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Scorpio Tankers Inc. Announces Financial Results for the Fourth Quarter of 2013 and Increases Its Quarterly Dividend
MONACO — (Marketwired) — 02/24/14 — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three months and year ended December 31, 2013 and increased its quarterly dividend to $0.08 per share.
Results for the three months ended December 31, 2013 and 2012
For the three months ended December 31, 2013, the Company had net income of $5.8 million, or $0.03 basic and diluted earnings per share. The Company’s adjusted net loss was $14.5 million (see Non-GAAP Measure section below), or $0.08 basic and diluted loss per share, which excludes (i) a $41.4 million, or $0.23 per share gain resulting from the previously announced investment in Dorian LPG Ltd. (‘Dorian’), (ii) a $21.2 million, or $0.12 per share write-down resulting from the designation of certain older vessels as ‘held for sale’ and (iii) an unrealized gain on derivative financial instruments of $0.1 million or $0.00 per share.
For the three months ended December 31, 2012, the Company had a net loss of $4.9 million, or $0.11 basic and diluted loss per share. The Company’s adjusted net loss was $3.6 million (see Non-GAAP Measure section below), or $0.08 basic and diluted loss per share, which excludes a $1.3 million, or $0.03 per share, unrealized loss on derivative financial instruments.
Results for the year ended December 31, 2013 and 2012
For the year ended December 31, 2013, the Company had net income of $17.0 million, or $0.12 basic and $0.11 diluted earnings per share. The Company’s adjusted net loss was $3.7 million (see Non-GAAP Measure section below), or $0.03 basic and diluted loss per share, which excludes (i) a $41.4 million, or $0.28 per share gain resulting from the previously announced investment in Dorian, (ii) a $21.2 million, or $0.14 per share write-down resulting from the designation of certain older vessels as ‘held for sale’ and (iii) an unrealized gain on derivative financial instruments of $0.6 million, or $0.00 per share.
For the year ended December 31, 2012, the Company had a net loss of $26.5 million or $0.64 basic and diluted loss per share. The Company’s adjusted net loss was $11.9 million (see Non-GAAP Measure section below), or $0.29 basic and diluted loss per share, which excludes (i) a $10.4 million, or $0.25 per share, loss from sales of vessels, (ii) a $3.0 million, or $0.07 per share, write-off of deferred financing fees, and (iii) a $1.2 million, or $0.03 per share, unrealized loss on derivative financial instruments.
Declaration of Dividend
On February 21, 2014, the Scorpio Tankers’ board of directors declared a quarterly cash dividend of $0.08 per share, payable on March 26, 2014 to all shareholders as of March 11, 2014 (the record date). There are currently 198,791,502 shares outstanding.
Emanuele Lauro, chief executive officer and chairman of the board commented, “Although our fourth quarter 2013 results reflect the deleterious effects of prolonged turnarounds of existing refineries and delays of commissioning the new refining assets, we remain confident in the underlying demand and supply thesis. Already in the first quarter, all of our vessel classes are experiencing higher returns than they did in the final quarter of 2013. We expect to be profitable this quarter; additionally, we have increased our quarterly dividend to $0.08 per share.
“As for the remainder of 2014, both new emissions regulations and customer preferences will leave us very well-positioned. By the end of the year, we will have a modern fuel-efficient fleet, which has significant commercial and technical benefits. Even though we expect the overall product market to continue to improve, we also expect there to be a bifurcation of returns between modern fuel-efficient and older vessels.”
Summary of Recent and Fourth Quarter Significant Events:
- Took delivery of two MR tankers under the Company’s Newbuilding Program, STI Opera and STI Duchessa, in January 2014. After delivery, each vessel began a time charter for up to 120 days at approximately $19,000 per day.
- Reached agreements to sell three of the Company’s older vessels, Noemi, Senatore, and STI Spirit, for an aggregate selling price of $74.2 million, further emphasizing the Company’s commitment to a modern fuel efficient fleet.
- Reached agreements with Hyundai Samho Heavy Industries (“HSHI”) and Daewoo Shipbuilding and Marine Engineering Co., Ltd. (“DSME”) for the construction of a total of seven Very Large Crude Carriers (VLCCs) for aggregate consideration of approximately $662.2 million, with deliveries in 2015 and 2016.
- Closed on the previously announced transaction with Dorian, acquiring 30% of Dorian’s outstanding shares in exchange for the contribution of 11 Very Large Gas Carrier (‘VLGC’) newbuilding contracts, together with a cash payment of $1.9 million. The Company also closed on the purchase of 24,121,621 new shares of Dorian’s common stock as part of a private placement of shares for total consideration of $75.0 million. The Company currently owns approximately 26% of Dorian’s outstanding shares after Dorian’s equity offering in February 2014.
