Scorpio Tankers Inc. Announces Financial Results for the Second Quarter of 2023

Rhea-AI Summary

Scorpio Tankers Inc. (NYSE: STNG) reported net income of $132.4 million for the three months ended June 30, 2023, and declared a quarterly cash dividend of $0.25 per share. The company executed $1.0 billion in term loans and credit facilities, exercised purchase options on multiple product tankers, and repurchased over 5.8 million common shares. The company's average daily Time Charter Equivalent (TCE) revenue and duration of contracted voyages for third quarter 2023 were also disclosed.

Positive

• Scorpio Tankers Inc. reported strong net income for the three and six months ended June 30, 2023, at $132.4 million and $325.6 million, respectively.
• The company's declaration of a quarterly cash dividend of $0.25 per share indicates confidence in its financial position and commitment to returning value to shareholders.
• Execution of a $1.0 billion credit facility and term loan, along with exercising purchase options on various product tankers, demonstrates strategic financial management and expansion.
• The company's repurchase of 5,893,324 common shares at an average price of $48.00 per share reflects a commitment to enhancing shareholder value and confidence in future prospects.

Negative

• The decrease in net income from $191.1 million for the three months ended June 30, 2022, to $132.4 million for the same period in 2023 may raise concerns about profitability.
• The potential future impact of the drawn credit facilities and term loans on the company's financial leverage and interest expenses is not disclosed, leaving investors with uncertainty about the company's debt management strategy.

MONACO, Aug. 02, 2023 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers" or the "Company") today reported its results for the three and six months ended June 30, 2023. The Company also announced that its board of directors (the "Board of Directors") has declared a quarterly cash dividend on its common shares of $0.25 per share.

Results for the three months ended June 30, 2023 and 2022

For the three months ended June 30, 2023, the Company had net income of $132.4 million, or $2.50 basic and $2.40 diluted earnings per share.

For the three months ended June 30, 2023, the Company had adjusted net income (see Non-IFRS Measures section below) of $133.3 million, or $2.51 basic and $2.41 diluted earnings per share, which excludes from net income a $0.9 million, or $0.02 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on certain lease financing obligations and related debt extinguishment costs.

For the three months ended June 30, 2022, the Company had net income of $191.1 million, or $3.44 basic and $3.06 diluted earnings per share.

For the three months ended June 30, 2022, the Company had adjusted net income (see Non-IFRS Measures section below) of $196.1 million, or $3.53 basic and $3.13 diluted earnings per share, which excludes from net income (i) a $1.5 million, or $0.03 per basic and $0.02 per diluted share, aggregate write-down of vessels held for sale and loss on the sale of vessels, (ii) a $3.9 million, or $0.07 per basic and $0.06 per diluted share, write-off or acceleration of the amortization of deferred financing fees on the debt or lease financing obligations relating to these vessel sales and related debt extinguishment costs, and (iii) a $0.4 million, or $0.01 per basic and $0.01 per diluted share, gain recorded on the repurchase of the Company's Convertible Notes Due 2025.

Results for the six months ended June 30, 2023 and 2022

For the six months ended June 30, 2023, the Company had net income of $325.6 million, or $5.93 basic and $5.69 diluted earnings per share.

For the six months ended June 30, 2023, the Company had adjusted net income (see Non-IFRS Measures section below) of $328.9 million, or $5.99 basic and $5.75 diluted earnings per share, which excludes from net income a $3.3 million, or $0.06 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on certain lease financing obligations and related debt extinguishment costs.

For the six months ended June 30, 2022, the Company had net income of $106.7 million, or $1.92 basic and $1.84 diluted earnings per share.

For the six months ended June 30, 2022, the Company had adjusted net income (see Non-IFRS Measures section below) of $181.3 million, or $3.27 basic and $2.99 diluted earnings per share, which excludes from net income (i) a $69.2 million, or $1.25 per basic and $1.07 per diluted share, aggregate write-down of vessels held for sale and loss on the sale of vessels, (ii) a $5.8 million, or $0.10 per basic and $0.09 per diluted share, write-off or acceleration of the amortization of deferred financing fees on the debt or lease financing obligations relating to these vessel sales and related debt extinguishment costs and (iii) a $0.4 million, or $0.01 per basic and $0.01 per diluted share, gain recorded on the repurchase of the Company's Convertible Notes Due 2025.

Declaration of Dividend

On August 1, 2023, the Board of Directors declared a quarterly cash dividend of $0.25 per common share, with a payment date of September 15, 2023 to all shareholders of record as of August 15, 2023 (the record date). As of August 1, 2023, there were 54,493,654 common shares of the Company outstanding.

Summary of Second Quarter 2023 and Other Recent Significant Events

• Below is a summary of the average daily Time Charter Equivalent ("TCE") revenue (see Non-IFRS Measures section below) and duration of contracted voyages and time charters for the Company's vessels (both in the pools and outside of the pools) thus far in the third quarter of 2023 as of the date hereof (See footnotes to "Other operating data" table below for the definition of daily TCE revenue):
  
  

	Pool and Spot Market						Time Charters Out of the Pool
	Average Daily TCE Revenue		Expected Revenue Days(1)	% of Days			Average Daily TCE Revenue		Expected Revenue Days(1)	% of Days
LR2	$	27,000	2,650	41	%		$	30,500	910	100	%
MR	$	27,000	4,900	37	%		$	21,800	450	100	%
Handymax	$	20,000	1,270	33	%		N/A		N/A	N/A

⁽¹⁾ Expected Revenue Days are the total number of calendar days in the quarter for each vessel, less the total number of expected off-hire days during the period associated with major repairs or drydockings. Consequently, Expected Revenue Days represent the total number of days the vessel is expected to be available to earn revenue. Idle days, which are days when a vessel is available to earn revenue, yet is not employed, are included in revenue days. The Company uses revenue days to show changes in net vessel revenues between periods.

• Below is a summary of the average daily TCE revenue earned by the Company's vessels during the second quarter of 2023:

	Average Daily TCE Revenue
Vessel class	Pool / Spot		Time Charters
LR2	$	42,647	$	30,361
MR	$	29,207	$	21,711
Handymax	$	26,784	N/A

• In July 2023, the Company executed its previously announced $1.0 billion term loan and revolving credit facility with a group of financial institutions (the "2023 $1.0 Billion Credit Facility"). The Company drew $440.6 million from this facility (split evenly between the term and revolving portions) to finance 21 of the Company’s unencumbered vessels. This facility has a final maturity of June 30, 2028 and bears interest at SOFR plus a margin of 1.95% per annum. The remaining availability of this facility is expected to be drawn between the third quarter of 2023 and the end of the first quarter of 2024, and mainly be used to repay (and re-finance) more expensive lease financing.
• In July 2023, the Company gave notice to exercise the purchase options on two MR product tankers (STI Leblon and STI Bosphorus) which are currently financed on the 2020 CMBFL Lease Financing. Additionally, the Company gave notice in October 2022 to exercise the purchase option on one LR2 product tanker (STI Supreme) which is currently financed on the Ocean Yield Lease Financing. These purchases are expected to take place prior to the end of the third quarter of 2023 and result in an aggregate debt reduction of $64.3 million.
• In July 2023, the Company exercised the purchase options on six MR product tankers (STI Miracle, STI Maestro, STI Mighty, STI Modest, STI Maverick, and STI Millennia) that were previously financed as part of the IFRS 16 - Leases - $670.0 Million lease financing. These transactions resulted in an aggregate debt reduction of $143.6 million.
• In July 2023, the Company sold the 2013 built MR product tanker, STI Ville, for $32.5 million. As the vessel was unencumbered, the Company made no debt repayments associated with this sale.
• During the second quarter of 2023, the Company exercised the purchase options on five LR2s and seven MRs (STI Steadfast, STI Grace, STI Jermyn, STI Lavender, STI Lobelia, STI Magnetic, STI Marshall, STI Magic, STI Mystery, STI Marvel, STI Mythic, and STI Magister) that were previously financed on the IFRS 16 - Leases - $670.0 Million lease financing, the Ocean Yield Lease Financing, and the 2021 CSSC Lease Financing. These transactions resulted in an aggregate debt reduction of $300.2 million.
• In May 2023, the Company executed a $117.4 million credit facility from a European financial institution (the "2023 $117.4 Million Credit Facility"). This facility was fully drawn upon execution and seven vessels (STI Battersea, STI Wembley, STI Texas City, STI Meraux, STI Mayfair, STI St. Charles, and STI Alexis) were collateralized on the facility upon drawdown. The 2023 $117.4 Million Credit Facility has a final maturity of five years from the drawdown date of each vessel and bears interest at SOFR plus a margin of 1.925% per annum.
• In June 2023, the Company received a commitment from DekaBank Deutsche Girozentrale for a credit facility of up to $94.0 million (the "2023 $94.0 Million Credit Facility"). This credit facility is expected to be used to finance one MR product tanker and three LR2 product tankers. This credit facility has a final maturity of five years from the drawdown date of each vessel and bears interest at SOFR plus a margin of 1.70% per annum.
• Since April 1, 2023 and through the date of this press release, the Company has repurchased an aggregate of 5,893,324 of its common shares in the open market at an average price of $48.00 per share.
  

