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Scorpio Tankers Inc. Announces Financial Results for the Fourth Quarter of 2015 and Declaration of a Quarterly Dividend

MONACO — (Marketwired) — 02/29/16 — Scorpio Tankers Inc. (NYSE: STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three months and year ended December 31, 2015 and declaration of a quarterly dividend.

Results for the three months ended December 31, 2015 and 2014

For the three months ended December 31, 2015, the Company’s adjusted net income was $36.3 million (see Non-IFRS Measures section below), or $0.22 basic and $0.21 diluted earnings per share, which excludes (i) a $0.7 million write-off of deferred financing fees, (ii) a $0.7 million write-off of deposits made for options to construct MR product tankers that expired unexercised, and (iii) a $0.7 million unrealized loss on derivative financial instruments. The adjustments aggregated to an increase of adjusted net income by $2.1 million or $0.01 basic and diluted earnings per share. For the three months ended December 31, 2015, the Company had net income of $34.2 million, or $0.21 basic and $0.20 diluted earnings per share.

For the three months ended December 31, 2015, the Company’s basic and diluted weighted average number of shares were 163,792,076 and 202,210,591, respectively. The diluted weighted average number of shares includes the potentially dilutive shares relating to the Company’s Convertible Senior Notes due 2019 (the “Convertible Notes”) representing 31,791,435 potential common shares that the Company may issue upon conversion (see below for further information).

For the three months ended December 31, 2014, the Company’s adjusted net income was $18.3 million (see Non-IFRS Measures Section below), or $0.12 basic and diluted earnings per share, which excludes (i) a $13.9 million write down from the discontinuation of equity method accounting for the Company’s investment in Dorian LPG Ltd. (“Dorian”), (ii) a $4.0 million write down from the designation of two vessels as held for sale, and (iii) a $0.1 million unrealized gain on derivative financial instruments. The adjustments aggregated to an increase of adjusted net income by $17.8 million or $0.12 basic and diluted earnings per share. For the three months ended December 31, 2014, the Company had net income of $0.5 million, or $0.00 basic and diluted earnings per share.

Results for the year ended December 31, 2015 and 2014

For the year ended December 31, 2015, the Company’s adjusted net income was $221.3 million (see Non-IFRS Measures section below), or $1.37 basic and $1.21 diluted earnings per share, which excludes (i) a $1.2 million gain from the sale of the Company’s investment in Dorian, (ii) a $1.4 million gain from the early termination of the contract on a time chartered-in vessel, (iii) a $1.4 million reserve for a pool bunker supplier in bankruptcy, (iv) a $2.7 million write-off of deferred financing fees, (v) a $0.7 million write-off of deposits made for options to construct MR product tankers that expired unexercised, (vi) a $35,000 net loss related to the sales of four vessels during 2015, (vii) a $1.3 million unrealized loss on derivative financial instruments, and (viii) a $46,000 gain from the repurchase of $1.5 million face value of the Company’s Convertible Notes. The adjustments aggregated to an increase of adjusted net income by $3.5 million or $0.02 basic and $0.01 diluted earnings per share. For the year ended December 31, 2015, the Company had net income of $217.7 million, or $1.35 basic and $1.20 diluted earnings per share.

For the year ended December 31, 2014, the Company’s adjusted net income was $7.7 million (see Non-IFRS Measures section below), or $0.04 basic and diluted earnings per share, which excludes (i) a $51.4 million gain from the sales of seven Very Large Crude Carriers (‘VLCCs’) under construction in March 2014, (ii) a $10.9 million gain from the acquisition of 7,500,000 common shares of the Company in exchange for 3,422,665 shares of Dorian in June 2014, (iii) a $13.9 million write down from the discontinuation of equity method accounting for the Company’s investment in Dorian, (iv) a $4.0 million write down from the designation of two vessels as held for sale, (v) a $0.3 million write-off of deferred financing fees and (vi) a $0.3 million unrealized gain on derivative financial instruments. The adjustments aggregated to a decrease of adjusted net income by $44.4 million or $0.26 basic and diluted loss per share. For the year ended December 31, 2014, the Company had net income of $52.1 million, or $0.30 basic and diluted earnings per share.

Declaration of Dividend

On February 25, 2016, the Company’s Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on March 30, 2016 to all shareholders as of March 10, 2016 (the record date). As of February 26, 2016, there were 173,035,794 shares outstanding.

Diluted Weighted Number of Shares

Diluted earnings per share for the three months and year ended December 31, 2015 includes the potentially dilutive shares relating to the Convertible Notes representing 31,791,435 potential common shares that the Company may issue upon conversion. 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, the Company assumes that the Convertible Notes are converted into common shares at the beginning of each period and the interest and non-cash amortization expense associated with these notes of $5.4 million and $21.4 million during the three months and year ended December 31, 2015, respectively, are 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 Fourth Quarter Significant Events:

  • Below is a summary of the voyages fixed thus far in the first quarter of 2016:
    • For the LR2s in the pool: approximately $28,000 per day for 80% of the days
    • For the LR1s in the pool: approximately $24,000 per day for 74% of the days
    • For the MRs in the pool: approximately $19,000 per day for 72% of the days
    • For the Handymaxes in the pool: approximately $18,000 per day for 66% of the days
  • Below is a summary of the TCE revenue earned during the fourth quarter of 2015:
    • For the LR2s in the pool: $26,464 per day
    • For the LR1s in the pool: $21,013 per day
    • For the MRs in the pool: $19,800 per day
    • For the MRs outside of the pool: $18,086 per day
    • For the Handymaxes in the pool: $18,562 per day
  • Reached an agreement with an unrelated third party to sell five 2014 built MR tankers for approximately $33.3 million each. Two of these sales are expected to close in March 2016, and the remaining three sales are expected to close in the second quarter of 2016.
  • Repurchased an aggregate of 5,220,971 of the Company’s common shares since October 1, 2015 that are being held as treasury shares at an average price of $7.35 per share.
  • Entered into time charter out agreements with an unrelated third party for two ice-class 1B MRs, STI Notting Hill and STI Westminster, each for three years at $20,500 per day. These charters commenced in November 2015 and December 2015, respectively.
  • Entered into a time charter out agreement with an unrelated third party for an LR2 product tanker, STI Rose, for three years at $28,000 per day. This charter commenced in February 2016.
  • Entered into time charter out agreements with an unrelated third party for two ice-class 1A Handymaxes, STI Poplar and STI Pimlico, each for three years at $18,000 per day. These charters commenced in January and February 2016, respectively.
  • Received a commitment from Scotiabank Europe plc for a loan facility of up to $36.0 million, which will be utilized to refinance the existing indebtedness on an LR2 product tanker (2015 built). The loan facility has a maturity of three years from the drawdown date and bears interest at LIBOR plus a margin of 1.50% per annum.
  • Received a commitment to upsize the previously announced $87.0 million credit facility with ING Bank N.V. to $132.5 million. The proceeds from the upsizing will be utilized to partially finance the purchase of STI Lombard (currently bareboat chartered-in) and refinance the existing indebtedness on an MR product tanker (2015 built).
  • Executed a loan facility for $34.5 million with BNP Paribas. The facility bears interest at LIBOR plus a margin of 1.95% per annum, and the proceeds were utilized to partially finance the purchase of STI Memphis and refinance the existing indebtedness on STI Battery.
  • Paid a quarterly cash dividend on the Company’s common stock of $0.125 per share in December 2015.
  • Reached agreements with Hyundai Mipo Dockyard of South Korea (“HMD”) in October 2015 to construct four MR product tankers for $36.0 million each with deliveries scheduled in the third and fourth quarters of 2017.
  • Sold the 2007 built Handymax product tanker, STI Highlander, for a selling price of $19.35 million in October 2015.

Agreement to Sell Five MR Product Tankers

In February 2016, the Company reached an agreement with an unrelated third party to sell five 2014 built MR product tankers (STI Powai, STI Lexington, STI Chelsea, STI Olivia and STI Mythos) for approximately $33.3 million each. The sales of two vessels are expected to close in March 2016, and the sales of the remaining three vessels are expected to close in the second quarter of 2016. The Company expects to record a write-down of approximately $3.2 million during the first quarter of 2016 in connection with the entry into this agreement.

$36.0 Million Scotiabank Credit Facility

In November 2015, the Company received a commitment from Scotiabank Europe plc for a loan facility of up to $36.0 million. The facility will bear interest at LIBOR plus a margin of 1.50% per annum, and the proceeds are expected to be used to refinance the existing indebtedness on one LR2 product tanker (2015 built).

The facility has a final maturity of three years from the drawdown date and is subject to customary conditions precedent and the execution of definitive documentation.

$34.5 Million BNP Paribas Credit Facility

In December 2015, the Company executed a senior secured term loan facility for $34.5 million with BNP Paribas. The facility bears interest at LIBOR plus a margin of 1.95% per annum, and the proceeds were used to partially finance the purchase of STI Memphis and to refinance the existing indebtedness on STI Battery.

The facility has a 15 year repayment profile and a final maturity of five years from the signing date of the loan for each vessel. The terms and conditions, including covenants, are similar to those in the Company’s existing credit facilities.

Upsizing of ING Credit Facility

In January 2016, the Company received a commitment to upsize its previously announced $87.0 million credit facility with ING Bank N.V. to $132.5 million. The facility bears interest at LIBOR plus a margin of 1.95% per annum, and the proceeds from the upsizing are expected to be used to partially finance the purchase of STI Lombard (currently bareboat chartered-in) and refinance the existing indebtedness on an MR product tanker (2015 built).

The terms and conditions, including covenants, are similar to those in the Company’s existing credit facilities.

$250 Million Securities Repurchase Program

In May 2015, the Company’s Board of Directors authorized a new Securities Repurchase 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 Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 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.

Since January 2015 through the date of this press release, the Company has acquired the following:

  • an aggregate of 10,573,315 of its common shares that are being held as treasury shares at an average price of $8.49 per share (9,826,676 shares were purchased at an average price of $8.53 under the May 2015$250 million Securities Repurchase Program; the remaining shares were purchased in the first quarter of 2015 under the previous buyback program). There are 173,035,794 shares outstanding as of February 26, 2016.
  • $1.5 million face value of its Convertible Notes 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 Repurchase Program).

The Company has $164.5 million remaining under its Securities Repurchase 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.

Time Charter-out Update

In December 2015, the Company entered into time charter-out agreements with an unrelated third party on two ice class 1A Handymax product tankers, STI Poplar and STI Pimlico. The term of each agreement is for three years at $18,000 per day. These charters commenced in January and February 2016, respectively.

In October 2015, the Company entered into time charter-out agreements with an unrelated third party on two ice class 1B MR product tankers, STI Notting Hill and STI Westminster. The term of each agreement is for three years at $20,500 per day. These charters commenced in November 2015 and December 2015, respectively.

In October 2015, the Company entered into a time charter-out agreement with an unrelated third party for an LR2 product tanker, STI Rose. The term of the agreement is for three years at $28,000 per day. This charter commenced in February 2016.

Time Charter-in Update

In February 2016, the Company extended the time charter on an LR1 tanker that is currently time chartered-in. The term of the agreement is for an additional year at $17,250 per day effective March 2016.

In November 2015, the Company declared an option to extend the charter on an LR2 product tanker that is currently time chartered-in for an additional year at $22,600 effective February 2016.

In October 2015, the Company declared an option to extend the time charter on an MR product tanker that is currently time chartered-in for an additional year at $17,500 per day effective January 2016. The Company also has an option to extend the charter for an additional year at $18,000 per day.

Conference Call

The Company will have a conference call on February 29, 2016 at 10:30 AM Eastern Standard Time and 4:30 PM Central European Time.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-888-797-2998 (U.S.) or +1-913-312-0664 (International). The conference participant passcode is 4772057. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.

Slides and Audio Webcast:

There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Webcast URL: https://www.webcaster4.com/Webcast/Page/610/13482

Current Liquidity
As of February 26, 2016, the Company had $169.9 million in cash.

