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Scorpio Tankers Inc. Announces Financial Results for the Third Quarter of 2020 and Declaration of a Quarterly Dividend  

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Scorpio Tankers (NYSE: STNG) reported a net loss of $20.2 million for Q3 2020, an improvement from a $45.3 million loss in Q3 2019. Adjusted net loss per share remains unchanged at $0.37. For the first nine months of 2020, the company achieved a net income of $170.4 million, translating to $3.11 earnings per share. A quarterly cash dividend of $0.10 per share was declared, set to be paid on December 14, 2020. Additionally, the company aims to enhance liquidity with approximately $63.9 million from refinancing efforts and has repurchased $52.3 million of convertible notes.

Positive
  • Achieved net income of $170.4 million for the nine months ended September 30, 2020.
  • Quarterly dividend declared at $0.10 per share, payable December 14, 2020.
  • Increased liquidity by approximately $63.9 million through refinancing and financing efforts.
Negative
  • Net loss of $20.2 million in Q3 2020, although improved year-over-year.
  • Average daily Time Charter Equivalent (TCE) revenue decreased across several vessel types in Q3 2020.

MONACO, Nov. 05, 2020 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers" or the "Company") today reported its results for the three and nine months ended September 30, 2020.  The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.10 per share on the Company’s common stock.

Results for the three months ended September 30, 2020 and 2019       

For the three months ended September 30, 2020, the Company had a net loss of $20.2 million, or $0.37 basic and diluted loss per share.  For the three months ended September 30, 2020, the Company had an adjusted net loss (see Non-IFRS Measures section below) of $20.2 million, or $0.37 basic and diluted loss per share, which excludes from net loss (i) a $1.0 million, or $0.02 per basic and diluted share, gain recorded on the Company's repurchase of its Convertible Notes due 2022 and (ii) a $1.0 million, or $0.02 per basic and diluted share, write-off of deferred financing fees and unamortized fair value discounts on sale and leaseback liabilities that were refinanced during the period.

For the three months ended September 30, 2019, the Company had a net loss of $45.3 million, or $0.93 basic and diluted loss per share.  For the three months ended September 30, 2019, the Company had an adjusted net loss (see Non-IFRS Measures section below) of $44.8 million, or $0.92 basic and diluted loss per share, which excludes from the net loss a $0.4 million, or $0.01 per basic and diluted share, write-off of deferred financing fees.

Results for the nine months ended September 30, 2020 and 2019       

For the nine months ended September 30, 2020, the Company had net income of $170.4 million, or $3.11 basic and $2.95 diluted earnings per share.  For the nine months ended September 30, 2020, the Company had an adjusted net income (see Non-IFRS Measures section below) of $170.6 million, or $3.11 basic and $2.95 diluted earnings per share, which excludes from net income (i) a $1.0 million, or $0.02 per basic and diluted share, gain recorded on the Company's repurchase of its Convertible Notes due 2022 and (ii) a $1.3 million, or $0.02 per basic and diluted share, write-off of deferred financing fees and unamortized fair value discounts on sale and leaseback liabilities that were refinanced during the period.

For the nine months ended September 30, 2019, the Company had a net loss of $60.5 million, or $1.25 basic and diluted loss per share.  For the nine months ended September 30, 2019, the Company had an adjusted net loss (see Non-IFRS Measures section below) of $59.8 million, or $1.24 basic and diluted loss per share, which excludes from the net loss a $0.7 million, or $0.01 per basic and diluted share, write-off of deferred financing fees.

Declaration of Dividend

On November 3, 2020, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about December 14, 2020 to all shareholders of record as of November 23, 2020 (the record date).  As of November 4, 2020, there were 58,000,147 common shares of the Company outstanding.