Securities Repurchase Program

On February 15, 2023, the Board of Directors authorized a new Securities Repurchase Program (the "2023 Securities Repurchase Program") to purchase up to an aggregate of $250.0 million of the Company’s securities which, in addition to its common shares also currently consist of its Senior Unsecured Notes Due 2025 (NYSE: SBBA).  

On May 1, 2023, and again on May 31, 2023, the Board of Directors authorized to reset the 2023 Securities Repurchase Program up to an aggregate of $250.0 million of the Company’s securities.

From April 1, 2023 through the date of this press release, the Company has purchased an aggregate of 5,893,324 of its common shares in the open market at an average price of $48.00 per share.

There is $213.2 million available under the 2023 Securities Repurchase Program as of August 1, 2023.

Lease Repayments

During the second quarter of 2023, the Company exercised the purchase options on five LR2s and seven MRs (STI Steadfast, STI Grace, STI Jermyn, STI Lavender, STI Lobelia, STI Magnetic, STI Marshall, STI Magic, STI Mystery, STI Marvel, STI Mythic, and STI Magister) that were previously financed on the IFRS 16 - Leases - $670.0 Million lease financing, the Ocean Yield Lease Financing, and the 2021 CSSC Lease Financing. These transactions resulted in an aggregate debt reduction of $300.2 million.

In July 2023, the Company exercised the purchase options on six MR product tankers that were previously financed on the IFRS 16 - Leases - $670.0 Million lease financing (STI Miracle, STI Maestro, STI Mighty, STI Modest, STI Maverick, and STI Millennia). These transactions resulted in an aggregate debt reduction of $143.6 million.

In July 2023, the Company gave notice to exercise the purchase options on two MR product tankers (STI Leblon and STI Bosphorus) that are currently financed on the 2020 CMBFL Lease Financing. These purchases are expected to take place prior to the end of the third quarter of 2023 and result in an aggregate debt reduction of $36.5 million.

The Company also expects to complete the previously announced repurchase of STI Supreme, which is currently financed on the Ocean Yield Lease Financing, in the third quarter of 2023 and which is expected to result in a debt reduction of $27.8 million.

All of these lease financings bore interest at LIBOR plus margins of between 3.2% and 5.4%.

New Executed or Committed Financings

The Company has executed or received commitments for three separate credit facilities for up to $1.2 billion in the aggregate (the "New Facilities").

The first credit facility, the 2023 $117.4 Million Credit Facility, is from a European financial institution for $117.4 million and was executed in May 2023. This facility was fully drawn upon execution and seven vessels (STI Battersea, STI Wembley, STI Texas City, STI Meraux, STI Mayfair, STI St. Charles, and STI Alexis) were collateralized on the facility upon drawdown. The 2023 $117.4 Million Credit Facility has a final maturity of five years from the drawdown date of each vessel, bears interest at SOFR plus a margin of 1.925% per annum and is expected to be repaid in equal, aggregate, installments of $4.3 million per quarter, with a balloon payment due at maturity. The remaining terms and conditions of this credit facility, including financial covenants, are similar to those set forth in the Company’s existing credit facilities.

The second credit facility, the 2023 $1.0 Billion Credit Facility, is a term loan and revolving credit facility from a group of financial institutions for up to $1.0 billion. Upon execution in July 2023, $440.6 million was drawn from this facility (split evenly between the term loan and the revolver) to finance 21 of the Company’s unencumbered vessels (STI Lobelia, STI Lavender, STI Jermyn, STI Steadfast, STI Magic, STI Mystery, STI Marvel, STI Millennia, STI Magister, STI Mythic, STI Modest, STI Maverick, STI Miracle, STI Maestro, STI Mighty, STI Magnetic, STI Seneca, STI Brooklyn, STI Manhattan, STI Bronx, and STI Tribeca). This facility has a final maturity of June 30, 2028 and bears interest at SOFR plus a margin of 1.95% per annum. The remaining availability of this facility is expected to be drawn between the third quarter of 2023 and the end of the first quarter of 2024, and mainly be used to repay (and re-finance) more expensive lease financing. This credit facility is expected to be repaid in quarterly installments with a balloon payment due at maturity date, where the term loan portion for each vessel shall be repaid in full prior to the reduction of the revolver for each vessel. The amounts drawn thus far are expected to be repaid in aggregate repayments of $12.9 million per quarter for the first two years, $8.7 million per quarter in years three through five, with a balloon payment at maturity.

The 2023 $1.0 Billion Credit Facility offers the Company an ability to substitute vessels and also includes an uncommitted accordion feature of up to $200.0 million, which may be incurred under the same terms and conditions at no later than 24 months after the closing date. The other terms and conditions of the 2023 $1.0 Billion Credit Facility, including financial covenants, are similar to those set forth in the Company’s existing credit facilities.

The third credit facility commitment, the 2023 $94.0 Million Credit Facility, is from DekaBank Deutsche Girozentrale for a credit facility of up to $94 million. This credit facility is expected to be used to finance one MR product tanker and three LR2 product tankers. This credit facility will have a final maturity of five years from the drawdown date of each vessel and will bear interest at SOFR plus a margin of 1.70% per annum. The terms and conditions of this credit facility, including financial covenants, will be similar to those set forth in the Company’s existing credit facilities. This credit facility will be subject to customary conditions precedent, and the execution of definitive documentation, and is expected to close within the third quarter of 2023.

The proceeds of the new facilities are expected to be used, primarily, to repay more expensive lease financing.

Diluted Weighted Number of Shares

The computation of earnings per share is determined by taking into consideration the potentially dilutive shares arising from the Company’s equity incentive plan. These potentially dilutive shares are excluded from the computation of earnings per share to the extent they are anti-dilutive.  

For the three and six months ended June 30, 2023, the Company’s basic weighted average number of shares outstanding were 53,040,031 and 54,926,939, respectively.   For the three and six months ended June 30, 2023, the Company’s diluted weighted average number of shares outstanding were 55,228,080 and 57,186,103, respectively, which included the potentially dilutive impact of restricted shares issued under the Company's equity incentive plan.  

Conference Call

On Wednesday August 2, 2023, the Company plans to issue its second quarter 2023 earnings press release in the morning (Eastern Daylight Time) and host a conference call at 8:30 AM Eastern Daylight Time and 2:30 PM Central European Summer Time.

Title: Scorpio Tankers Inc. Second Quarter 2023 Conference Call

Date: Wednesday August 2, 2023

Time: 8:30 AM Eastern Daylight Time and 2:30 PM Central European Summer Time

The conference call will be available over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com and the webcast link:

https://edge.media-server.com/mmc/p/8q35pjcs

Participants for the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

The conference will also be available telephonically:

US/CANADA Dial-In Number: 1 (833) 636-1321

International Dial-In Number: +1 (412) 902-4260

Please ask to join the Scorpio Tankers Inc call

Participants should dial into the call 10 minutes before the scheduled time.