Debt
The Company made the following drawdowns from its credit facilities since September 30, 2015 and through the date of this press release:

 

                                   Drawdown
                                    amount
                                    (in $
          Credit facility         millions)   Drawdown date   Collateral
    --------------------------- ------------- ------------- -------------
  1 ING Credit Facility              17.5      October 2015  STI Pontiac (1)
  2 BNP Paribas Credit Facility      17.3     December 2015  STI Memphis
  3 BNP Paribas Credit Facility      17.3     February 2016  STI Battery (2)


(1) The Company refinanced the debt for this vessel by repaying $18.9
    million into the 2013 Credit Facility and drawing down $17.5 million
    from the ING Credit Facility.

(2) The Company refinanced the debt for this vessel by repaying $18.2
    million into the 2013 Credit Facility and drawing down $17.25 million
    from the BNP Paribas Credit Facility.


 

As of February 26, 2016, the Company’s outstanding debt balance, and amount available to draw, is as follows:

 

                                       Amount        Amount     Availability
                                     outstanding   Outstanding    as of the
                                     at December   at February  date of this
In thousands of U.S. dollars          31, 2015      26, 2016       report
                                    ------------  ------------  ------------
2011 Credit Facility                $    100,976$    100,976  $          -
Newbuilding Credit Facility               71,843        71,843             -
2013 Credit Facility (1)                 428,253       410,053             -
K-Sure Credit Facility                   439,999       425,072             -
KEXIM Credit Facility                    400,250       395,950             -
Credit Suisse Credit Facility (2)              -             -        61,200
ING Credit Facility (5)                   34,708        34,417        97,500
ABN AMRO Credit Facility                 139,830       138,055             -
BNP Paribas Credit Facility (1)           17,250        34,500             -
Scotiabank Credit Facility (3)                 -             -        36,000
Senior Unsecured Notes                   105,500       105,500             -
Convertible Notes (4)                    358,500       358,500             -
Finance Lease                             53,372        53,158             -
                                    ------------  ------------  ------------
Total                               $  2,150,481$  2,128,024$    194,700
                                    ============  ============  ============

(1) In January 2016, $18.2 million was repaid into the 2013 Credit Facility
    and $17.25 million was drawn from the BNP Paribas Credit Facility as
    part of the refinancing of the amounts borrowed for STI Battery.

(2) The Company entered into 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.

(3) In November 2015, the Company received a commitment for a loan facility
    of up to $36.0 million from Scotiabank Europe plc which is expected to
    be utilized to refinance the existing indebtedness on an LR2 product
    tanker (2015 built). This facility has a maturity of three years from
    the drawdown date and bears interest at LIBOR plus a margin of 1.50% per
    annum.

(4) As of December 31, 2015, $44.7 million of this amount has been
    attributed to the conversion feature of the Convertible Notes and
    recorded within additional paid in capital on the consolidated balance
    sheet.

(5) In January 2016, the Company received a commitment to upsize its
    previously announced $87.0 million credit facility with ING Bank N.V. to
    $132.5 million. The proceeds are expected to be utilized to finance the
    purchase of STI Lombard (currently bareboat chartered-in) and refinance
    the existing indebtedness on an MR product tanker (2015 built).

 

Newbuilding Program

During the fourth quarter of 2015, the Company made $42.1 million of installment payments on its newbuilding vessels.

The Company currently has 12 newbuilding vessel orders with HMD, Daehan Shipbuilding Co., Ltd (“DHSC”), and Sungdong Shipbuilding and Marine Engineering Co., Ltd. (“SSME”) (eight MRs and four LR2s), and one LR2 vessel (STI Lombard) to be acquired in April 2016 at the conclusion of its bareboat charter-in agreement. The estimated first quarter of 2016 and future payments are as follows*:

 

                                                             $ in millions
                                                           -----------------
Q1 2016 - installment payments made                        $            56.9
Q1 2016 - remaining installment payment                                 15.3
Q2 2016                                                                 74.7
Q3 2016                                                                 36.7
Q4 2016                                                                 44.0
Q1 2017                                                                 57.3
Q2 2017                                                                 46.6
Q3 2017                                                                 54.1
Q4 2017                                                                 43.3

                                                           -----------------
Total                                                      $           428.9
                                                           =================

 

*These are estimates only and are subject to change as construction progresses.

Explanation of Variances on the Fourth Quarter of 2015 Financial Results Compared to the Fourth Quarter of 2014

For the three months ended December 31, 2015, the Company recorded net income of $34.2 million compared to net income of $0.5 million for the three months ended December 31, 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 December 31, 2015 and 2014:

 

                                                 For the three months ended
                                                        December 31,
                                                 --------------------------
In thousands of U.S. dollars                         2015          2014
                                                 ------------  ------------
  Vessel revenue                                 $    178,398$    125,738
  Voyage expenses                                        (293)       (2,106)
                                                 ------------  ------------
  TCE revenue                                    $    178,105$    123,632
                                                 ============  ============

 