Summary of Third Quarter 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 pool voyages and time charters for the Company's vessels thus far in the fourth quarter of 2020 as of the date hereof (See footnotes to "Other operating data" table below for the definition of daily TCE revenue): 
 Total
PoolAverage daily TCE revenue% of Days
LR2$18,25051 %
LR1$12,50063 %
MR$11,00048 %
Handymax$8,50047 %
  • Below is a summary of the average daily TCE revenue earned by the Company's vessels in each of the pools during the third quarter of 2020:
PoolAverage daily TCE revenue
LR2$19,131
LR1$17,632
MR$13,530
Handymax$9,899
  • The Company has committed financing to increase liquidity by approximately $63.9 million, which includes:
    o $47.1 million from the refinancing of eight vessels (after the repayment of existing debt) 
    o $16.8 million from the drawdown of financing for scrubbers that have been previously paid for and installed (i.e. there are no additional payments needed in order to drawdown these funds)
    o These funds will be drawn down in the coming weeks
  • The Company is also in discussions with financial institutions to further increase liquidity by up to $75 million from the refinancing of 11 vessels.
  • In addition to the above, the Company has $44.2 million of additional liquidity available (after the repayment of existing debt) from previously announced financings that have been committed.  These drawdowns are expected to occur at varying points in the future as several of these financings are tied to scrubber installations on the Company’s vessels.
  • In the third quarter of 2020, the Company repurchased $52.3 million face value of its Convertible Notes due 2022 at an average price of $894.12 per $1,000 principal amount, or $46.7 million.
  • In September 2020, the Company acquired an aggregate of 1,170,000 of its common shares at an average price of $11.18 per share for a total of $13.1 million. 
  • In September 2020, the Company's Board of Directors authorized a new Securities Repurchase Program to purchase up to an aggregate of $250 million of securities which, in addition to the Company's common shares, currently consist of the Convertible Notes due 2022 and Senior Notes due 2025 (NYSE: SBBA).  The aforementioned repurchases of common stock and our convertible notes were executed under the previous securities repurchase program.  This program has since been terminated and any future purchases of the Company's securities will be made under the new $250 million securities repurchase program.
  • In September 2020, the Company took delivery of a scrubber-fitted MR product tanker, STI Maximus, under an eight-year bareboat charter agreement. The leasehold interest in this vessel was acquired as part of the transaction with Trafigura Maritime Logistics Pte. Ltd. (the “Trafigura Transaction”) that was announced in September 2019. The bareboat lease has similar terms and conditions as the other leased vessels in the Trafigura Transaction.

Diluted Weighted Number of Shares

Diluted earnings per share is determined using the if-converted method. Under this method, the Company assumes that its Convertible Notes due 2022, which were issued in May and July 2018, were converted into common shares at the beginning of each period and the interest and non-cash amortization expense associated with these notes of $3.4 million and $11.0 million, respectively, during the three and nine months ended September 30, 2020 were not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.

For the three and nine months ended September 30, 2020, the Company's basic weighted average number of shares were 54,905,361 and 54,800,402, respectively.  For the three and nine months ended September 30, 2020, the Company's diluted weighted average number of shares were 55,850,026 and 56,516,982 (which includes the potentially dilutive impact of unvested shares of restricted stock and excludes the impact of the Convertible Notes due 2022), respectively, and 60,486,468 and 61,578,016, respectively, under the if-converted method.  The Company's earnings per share for the nine months ended September 30, 2020 was calculated under the if-converted method as the result of this calculation was dilutive.  The Company's diluted loss per share for the three months ended September 30, 2020 was calculated using the basic weighted average number of shares outstanding, as the calculation using both diluted weighted average shares outstanding and under the if-converted method were anti-dilutive. 

Novel Coronavirus (COVID-19)

Since the beginning of calendar year 2020, the outbreak of COVID-19 that originated in China and that has spread to most developed nations of the world has resulted in numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus. These measures have resulted in a significant reduction in global economic activity and extreme volatility in the global financial and commodities markets (including oil).

While the reduction of economic activity significantly reduced global demand for oil and refined petroleum products, the extreme volatility in the oil markets and the steep contango that developed in the prices of oil and refined petroleum products in March 2020 resulted in record increases in spot TCE rates during the second quarter of 2020 as an abundance of arbitrage and floating storage opportunities opened up.  These market dynamics led to a build up of global oil and refined petroleum product inventories during that time period.  In June 2020, the underlying oil markets stabilized and these excess inventories began to unwind which, along with customary seasonal weakness, led to a reduction in spot TCE rates through the third quarter of 2020. 

We expect that the COVID-19 virus will continue to cause volatility in the commodities markets. The scale and duration of these circumstances is unknowable but could have a material impact on our earnings, cash flow and financial condition for the remainder of 2020 and beyond. An estimate of the impact on our results of operations and financial condition cannot be made at this time.