To access the replay telephonically (valid until August 16, 2023):

US Toll Free: 1-877-344-7529

International Toll: +1-412-317-0088

Canada Toll Free: 1-855-669-9658

To access dial-in numbers for additional countries click on the below link

https://services.choruscall.com/ccforms/replay.html

Replay Access Code: 8082952
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. Information on the Company’s website does not constitute a part of and is not incorporated by reference into this press release.

Current Liquidity

As of July 31, 2023, the Company had $682.7 million in unrestricted cash and cash equivalents.

Drydock, Scrubber and Ballast Water Treatment Update

Set forth below is a table summarizing the drydock, scrubber, and ballast water treatment system ("BWTS") activity that occurred during the second quarter of 2023 and the estimated expected payments to be made, and off-hire days that are expected to be incurred, for the Company's drydocks, ballast water treatment system installations, and scrubber installations through 2023 and 2024:

				Number of(3)
	Aggregate costs in millions of USD(1)		Aggregate offhire days(2)	LR2s	MRs	Handymax
Q2 2023 - actual (a)	$	5.1	64	—	3	—
Q3 2023 - estimated (b)		3.9	20	—	1	—
Q4 2023 - estimated (c)		7.5	20	—	1	—
FY 2024 - estimated (d)		69.9	1,355	11	36	12

⁽¹⁾ These costs include estimated cash payments for drydocks, ballast water treatment system installations and scrubber installations. These amounts may include costs incurred for previous projects for which payments may not be due until subsequent quarters, or installment payments that are due in advance of the scheduled service and may be scheduled to occur in quarters prior to the actual installation. In addition to these installment payments, these amounts also include estimates of the installation costs of such systems.  The timing of the payments set forth are estimates only and may vary as the timing of the related drydocks and installations finalize. 

⁽²⁾ Represents the total estimated off-hire days during the period, including vessels that commenced work in a previous period.

⁽³⁾ Represents the number of vessels scheduled to commence drydock, ballast water treatment system, and/or scrubber installations during the period. It does not include vessels that commenced work in prior periods but will be completed in the subsequent period. The number of vessels in these tables may reflect a certain amount of overlap where certain vessels are expected to be drydocked and have ballast water treatment systems and/or scrubbers installed simultaneously.  Additionally, the timing set forth in these tables may vary as drydock, ballast water treatment system installation and scrubber installation times are finalized.

(a)   Includes one BWTS installation.
(b)   Includes one BWTS installation.
(c)   Includes one BWTS installation.
(d)   Includes 11 scrubber installations.

Debt

Set forth below is a summary of the principal balances of the Company’s outstanding indebtedness as of the dates presented:

	In thousands of U.S. Dollars	Outstanding Principal as of March 31, 2023		Outstanding Principal as of June 30, 2023		Outstanding Principal as of July 31, 2023
1	Hamburg Commercial Credit Facility (6)	$	32,909	$	32,086	$	32,086
2	Prudential Credit Facility (6)		37,899		36,513		35,589
3	2019 DNB / GIEK Credit Facility (6)		36,559		34,781		34,781
4	BNPP Sinosure Credit Facility (6)		80,576		75,121		75,121
5	2020 $225.0 Million Credit Facility (6)		36,482		35,198		35,198
6	2023 $225.0 Million Credit Facility		225,000		216,525		208,050
7	2023 $49.1 Million Credit Facility		49,088		47,934		47,934
8	2023 $117.4 Million Credit Facility (1)		—		117,394		117,394
9	2023 $1.0 Billion Credit Facility (2)		—		—		440,600
10	Ocean Yield Lease Financing (3) (6)		84,372		54,895		54,443
11	BCFL Lease Financing (LR2s)		65,598		62,837		61,931
12	CSSC Lease Financing (6)		117,635		113,994		112,780
13	BCFL Lease Financing (MRs)		49,202		45,040		43,688
14	2020 CMBFL Lease Financing (6)		37,279		36,468		36,468
15	2020 TSFL Lease Financing		39,777		38,947		38,947
16	2020 SPDBFL Lease Financing (6)		81,887		80,264		80,264
17	2021 AVIC Lease Financing (6)		82,822		81,009		81,009
18	2021 CMBFL Lease Financing (6)		66,415		64,785		64,380
19	2021 TSFL Lease Financing		48,902		47,807		47,807
20	2021 CSSC Lease Financing (4)		47,315		—		—
21	2021 $146.3 Million Lease Financing (6)		130,404		127,110		123,815
22	2021 Ocean Yield Lease Financing (6)		62,490		61,032		60,535
23	2022 AVIC Lease Financing (6)		111,512		109,220		109,220
24	IFRS 16 - Leases - 3 MR		19,063		16,904		16,195
25	IFRS 16 - Leases - $670.0 Million (5)		464,813		231,015		86,673
26	Unsecured Senior Notes Due 2025		70,571		70,571		70,571
	Gross debt outstanding		2,078,570		1,837,450		2,115,479
	Cash and cash equivalents		612,655		313,923		682,678
	Net debt	$	1,465,915	$	1,523,527	$	1,432,801

⁽¹⁾ The 2023 $117.4 Million Credit Facility was executed and drawn in May 2023. Seven product tankers (two Handymax, four MRs and one LR2) were collateralized under this facility as part of the drawdown. The 2023 $117.4 Million Credit Facility has a final maturity of five years from the drawdown date of each vessel, bears interest at SOFR plus a margin of 1.925% per annum and is expected to be repaid in equal, aggregate, installments of $4.3 million per quarter, with a balloon payment due at maturity The remaining terms and conditions of this credit facility, including financial covenants, are similar to those set forth in the Company’s existing credit facilities.

⁽²⁾ The 2023 $1.0 Billion Credit Facility was executed in July 2023. Upon execution, $440.6 million was drawn from this facility (split evenly between the term loan and the revolver) to finance 21 of the Company’s unencumbered vessels (17 MRs and four LR2s). This facility has a final maturity of June 30, 2028 and bears interest at SOFR plus a margin of 1.95% per annum. The amounts drawn, thus far, are expected to be repaid in aggregate repayments of $12.9 million per quarter for the first two years, $8.7 million per quarter in years three through five, with a balloon payment at maturity, where the term loan portion for each vessel shall be repaid in full prior to the reduction of the revolver for each vessel. The remaining terms and conditions of this credit facility, including financial covenants, are similar to those set forth in the Company’s existing credit facilities.

⁽³⁾ In October 2022, the Company gave notice to exercise the purchase options on STI Steadfast and STI Supreme on the Ocean Yield Lease Financing. In May 2023, the Company exercised the purchase option on STI Steadfast resulting in a debt reduction of $27.8 million. The remaining transaction for STI Supreme is expected to occur in the third quarter of 2023 resulting in a debt reduction of $27.8 million.

⁽⁴⁾ In May 2023, the Company exercised the purchase options on STI Grace and STI Jermyn on the 2021 CSSC Lease Financing and repaid the aggregate outstanding lease obligation of $46.9 million as part of these transactions.

⁽⁵⁾ In May and June 2023, the Company exercised the purchase options on STI Lavender, STI Magnetic, STI Marshall, STI Lobelia, STI Magic, STI Mystery, STI Marvel, STI Mythic, and STI Magister on the IFRS 16 - Leases - $670.0 Million lease financing and repaid the aggregate outstanding lease obligation of $225.5 million as part of these transactions. In July 2023, the Company exercised the purchase options on STI Miracle, STI Maestro, STI Mighty, STI Modest, STI Maverick, and STI Millennia on the IFRS 16 - Leases - $670.0 Million lease financing and repaid the aggregate outstanding lease obligation of $143.6 million as part of these transactions.

⁽⁶⁾ We have agreed to, or executed an amendment agreement for the transitioning from LIBOR to SOFR. The weighted average credit adjustment spread of all these transition agreements (based on June 30, 2023 debt outstanding), which will be added to the margin on each facility, is 0.17%.