- Acquired four MR product tankers currently under construction in South Korea from an unaffiliated third party. Approximately 26% of the aggregate purchase price of $153.9 million consisted of newly issued common shares of the Company. One vessel is expected to be delivered in the third quarter of 2014, one is expected to be delivered in the first quarter of 2015 and the remaining two are expected to be delivered in the second quarter of 2015.
- Received loan commitments from a group of financial institutions led by DNB Bank ASA and Skandinaviska Enskilda Banken AB (publ) and from the Export-Import Bank of Korea (“KEXIM”) for a total loan facility of up to $429.6 million (the “KEXIM Financing”). The KEXIM Financing incorporates an optional guarantee from KEXIM for the issuance by the Company, at the option of the Company, of a five year $125.3 million amortizing bond facility; the proceeds of which will reduce KEXIM’s direct loan commitment in the KEXIM Financing.
- Received an Acceptance of Insurance Agreement (“Insurance Agreement”) from Korea Trade Insurance Corporation (“KSURE”) covering 95% of an up to $358.3 million KSURE tranche as part of a credit facility of up to $458.3 million (the “KSURE Financing”).
- Declared and paid a quarterly cash dividend on the Company’s common stock of $0.07 per share in December 2013.
Vessel sales
As part of the Company’s commitment to a modern fuel efficient fleet, the Company designated certain older vessels as ‘held for sale’ in December 2013. This designation resulted in a write-down of the book value of these vessels of $21.2 million in aggregate. As part of this commitment, the Company reached agreements for the following in the first quarter of 2014:
- The sale of two, 2004 built, LR1 product tankers, Noemi and Senatore, for an aggregate selling price of $44.0 million. These sales are expected to close in March and April 2014.
- The sale of the 2008 built LR2 product tanker, STI Spirit, for $30.2 million. This sale is expected to close in April 2014.
The Company will also make repayments of the debt associated with these three vessels upon the closing of each sale for $44.4 million in aggregate.
VLCC Newbuildings
In December 2013, the Company reached agreements with DSME and HSHI for the construction of seven VLCCs for an aggregate purchase price of approximately $662.2 million. One vessel is scheduled for delivery in the third quarter of 2015, two in the fourth quarter of 2015, two in the first quarter of 2016, one in the second quarter of 2016 and one in the third quarter of 2016.
MR Product Tanker Newbuildings
In December 2013, the Company closed on an agreement with an unaffiliated third party to issue shares in exchange for the transfer of ownership to the Company of four MR product tankers currently under construction in South Korea. The purchase price of the four vessels, in aggregate, is approximately $153.9 million. Approximately 26% of the total purchase price for the vessels consisted of newly issued common shares of the Company having a valuation based on the fair market value of the shares at the time of issuance. The new common shares, in addition to a payment of $4.4 million, were issued to affiliates of York Capital and the remainder of the purchase price will be paid to the shipyard from cash-on-hand and bank debt.
One vessel is expected to be delivered in the third quarter of 2014, one in the first quarter of 2015 and the remaining two are expected to be delivered in the second quarter of 2015. These vessels are similar to the Company’s newbuildings that are also under construction at the same shipyard.
Investment in Dorian LPG Ltd.
In November 2013, the Company contributed 11 VLGC newbuilding contracts, together with a cash payment of $1.9 million, to Dorian in exchange for newly issued shares representing 30% of Dorian’s outstanding shares at that time. As of the closing date of the transaction, the Company paid $83.1 million in installment payments under these 11 VLGC contracts. Additionally, in November 2013, the Company purchased 24,121,621 new shares of Dorian’s common stock as part of a private placement of shares for total consideration of $75.0 million.
The Company currently owns 64,073,744 shares or approximately 26% of the outstanding shares of Dorian. As of February 21, 2014, these Dorian shares, which are traded on the Norwegian Over the Counter exchange, were worth approximately $234.2 million using the closing price of NOK 22.25 per share or approximately $3.65 per share.
KSURE Credit Facility
In October 2013, the Company received an Acceptance of Insurance Agreement from KSURE covering 95% of an up to $358.3 million KSURE Tranche which is a component of a credit facility of up to $458.3 million. The KSURE Financing also includes a commercial tranche (the “Commercial Tranche”) of $100.0 million.
The KSURE Financing will be used to finance up to 60% of the contract price of up to 21 newbuilding product tankers upon delivery. The covenants are similar to those in the Company’s existing credit facilities, and other terms and conditions of the loan are in accordance with OECD Guidelines. The facility is expected to close before the end of the first quarter of 2014.
KEXIM Financing
In September 2013, the Company received loan commitments from a group of financial institutions led by DNB Bank ASA and Skandinaviska Enskilda Banken AB (publ) for loan commitments of up to $429.6 million, including a commitment from KEXIM for up to $300.6 million (the “KEXIM Tranche”).