  • TCE revenue increased $54.5 million to $178.1 million. This increase was driven by an increase in the average number of operating vessels (owned and time chartered-in) to 92.2 from 72.8 for the three months ended December 31, 2015 and 2014, respectively, along with an increase in time charter equivalent revenue per day to $21,057 per day from $18,664 per day for the three months ended December 31, 2015 and 2014, respectively (see the breakdown of daily TCE below). Product tanker market fundamentals continued to show strength during the fourth quarter of 2015 as the continuing glut of crude oil supplies has led to lower worldwide oil prices and thus higher demand for refined products. As such, global refinery utilization has increased which, along with increased refining capacity in the Middle East and India, has resulted in increased demand across all of the Company’s vessel classes.
  • Vessel operating costs increased $19.8 million to $50.9 million from $31.1 million for the three months ended December 31, 2015 and 2014, respectively. This increase was primarily driven by an increase in the Company’s owned fleet to an average of 80.3 vessels from 50.8 vessels for the three months ended December 31, 2015 and 2014, respectively. Additionally, overall vessel operating costs per day increased to $6,891 per day from $6,662 per day for the three months ended December 31, 2015 and 2014, respectively (see the breakdown of daily vessel operating costs below). This increase was primarily attributable to increased crewing and spares and stores costs incurred in our MR and LR2 operating segments during the quarter.
  • Charterhire expense decreased $11.6 million to $18.2 million from $29.8 million for the three months ended December 31, 2015 and 2014, respectively. This decrease was driven by a decrease in the Company’s time chartered-in fleet to an average of 11.9 vessels from 22.0 vessels for the three months ended December 31, 2015 and 2014, respectively.
  • Depreciation expense increased $13.2 million to $30.9 million from $17.7 million for the three months ended December 31, 2015 and 2014, respectively. This increase was the result of an increase in the average number of owned vessels to 80.3 from 50.8 for the three months ended December 31, 2015 and 2014, respectively.
  • General and administrative expenses increased $4.4 million to $18.2 million from $13.8 million for the three months ended December 31, 2015 and 2014, respectively. This increase is due to the significant growth in the Company’s fleet to an average of 92.2 owned and time chartered-in vessels from an average of 72.8 owned and time chartered-in vessels during the three months ended December 31, 2015 and 2014, respectively.
  • The write down of vessels held for sale and loss from sale vessels of $4.0 million for the three months ended December 31, 2014 is attributable to the designation of STI Harmony and STI Heritage as held for sale at that date.
  • The write-off of vessel purchase options of $0.7 million for the three months ended December 31, 2015 is the write-off of deposits made for options to construct MR product tankers that expired unexercised in December 2015.
  • The re-measurement of the Company’s investment in Dorian for the three months ended December 31, 2014 is from the change in the accounting method of this investment from the equity method to the available for sale method in October 2014 which resulted in a write-down of $13.9 million. The Company’s investment in Dorian was sold in July 2015 for a gain of $1.2 million.
  • Financial expenses increased $10.9 million to $24.1 million from $13.2 million primarily as a result of:
    • an increase in average debt outstanding to $2.1 billion from $1.4 billion for the three months ended December 31, 2015 and 2014, respectively;
    • a decrease in the amount of interest capitalized of $2.8 million;
    • a write-off of $0.7 million of deferred financing fees as a result of the refinancing of the amounts borrowed for STI Pontiac during the three months ended December 31, 2015.

 

                   Scorpio Tankers Inc. and Subsidiaries
             Condensed Consolidated Statement of Income or Loss
                                (unaudited)

                     For the three months ended      For the year ended
                            December 31,                December 31,
                     --------------------------  --------------------------
In thousands of U.S.
 dollars except per
 share and share data    2015          2014          2015          2014
                     ------------  ------------  ------------  ------------
Revenue
  Vessel revenue     $    178,398$    125,738$    755,711$    342,807

Operating expenses
  Vessel operating
   costs                  (50,916)      (31,140)     (174,556)      (78,823)
  Voyage expenses            (293)       (2,106)       (4,432)       (7,533)
  Charterhire             (18,206)      (29,834)      (96,865)     (139,168)
  Depreciation            (30,874)      (17,721)     (107,356)      (42,617)
  General and
   administrative
   expenses               (18,245)      (13,830)      (65,831)      (48,129)
  Write-down of
   vessel held for
   sale and loss on
   sales of vessels             -        (3,978)          (35)       (3,978)
  Write-off of vessel
   purchase options          (731)            -          (731)            -
  Gain on sale of
   VLCCs                        -             -             -        51,419
  Gain on sale of
   Dorian shares                -             -         1,179        10,924
  Re-measurement of
   investment in
   Dorian                       -       (13,895)            -       (13,895)
                     ------------  ------------  ------------  ------------
  Total operating
   expenses              (119,265)     (112,504)     (448,627)     (271,800)
                     ------------  ------------  ------------  ------------
Operating income           59,133        13,234       307,084        71,007
                     ------------  ------------  ------------  ------------
Other (expense) and
 income, net
  Financial expenses      (24,149)      (13,216)      (89,596)      (20,770)
  Realized gain on
   derivative
   financial
   instruments                  -             -            55            17
  Unrealized gain /
   (loss) on
   derivative
   financial
   instruments               (678)           77        (1,255)          264
  Financial income             18            32           145           203
  Share of income
   from associate               -           438             -         1,473
  Other expenses, net        (112)          (70)        1,316          (103)
                     ------------  ------------  ------------  ------------
  Total other
   expense, net           (24,921)      (12,739)      (89,335)      (18,916)
                     ------------  ------------  ------------  ------------
Net income           $     34,212$        495$    217,749$     52,091
                     ============  ============  ============  ============


Earnings per share

  Basic              $       0.21$       0.00$       1.35$       0.30
  Diluted            $       0.20$       0.00$       1.20$       0.30
  Basic weighted
   average shares
   outstanding        163,792,076   152,880,399   161,436,449   171,851,061
  Diluted weighted
   average shares
   outstanding        202,210,591   156,447,674   199,739,326   176,292,802



                   Scorpio Tankers Inc. and Subsidiaries
                    Condensed Consolidated Balance Sheet
                                (unaudited)

                                                           As of
                                               ----------------------------
                                                December 31,   December 31,
In thousands of U.S. dollars                        2015           2014
                                               -------------  -------------
Assets
Current assets
Cash and cash equivalents                      $     200,970$     116,143
Accounts receivable                                   69,017         78,201
Prepaid expenses and other current assets              3,585          2,420
Inventories                                            6,575          6,075
Vessels held for sale                                      -         70,865
                                               -------------  -------------
Total current assets                                 280,147        273,704
                                               -------------  -------------
Non-current assets
Vessels and drydock                                3,087,753      1,971,878
Vessels under construction                           132,218        404,877
Other assets                                          23,337         23,728
Available for sale investment                              -        130,456
                                               -------------  -------------
Total non-current assets                           3,243,308      2,530,939
                                               -------------  -------------
Total assets                                   $   3,523,455$   2,804,643
                                               =============  =============
Current liabilities
Current portion of long-term debt                    124,503         87,163
Debt related to vessels held for sale                      -         32,932
Finance lease liability                               53,372              -
Accounts payable                                      25,683         14,929
Accrued expenses                                      32,643         55,139
Derivative financial instruments                       1,175            205
                                               -------------  -------------
Total current liabilities                            237,376        190,368
                                               -------------  -------------
Non-current liabilities
Long-term debt                                     1,872,114      1,451,427
Derivative financial instruments                          80              -
                                               -------------  -------------
Total non-current liabilities                      1,872,194      1,451,427
                                               -------------  -------------
Total liabilities                                  2,109,570      1,641,795
                                               -------------  -------------
Shareholders' equity
Issued, authorized and fully paid in share
 capital:
Share capital                                          2,224          2,033
Additional paid in capital                         1,729,314      1,550,956
Treasury shares                                     (427,311)      (351,283)
Accumulated other comprehensive income /
 (loss)                                                    -        (10,878)
Retained earnings / (accumulated deficit)            109,658        (27,980)
                                               -------------  -------------
Total shareholders' equity                         1,413,885      1,162,848
                                               -------------  -------------
Total liabilities and shareholders' equity     $   3,523,455$   2,804,643
                                               =============  =============