Set forth below are the estimated expected future principal repayments on the Company's outstanding indebtedness as of June 30, 2023, which includes principal amounts due under the Company's secured credit facilities, lease financing arrangements, Senior Notes Due 2025, and lease liabilities under IFRS 16 (which also include actual scheduled payments made from July 1, 2023 through July 31, 2023):

In millions of U.S. dollars		Repayments/maturities of unsecured debt		Vessel financings - announced vessel purchases and maturities in 2023 and 2024		Vessel financings - scheduled repayments, in addition to maturities in 2025 and thereafter		Total(1)		Repayments of new borrowing during July 2023(4)		Pro forma, including new borrowing
July 1, 2023 to July 31, 2023(2)		$	—	$	143.6	$	19.0	$	162.6	$	—	$	162.6
Q3 2023(3)			—		64.3		29.9		94.2		12.9		107.1
Q4 2023			—		—		54.2		54.2		12.9		67.1
Q1 2024			—		—		48.3		48.3		12.9		61.2
Q2 2024			—		—		53.7		53.7		12.9		66.6
Q3 2024(5)			—		42.7		46.5		89.2		12.9		102.1
Q4 2024(6)			—		38.2		48.0		86.2		12.9		99.1
2025 and thereafter			70.6		—		1,178.5		1,249.1		363.2		1,612.3
		$	70.6	$	288.8	$	1,478.1	$	1,837.5	$	440.6	$	2,278.1

⁽¹⁾ Amounts represent the principal payments due on the Company’s outstanding indebtedness as of June 30, 2023.

⁽²⁾ Repayments include the exercise of the purchase options on STI Miracle, STI Maestro, STI Mighty, STI Modest, STI Maverick, and STI Millennia on the IFRS 16 - Leases - $670.0 Million lease financing and the aggregate outstanding lease obligation of $143.6 million related to these vessels at the date of the purchases.

⁽³⁾ Repayments include the exercise the purchase options on two MR product tankers that are currently financed on the 2020 CMBFL Lease Financing (STI Leblon and STI Bosphorus). These purchases are expected to take place prior to the end of the third quarter of 2023 and result in an aggregate debt reduction of $36.5 million at the dates of the purchases. In October 2022, the Company gave notice to exercise the purchase option on STI Supreme on the Ocean Yield Lease Financing. The transaction is expected to occur in the third quarter of 2023 resulting in a debt reduction of $27.8 million.

⁽⁴⁾ Repayments include the 2023 $1.0 Billion Credit Facility which was executed in July 2023. Upon execution, $440.6 million was drawn from this facility (split evenly between the term and revolving portions) to finance 21 of the Company’s unencumbered vessels (17 MRs and four LR2s). This facility has a final maturity of June 30, 2028. The amounts drawn thus far are expected to be repaid in aggregate repayments of $12.9 million per quarter for the first two years, $8.7 million per quarter in years three through five, with a balloon payment at maturity, where the term loan portion for each vessel shall be repaid in full prior to the reduction of the revolver for each vessel.

⁽⁵⁾ Repayments include (i) $15.0 million, inclusive of the scheduled purchase options, on three MR product tankers (STI Topaz, STI Ruby, and STI Garnet), which are currently financed under the BCFL Lease Financing (MRs); and (ii) $27.7 million for the scheduled maturity payments on the 2019 DNB / GIEK Credit Facility.

⁽⁶⁾ Repayments include (i) $10.2 million, inclusive of the scheduled purchase options, on two MR product tankers (STI Onyx and STI Amber), which are currently financed under the BCFL Lease Financing (MRs); and (ii) $28.0 million for the scheduled maturity payments on the Hamburg Commercial Credit Facility.

Explanation of Variances on the Second Quarter of 2023 Financial Results Compared to the Second Quarter of 2022

For the three months ended June 30, 2023, the Company recorded net income of $132.4 million compared to net income of $191.1 million for the three months ended June 30, 2022. The following were the significant changes between the two periods:

• TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot voyages, time charters, and pool charters), and it provides useful information to investors and management. The following table sets forth TCE revenue for the three months ended June 30, 2023 and 2022:

			For the three months ended June 30,
In thousands of U.S. dollars				2023				2022
	Vessel revenue		$	329,299			$	405,073
	Voyage expenses			(1,744	)			(23,485	)
	TCE revenue		$	327,555			$	381,588

• TCE revenue for the three months ended June 30, 2023 decreased by $54.0 million to $327.6 million, from $381.6 million for the three months ended June 30, 2022. Overall average TCE revenue per day decreased to $32,154 per day during the three months ended June 30, 2023, from $36,006 per day during the three months ended June 30, 2022.   The average number of vessels was 113.0 during the three months end June 30, 2023 as compared to 119.9 during the three months ended June 30, 2022.   The decrease in the average number of vessels was due to the previously disclosed sales of 18 vessels during the year ended December 31, 2022.
  • TCE revenue for the three months ended June 30, 2023 was robust despite a decline in daily TCE rates when compared to the same period in the prior year. The second quarter of 2022 reflected several key events and market conditions (discussed below), which provided multiple catalysts simultaneously and resulted in a counter-seasonal spike in daily TCE rates. The second quarter of 2023 (particularly the latter half) reflected a more normalized seasonal pattern whereby extended refinery maintenance, lower refining margins and a reduction in arbitrage opportunities all led to reduced refinery throughput and decreased volumes from major export regions. Nevertheless, on a seasonally adjusted basis, demand for the Company's vessels remained resilient, driven by low inventory levels, a modest newbuilding orderbook (with a dearth of deliveries expected in the next two years), and growing underlying consumption for refined petroleum products.
  • TCE revenue for the three months ended June 30, 2022 reflected a structural change in the supply and demand balance for product tankers. A confluence of events served as a catalyst to a substantial increase in ton-mile demand beginning in March 2022. First, the continued easing of COVID-19 restrictions around the globe resulted in increased personal mobility thus stimulating underlying demand for refined petroleum products. Second, record refining margins combined with low global refined petroleum product inventories incentivized refiners to increase and maintain high utilization levels, which drove substantial increases in refined petroleum product export volumes throughout the world. Third, the volatility brought on by the ongoing conflict in Ukraine has disrupted supply chains for crude oil and refined petroleum products, changing volumes and trade routes, and thus increasing ton-mile demand for refined petroleum products.

The Company also had an increased number of vessels operating outside of the Scorpio pools during the three months ended June 30, 2022, which led to an increase in voyage revenue and voyage expenses for that period.