The KEXIM Financing will be used to finance up to 60% of the contract price of 18 newbuilding product tankers upon delivery. The covenants are similar to those in the Company’s existing credit facilities, and other terms and conditions of the loan are in accordance with OECD Guidelines. The KEXIM Financing is expected to close before the end of the first quarter of 2014.
In addition to KEXIM’s commitment of up to $300.6 million, KEXIM has also provided an optional guarantee for a five year amortizing note of $125.3 million (the “KEXIM Guaranteed Note”) that may be issued by the Company at the Company’s discretion in 2014; the proceeds of which will be used to reduce the $300.6 million KEXIM Tranche.
Time charter-in update
In February 2014, the Company entered into a new time charter-in agreement on an LR2 vessel that is currently time chartered-in. The new agreement is for six months at $16,500 per day and commenced upon the expiration of the existing charter in February 2014.
In December 2013, the Company declared options to extend the charter on a 2007 built LR1 product tanker for six months at $14,250 per day effective February 2014 and a 2012 built LR2 product tanker for six months at $15,250 per day effective January 2014.
In December 2013, the Company time chartered-in a 2008 built LR2 product tanker for one year at $15,700 per day and a 2003 built LR1 product tanker for one year at $13,600 per day.
In October 2013, the Company declared an option to extend the charter on a 2007 built MR product tanker for one year at $14,500 per day effective January 2014.
Conference Call
The Company will have a conference call on February 24, 2014 at 11:00 AM Eastern Standard Time and 5:00 PM Central European Time.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(888)-765-5576 (U.S.) or 1(913)-312-1520 (International). The conference participant passcode is 9755351. 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=98195
Current Liquidity
As of February 21, 2014, the Company had $123.3 million in cash.
Debt
In January 2014, the Company drew down $72.4 million from the 2010 Revolving Credit Facility.
In January 2014, the Company drew down $52.0 million from the 2011 Credit Facility. In connection with this draw down, STI Duchessa, STI Le Rocher and STI Larvotto were provided as collateral under the facility.
In February 2014, the Company drew down $64.2 million from the 2013 Credit Facility. In connection with this draw down, STI Opera, STI Fontvieille and STI Ville were provided as collateral under the facility.
In December 2013, the Company made a $1.4 million prepayment into the STI Spirit Credit Facility in order to maintain compliance with that facility’s collateral maintenance ratio (which requires that the charter-free market value of STI Spirit be no less than 140% of the then outstanding loan balance).
As of February 24, 2014, the Company’s outstanding debt balance is as follows:
2010 Revolving Credit Facility $ 72.4 million
2011 Credit Facility 116.0 million
STI Spirit Credit Facility 21.7 million
Newbuilding Credit Facility 83.8 million
2013 Credit Facility 64.2 million
-----------
Total $ 358.1 million
===========
Newbuilding Program
During the fourth quarter of 2013, the Company made $260.9 million of installment payments on its newbuilding vessels. The Company currently has 63 newbuilding vessel orders with HMD, SPP, HSHI and DSME (30 MRs, 14 Handymaxes, 12 LR2s and 7 VLCCs). The estimated future payment dates and amounts are as follows*:
Q1 2014 223.4 million**
Q2 2014 400.9 million
Q3 2014 431.4 million
Q4 2014 310.9 million
Q1 2015 205.5 million
Q2 2015 205.9 million
Q3 2015 80.3 million
Q4 2015 103.5 million
Q1 2016 105.1 million
Q2 2016 56.7 million
Q3 2016 56.7 million
-----------
Total $ 2,180.3 million
*These are estimates only and are subject to change as construction progresses.
**$127.2 million has been paid prior to the date of this press release.
Explanation of Variances on the Fourth Quarter of 2013 Financial Results Compared to the Fourth Quarter of 2012
For the three months ended December 31, 2013, the Company recorded net income of $5.8 million compared to a net loss of $4.9 million in the three months ended December 31, 2012. 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 December 31, 2013 and 2012:
For the three months
ended December 31,
------------------------
In thousands of U.S. dollars 2013 2012
----------- -----------
Vessel revenue $ 53,367$ 30,104
Voyage expenses (1,064) (1,794)
----------- -----------
TCE revenue $ 52,303$ 28,310
=========== ===========
- TCE revenue increased $24.0 million to $52.3 million. This increase was primarily driven by an increase in the average number of operating vessels (owned and time chartered-in) to 47.2 from 23.8 for the three months ended December 31, 2013 and 2012, respectively. This increase was offset by an overall decrease in time charter equivalent revenue per day to $12,080 per day from $13,392 per day for the three months ended December 31, 2013 and 2012, respectively (see the breakdown of daily TCE averages below).