                   Scorpio Tankers Inc. and Subsidiaries
               Condensed Consolidated Statement of Cash Flows
                                (unaudited)

                                                    For the year ended
                                                       December 31,
                                               ----------------------------
In thousands of U.S. dollars                        2015           2014
                                               -------------  -------------
Operating activities
Net income                                     $     217,749$      52,091
Gain on sale of VLCCs                                      -        (51,419)
Gain on sale of Dorian shares                         (1,179)       (10,924)
Re-measurement of investment in Dorian                     -         13,895
Loss on sales of vessels                                  35              -
Write down of vessels held for sale                        -          3,978
Write-off of vessel purchase options                     731              -
Depreciation                                         107,356         42,617
Amortization of restricted stock                      33,687         29,726
Amortization of deferred financing fees               17,418          4,834
Straight-line adjustment for charterhire
 expense                                                   -              3
Share of profit from associate                             -         (1,473)
Unrealized loss/(gain) on derivative financial
 instruments                                           1,255           (264)
Amortization of acquired time charter
 contracts                                               513            478
Accretion of Convertible Notes                        11,096          5,330
Gain on repurchase of Convertible Notes                  (46)             -
                                               -------------  -------------
                                                     388,615         88,872
                                               -------------  -------------
Changes in assets and liabilities:
Drydock payments                                           -         (1,290)
Increase in inventories                               (1,909)        (3,218)
Decrease/(increase) in accounts receivable             9,184         (5,660)
Increase in prepaid expenses and other current
 assets                                               (1,615)          (154)
Increase in other assets                             (14,153)        (2,901)
Increase in accounts payable                             775          6,471
Increase in accrued expenses                          11,206         12,070
Interest rate swap termination payment                  (128)          (274)
                                               -------------  -------------
                                                       3,360          5,044
                                               -------------  -------------
Net cash inflow from operating activities            391,975         93,916
                                               -------------  -------------
Investing activities
Acquisition of vessels and payments for
 vessels under construction                         (905,396)    (1,403,181)
Proceeds from disposal of vessels                     90,820        213,670
Proceeds from sale of Dorian shares                  142,435              -
Deposit (returned)/received for vessel
 purchases                                           (31,277)        31,277
                                               -------------  -------------
Net cash outflow from investing activities          (703,418)    (1,158,234)
                                               -------------  -------------
Financing activities
Debt repayments                                     (226,260)       (74,674)
Issuance of debt                                     643,550      1,219,784
Debt issuance costs                                   (8,497)       (45,670)
(Repayment) / proceeds of Convertible Notes           (1,632)       360,000
Convertible Notes issuance costs                           -        (10,993)
Gross proceeds from issuance of common stock         159,747              -
Equity issuance costs                                 (7,554)           (42)
Dividends paid                                       (87,056)       (70,495)
Repurchase of common stock                           (76,028)      (276,294)
                                               -------------  -------------
Net cash inflow from financing activities            396,270      1,101,616
                                               -------------  -------------
Increase in cash and cash equivalents                 84,827         37,298
Cash and cash equivalents at January 1,              116,143         78,845
                                               -------------  -------------
Cash and cash equivalents at December 31,      $     200,970$     116,143
                                               =============  =============



                    Scorpio Tankers Inc. and Subsidiaries
 Other operating data for the three months and year ended December 31, 2015
                                   and 2014
                                 (unaudited)


                               For the three months     For the year ended
                                ended December 31,         December 31,
                             ----------------------- -----------------------
                                 2015        2014        2015        2014
                             ----------- ----------- ----------- -----------
Adjusted EBITDA(1)(in
 thousands of U.S. dollars)  $    99,520$    57,061$   449,084$   102,342

Average Daily Results
Time charter equivalent per
 day(2)                      $    21,057$    18,664$    23,163$    15,935
Vessel operating costs per
 day(3)                            6,891       6,662       6,564       6,802

Aframax/LR2
TCE per revenue day (2)           26,464      23,561      30,544      18,621
Vessel operating costs per
 day(3)                            7,330       6,520       6,865       6,789

Panamax/LR1
TCE per revenue day (2)           21,013      17,571      21,804      16,857
Vessel operating costs per
 day(3)                                -       7,705       8,440       8,332

MR
TCE per revenue day (2)           19,681      18,619      21,803      15,297
Vessel operating costs per
 day(3)                            6,838       6,621       6,461       6,580

Handymax
TCE per revenue day (2)           18,562      15,705      19,686      14,528
Vessel operating costs per
 day(3)                            6,483       6,563       6,473       6,704

Fleet data
Average number of owned
 vessels                            80.3        50.8        72.7        31.6
Average number of time
 chartered-in vessels               11.9        22.0        16.9        26.3

Drydock
Expenditures for drydock (in
 thousands of U.S. dollars)            -           -           - $     1,290

(1) See Non-IFRS Measures section below.