• Vessel operating costs for the three months ended June 30, 2023 increased by $1.9 million to $78.9 million, from $76.9 million for the three months ended June 30, 2022. Vessel operating costs per vessel per day increased to $7,669 per day for the three months ended June 30, 2023 from $7,048 per day for the three months ended June 30, 2022. General inflationary pressures were the main driver behind the increase, as vessel operating costs per day increased across all vessel classes with the largest increases affecting certain crewing expenses, spares and stores expenses. The aggregate increase is offset by the sale of 18 owned or lease financed vessels during the year ended December 31, 2022 (16 of which closed during the first half of the year and two in the second half of 2022).
• Depreciation expense – owned or sale leaseback vessels for the three months ended June 30, 2023 increased by $1.1 million to $42.2 million, from $41.1 million for the three months ended June 30, 2022. This increase was attributable to the exercise of purchase options on nine lease financed vessels during the second quarter of 2023 that were previously accounted for as IFRS 16 - Leases. The carrying value of these vessels was reclassified to Vessels from Right of Use Assets on the Company's balance sheet on the date of purchase. Depreciation expense going forward from the date of repurchase will be recorded as a part of owned vessels and will not change significantly. This increase was offset by the sale of 17 of the Company's owned or sale leaseback vessels during the year ended December 31, 2022 (16 of which closed during the first half of 2022). These vessels were written down to their net realizable value upon being designated as held for sale, and depreciation expense ceased being recorded upon that designation.
• Depreciation expense - right of use assets for the three months ended June 30, 2023 decreased by $1.3 million to $8.5 million from $9.8 million for the three months ended June 30, 2022. Depreciation expense - right of use assets reflects the straight-line depreciation expense recorded under IFRS 16 - Leases. This decrease was attributable to the exercise of purchase options on nine lease financed vessels during the second quarter of 2023 that were previously accounted for as IFRS 16 - Leases. The carrying value of these vessels was reclassified to Vessels from Right of Use Assets on the Company's balance sheet on the date of purchase. Depreciation expense going forward from the date of repurchase will be recorded as part of owned vessels. The decrease is also attributable to the sale of one of the Company's right of use asset vessels which was written down to its net realizable value upon being designated as held for sale during the first quarter of 2022, and depreciation expense ceased being recorded upon that designation. The Company had four LR2s and 17 MRs that were accounted for under IFRS 16 - Leases for all or a portion of the three months ended June 30, 2023.
• General and administrative expenses for the three months ended June 30, 2023, increased by $4.4 million to $27.2 million, from $22.8 million for the three months ended June 30, 2022. This increase was primarily due to an increase in the amortization of restricted stock awards as a result of a recent grant, the value of which is determined based on the Company's stock price on the date of the grant. The awards granted to employees vest ratably in years three, four, and five following the initial grant.
• Financial expenses for the three months ended June 30, 2023 increased by $3.0 million to $43.7 million, from $40.7 million for the three months ended June 30, 2022. This increase was primarily attributable to increases in benchmark rates, primarily LIBOR. This increase was partially offset by the overall reduction in the Company's average indebtedness to $2.0 billion from $2.8 billion during the three months ended June 30, 2023 as compared to the three months ended June 30, 2022, arising from the aforementioned sales of 18 vessels (and repayments of the related debt or lease financing obligations), the exercise of purchase options on 39 lease financed vessels (six in August 2022, 16 in December 2022, four in January 2023, one in March 2023, six in May 2023, and six in June 2023), the maturity of the Convertible Notes Due 2022 in May 2022 and the conversion of the Convertible Notes Due 2025 in December 2022.
  
  Additionally, the Company recorded $0.9 million of debt extinguishment related costs during the three months ended June 30, 2023, as compared to $3.9 million during the three months ended June 30, 2022. This was accompanied by an aggregate decrease of $4.1 million in the amortization of deferred financing fees, accretion on both the convertible notes, and debt assumed in business combinations, which were $1.7 million during the three months ended June 30, 2023 as compared to $5.8 million during the three months ended June 30, 2022. The decrease was primarily related to maturity and conversion of the convertible notes during 2022, as noted above.

	Scorpio Tankers Inc. and Subsidiaries Condensed Consolidated Statements of Income (unaudited)
		For the three months ended June 30,								For the six months ended June 30,
In thousands of U.S. dollars except per share and share data			2023				2022				2023				2022
Revenue
	Vessel revenue	$	329,299			$	405,073			$	713,730			$	579,120
Operating expenses
	Vessel operating costs		(78,858	)			(76,923	)			(152,532	)			(161,755	)
	Voyage expenses		(1,744	)			(23,485	)			(9,013	)			(25,508	)
	Depreciation - owned or sale leaseback vessels		(42,197	)			(41,051	)			(82,688	)			(85,159	)
	Depreciation - right of use assets		(8,513	)			(9,768	)			(18,003	)			(19,488	)
	General and administrative expenses		(27,209	)			(22,803	)			(49,480	)			(35,257	)
	Net loss on sales of vessels		—				(1,480	)			—				(69,218	)
	Total operating expenses		(158,521	)			(175,510	)			(311,716	)			(396,385	)
Operating income			170,778				229,563				402,014				182,735
Other (expenses) and income, net
	Financial expenses		(43,720	)			(40,709	)			(87,252	)			(78,710	)
	Financial income		4,359				836				8,544				1,024
	Other income, net		986				1,441				2,332				1,634
	Total other expense, net		(38,375	)			(38,432	)			(76,376	)			(76,052	)
Net income		$	132,403			$	191,131			$	325,638			$	106,683
Earnings per share
	Basic	$	2.50			$	3.44			$	5.93			$	1.92
	Diluted	$	2.40			$	3.06			$	5.69			$	1.84
	Basic weighted average shares outstanding		53,040,031				55,594,623				54,926,939				55,502,389
	Diluted weighted average shares outstanding (1)		55,228,080				64,419,318				57,186,103				64,611,651

⁽¹⁾ The computation of diluted earnings per share for the three months ended June 30, 2023 includes the effect of potentially dilutive unvested shares of restricted stock. The computation of diluted earnings per share for the three months ended June 30, 2022 includes the effect of potentially dilutive unvested shares of restricted stock and the Convertible Notes Due 2022 (which were repaid in full upon maturity in May 2022) and Convertible Notes Due 2025 (which were fully converted to common shares in December 2022).

Scorpio Tankers Inc. and Subsidiaries Condensed Consolidated Balance Sheets (unaudited)
	As of
In thousands of U.S. dollars	June 30, 2023				December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	313,923			$	376,870
Accounts receivable		201,568				276,700
Prepaid expenses and other current assets		10,667				18,159
Inventories		8,506				15,620
Assets held for sale		24,561				—
Total current assets		559,225				687,349
Non-current assets
Vessels and drydock		3,319,688				3,089,254
Right of use assets for vessels		348,797				689,826
Other assets		83,742				83,754
Goodwill		8,197				8,197
Restricted cash		783				783
Total non-current assets		3,761,207				3,871,814
Total assets	$	4,320,432			$	4,559,163
Current liabilities
Current portion of long-term debt	$	86,087			$	31,504
Lease liability - sale and leaseback vessels		128,823				269,145
Lease liability - IFRS 16		161,887				52,346
Accounts payable		11,220				28,748
Accrued expenses and other liabilities		72,893				91,508
Total current liabilities		460,910				473,251
Non-current liabilities
Long-term debt		569,327				264,106
Lease liability - sale and leaseback vessels		778,816				871,469
Lease liability - IFRS 16		86,981				443,529
Total non-current liabilities		1,435,124				1,579,104
Total liabilities		1,896,034				2,052,355
Shareholders' equity
Issued, authorized and fully paid-in share capital:
Share capital		745				727
Additional paid-in capital		3,066,288				3,049,732
Treasury shares		(1,040,489	)			(641,545	)
Retained earnings		397,854				97,894
Total shareholders' equity		2,424,398				2,506,808
Total liabilities and shareholders' equity	$	4,320,432			$	4,559,163

Scorpio Tankers Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (unaudited)
	For the six months ended June 30,
In thousands of U.S. dollars		2023				2022
Operating activities
Net income	$	325,638			$	106,683
Depreciation - owned or sale leaseback vessels		82,688				85,159
Depreciation - right of use assets		18,003				19,488
Amortization of restricted stock		16,574				10,676
Amortization of deferred financing fees		2,548				3,484
Non-cash debt extinguishment costs		824				4,543
Accretion of convertible notes		—				7,748
Net loss on sales of vessels		—				69,218
Accretion of fair value measurement on debt assumed in business combinations		656				1,396
Gain on Convertible Notes transactions		—				(412	)
Share of income from dual fuel tanker joint venture		(2,395	)			(133	)
		444,536				307,850
Changes in assets and liabilities:
Decrease in inventories		7,114				5,873
Decrease / (increase) in accounts receivable		75,132				(166,834	)
Decrease / (increase) in prepaid expenses and other current assets		7,492				(4,583	)
Decrease / (increase) in other assets		918				(185	)
Decrease in accounts payable		(16,497	)			(20,740	)
(Decrease) / increase in accrued expenses		(17,346	)			18,421
		56,813				(168,048	)
Net cash inflow from operating activities		501,349				139,802
Investing activities
Net proceeds from sales of vessels		—				541,187
Distributions from dual fuel tanker joint venture		1,489				240
Drydock, scrubber, ballast water treatment system and other vessel related payments (owned, leased financed and bareboat-in vessels)		(13,545	)			(22,779	)
Net cash (outflow) / inflow from investing activities		(12,056	)			518,648
Financing activities
Debt repayments		(260,950	)			(507,764	)
Issuance of debt		391,482				122,637
Debt issuance costs		(7,524	)			(1,621	)
Principal repayments on lease liability - IFRS 16		(250,626	)			(52,568	)
Repurchase / repayment of convertible notes		—				(82,251	)
Decrease in restricted cash		—				4,008
Dividends paid		(25,678	)			(11,778	)
Repurchase of common stock		(398,944	)			—
Net cash outflow from financing activities		(552,240	)			(529,337	)
(Decrease) / increase in cash and cash equivalents		(62,947	)			129,113
Cash and cash equivalents at January 1,		376,870				230,415
Cash and cash equivalents at June 30,	$	313,923			$	359,528