- Vessel operating costs increased $4.4 million to $12.6 million from $8.2 million for the three months ended December 31, 2013 and 2012, respectively. This increase was primarily driven by an increase in the Company’s owned fleet to an average of 19.0 vessels from 12.0 vessels for the three months ended December 31, 2013 and 2012, respectively. The increase was offset by an overall decrease in vessel operating costs per day to $7,071 per day from $7,348 per day for the three months ended December 31, 2013 and 2012, respectively (see the breakdown of daily TCE averages below). The overall decrease was driven by the growth in the fleet of newbuilding MRs, which realized improved operating performance when compared to the Company’s older vessels.
- Charterhire expense increased $22.0 million to $36.2 million as a result of an increase in the average number of vessels time chartered-in to 28.2 from 11.8 for the three months ended December 31, 2013 and 2012, respectively. See the Company’s Fleet List below for the terms of these agreements.
- Depreciation expense increased $2.3 million to $6.9 million primarily as a result of an increase in the average number of owned vessels to 19.0 from 12.0 for the three months ended December 31, 2013 and 2012.
- General and administrative expenses increased $8.1 million to $11.2 million. This increase was driven by a $5.5 million increase in the amortization of restricted stock (non-cash) and an overall increase in other general and administrative expenses due to the significant growth in the Company’s fleet and Newbuilding program.
- Write-down of vessels held for sale of $21.2 million relates to the designation of certain vessels as held-for-sale at December 31, 2013 and the corresponding write-down to their estimated selling prices.
- Gain on sale of VLGCs of $41.4 million relates to the gain recorded as a result of our contribution of 11 VLGCs under construction and $1.9 million in cash, to Dorian in exchange for 30% of Dorian’s outstanding shares.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Profit or Loss
(unaudited)
For the three months For the year ended
ended December 31, December 31,
-------------------- --------------------
In thousands of U.S. dollars
except per share and share data 2013 2012 2013 2012
--------- --------- --------- ---------
Revenue
Vessel revenue $ 53,367$ 30,104$ 207,580$ 115,381
Operating expenses
Vessel operating costs (12,569) (8,195) (40,204) (30,353)
Voyage expenses (1,064) (1,794) (4,846) (21,744)
Charterhire (36,197) (14,222) (115,543) (43,701)
Depreciation (6,930) (4,605) (23,595) (14,818)
General and administrative
expenses (11,216) (3,132) (25,788) (11,536)
Write down of vessels held for
sale and loss from sales of
vessels (21,187) - (21,187) (10,404)
Gain on sale of VLGCs 41,375 - 41,375 -
--------- --------- --------- ---------
Total operating expenses (47,788) (31,948) (189,788) (132,556)
--------- --------- --------- ---------
Operating income / (loss) 5,579 (1,844) 17,792 (17,175)
--------- --------- --------- ---------
Other (expense) and income, net
Financial expenses (383) (1,929) (2,705) (8,512)
Realized gain/(loss) on
derivative financial
instruments (22) 157 3 443
Unrealized gain/(loss) on
derivative financial
instruments 82 (1,269) 567 (1,231)
Financial income 197 29 1,147 35
Share of profit from associate 369 - 369 -
Other expenses, net (51) (24) (158) (97)
--------- --------- --------- ---------
Total other income/(expense),
net 192 (3,036) (777) (9,362)
--------- --------- --------- ---------
Net income / (loss) $ 5,771$ (4,880)$ 17,015$ (26,537)
========= ========= ========= =========
Earnings / (loss) per share
Basic $ 0.03$ (0.11)$ 0.12$ (0.64)
Diluted $ 0.03$ (0.11)$ 0.11$ (0.64)
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
As of
----------------------------
In thousands of U.S. dollars December 31, December 31,
2013 2012
------------- -------------
Assets
Current assets
Cash and cash equivalents $ 78,845$ 87,165
Accounts receivable 72,542 36,438
Prepaid expenses and other current assets 2,277 956
Inventories 2,857 2,169
Vessels held for sale 82,649 -
------------- -------------
Total current assets 239,170 126,728
------------- -------------
Non-current assets
Vessels and drydock 530,270 395,412
Vessels under construction 649,526 50,251
Other assets 17,907 889
Investment in associate 209,803 -
------------- -------------
Total non-current assets 1,407,506 446,552
