollars 2013 2012
------------ ------------
Vessel revenue $ 51,533$ 27,487
Voyage expenses (1,333) (7,797)
------------ ------------
TCE revenue $ 50,200$ 19,690
============ ============
- TCE revenue increased by $30.5 million to $50.2 million as a result of an increase in the average number of operating vessels (owned and time chartered-in) to 35.9 from 17.8 for the three month periods ended June 30, 2013 and 2012, respectively. Additionally, the Company experienced an increase in time charter equivalent revenue per day to $15,444 per day from $12,258 per day for the three months ended June 30, 2013 and 2012, respectively (see the breakdown of daily TCE averages below).
- Vessel operating costs increased $1.5 million to $8.5 million from $7.0 million. This increase was driven by an increase in the Company’s owned fleet to an average of 14.69 vessels from 9.55 vessels for the three months ended June 30, 2013 and 2012, respectively. This increase was offset by a decrease in operating costs per day to $6,262 per day from $7,942 per day for the three months ended June 30, 2013 and 2012, respectively. The improvement in operating costs per day was primarily driven by the mix of vessels in the Company’s fleet.
- The Company’s fleet for the three months ended June 30, 2013 included the first eight vessels under the Company’s Newbuilding program for all or part of the period. Daily operating costs for these vessels were $5,945 per day. The Company’s fleet for three months ended June 30, 2012 did not include such vessels and included STI Matador, STI Gladiator, STI Diamond and STI Coral, which were sold during 2012. Daily operating costs for these vessels were $8,241 per day.
- Charterhire expense increased $17.2 million to $27.0 million as a result of an increase in the average number of time chartered-in vessels to 21.19 from 8.25 for the three months ended June 30, 2013 and 2012, respectively. See the Company’s Fleet List below for the terms of these agreements.
- Depreciation expense increased $2.3 million to $5.5 million primarily as a result of (i) an increase in the average number of owned vessels to 14.69 from 9.55 for the three months ended June 30, 2013 and 2012, and (ii) a change in the mix vessels in the Company’s fleet. Both were driven by the deliveries of the first eight vessels under the Company’s Newbuilding program offset by the sales of STI Matador, STI Gladiator, STI Diamond and STI Coral in 2012.
- General and administrative expenses increased $2.6 million to $5.3 million. This increase was driven by (i) a $1.5 million increase in restricted stock amortization (non-cash) as a result of restricted stock issued during the second quarter under the Company’s Equity Incentive Plan and (ii) an overall increase in other general and administrative expenses due to the significant growth in the Company’s fleet and Newbuilding program.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Profit or Loss
(unaudited)
For the three months For the six months
ended ended
June 30, June 30,
-------------------- --------------------
In thousands of U.S. dollars
except per share and share data 2013 2012 2013 2012
--------- --------- --------- ---------
Revenue
Vessel revenue 51,533 27,487 96,457 56,611
Operating expenses:
Vessel operating costs (8,527) (6,966) (16,498) (15,784)
Voyage expenses (1,333) (7,797) (2,533) (13,647)
Charterhire (26,972) (9,766) (47,469) (16,891)
Depreciation (5,521) (3,178) (10,288) (6,824)
Loss from sale of vessels - (31) - (4,525)
General and administrative
expenses (5,290) (2,737) (8,049) (5,592)
--------- --------- --------- ---------
Total operating expenses (47,643) (30,475) (84,837) (63,263)
--------- --------- --------- ---------
Operating income / (loss) 3,890 (2,988) 11,620 (6,652)
--------- --------- --------- ---------
Other (expense) and income, net
Financial expenses (476) (1,049) (1,875) (2,475)
Realized (loss) / gain on
derivative financial
instruments (46) - 23 -
Unrealized gain on derivative
financial instruments 323 - 365 -
Financial income 369 1 550 2
Other expenses, net (92) (8) (107) (20)
--------- --------- --------- ---------
Total other expense, net 78 (1,056) (1,044) (2,493)
--------- --------- --------- ---------
Net income / (loss) $ 3,968$ (4,044)$ 10,576$ (9,145)
========= ========= ========= =========
Earnings / (loss) per share
Basic and diluted $ 0.03$ (0.10)$ 0.09$ (0.23)
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
As of
--------------------------
June 30, December 31,
In thousands of U.S. dollars 2013 2012
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 520,849$ 87,165
Accounts receivable 62,847 36,438
Prepaid expenses and other current assets 4,076 956
Inventories 2,525 2,169
------------ ------------
Total current assets 590,297 126,728
------------ ------------