Scorpio Tankers Inc. and Subsidiaries Other operating data for the six months ended June 30, 2023 and 2022 (unaudited)
		For the three months ended June 30,						For the six months ended June 30,
			2023			2022			2023			2022
Adjusted EBITDA(1) (in thousands of U.S. dollars except Fleet Data)		$	235,227		$	289,485		$	521,611		$	368,910
Average Daily Results
Fleet
TCE per revenue day (2)		$	32,154		$	36,006		$	34,810		$	25,444
Vessel operating costs per day (3)		$	7,669		$	7,048		$	7,458		$	7,173
Average number of vessels			113.0			119.9			113.0			124.6
LR2
TCE per revenue day (2)		$	39,526		$	36,065		$	41,395		$	25,287
Vessel operating costs per day (3)		$	8,070		$	7,287		$	7,785		$	7,258
Average number of vessels			39.0			41.9			39.0			41.9
LR1
TCE per revenue day (2)		N/A			$	22,345		N/A			$	13,690
Vessel operating costs per day (3)		N/A			$	7,708		N/A			$	7,286
Average number of vessels		N/A				2.8		N/A				6.7
MR
TCE per revenue day (2)		$	28,586		$	34,904		$	31,037		$	25,583
Vessel operating costs per day (3)		$	7,563		$	6,967		$	7,337		$	7,166
Average number of vessels			60.0			61.3			60.0			62.0
Handymax
TCE per revenue day (2)		$	26,784		$	41,831		$	32,534		$	29,119
Vessel operating costs per day (3)		$	7,064		$	6,554		$	7,083		$	6,890
Average number of vessels			14.0			14.0			14.0			14.0
Capital Expenditures
Drydock, scrubber, ballast water treatment system and other vessel related payments (in thousands of U.S. dollars)		$	5,062		$	8,500		$	13,545		$	22,779

(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 vessels are part of the fleet less the number of days vessels are off-hire for drydock and repairs.
(3)	Vessel operating costs per day represent vessel operating costs divided by the number of operating days during the period. Operating days are the total number of available days in a period with respect to vessels that are owned, operating under a lease financing arrangement, or bareboat chartered-in, before deducting available days due to off-hire days and days in drydock. Operating days is a measurement that is only applicable to vessels that are owned, operating under a lease financing arrangement, or bareboat chartered-in, not time chartered-in vessels.