------------- -------------
Total assets $ 1,646,676$ 573,280
============= =============
Current liabilities
Bank loans 31,850 7,475
Accounts payable 20,696 11,387
Accrued expenses 7,251 3,057
Derivative financial instruments 689 844
------------- -------------
Total current liabilities 60,486 22,763
------------- -------------
Non-current liabilities
Bank loans 135,279 134,984
Derivative financial instruments 188 743
------------- -------------
Total non-current liabilities 135,467 135,727
------------- -------------
Total liabilities 195,953 158,490
------------- -------------
Shareholders' equity
Issued, authorized and fully paid in share
capital:
Share capital 1,999 650
Additional paid in capital 1,536,945 519,493
Treasury shares (7,938) (7,938)
Hedging reserve (212) (329)
Accumulated deficit (80,071) (97,086)
------------- -------------
Total shareholders' equity 1,450,723 414,790
------------- -------------
Total liabilities and shareholders' equity $ 1,646,676$ 573,280
============= =============
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
For the year ended
December 31,
----------------------
In thousands of U.S. dollars 2013 2012
---------- ----------
Operating activities
Net income / (loss) $ 17,015$ (26,537)
Gain on sale of VLGCs (41,375) -
Write down of vessels held for sale and loss from
sales of vessels 21,187 10,404
Depreciation 23,595 14,818
Amortization of restricted stock 13,142 3,490
Amortization of deferred financing fees 332 4,093
Straight-line adjustment for charterhire expense 53 41
Share of profit from associate (369) -
Unrealized gain on derivative financial instruments (567) 1,231
---------- ----------
33,013 7,540
---------- ----------
Changes in assets and liabilities:
Drydock payments (1,469) (1,702)
(Increase)/decrease in inventories (687) 526
Increase in accounts receivable (36,104) (16,052)
(Increase)/decrease in prepaid expenses and other
current assets (823) 547
(Increase)/decrease in other assets (848) 2,443
(Decrease)/increase in accounts payable (2,021) 3,966
Increase in accrued expenses 3,253 804
---------- ----------
(38,699) (9,468)
---------- ----------
Net cash outflow from operating activities (5,686) (1,928)
---------- ----------
Investing activities
Acquisition of vessels and payments for vessels
under construction (768,170) (191,490)
Proceeds from disposal of vessels - 101,335
VLGC installment payments (83,070) -
Investment in associate (84,583) -
---------- ----------
Net cash outflow from investing activities (935,823) (90,155)
---------- ----------
Financing activities
Bank loan repayment (28,410) (129,076)
Bank loan drawdown 52,050 124,172
Debt issuance costs (13,940) (3,293)
Gross proceeds from issuance of common stock 983,537 159,002
Equity issuance costs (35,695) (5,950)
Purchase of treasury shares - (2,440)
Dividends paid (24,353) -
---------- ----------
Net cash inflow from financing activities 933,189 142,415
---------- ----------
(Decrease)/increase in cash and cash equivalents (8,320) 50,332
Cash and cash equivalents at January 1, 87,165 36,833
---------- ----------
Cash and cash equivalents at December 31, $ 78,845$ 87,165
========== ==========
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three months and year ended December 31, 2013
and 2012
(unaudited)
For the three months For the year ended
ended December 31, December 31,
---------------------- ---------------------
2013 2012 2013 2012
---------- ---------- ---------- ----------
Adjusted EBITDA(1) (in
thousands of U.S. dollars) $ (681)$ 3,786$ 34,852$ 11,883
Average Daily Results
Time charter equivalent per
day(2) $ 12,080$ 13,392$ 14,369$ 12,960
Vessel operating costs per
day(3) 7,071 7,348 6,781 7,605
Aframax/LR2
TCE per revenue day (2) $ 12,582$ 6,619$ 12,718$ 10,201
Vessel operating costs per
day(3) 9,402 7,884 8,203 8,436
Panamax/LR1
TCE per revenue day (2) $ 10,194$ 13,389$ 12,599$ 14,264
Vessel operating costs per
day(3) 8,306 7,509 7,756 7,714
MR
TCE per revenue day (2) $ 13,784$ 13,677$ 16,546$ 12,289
Vessel operating costs per
day(3) 6,340 5,994 6,069 6,770
Handymax
TCE per revenue day (2) $ 9,618$ 13,821$ 12,862$ 13,069
Vessel operating costs per
day(3) 7,332 7,908 6,852 7,594
Fleet data
Average number of owned vessels 19.0 12.0 15.9 10.8
Average number of time
chartered-in vessels 28.2 11.8 22.9 9.2
Drydock
Expenditures for drydock (in
thousands of U.S. dollars) - $ 2,869 - $ 2,869
(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.