(2) Freight rates are commonly measured in the shipping industry in terms of
    time charter equivalent per day (or TCE per day), which is calculated by
    subtracting voyage expenses, including bunkers and port charges, from
    vessel revenue and dividing the net amount (time charter equivalent
    revenues) by the number of revenue days in the period. Revenue days are
    the number of days the vessel is owned 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 February 26, 2016

                        Year              Ice
    Vessel Name         Built    DWT     class     Employment    Vessel type
    ------------------ ------ --------- ------ ----------------- -----------
    Owned vessels
  1 STI Brixton         2014    38,000    1A        SHTP (1)       Handymax
  2 STI Comandante      2014    38,000    1A        SHTP (1)       Handymax
  3 STI Pimlico         2014    38,000    1A    Time Charter (5)   Handymax
  4 STI Hackney         2014    38,000    1A        SHTP (1)       Handymax
  5 STI Acton           2014    38,000    1A        SHTP (1)       Handymax
  6 STI Fulham          2014    38,000    1A        SHTP (1)       Handymax
  7 STI Camden          2014    38,000    1A        SHTP (1)       Handymax
  8 STI Battersea       2014    38,000    1A        SHTP (1)       Handymax
  9 STI Wembley         2014    38,000    1A        SHTP (1)       Handymax
 10 STI Finchley        2014    38,000    1A        SHTP (1)       Handymax
 11 STI Clapham         2014    38,000    1A        SHTP (1)       Handymax
 12 STI Poplar          2014    38,000    1A    Time Charter (5)   Handymax
 13 STI Hammersmith     2015    38,000    1A        SHTP (1)       Handymax
 14 STI Rotherhithe     2015    38,000    1A        SHTP (1)       Handymax
 15 STI Amber           2012    52,000     -        SMRP(2)           MR
 16 STI Topaz           2012    52,000     -        SMRP(2)           MR
 17 STI Ruby            2012    52,000     -        SMRP(2)           MR
 18 STI Garnet          2012    52,000     -        SMRP(2)           MR
 19 STI Onyx            2012    52,000     -        SMRP(2)           MR
 20 STI Sapphire        2013    52,000     -        SMRP(2)           MR
 21 STI Emerald         2013    52,000     -        SMRP(2)           MR
 22 STI Beryl           2013    52,000     -        SMRP(2)           MR
 23 STI Le Rocher       2013    52,000     -        SMRP(2)           MR
 24 STI Larvotto        2013    52,000     -        SMRP(2)           MR
 25 STI Fontvieille     2013    52,000     -        SMRP(2)           MR
 26 STI Ville           2013    52,000     -        SMRP(2)           MR
 27 STI Duchessa        2014    52,000     -        SMRP(2)           MR
 28 STI Opera           2014    52,000     -        SMRP(2)           MR
 29 STI Texas City      2014    52,000     -    Time Charter (6)      MR
 30 STI Meraux          2014    52,000     -        SMRP(2)           MR
 31 STI Chelsea         2014    52,000     -        SMRP(2)           MR
 32 STI Lexington       2014    52,000     -        SMRP(2)           MR
 33 STI San Antonio     2014    52,000     -        SMRP(2)           MR
 34 STI Venere          2014    52,000     -        SMRP(2)           MR
 35 STI Virtus          2014    52,000     -        SMRP(2)           MR
 36 STI Powai           2014    52,000     -        SMRP(2)           MR
 37 STI Aqua            2014    52,000     -        SMRP(2)           MR
 38 STI Dama            2014    52,000     -        SMRP(2)           MR
 39 STI Olivia          2014    52,000     -        SMRP(2)           MR
 40 STI Mythos          2014    52,000     -        SMRP(2)           MR
 41 STI Benicia         2014    52,000     -        SMRP(2)           MR
 42 STI Regina          2014    52,000     -        SMRP(2)           MR
 43 STI St. Charles     2014    52,000     -        SMRP(2)           MR
 44 STI Mayfair         2014    52,000     -        SMRP(2)           MR
 45 STI Yorkville       2014    52,000     -        SMRP(2)           MR
 46 STI Milwaukee       2014    52,000     -        SMRP(2)           MR
 47 STI Battery         2014    52,000     -        SMRP(2)           MR
 48 STI Soho            2014    52,000     -        SMRP(2)           MR
 49 STI Memphis         2014    52,000              SMRP(2)           MR
 50 STI Tribeca         2015    52,000     -        SMRP(2)           MR
 51 STI Gramercy        2015    52,000     -        SMRP(2)           MR
 52 STI Bronx           2015    52,000     -        SMRP(2)           MR
 53 STI Pontiac         2015    52,000     -        SMRP(2)           MR
 54 STI Manhattan       2015    52,000     -        SMRP(2)           MR
 55 STI Queens          2015    52,000     -        SMRP(2)           MR
 56 STI Osceola         2015    52,000     -        SMRP(2)           MR
 57 STI Notting Hill    2015    52,000    1B    Time Charter (7)      MR
 58 STI Seneca          2015    52,000     -        SMRP(2)           MR
 59 STI Westminster     2015    52,000    1B    Time Charter (7)      MR
 60 STI Brooklyn        2015    52,000     -        SMRP(2)           MR
 61 STI Black Hawk      2015    52,000     -        SMRP(2)           MR
 62 STI Elysees         2014   109,999     -       SLR2P (4)         LR2
 63 STI Madison         2014   109,999     -       SLR2P (4)         LR2
 64 STI Park            2014   109,999     -       SLR2P (4)         LR2
 65 STI Orchard         2014   109,999     -       SLR2P (4)         LR2
 66 STI Sloane          2014   109,999     -       SLR2P (4)         LR2
 67 STI Broadway        2014   109,999     -       SLR2P (4)         LR2
 68 STI Condotti        2014   109,999     -       SLR2P (4)         LR2
 69 STI Rose            2015   109,999     -    Time Charter (8)     LR2
 70 STI Veneto          2015   109,999     -       SLR2P (4)         LR2
 71 STI Alexis          2015   109,999     -       SLR2P (4)         LR2
 72 STI Winnie          2015   109,999     -       SLR2P (4)         LR2
 73 STI Oxford          2015   109,999     -       SLR2P (4)         LR2
 74 STI Lauren          2015   109,999     -       SLR2P (4)         LR2
 75 STI Connaught       2015   109,999     -       SLR2P (4)         LR2
 76 STI Spiga           2015   109,999     -       SLR2P (4)         LR2
 77 STI Savile Row      2015   109,999     -       SLR2P (4)         LR2
 78 STI Kingsway        2015   109,999     -       SLR2P (4)         LR2
 79 STI Carnaby         2015   109,999     -       SLR2P (4)         LR2