Fleet list as of August 1, 2023
	Vessel Name		Year Built		DWT		Ice class		Employment		Vessel type		Scrubber
	Owned, sale leaseback and bareboat chartered-in vessels
1	STI Brixton		2014		38,734		1A		SHTP (1)		Handymax		N/A
2	STI Comandante		2014		38,734		1A		SHTP (1)		Handymax		N/A
3	STI Pimlico		2014		38,734		1A		SHTP (1)		Handymax		N/A
4	STI Hackney		2014		38,734		1A		SHTP (1)		Handymax		N/A
5	STI Acton		2014		38,734		1A		SHTP (1)		Handymax		N/A
6	STI Fulham		2014		38,734		1A		SHTP (1)		Handymax		N/A
7	STI Camden		2014		38,734		1A		SHTP (1)		Handymax		N/A
8	STI Battersea		2014		38,734		1A		SHTP (1)		Handymax		N/A
9	STI Wembley		2014		38,734		1A		SHTP (1)		Handymax		N/A
10	STI Finchley		2014		38,734		1A		SHTP (1)		Handymax		N/A
11	STI Clapham		2014		38,734		1A		SHTP (1)		Handymax		N/A
12	STI Poplar		2014		38,734		1A		SHTP (1)		Handymax		N/A
13	STI Hammersmith		2015		38,734		1A		SHTP (1)		Handymax		N/A
14	STI Rotherhithe		2015		38,734		1A		SHTP (1)		Handymax		N/A
15	STI Amber		2012		49,990		—		SMRP (2)		MR		Yes
16	STI Topaz		2012		49,990		—		SMRP (2)		MR		Yes
17	STI Ruby		2012		49,990		—		SMRP (2)		MR		Not Yet Installed
18	STI Garnet		2012		49,990		—		SMRP (2)		MR		Yes
19	STI Onyx		2012		49,990		—		SMRP (2)		MR		Yes
20	STI Duchessa		2014		49,990		—		Time Charter (4)		MR		Not Yet Installed
21	STI Opera		2014		49,990		—		SMRP (2)		MR		Not Yet Installed
22	STI Texas City		2014		49,990		—		SMRP (2)		MR		Yes
23	STI Meraux		2014		49,990		—		SMRP (2)		MR		Yes
24	STI San Antonio		2014		49,990		—		SMRP (2)		MR		Yes
25	STI Venere		2014		49,990		—		SMRP (2)		MR		Yes
26	STI Virtus		2014		49,990		—		SMRP (2)		MR		Yes
27	STI Aqua		2014		49,990		—		SMRP (2)		MR		Yes
28	STI Dama		2014		49,990		—		SMRP (2)		MR		Yes
29	STI Regina		2014		49,990		—		SMRP (2)		MR		Yes
30	STI St. Charles		2014		49,990		—		SMRP (2)		MR		Yes
31	STI Mayfair		2014		49,990		—		SMRP (2)		MR		Yes
32	STI Yorkville		2014		49,990		—		SMRP (2)		MR		Yes
33	STI Milwaukee		2014		49,990		—		SMRP (2)		MR		Yes
34	STI Battery		2014		49,990		—		SMRP (2)		MR		Yes
35	STI Soho		2014		49,990		—		SMRP (2)		MR		Yes
36	STI Memphis		2014		49,990		—		Time Charter (5)		MR		Yes
37	STI Tribeca		2015		49,990		—		SMRP (2)		MR		Yes
38	STI Gramercy		2015		49,990		—		SMRP (2)		MR		Yes
39	STI Bronx		2015		49,990		—		SMRP (2)		MR		Yes
40	STI Pontiac		2015		49,990		—		SMRP (2)		MR		Yes
41	STI Manhattan		2015		49,990		—		SMRP (2)		MR		Yes
42	STI Queens		2015		49,990		—		SMRP (2)		MR		Yes
43	STI Osceola		2015		49,990		—		SMRP (2)		MR		Yes
44	STI Notting Hill		2015		49,687		1B		SMRP (2)		MR		Yes
45	STI Seneca		2015		49,990		—		SMRP (2)		MR		Yes
46	STI Westminster		2015		49,687		1B		SMRP (2)		MR		Yes
47	STI Brooklyn		2015		49,990		—		SMRP (2)		MR		Yes
48	STI Black Hawk		2015		49,990		—		SMRP (2)		MR		Yes
49	STI Galata		2017		49,990		—		SMRP (2)		MR		Yes
50	STI Bosphorus		2017		49,990		—		SMRP (2)		MR		Not Yet Installed
51	STI Leblon		2017		49,990		—		SMRP (2)		MR		Yes
52	STI La Boca		2017		49,990		—		SMRP (2)		MR		Yes
53	STI San Telmo		2017		49,990		1B		SMRP (2)		MR		Not Yet Installed
54	STI Donald C Trauscht		2017		49,990		1B		SMRP (2)		MR		Not Yet Installed
55	STI Esles II		2018		49,990		1B		SMRP (2)		MR		Not Yet Installed
56	STI Jardins		2018		49,990		1B		SMRP (2)		MR		Not Yet Installed
57	STI Magic		2019		50,000		—		SMRP (2)		MR		Yes
58	STI Mystery		2019		50,000		—		SMRP (2)		MR		Yes
59	STI Marvel		2019		50,000		—		SMRP (2)		MR		Yes
60	STI Magnetic		2019		50,000		—		Time Charter (6)		MR		Yes
61	STI Millennia		2019		50,000		—		SMRP (2)		MR		Yes
62	STI Magister		2019		50,000		—		SMRP (2)		MR		Yes
63	STI Mythic		2019		50,000		—		SMRP (2)		MR		Yes
64	STI Marshall		2019		50,000		—		Time Charter (7)		MR		Yes
65	STI Modest		2019		50,000		—		SMRP (2)		MR		Yes
66	STI Maverick		2019		50,000		—		SMRP (2)		MR		Yes
67	STI Miracle		2020		50,000		—		Time Charter (8)		MR		Yes
68	STI Maestro		2020		50,000		—		SMRP (2)		MR		Yes
69	STI Mighty		2020		50,000		—		SMRP (2)		MR		Yes
70	STI Maximus		2020		50,000		—		SMRP (2)		MR		Yes
71	STI Elysees		2014		109,999		—		SLR2P (3)		LR2		Yes
72	STI Madison		2014		109,999		—		SLR2P (3)		LR2		Yes
73	STI Park		2014		109,999		—		SLR2P (3)		LR2		Yes
74	STI Orchard		2014		109,999		—		SLR2P (3)		LR2		Yes
75	STI Sloane		2014		109,999		—		SLR2P (3)		LR2		Yes
76	STI Broadway		2014		109,999		—		SLR2P (3)		LR2		Yes
77	STI Condotti		2014		109,999		—		SLR2P (3)		LR2		Yes
78	STI Rose		2015		109,999		—		SLR2P (3)		LR2		Yes
79	STI Veneto		2015		109,999		—		SLR2P (3)		LR2		Yes
80	STI Alexis		2015		109,999		—		SLR2P (3)		LR2		Yes
81	STI Winnie		2015		109,999		—		SLR2P (3)		LR2		Yes
82	STI Oxford		2015		109,999		—		SLR2P (3)		LR2		Yes
83	STI Lauren		2015		109,999		—		SLR2P (3)		LR2		Yes
84	STI Connaught		2015		109,999		—		Time Charter (9)		LR2		Yes
85	STI Spiga		2015		109,999		—		SLR2P (3)		LR2		Yes
86	STI Kingsway		2015		109,999		—		SLR2P (3)		LR2		Yes
87	STI Solidarity		2015		109,999		—		SLR2P (3)		LR2		Yes
88	STI Lombard		2015		109,999		—		Time Charter (10)		LR2		Yes
89	STI Grace		2016		109,999		—		Time Charter (11)		LR2		Yes
90	STI Jermyn		2016		109,999		—		Time Charter (12)		LR2		Yes
91	STI Sanctity		2016		109,999		—		SLR2P (3)		LR2		Yes
92	STI Solace		2016		109,999		—		SLR2P (3)		LR2		Yes
93	STI Stability		2016		109,999		—		SLR2P (3)		LR2		Yes
94	STI Steadfast		2016		109,999		—		SLR2P (3)		LR2		Yes
95	STI Supreme		2016		109,999		—		SLR2P (3)		LR2		Yes
96	STI Symphony		2016		109,999		—		SLR2P (3)		LR2		Yes
97	STI Gallantry		2016		113,000		—		SLR2P (3)		LR2		Yes
98	STI Goal		2016		113,000		—		SLR2P (3)		LR2		Yes
99	STI Guard		2016		113,000		—		Time Charter (13)		LR2		Yes
100	STI Guide		2016		113,000		—		Time Charter (14)		LR2		Yes
101	STI Selatar		2017		109,999		—		SLR2P (3)		LR2		Yes
102	STI Rambla		2017		109,999		—		SLR2P (3)		LR2		Yes
103	STI Gauntlet		2017		113,000		—		Time Charter (15)		LR2		Yes
104	STI Gladiator		2017		113,000		—		Time Charter (14)		LR2		Yes
105	STI Gratitude		2017		113,000		—		Time Charter (16)		LR2		Yes
106	STI Lobelia		2019		110,000		—		SLR2P (3)		LR2		Yes
107	STI Lotus		2019		110,000		—		SLR2P (3)		LR2		Yes
108	STI Lily		2019		110,000		—		SLR2P (3)		LR2		Yes
109	STI Lavender		2019		110,000		—		Time Charter (17)		LR2		Yes
110	STI Beryl		2013		49,990		—		SMRP (2)		MR		Not Yet Installed
111	STI Le Rocher		2013		49,990		—		SMRP (2)		MR		Not Yet Installed
112	STI Larvotto		2013		49,990		—		SMRP (2)		MR		Not Yet Installed
	Total Fleet DWT				7,802,192

(1	)	This vessel operates in, or is expected to operate in, the Scorpio Handymax Tanker Pool, or SHTP. SHTP is a Scorpio Pool and is operated by Scorpio Commercial Management S.A.M. (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, or SMRP. SMRP is a Scorpio Pool and is operated by SCM. SMRP and SCM are related parties to the Company.
(3	)	This vessel operates in, or is expected to operate in, the Scorpio LR2 Pool, or SLR2P. SLR2P is a Scorpio Pool and is operated by SCM. SLR2P and SCM are related parties to the Company.
(4	)	This vessel commenced a time charter in October 2022 for three years at an average rate of $25,000 per day.
(5	)	This vessel commenced a time charter in June 2022 for three years at an average rate of $21,000 per day. The daily rate is the average rate over the three-year period, which is payable during the first six months at $30,000 per day, the next six months are payable at $20,000 per day, and years two and three are payable at $19,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $22,500 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $24,000 per day.
(6	)	This vessel commenced a time charter in July 2022 for three years at an average rate of $23,000 per day. The daily rate is the average rate over the three-year period, which is payable in years one, two, and three at $30,000 per day, $20,000 per day, and $19,000 per day, respectively. The charterers have the option to extend the term of this agreement for an additional year at $24,500 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $26,000 per day.
(7	)	This vessel commenced a time charter in July 2022 for three years at a rate of $23,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $24,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $25,000 per day. If this second option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $26,000 per day.
(8	)	This vessel commenced a time charter in August 2022 for three years at a rate of $21,000 per day. The daily rate is the average rate over the three-year period, which is payable during the first six months at $30,000 per day, the next six months are payable at $20,000 per day, and years two and three are payable at $19,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $22,500 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $24,000 per day.
(9	)	In April 2023, STI Connaught replaced STI Goal on a time charter which initially commenced in August 2022 for three years at a rate of $30,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $32,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $34,000 per day.
(10	)	This vessel commenced a time charter in September 2022 for three years at an average rate of $32,750 per day. The charterer has the option to extend the term of this agreement for an additional year at $34,750 per day. If this option is declared, the charterer has the option to further extend the term of this agreement for an additional year at $36,750 per day.
(11	)	This vessel commenced a time charter in December 2022 for three years at an average rate of $37,500 per day. The daily rate is the average rate over the three-year period, which is payable during the first six months at $47,000 per day, the next 6 months are payable at $28,000 per day, and years two and three are payable at $37,500 per day.
(12	)	This vessel commenced a time charter in April 2023 for three years at a rate of $40,000 per day. The charterer has the option to extend the term of this agreement for an additional year at $42,500 per day.
(13	)	This vessel commenced a time charter in July 2022 for five years at a rate of $28,000 per day. The charterers have the option to convert the term of this agreement to three years at $30,000 per day, which must be declared within 30 months after the delivery date.
(14	)	This vessel commenced a time charter in July 2022 for three years at an average rate of $28,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $31,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $33,000 per day.
(15	)	This vessel commenced a time charter in November 2022 for three years at an average rate of $32,750 per day.
(16	)	This vessel commenced a time charter in May 2022 for three years at an average rate of $28,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $31,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $33,000 per day.
(17	)	This vessel commenced a time charter in December 2022 for three years at an average rate of $35,000 per day.