Vessel Name Year Built DWT Ice class Employment Vessel 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 - SMRP(4) MR
11 STI Larvotto 2013 52,000 - SMRP(4) MR
12 STI Fontvieille 2013 52,000 - SMRP(4) MR
13 STI Ville 2013 52,000 - SMRP(4) MR
14 STI Duchessa 2014 52,000 - Spot MR
15 STI Opera 2014 52,000 - Spot MR
16 Noemi 2004 72,515 - Spot LR1
17 Senatore 2004 72,514 - Spot LR1
18 STI Harmony 2007 73,919 1A SPTP (2) LR1
19 STI Heritage 2008 73,919 1A SPTP (2) LR1
20 Venice 2001 81,408 1C Spot Post-Panamax
21 STI Spirit 2008 113,100 - SLR2P (3) LR2
---------
Total owned DWT 1,252,520
=========
Daily
Vessel Year Ice Vessel Base Expiry
Name Built DWT class Employment type Rate (5)
---------- ---- --------- ----- --------- -------- ------- ---------
Time chartered-in vessels
22 Freja
Polaris 2004 37,217 1B SHTP (1) Handymax $12,700 14-Apr-14 (6)
23 Kraslava 2007 37,258 1B SHTP (1) Handymax $12,800 18-May-14 (7)
24 Krisjanis
Valdemars 2007 37,266 1B SHTP (1) Handymax $12,800 14-Apr-14 (8)
25 Jinan 2003 37,285 - SHTP (1) Handymax $12,600 28-Apr-15
26 Iver
Progress 2007 37,412 - SHTP (1) Handymax $12,500 03-Mar-15 (9)
27 Iver
Prosperity 2007 37,455 - SHTP (1) Handymax $12,500 20-Oct-14 (10)
28 Histria
Azure 2007 40,394 - SHTP (1) Handymax $12,600 04-Apr-14 (11)
29 Histria
Coral 2006 40,426 - SHTP (1) Handymax $12,800 17-Jul-14 (12)
30 Histria
Perla 2005 40,471 - SHTP (1) Handymax $12,800 15-Jul-14 (12)
31 STX Ace 6 2007 46,161 - SMRP(4) MR $14,150 17-May-14 (13)
32 Targale 2007 49,999 - SMRP(4) MR $14,500 17-May-14 (14)
33 Gan-
Triumph 2010 49,999 - SMRP(4) MR $14,150 20-May-14
34 Nave Orion 2013 49,999 - SMRP(4) MR $14,300 25-Mar-15 (15)
35 Hafnia
Lupus 2012 50,385 - SMRP(4) MR $14,760 26-Apr-14 (16)
36 Gan-Trust 2013 51,561 - SMRP(4) MR $16,250 06-Jan-16 (17)
37 Usma 2007 52,684 1B SMRP(4) MR $14,500 03-Jan-15
38 SN
Federica 2003 72,344 - SPTP (2) LR1 $11,250 15-May-15 (18)
39 SN Azzura 2003 72,344 - SPTP (2) LR1 $13,600 25-Dec-14
40 King
Douglas 2008 73,666 - SPTP (2) LR1 $14,000 08-Aug-14 (19)
41 Hellespont
Promise 2007 73,669 - SPTP (2) LR1 $14,250 14-Aug-14
42 FPMC P
Eagle 2009 73,800 - SPTP (2) LR1 $14,525 09-Sep-15
43 FPMC P
Hero 2011 99,995 - SLR2P (3) LR2 $15,000 02-May-14 (20)
44 FPMC P
Ideal 2012 99,993 - SLR2P (3) LR2 $15,250 09-Jul-14 (21)
45 Densa
Alligator 2013 105,708 - SLR2P (3) LR2 $16,500 17-Sep-14 (22)
46 Khawr
Aladid 2006 106,003 - SLR2P (3) LR2 $15,400 11-Jul-15
47 Fair Seas 2008 115,406 SLR2P (3) LR2 $16,500 21-Aug-14
48 Southport 2008 115,462 SLR2P (3) LR2 $15,700 10-Dec-14
49 Pink Stars 2010 115,592 - SLR2P (3) LR2 $16,125 10-Apr-14
50 Four Sky 2010 115,708 - SLR2P (3) LR2 $16,250 02-Sep-14
51 Orange
Stars 2011 115,756 - SLR2P (3) LR2 $16,125 06-Apr-14
---------
Total time
chartered-in
DWT 2,051,418
=========
Newbuildings currently under construction
Vessel Name Yard DWT Ice class Vessel type
--------------------- ---------- ---------- ---------- ------------
Product tankers
52 Hull 2451 HMD (23) 38,000 1A Handymax
53 Hull 2452 HMD (23) 38,000 1A Handymax
54 Hull 2453 HMD (23) 38,000 1A Handymax
55 Hull 2454 HMD (23) 38,000 1A Handymax
56 Hull 2462 HMD (23) 38,000 1A Handymax
57 Hull 2463 HMD (23) 38,000 1A Handymax
58 Hull 2464 HMD (23) 38,000 1A Handymax
59 Hull 2465 HMD (23) 38,000 1A Handymax
60 Hull 2476 HMD (23) 38,000 1A Handymax
61 Hull 2477 HMD (23) 38,000 1A Handymax
62 Hull 2478 HMD (23) 38,000 1A Handymax
63 Hull 2479 HMD (23) 38,000 1A Handymax
64 Hull 2499 HMD (23) 38,000 1A Handymax
65 Hull 2500 HMD (23) 38,000 1A Handymax
66 Hull 2391 HMD (23) 52,000 MR
67 Hull 2392 HMD (23) 52,000 MR
68 Hull 2449 HMD (23) 52,000 MR
69 Hull 2450 HMD (23) 52,000 MR
70 Hull 2458 HMD (23) 52,000 MR
71 Hull 2459 HMD (23) 52,000 MR
72 Hull 2460 HMD (23) 52,000 MR
73 Hull 2461 HMD (23) 52,000 MR
74 Hull 2492 HMD (23) 52,000 MR
75 Hull 2493 HMD (23) 52,000 MR
76 Hull 2445 HMD (23) 52,000 MR