                              ---------
    Total owned DWT           4,955,982
                              =========

                                                        Daily
                Year          Ice             Vessel    Base    Expiry
   Vessel Name  Built  DWT   class Employment  type     Rate     (9)
   ------------ ---- ------- ----- --------- -------- ------- ---------
   Time or
   bareboat
   chartered-in
   vessels
80 Kraslava     2007  37,258   1B   SHTP (1) Handymax $14,150 18-May-16
   Krisjanis
81 Valdemars    2007  37,266   1B   SHTP (1) Handymax $14,150 01-May-16
   Iver
82 Prosperity   2007  37,412   -    SHTP (1) Handymax $13,500 03-Apr-16
   Miss
83 Mariarosaria 2011  47,499   -    SMRP(2)     MR    $15,250 26-May-16 (10)
84 Vukovar      2015  49,990   -    SMRP(2)     MR    $17,034 01-May-18
85 Targale      2007  49,999   -    SMRP(2)     MR    $15,200 17-May-16 (11)
86 Gan-Trust    2013  51,561   -    SMRP(2)     MR    $17,500 06-Jan-17 (12)
   Hellespont
87 Progress     2006  73,728   -    SPTP (3)    LR1   $16,250 18-Mar-17 (13)
   Densa
88 Crocodile    2015 105,408   -   SLR2P (4)    LR2   $22,600 07-Feb-17 (14)
   Densa
89 Alligator    2013 105,708   -   SLR2P (4)    LR2   $24,875 17-Sep-16 (15)
90 STI Lombard  2015 109,999   -   SLR2P (4)    LR2   $10,000 03-May-16 (16)

                     -------
   Total time
   chartered-in      705,828
   DWT
                     =======

    Newbuildings currently under
    construction
    Vessel Name                           Yard           DWT     Vessel type
    ------------------------------------- ----      ------------ -----------
 91 Hull 2601 - TBN STI Galata             HMD (17)       52,000      MR
 92 Hull 2602 - TBN STI Taskim             HMD (17)       52,000      MR
 93 Hull 2603 - TBN STI Leblon             HMD (17)       52,000      MR
 94 Hull 2604 - TBN STI La Boca            HMD (17)       52,000      MR
 95 Hull 2605 - TBN STI San Telmo          HMD (17)       52,000      MR
 96 Hull 2606 - TBN STI Jurere             HMD (17)       52,000      MR
 97 Hull 2607 - TBN STI Esles II           HMD (17)       52,000      MR
 98 Hull 2608 - TBN STI Jardins            HMD (17)       52,000      MR
 99 Hull S3120 - TBN STI Selatar          SSME (18)      109,999     LR2
100 Hull S3121 - TBN STI Rambla           SSME (18)      109,999     LR2
101 Hull 5003 - TBN STI Grace             DHSC (19)      109,999     LR2
102 Hull 5004 - TBN STI Jermyn            DHSC (19)      109,999     LR2

                                                    ------------
    Total newbuilding product tankers DWT                855,996
                                                    ============

                                                    ------------
    Total Fleet DWT                                    6,517,806
                                                    ============

(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 MR
     Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the
     Company.
(3)  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.
(4)  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.
(5)  This vessel is currently time chartered-out to an unrelated third party
     for three years at $18,000 per day. This time charter is scheduled to
     expire in January 2019.
(6)  This vessel is currently time chartered-out to an unrelated third party
     for two years. The agreement expires in March 2016, and contains a 50%
     profit sharing provision whereby we split all of the vessel's profits
     above the daily base rate with the charterer.
(7)  This vessel is currently time chartered-out to an unrelated third party
     for three years at $20,500 per day. This time charter is scheduled to
     expire in December 2018.
(8)  This vessel is currently time chartered-out to an unrelated third party
     for three years at $28,000 per day. This time charter is scheduled to
     expire in February 2019.
(9)  Redelivery from the charterer is plus or minus 30 days from the expiry
     date.
(10) We have an option to extend the charter for an additional year at
     $16,350 per day.
(11) We have an option to extend the charter for an additional year at
     $16,200 per day.
(12) In October 2015, we extended the charter for an additional year at
     $17,500 per day effective January 2016. We have an option to extend the
     charter for an additional year at $18,000 per day.
(13) In February 2016, we extended the charter for an additional year at
     $17,250 per day effective March 2016.
(14) In November 2015, we declared an option to extend the charter for an
     additional year at $22,600 per day effective February 2016. 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.
(15) We have an option to extend the charter for an additional year at
     $26,925 per day.
(16) This vessel was delivered in August 2015 under a bareboat charter-in
     agreement for $10,000 per day for up to nine months. We are obligated
     to take ownership of the vessel and pay the remaining 90% of the
     contract price, at the conclusion of the bareboat charter (or at any
     point prior, at our discretion).
(17) These newbuilding vessels are being constructed at HMD (Hyundai Mipo
     Dockyard Co. Ltd. of South Korea). All eight vessels are expected to be
     delivered throughout 2017.
(18) These newbuilding vessels are being constructed at SSME (Sungdong
     Shipbuilding & Marine Engineering Co., Ltd). One vessel is expected to
     be delivered in the third quarter of 2016 and one in the fourth quarter
     of 2016.
(19) 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 quarters of 2016.

 

Dividend Policy and Securities Repurchase Program

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:

 

                                                  Dividends per
                        Date paid                     share
          --------------------------------------------------------
                        June 2013$0.025September 2013$0.035December 2013$0.070March 2014$0.080June 2014$0.090September 2014$0.100December 2014$0.120March 2015$0.120June 2015$0.125September 2015$0.125December 2015$0.125

 

On February 25, 2016, the Scorpio Tankers’ Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on March 30, 2016 to all shareholders as of March 10, 2016 (the record date). As of February 26, 2016 there were 173,035,794 shares outstanding.