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 the amount of dividends, if any, depends on the Company's earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.

The Company's dividends paid during 2022 and 2023 were as follows:

Date paid	Dividend per common share
March 2022	$0.10
June 2022	$0.10
September 2022	$0.10
December 2022	$0.10
March 2023	$0.20
June 2023	$0.25

On August 1, 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.25 per common share, with a payment date of September 15, 2023 to all shareholders of record as of August 15, 2023 (the record date). As of August 1, 2023, there were 54,493,654 common shares of the Company outstanding.

Conflict in Ukraine

The ongoing military conflict in Ukraine has had a significant direct and indirect impact on the trade of refined petroleum products. This conflict has resulted in the United States, the United Kingdom, and the European Union countries, among other countries and jurisdictions, implementing sanctions and executive orders against citizens, entities, and activities connected to Russia. Some of these sanctions and executive orders target the Russian oil sector, including a prohibition on the import of oil from Russia to the United States or the United Kingdom, and the European Union's recent ban on Russian crude oil and petroleum products which took effect in December 2022 and February 2023, respectively. The Company cannot foresee what other sanctions or executive orders may arise that affect the trade of petroleum products. Furthermore, the conflict and ensuing international response has disrupted the supply of Russian oil to the global market, and as a result, the price of oil and petroleum products has experienced significant volatility. The Company cannot predict what effect the higher price of oil and petroleum products will have on demand, and it is possible that the current conflict in Ukraine could adversely affect the Company's financial condition, results of operations, and future performance.

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns, lease finances or bareboat charters-in 112 product tankers (39 LR2 tankers, 59 MR tankers and 14 Handymax tankers) with an average age of 7.5 years. Additional information about the Company is available at the Company's website www.scorpiotankers.com. Information on the Company’s website does not constitute a part of and is not incorporated by reference into this press release.

Non-IFRS Measures

Reconciliation of IFRS Financial Information to Non-IFRS Financial Information

This press release describes time charter equivalent revenue, or TCE revenue, adjusted net income or loss, and adjusted EBITDA, which are not measures prepared in accordance with IFRS ("Non-IFRS" measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors and other users of our financial statements, such as our lenders, with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.

The Company believes that the presentation of TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful to investors or other users of our financial statements, such as our lenders, because they facilitate the comparability and the evaluation of companies in the Company’s industry. In addition, the Company believes that TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful in evaluating its operating performance compared to that of other companies in the Company’s industry. The Company’s definitions of TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA may not be the same as reported by other companies in the shipping industry or other industries.

TCE revenue, on a historical basis, is reconciled above in the section entitled "Explanation of Variances on the Second Quarter of 2023 Financial Results Compared to the Second Quarter of 2022". The Company has not provided a reconciliation of forward-looking TCE revenue because the most directly comparable IFRS measure on a forward-looking basis is not available to the Company without unreasonable effort.

Reconciliation of Net Income to Adjusted Net Income

			For the three months ended June 30, 2023
						Per share			Per share
In thousands of U.S. dollars except per share data			Amount			basic			diluted
	Net income		$	132,403		$	2.50		$	2.40
	Adjustment:
	Write-offs of deferred financing fees and debt extinguishment costs			939			0.02			0.02
	Adjusted net income		$	133,342		$	2.51	(1)	$	2.41	(1)

			For the three months ended June 30, 2022
							Per share				Per share
In thousands of U.S. dollars except per share data			Amount				basic				diluted
	Net income		$	191,131			$	3.44			$	3.06
	Adjustments:
	Loss on sales of vessels			1,480			$	0.03			$	0.02
	Write-offs of deferred financing fees and debt extinguishment costs			3,929			$	0.07			$	0.06
	Gain on repurchase of Convertible Notes			(412	)		$	(0.01	)		$	(0.01	)
	Adjusted net income		$	196,128			$	3.53			$	3.13

			For the six months ended June 30, 2023
						Per share			Per share
In thousands of U.S. dollars except per share data			Amount			basic			diluted
	Net income		$	325,638		$	5.93		$	5.69
	Adjustment:
	Write-offs of deferred financing fees and debt extinguishment costs			3,254			0.06			0.06
	Adjusted net income		$	328,892		$	5.99		$	5.75

			For the six months ended June 30, 2022
							Per share				Per share
In thousands of U.S. dollars except per share data			Amount				basic				diluted
	Net income		$	106,683			$	1.92			$	1.84
	Adjustments:
	Loss on sales of vessels			69,218			$	1.25			$	1.07
	Write-offs of deferred financing fees and debt extinguishment costs			5,784			$	0.10			$	0.09
	Gain on repurchase of Convertible Notes		$	(412	)		$	(0.01	)		$	(0.01	)
	Adjusted net income		$	181,273			$	3.27		(1)	$	2.99

⁽¹⁾ Summation difference due to rounding

Reconciliation of Net Income to Adjusted EBITDA

			For the three months ended June 30,								For the six months ended June 30,
In thousands of U.S. dollars				2023				2022				2023				2022
	Net Income		$	132,403			$	191,131			$	325,638			$	106,683
	Financial expenses			43,720				40,709				87,252				78,710
	Financial income			(4,359	)			(836	)			(8,544	)			(1,024	)
	Depreciation - owned or lease financed vessels			42,197				41,051				82,688				85,159
	Depreciation - right of use assets			8,513				9,768				18,003				19,488
	Amortization of restricted stock			12,753				6,182				16,574				10,676
	Net loss on sales of vessels			—				1,480				—				69,218
	Adjusted EBITDA		$	235,227			$	289,485			$	521,611			$	368,910

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," "expect," "anticipate," "estimate," "intend," "plan," "target," "project," "likely," "may," "will," "would," "could" 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, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although management believes 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 the Company’s control, there can be no assurance that the Company will achieve or accomplish these expectations, beliefs or projections. The Company undertakes no obligation, and specifically declines 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 the Company’s view, could cause actual results to differ materially from those discussed in the forward‐looking statements include unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the continuing impacts of the novel coronavirus (COVID-19) pandemic, including its effect on demand for petroleum products and the transportation thereof, expansion and growth of the Company’s operations, risks relating to the integration of assets or operations of entities that it has or may in the future acquire and the possibility that the anticipated synergies and other benefits of such acquisitions may not be realized within expected timeframes or at all, the failure of counterparties to fully perform their contracts with the Company, 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 the Company’s operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company’s 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, including the impact of the conflict in Ukraine, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off‐hires, and other factors. Please see the Company's filings with the SEC for a more complete discussion of certain of these and other risks and uncertainties.

Contact Information

Scorpio Tankers Inc.
James Doyle - Head of Corporate Development & Investor Relations
Tel: +1 646-432-1678
Email: investor.relations@scorpiotankers.com

FAQ

What is Scorpio Tankers Inc.'s net income for the three months ended June 30, 2023?

Scorpio Tankers Inc. reported net income of $132.4 million for the three months ended June 30, 2023.

What dividend did Scorpio Tankers Inc. declare?

Scorpio Tankers Inc. declared a quarterly cash dividend of $0.25 per share.

What financial activities did Scorpio Tankers Inc. undertake?

Scorpio Tankers Inc. executed a $1.0 billion term loan and revolving credit facility, repurchased over 5.8 million common shares, and exercised purchase options on various product tankers.

What was the average daily Time Charter Equivalent (TCE) revenue for the third quarter of 2023?

The average daily TCE revenue for the third quarter of 2023 was disclosed as $27,000 for LR2 vessels and $30,500 for spot market time charters, among other details.