77 Hull 2474 HMD (23) 52,000 MR
78 Hull 2475 HMD (23) 52,000 MR
79 Hull 2490 HMD (23) 52,000 MR
80 Hull S1138 SPP (24) 52,000 MR
81 Hull S1139 SPP (24) 52,000 MR
82 Hull S1140 SPP (24) 52,000 MR
83 Hull S1141 SPP (24) 52,000 MR
84 Hull S1142 SPP (24) 52,000 MR
85 Hull S1143 SPP (24) 52,000 MR
86 Hull S1144 SPP (24) 52,000 MR
87 Hull S1145 SPP (24) 52,000 MR
88 Hull S1167 SPP (24) 52,000 MR
89 Hull S1168 SPP (24) 52,000 MR
90 Hull S1169 SPP (24) 52,000 MR
91 Hull S1170 SPP (24) 52,000 MR
92 Hull S5122 SPP (24) 52,000 MR
93 Hull S5123 SPP (24) 52,000 MR
94 Hull S5124 SPP (24) 52,000 MR
95 Hull S5125 SPP (24) 52,000 MR
96 Hull S703 HSHI (25) 114,000 LR2
97 Hull S704 HSHI (25) 114,000 LR2
98 Hull S705 HSHI (25) 114,000 LR2
99 Hull S706 HSHI (25) 114,000 LR2
100 Hull S709 HSHI (25) 114,000 LR2
101 Hull S710 HSHI (25) 114,000 LR2
102 Hull S715 HSHI (25) 114,000 LR2
103 Hull S716 HSHI (25) 114,000 LR2
104 Hull 5394 DSME (26) 114,000 LR2
105 Hull 5395 DSME (26) 114,000 LR2
106 Hull 5398 DSME (26) 114,000 LR2
107 Hull 5399 DSME (26) 114,000 LR2
----------
Total newbuilding product tankers DWT 3,460,000
==========
VLCCs
108 Hull 5404 DSME (27) 300,000 VLCC
109 Hull 5405 DSME (27) 300,000 VLCC
110 Hull 5406 DSME (27) 300,000 VLCC
111 Hull 5407 DSME (27) 300,000 VLCC
112 Hull 5408 DSME (27) 300,000 VLCC
113 Hull S777 HSHI (28) 300,000 VLCC
114 Hull S778 HSHI (28) 300,000 VLCC
----------
Total VLCC DWT 2,100,000
==========
----------
Total Fleet DWT 8,863,938
==========
(1) This vessel operates in or is expected to operate in the Scorpio
Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial
Management (SCM). SHTP and SCM are related parties to the Company.
(2) This vessel operates in or is expected to operate in the Scorpio
Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related
party to the Company.
(3) This vessel operates in or is expected to operate in the Scorpio LR2
Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the
Company.
(4) This vessel operates in or is expected to operate in the Scorpio MR
Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the
Company.
(5) Redelivery from the charterer is plus or minus 30 days from the expiry
date.
(6) We have an option to extend the charter for an additional year at
$14,000 per day.
(7) We have an option to extend the charter for an additional year at
$13,650 per day.
(8) We have an option to extend the charter for an additional year at
$13,650 per day. The agreement also contains a 50% profit and loss
sharing provision whereby we split all of the vessel's profits and
losses above or below the daily base rate with the vessel's owner.
(9) We have an option to extend the charter for an additional year at
$13,500 per day.
(10) We have an option to extend the charter for an additional year at
$13,250 per day.
(11) We have an option to extend the charter for an additional year at
$13,550 per day.
(12) We have an option to extend the charter for an additional year at
$13,550 per day.
(13) We have an option to extend the charter for an additional year at
$15,150 per day.
(14) We have options to extend the charter for up to three consecutive one
year periods at $14,850 per day, $15,200 per day and $16,200 per day,
respectively.
(15) We have an option to extend the charter for an additional year at
$15,700 per day.
(16) We have an option to extend the charter for an additional year at
$16,000 per day.
(17) 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.
(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
vessel's 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 options to extend the charter for two consecutive six month
periods at $15,250 per day, and $15,500 per day respectively.
(21) We have an option to extend the charter for an additional six months at
$15,500 per day.
(22) We have an option to extend the charter for one year at $17,550 per
day.