Non-current assets
Vessels and drydock 498,639 395,412
Vessels under construction 261,580 50,251
Other assets 11,895 889
------------ ------------
Total non-current assets 772,114 446,552
------------ ------------
Total assets $ 1,362,411$ 573,280
============ ============
Current liabilities
Bank loans 13,373 7,475
Accounts payable 12,868 11,387
Accrued expenses 12,384 3,057
Derivative financial instruments 738 844
------------ ------------
Total current liabilities 39,363 22,763
------------ ------------
Non-current liabilities
Bank loans 160,448 134,984
Derivative financial instruments 378 743
------------ ------------
Total non-current liabilities 160,826 135,727
------------ ------------
Total liabilities 200,189 158,490
------------ ------------
Shareholders' equity
Issued, authorized and fully paid in share
capital:
Share capital 1,658 650
Additional paid in capital 1,255,260 519,493
Treasury shares (7,938) (7,938)
Hedging reserve (250) (329)
Accumulated deficit (86,508) (97,086)
------------ ------------
Total shareholders' equity 1,162,222 414,790
------------ ------------
Total liabilities and shareholders' equity $ 1,362,411$ 573,280
============ ============
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 2013 2012
------------ ------------
Operating activities
Net income / (loss) $ 10,576$ (9,145)
Loss from sale of vessels - 4,525
Depreciation 10,288 6,824
Amortization of restricted stock 2,882 1,706
Amortization of deferred financing fees 536 627
Straight-line adjustment for charterhire expense (118) 89
Unrealized gain on derivative financial
instruments (365) -
------------ ------------
23,799 4,626
------------ ------------
Changes in assets and liabilities:
Drydock payments (1,381) (119)
Increase in inventories (356) (561)
Increase in accounts receivable (26,410) (3,608)
(Increase)/decrease in prepaid expenses and
other current assets (3,146) 476
(Decrease)/increase in other assets (394) 1,068
Increase in accounts payable 1,684 2,333
(Decrease)/increase in accrued expenses (833) 1,111
------------ ------------
(30,836) 700
------------ ------------
Net cash (outflow) / inflow from operating
activities (7,037) 5,326
------------ ------------
Investing activities
Acquisition of vessels and payments for vessels
under construction (323,548) (46,680)
Proceeds from disposal of vessels - 52,236
------------ ------------
Net cash (outflow) / inflow from investing
activities (323,548) 5,556
------------ ------------
Financing activities
Bank loan repayment (21,452) (58,891)
Bank loan drawdown 52,050 25,708
Debt issuance costs (439) (2,097)
Gross proceeds from issuance of common stock 765,037 27,000
Equity issuance costs (26,811) (1,118)
Purchase of treasury shares - (2,000)
Dividends paid (4,116) -
------------ ------------
Net cash inflow / (outflow) from financing
activities 764,269 (11,398)
------------ ------------
Increase in cash and cash equivalents 433,684 (516)
Cash and cash equivalents at January 1, 87,165 36,833
------------ ------------
Cash and cash equivalents at June 30, $ 520,849$ 36,317
============ ============
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three and six months ended June 30, 2013 and
2012
(unaudited)
For the three months For the six months
ended ended
June 30, June 30,
--------------------- ---------------------
2013 2012 2013 2012
---------- ---------- ---------- ----------
Adjusted EBITDA(1)(in thousands
of U.S. dollars) $ 11,655$ 1,105$ 24,706$ 6,383
Average Daily Results
Time charter equivalent per
day(2) $ 15,444$ 12,258$ 15,943$ 13,329
Vessel operating costs per
day(3) 6,262 7,942 6,529 $ 8,042
Aframax/LR2
TCE per revenue day (2) $ 12,681$ 491$ 14,680$ 9,319
Vessel operating costs per
day(3) 7,301 10,363 7,131 9,115
Panamax/LR1
TCE per revenue day (2) $ 14,242$ 15,591$ 13,600$ 15,138
Vessel operating costs per
day(3) 6,553 7,496 7,264 8,042
MR
TCE per revenue day (2) $ 17,840$ 13,210$ 18,000$ 11,845
Vessel operating costs per
day(3) 5,945 7,538 5,905 7,880
Handymax
TCE per revenue day (2) $ 13,906$ 10,968$ 14,979$ 13,605
Vessel operating costs per
day(3) 6,211 8,340 6,453 7,766
Fleet data
Average number of owned vessels 14.69 9.55 13.73 10.71
Average number of time
chartered-in vessels 21.19 8.25 19.02 7.18
Drydock
Expenditures for drydock (in
thousands of U.S. dollars) - - - -
(1) See Non-GAAP Measure section below
(2) Freight rates are commonly measured in the shipping industry in terms of
time charter equivalent per day (or TCE per day), which is calculated by
subtracting voyage expenses, including bunkers and port charges, from
vessel revenue and dividing the net amount (time charter equivalent
revenues) by the number of revenue days in the period. Revenue days are
the number of days the vessel is owned less the number of days the
vessel is off-hire for drydock and repairs.