Securities Repurchase Program
In May 2015, the Company’s Board of Directors authorized a new Securities Repurchase 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 Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 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 10,573,315 of its common shares that are being held as treasury shares at an average price of $8.49 per share (9,826,676 shares were purchased at an average price at $8.53 under the May 2015$250 million Securities Repurchase Program; the remaining shares were purchased in the first quarter of 2015 under the previous buyback program). There are 173,035,794 shares outstanding as of February 26, 2016.
  • $1.5 million face value of its Convertible Notes 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 Repurchase Program).

The Company has $164.5 million remaining under its Securities Repurchase 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 79 product tankers (18 LR2, 14 Handymax, and 47 MR tankers) with an average age of 1.4 years and time or bareboat charters-in 11 product tankers (three LR2, one LR1, four MR and three Handymax tankers). The Company has contracted for 12 newbuilding product tankers (eight MR and four LR2 tankers). The four LR2s are expected to be delivered in 2016 (one per quarter), and the eight MRs are expected to be delivered throughout 2017. The Company has also reached an agreement to sell five of its 2014 built MR product tankers. Additional information about the Company is available at the Company’s website www.scorpiotankers.com, which is not a part of this press release.

Non-IFRS Measures

This press release describes adjusted net income and adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. “Non-IFRS” measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.

 

Adjusted net income for the three months ended December 31, 2015 and 2014

                                        For the three months ended
                                             December 31, 2015
                                    -----------------------------------
In thousands of U.S. dollars except            Per share      Per share
 per share data                       Amount     basic         diluted
                                    ---------  ---------      ---------
  Net income                        $  34,212$    0.21$    0.20
  Adjustments:
    Deferred financing fees write-
     off                                  720       0.00           0.00
    Write-off of vessel purchase
     options                              731       0.00           0.00
    Unrealized loss on derivative
     financial instruments                678       0.00           0.00
                                    ---------  ---------      ---------
  Adjusted net income               $  36,341$    0.22  (1) $    0.21  (1)
                                    =========  =========      =========

                                        For the three months ended
                                             December 31, 2014
                                    -----------------------------------
In thousands of U.S. dollars except            Per share      Per share
 per share data                       Amount     basic         diluted
                                    ---------  ---------      ---------
  Net income                        $     495$    0.00$    0.00
  Adjustments:
    Unrealized gain on derivative
     financial instruments                (77)     (0.00)         (0.00)
    Write down of vessel held for
     sale                               3,978       0.03           0.03
    Write down of investment in
     Dorian                            13,895       0.09           0.09
                                    ---------  ---------      ---------
  Adjusted net income               $  18,291$    0.12$    0.12
                                    =========  =========      =========

(1) Summation differences due to rounding.


Adjusted net income for the years ended December 31, 2015 and 2014

                                                   For the year ended
                                                   December 31, 2015
                                            -------------------------------
In thousands of U.S. dollars except per                Per share  Per share
 share data                                   Amount     basic     diluted
                                            ---------  ---------  ---------
  Net income                                $ 217,749$    1.35       1.20
  Adjustments:
    Deferred financing fees write-off           2,730       0.02       0.01
    Gain on sale of Dorian shares              (1,179)     (0.01)     (0.01)
    Write-down of vessel held for sale/gain
     on sales of vessels                           35       0.00       0.00
    Gain on early termination of time
     chartered-in contract                     (1,397)     (0.01)     (0.01)
    Reserve for pool bunker supplier in
     bankruptcy                                 1,396       0.01       0.01
    Unrealized loss on derivative financial
     instruments                                1,255       0.01       0.01
    Gain on repurchase of Convertible Notes       (46)     (0.00)     (0.00)
    Write-off of vessel purchase options          731       0.00       0.00
                                            ---------  ---------  ---------
  Adjusted net income                       $ 221,274$    1.37       1.21
                                            =========  =========  =========


                                                   For the year ended
                                                   December 31, 2014
                                            -------------------------------
In thousands of U.S. dollars except per                Per share  Per share
 share data                                   Amount     basic     diluted
                                            ---------  ---------  ---------
  Net income                                $  52,091$    0.30$    0.30
  Adjustments:
    Deferred financing fees write-off             317       0.00       0.00
    Unrealized gain on derivative financial
     instruments                                 (264)     (0.00)     (0.00)
    Write down of vessels held for sale         3,978       0.02       0.02
    Gain on sale of VLCCs                     (51,419)     (0.30)     (0.30)
    Gain on sale of Dorian shares             (10,924)     (0.06)     (0.06)
    Re-measurement of investment in Dorian     13,895       0.08       0.08
                                            ---------  ---------  ---------
  Adjusted net income                       $   7,674$    0.04$    0.04
                                            =========  =========  =========


Adjusted EBITDA

                              For the three months     For the year ended
                               ended December 31,         December 31,
                             ----------------------  ----------------------
In thousands of U.S. dollars    2015        2014        2015        2014
                             ----------  ----------  ----------  ----------
  Net income                 $   34,212$      495$  217,749$   52,091
    Financial expenses           24,149      13,216      89,596      20,770
    Unrealized (gain) / loss
     on derivative financial
     instruments                    678         (77)      1,255        (264)
    Financial income                (18)        (32)       (145)       (203)
    Depreciation                 30,874      17,721     107,356      42,617
    Depreciation component of
     our net profit from
     associate                        -         206           -       2,075
    Amortization of
     restricted stock             8,894       7,659      33,687      29,726
    Gain on sale of VLCCs             -           -           -     (51,419)
    Gain on sale of Dorian
     shares                           -           -      (1,179)    (10,924)
    Re-measurement of
     investment in Dorian             -      13,895           -      13,895
    Write-down of vessel held
     for sale and gain on
     sales of vessels                 -       3,978          35       3,978
    Write-off of vessel
     purchase options               731           -         731           -
    Gain on early termination
     of time chartered-in
     contract                         -           -      (1,397)          -
    Reserve for pool bunker
     supplier in bankruptcy           -           -       1,396           -
                             ----------  ----------  ----------  ----------
  Adjusted EBITDA            $   99,520$   57,061$  449,084$  102,342
                             ==========  ==========  ==========  ==========

 

Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include 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.

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