(23) These newbuilding vessels are being constructed at HMD (Hyundai Mipo
Dockyard Co. Ltd. of South Korea). 23 vessels are expected to be
delivered in 2014 and five vessels in the first and second quarters of
2015.
(24) These newbuilding vessels are being constructed at SPP (SPP
Shipbuilding Co., Ltd. of South Korea ). 12 vessels are expected to be
delivered in 2014 and four in the first and second quarters of 2015.
(25) 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.
(26) 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.
(27) These newbuilding VLCCs are being constructed at DSME. One vessel is
expected to be delivered in the third quarter of 2015, two in the
fourth quarter of 2015 and two in the first quarter of 2016.
(28) These two newbuilding VLCCs are being constructed at HSHI. These
vessels are expected to be delivered in the second and third quarters
of 2016.
Business Strategy, Dividend Policy, and Stock Buyback Program
Business Strategy
The Company’s primary objectives are to profitably grow the business and emerge as a major operator of product tanker vessels and very large crude carriers. 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, and crude oil.
- 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.
On February 21, 2014, the Company’s board of directors declared a quarterly cash dividend of $0.08 per share, payable on March 26, 2014 to all shareholders as of March 11, 2014 (the record date). On December 18, 2013, the Company paid a quarterly cash dividend on its common stock of $0.07 per share to all shareholders as of December 3, 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 February 21, 2014 the Company has purchased $7.9 million of shares in the open market at an average price of $6.78.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 21 tankers (one LR2 tanker, four LR1 tankers, one Handymax tanker, 14 MR tankers, and one post-Panamax tanker) with an average age of 3.9 years, time charters-in 30 product tankers (nine LR2, five LR1, seven MR and nine Handymax tankers), and has contracted for 63 newbuilding vessels (30 MR, 12 LR2, and 14 Handymax ice class-1A product tankers and seven VLCCs), 43 are expected to be delivered to the Company throughout 2014, 16 in 2015 and four in 2016. The Company also owns approximately 26% of Dorian LPG Ltd. Additional information about the Company is available at the Company’s website www.scorpiotankers.com, which is not a part of this press release.
Non-GAAP Measures
This press release describes adjusted net income and Adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. “Non-GAAP” measure). The Non-GAAP measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
Adjusted net income / (loss)
For the three months ended December 31,
------------------------------------------
2013 2012
-------------------- --------------------
In thousands of U.S. dollars
except per share and share data Amount Per share Amount Per share
--------- --------- --------- ---------
Net income / (loss) $ 5,771$ 0.03$ (4,880)$ (0.11)
Adjustments:
Unrealized (gain)/loss on
derivative financial
instruments (82) (0.00) 1,269 0.03
Write down of vessels held for
sale 21,187 0.12 - 0.00
Gain on sale of VLGCs (41,375) (0.23) - 0.00
--------- --------- --------- ---------
Total adjustments (20,270) (0.11) 1,269 0.03
--------- --------- --------- ---------
Adjusted net loss $ (14,499)$ (0.08)$ (3,611)$ (0.08)
========= ========= ========= =========
For the year ended December 31,
------------------------------------------
2013 2012
-------------------- --------------------
In thousands of U.S. dollars
except per share and share data Amount Per share Amount Per share
--------- --------- --------- ---------
Net income / (loss) $ 17,015$ 0.12$ (26,537)$ (0.64)
Adjustments:
Write off of deferred
financing fees - - 2,978 0.07
Unrealized (gain)/loss on
derivative financial
instruments (567) (0.00) 1,231 0.03
Write down of vessels held for
sale and loss from sales of
vessels 21,187 0.14 10,404 0.25
Gain on sale of VLGCs (41,375) (0.28) - -
--------- --------- --------- ---------
Total adjustments $ (20,755) (0.14) 14,613 0.35
--------- --------- --------- ---------
Adjusted net loss $ (3,740)$ (0.03)$ (11,924)$ (0.29)
========= ========= ========= =========
For the three months For the year ended
ended December 31, December 31,
-------------------- --------------------
In thousands of U.S. dollars 2013 2012 2013 2012
--------- --------- --------- ---------
Net income / (loss) $ 5,771$ (4,880) 17,015 $ (26,537)
Financial expenses 383 1,929 2,705 8,512
Unrealized (gain)/loss on
derivative financial
instruments (82) 1,269 (567) 1,231
Financial income (197) (29) (1,147) (35)
Depreciation 6,930 4,605 23,595 14,818
Depreciation component of our
net profit from associate 297 - 297 -
Amortization of restricted
stock 6,405 892 13,142 3,490
Write down of vessels held for
sale 21,187 - 21,187 10,404
Gain on sale of VLGCs (41,375) - (41,375) -
--------- --------- --------- ---------
Adjusted EBITDA $ (681)$ 3,786$ 34,852$ 11,883
========= ========= ========= =========
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.