(3) Vessel operating costs per day represent vessel operating costs
excluding non-recurring expenses (for example insurance deductible
expenses for repairs) divided by the number of days the vessel is owned
during the period.
Fleet List as of July 29, 2013
Vessel Year Ice Vessel
Name Built DWT class Employment type
---------- -------- --------- ----- ---------- --------
Owned
vessels
1 STI
Highlander 2007 37,145 1A SHTP (1) Handymax
2 STI Amber 2012 52,000 - SMRP(4) MR
3 STI Topaz 2012 52,000 - SMRP(4) MR
4 STI Ruby 2012 52,000 - SMRP(4) MR
5 STI Garnet 2012 52,000 - SMRP(4) MR
6 STI Onyx 2012 52,000 - SMRP(4) MR
7 STI
Sapphire 2013 52,000 - SMRP(4) MR
8 STI
Emerald 2013 52,000 - SMRP(4) MR
9 STI Beryl 2013 52,000 - SMRP(4) MR
10 STI Le
Rocher 2013 52,000 - Spot MR
11 STI
Larvotto 2013 52,000 - Spot MR
12 Noemi 2004 72,515 - SPTP (2) LR1
13 Senatore 2004 72,514 - SPTP (2) LR1
14 STI
Harmony 2007 73,919 1A SPTP (2) LR1
15 STI
Heritage 2008 73,919 1A SPTP (2) LR1
16 Venice Post-
2001 81,408 1C SPTP (2) Panamax
17 STI Spirit 2008 113,100 - SLR2P (3) LR2
---------
Total
owned DWT 1,044,520
=========
Time Chartered-In Time Charter
vessels Info
--------------
Daily
Vessel Year Ice Employ Vessel Base Expiry
Name Built DWT class ment type Rate (5)
---------- -------- --------- ----- ------ ---------- ------- ------
18 Freja SHTP 14-
Polaris 2004 37,217 1B (1) Handymax $12,700 Apr-14 (6)
19 Kraslava SHTP 18-
2007 37,258 1B (1) Handymax $12,800 May-14 (7)
20 Krisjanis SHTP 14-
Valdemars 2007 37,266 1B (1) Handymax $12,800 Apr-14 (8)
21 Jinan SHTP 28-
2003 37,285 - (1) Handymax $12,600 Apr-15
22 Histria SHTP 04-
Azure 2007 40,394 - (1) Handymax $12,600 Apr-14 (9)
23 Histria SHTP 17-
Coral 2006 40,426 - (1) Handymax $12,800 Jul-14 (10)
24 Histria SHTP 15-
Perla 2005 40,471 - (1) Handymax $12,800 Jul-14 (10)
25 STX Ace 6 SMRP 17-
2007 46,161 - (4) MR $14,150 May-14 (11)
26 Targale SMRP 17-
2007 49,999 - (4) MR $14,500 May-14 (12)
27 Ugale SMRP 15-
2007 49,999 1B (4) MR $14,000 Jan-14 (13)
28 Gan SMRP 20-
Triumph 2010 49,999 - (4) MR $14,150 May-14
29 Nave Orion SMRP 25-
2013 49,999 - (4) MR $14,300 Mar-15 (14)
30 Freja SMRP 26-
Lupus 2012 50,385 - (4) MR $14,760 Apr-14 (15)
31 Gan-Trust SMRP 06-
2013 51,561 - (4) MR $16,250 Jan-16 (16)
32 Usma SMRP 03-
2007 52,684 1B (4) MR $13,500 Jan-14 (17)
33 SN SPTP 15-
Federica 2003 72,344 - (2) LR1 $11,250 May-15 (18)
34 King SPTP 26-
Douglas 2008 73,666 (2) LR1 $14,000 Jul-14 (19)
35 Hellespont SPTP 16-
Promise 2007 73,669 - (2) LR1 $12,500 Dec-13 (20)
36 FPMC P SPTP 09-
Eagle 2009 73,800 - (2) LR1 $12,800 Sep-13 (21)
37 FPMC P SLR2P 02-
Hero 2011 99,995 - (3) LR2 $14,750 Nov-13 (22)
38 FPMC P SLR2P 09-
Ideal 2012 99,993 - (3) LR2 $15,000 Jan-14 (23)
39 Densa SLR2P 11-
Alligator 2013 105,708 - (3) LR2 $16,500 Sep-14 (24)
40 Khawr SLR2P 11-
Aladid 2006 106,003 - (3) LR2 $15,400 Jul-15
41 Fair Seas SLR2P 31-
2008 115,406 - (3) LR2 $16,250 Jan-14 (25)
42 Pink Stars SLR2P 10-
2010 115,592 - (3) LR2 $16,125 Apr-14
43 Four Sky SLR2P 01-
2010 115,708 - (3) LR2 $16,250 Sep-14 (26)
44 Orange SLR2P 06-
Stars 2011 115,756 - (3) LR2 $16,125 Apr-14
---------
Total time
chartered-in DWT 1,838,744
=========
Newbuildings
currently under
construction
Vessel Ice Vessel
Name Yard DWT class type
---------- ---- --------- ----- ----------
Product
tankers
45 Hull 2451 HMD(27) 38,000 1A Handymax
46 Hull 2452 HMD(27) 38,000 1A Handymax
47 Hull 2453 HMD(27) 38,000 1A Handymax
48 Hull 2454 HMD(27) 38,000 1A Handymax
49 Hull 2462 HMD(27) 38,000 1A Handymax
50 Hull 2463 HMD(27) 38,000 1A Handymax
51 Hull 2464 HMD(27) 38,000 1A Handymax
52 Hull 2465 HMD(27) 38,000 1A Handymax
53 Hull 2476 HMD(27) 38,000 1A Handymax
54 Hull 2477 HMD(27) 38,000 1A Handymax
55 Hull 2478 HMD(27) 38,000 1A Handymax
56 Hull 2479 HMD(27) 38,000 1A Handymax
57 Hull 2349 HMD(27) 52,000 MR
58 Hull 2350 HMD(27) 52,000 MR
59 Hull 2389 HMD(27) 52,000 MR
60 Hull 2390 HMD(27) 52,000 MR
61 Hull 2391 HMD(27) 52,000 MR
62 Hull 2392 HMD(27) 52,000 MR
63 Hull 2449 HMD(27) 52,000 MR
64 Hull 2450 HMD(27) 52,000 MR
65 Hull 2458 HMD(27) 52,000 MR
66 Hull 2459 HMD(27) 52,000 MR
67 Hull 2460 HMD(27) 52,000 MR
68 Hull 2461 HMD(27) 52,000 MR
69 Hull S1138 SPP(28) 52,000 MR
70 Hull S1139 SPP(28) 52,000 MR
71 Hull S1140 SPP(28) 52,000 MR
72 Hull S1141 SPP(28) 52,000 MR
73 Hull S1142 SPP(28) 52,000 MR
74 Hull S1143 SPP(28) 52,000 MR
75 Hull S1144 SPP(28) 52,000 MR
76 Hull S1145 SPP(28) 52,000 MR
77 Hull S1167 SPP(28) 52,000 MR
78 Hull S1168 SPP(28) 52,000 MR
79 Hull S1169 SPP(28) 52,000 MR
80 Hull S1170 SPP(28) 52,000 MR
81 Hull S703 HSHI(29) 114,000 LR2
82 Hull S704 HSHI(29) 114,000 LR2
83 Hull S705 HSHI(29) 114,000 LR2
84 Hull S706 HSHI(29) 114,000 LR2
85 Hull S709 HSHI(29) 114,000 LR2
86 Hull S710 HSHI(29) 114,000 LR2
87 Hull S715 HSHI(29) 114,000 LR2
88 Hull S716 HSHI(29) 114,000 LR2
89 Hull 5394 DSME(30) 114,000 LR2
90 Hull 5395 DSME(30) 114,000 LR2
91 Hull 5398 DSME(30) 114,000 LR2
92 Hull 5399 DSME(30) 114,000 LR2
---------
Total product
tankers DWT 3,072,000
=========
Vessel
Vessel Yard size Vessel
Name (cbm) type
---------- ---- --------- ----------
LPG
Carriers
93 VLGC #1 DSME(31) 84,000 VLGC
94 VLGC #2 DSME(31) 84,000 VLGC
95 Hull S749 HSHI(32) 84,000 VLGC
96 Hull S750 HSHI(32) 84,000 VLGC
97 Hull S751 HSHI(32) 84,000 VLGC
---------
Total LPG
carriers (cbm) 420,000
=========
(1) This vessel operates in or is expected to operate in the Scorpio
Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial
Management (SCM). SHTP and SCM are related parties to the Company.
(2) This vessel operates in or is expected to operate in the Scorpio
Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related
party to the Company.
(3) This vessel operates in or is expected to operate in the Scorpio LR2
Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the
Company.
(4) This vessel operates in or is expected to operate in the Scorpio MR
Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the
Company.
(5) Redelivery from the charterer is plus or minus 30 days from the expiry
date.
(6) We have an option to extend the charter for an additional year at
$14,000 per day.
(7) We have extended the charter for an additional ten months at $12,800
per day beginning in July 2013. We have an option to extend the charter
for an additional year at $13,650 per day.
(8) We have extended the charter for an additional ten months at $12,800
per day beginning in June 2013. We have an option to extend the charter
for an additional year at $13,650 per day. The agreement also contains
a 50% profit and loss sharing provision whereby we split all of the
vessel's profits and losses above or below the daily base rate with the
vessel's owner.
(9) We have an option to extend the term of the charter for an additional
year at $13,550 per day.
(10) We entered into new charter agreements at $12,800 per day. We have
options to extend the charters for an additional year at $13,550 per
day.
(11) We have an option to extend the charter for an additional year at
$15,150 per day.
(12) We have options to extend the charter for up to three consecutive one
year periods at $14,850 per day, $15,200 per day and $16,200 per day,
respectively.
(13) We have an option to extend the charter for an additional year at
$15,000 per day.
(14) We have an option to extend the charter for an additional year at
$15,700 per day.
(15) We have an option to extend the charter for an additional year at
$16,000 per day.
(16) The daily base rate represents the average rate for the three year
duration of the agreement. The rate for the first year is $15,750 per
day, the rate for the second year is $16,250 per day, and the rate for
the third year is $16,750 per day. We have options to extend the
charter for up to two consecutive one year periods at $17,500 per day
and $18,000 per day, respectively.
(17) We have an option to extend the charter for an additional year at
$14,500 per day.
(18) We have an option to extend the charter for an additional year at
$12,500 per day. We have also entered into an agreement with the owner
whereby we split all of the vessel's profits above the daily base rate.
(19) We have an option to extend the charter for an additional year at
$15,000 per day.
(20) We have an option to extend the charter for an additional six months at
$14,250 per day.
(21) We have also 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.
(22) We have options to extend the charter for three consecutive six month
periods at $15,000 per day, $15,250 per day, and $15,500 per day
respectively.
(23) We have options to extend the charter for two consecutive six month
periods at $15,250 per day, and $15,500 per day respectively.
(24) This vessel is expected to be delivered in early September 2013. We
have an option to extend the charter for one year at $17,550 per day.
(25) We have options to extend the charter for two consecutive six month
periods at $16,500 per day and $16,750 per day, respectively.
(26) This vessel is expected to be delivered by the end of September 2013.
(27) These newbuilding vessels are being constructed at HMD (Hyundai Mipo
Dockyard Co. Ltd. of South Korea). Two vessels are expected to be
delivered in the third quarter of 2013 and the remaining 22 vessels by
the end of 2014.
(28) These newbuilding vessels are being constructed at SPP (SPP
Shipbuilding Co., Ltd. of South Korea ). Eight vessels are expected to
be delivered during the second, third and fourth quarters of 2014 and
four in the first and second quarter of 2015.
(29) These newbuilding vessels are being constructed at HSHI (Hyundai Samho
Heavy Industries Co., Ltd.). Six vessels are expected to be delivered
in the third and fourth quarters of 2014 and two in the first quarter
of 2015.
(30) These newbuilding vessels are being constructed at DSME (Daewoo
Shipbuilding and Marine Engineering). Two vessels are expected to be
delivered in the fourth quarter of 2014 and two in the second quarter
of 2015.
(31) These newbuilding vessels are being constructed at DSME (Daewoo
Shipbuilding and Marine Engineering). One vessel is expected to be
delivered in the second quarter and one in the fourth quarter of 2015.
(32) These newbuilding vessels are being constructed at HSHI (Hyundai Samho
Heavy Industries Co., Ltd.). One vessel is expected to be delivered in
the second quarter, one in the third quarter and one in the fourth
quarter of 2015.
Business Strategy, Dividend Policy, and Stock Buyback Program
Business Strategy
The Company’s primary objectives are to profitably grow the business and emerge as a major operator of medium-sized tanker vessels and gas carriers. The Company intends to acquire modern, high-quality tankers and gas carriers through timely and selective acquisitions. The Company is currently concentrating on product or coated tankers and gas carriers because of the fundamentals of these segments, which the Company believes includes:
- increasing demand for refined products and LPG;
- increasing ton miles (distance between new refiners and areas of demand); and
- reduced order book.
Dividend Policy
The declaration and payment of dividends is subject at all times to the discretion of the Company’s board of directors. The timing and amount of dividends, if any, depends on the Company’s earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.
On July 29, 2013, the Company’s board of directors declared a quarterly cash dividend of $0.035 per share, payable on September 25, 2013 to all shareholders as of September 10, 2013 (the record date). On June 25, 2013, the Company paid a quarterly cash dividend on its common stock of $0.025 per share to all shareholders as of June 11, 2013 (the record date).
Share Buyback Program
On July 9, 2010, the Company’s board of directors authorized a share buyback program of up to $20 million. The Company expects to repurchase these shares in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any shares.
As of July 29, 2013, the Company has purchased $7.9 million of shares in the open market at an average price of $6.78.
Non-GAAP Measures
This press release describes adjusted net income and Adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. “Non-GAAP” measure). The Non-GAAP measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
Adjusted net income / (loss)
For the three months ended June 30,
------------------------------------------
2013 2012
-------------------- --------------------
In thousands of U.S. dollars
except per share and share data Amount Per share Amount Per share
--------- --------- --------- ---------
Net income / (loss) $ 3,968$ 0.03$ (4,044)$ (0.10)
Adjustments:
Loss from sale of vessels - 0.00 31 0.00
Unrealized gain on
derivative financial
instruments (323) (0.00) - 0.00
--------- --------- --------- ---------
Total adjustments (323) (0.00) 31 0.00
--------- --------- --------- ---------
Adjusted net income/ (loss) $ 3,645$ 0.03$ (4,013)$ (0.10)
========= ========= ========= =========
For the six months ended June 30,
------------------------------------------
2013 2012
-------------------- --------------------
Amount Per share Amount Per share
--------- --------- --------- ---------
Net income / (loss) $ 10,576$ 0.09$ (9,145)$ (0.23)
Adjustments:
Loss from sale of vessels - 0.00 4,525 0.11
Unrealized gain on
derivative financial
instruments (365) (0.00) - 0.00
--------- --------- --------- ---------
Total adjustments (365) (0.00) 4,525 0.11
--------- --------- --------- ---------
Adjusted net income/ (loss) $ 10,211$ 0.09$ (4,620)$ (0.12)
========= ========= ========= =========
Adjusted EBITDA
For the three months For the six months
ended June 30, ended June 30,
-------------------- --------------------
In thousands of U.S. dollars 2013 2012 2013 2012
--------- --------- --------- ---------
Net income / (loss) $ 3,968$ (4,044)$ 10,576$ (9,145)
Financial expenses 476 1,049 1,875 2,475
Unrealized gain on derivative
financial instruments (323) - (365) -
Financial income (369) (1) (550) (2)
Depreciation 5,521 3,178 10,288 6,824
Amortization of restricted
stock 2,382 892 2,882 1,706
Loss from sale of vessels - 31 - 4,525
--------- --------- --------- ---------
Adjusted EBITDA $ 11,655$ 1,105$ 24,706$ 6,383
========= ========= ========= =========
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 17 tankers (one LR2 tanker, four LR1 tankers, one Handymax tanker, ten MR tankers, and one post-Panamax tanker) with an average age of 4.1 years, time charters-in 27 product tankers (eight LR2, four LR1, eight MR and seven Handymax tankers), and has contracted for 53 newbuilding vessels (24 MR, 12 LR2, and 12 Handymax ice class-1A product tankers, and 5 Very Large Gas Carriers), two of which are expected to be delivered to the Company by September 2013, 38 within 2014 and the remaining 13 by the end of 2015. Additional information about the Company is available at the Company’s website www.scorpiotankers.com, which is not a part of this press release.
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.