$250 Million Securities Repurchase Program

In May 2015, the Company's Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company's securities which, in addition to its common shares, currently consist of its Senior Notes due 2025 (NYSE: SBBA), which were issued in May 2020, and Convertible Notes due 2022, which were issued in May and July 2018.

  • Between July 1, 2020 and September 7, 2020, the Company repurchased $52.3 million face value of its Convertible Notes due 2022 at an average price of $894.12 per $1,000 principal amount, or $46.7 million.
  • In September 2020, the Company acquired an aggregate of 1,170,000 of its common shares at an average price of $11.18 per share for a total of $13.1 million.  The repurchased shares are being held as treasury shares.

In September 2020, 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 securities.  The aforementioned repurchases of common stock and our convertible notes were executed under the previous securities repurchase program which has since been terminated and any future purchases of the Company's securities will be made under the new $250 million securities repurchase program.

Conference Call

The Company has scheduled a conference call on November 5, 2020 at 9:00 AM Eastern Standard Time and 3:00 PM Central European Time.  The dial-in information is as follows:

US Dial-In Number: 1 (855) 861-2416
International Dial-In Number:  +1 (703) 736-7422
Conference ID:  9535429

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

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://edge.media-server.com/mmc/p/gpx2hp37.

Current Liquidity

As of November 4, 2020, the Company had $209.7 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 activity that occurred during the third quarter of 2020 and that is in progress as of October 1, 2020:

 Number of VesselsDrydock Ballast Water Treatment SystemsScrubbersAggregate Costs
($ in millions) (1)		Aggregate Off-hire
Days in Q3 2020
Completed in the third quarter of 2020      
LR24 2 1 4$14.5163
LR11 — — 1 2.564
MR6 3 3 6 22.1197
Handymax— — — — ——
 11 5 4 11$39.1424
       
In progress as of October 1, 2020      
LR23 3 — 3$11.190
LR1— — — — ——
MR1 1 1 1 4.556
Handymax— — — — ——
 4 4 1 4$15.6146

(1) Aggregate costs for vessels completed in the quarter represent the total costs incurred, some of which may have been incurred in prior periods.  Aggregate costs for vessels in progress as of October 1, 2020 represent the total costs incurred through that date, some of which may have been incurred in prior periods. 

Set forth below are the estimated expected payments to be made for the Company's drydocks, ballast water treatment system installations, and scrubber installations through 2020 (which also include actual payments made during the third quarter of 2020 and through November 4, 2020): 

In millions of U.S. dollars As of November 4, 2020 (1) (2)
   
Q4 2020 - payments made through November 4, 2020$3.1
Q4 2020 - remaining payments 17.2
Q1 2021 10.8
Q2 2021 7.5
Q3 2021 7.5
Q4 2021 14.5
FY 2022 49.0

(1) Includes estimated cash payments for drydocks, ballast water treatment system installations and scrubber installations.  These amounts include 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) Based upon the commitments received to date, which include the remaining availability under the 2020 $225.0 Million Credit Facility and certain financing transactions that have been previously announced, the Company expects to raise approximately $61 million of aggregate additional liquidity to finance the purchase and installations of scrubbers (after the repayment of existing debt) once all of the agreements are closed and drawn.  These drawdowns are expected to occur at varying points in the future as several of these financings are tied to scrubber installations on the Company’s vessels.

Set forth below are the estimated expected number of ships and estimated expected off-hire days for the Company's drydocks, ballast water treatment system installations, and scrubber installations (1):  

 Q4 2020 
 Ships Scheduled for (2):Off-hire
 Drydock Ballast Water Treatment SystemsScrubbersDays (3)
LR22  —  2  194  
LR11  —  —  20  
MR—  —  1  76  
Handymax—  —  —  —  
     
Total Q4 20203  —  3  290  
     
     
 Q1 2021 
 Ships Scheduled for (2):Off-hire
 DrydockBallast Water Treatment SystemsScrubbersDays (3)
LR23  —  —  60  
LR14  —  —  80  
MR—  —  —  —  
Handymax—  —  —  —  
     
Total Q1 20217  —  —  140  
     
 Q2 2021 
 Ships Scheduled for (2):Off-hire
 DrydockBallast Water Treatment SystemsScrubbersDays (3)
LR23  —  —  60  
LR13  —  —  60  
MR—  —  —  —  
Handymax—  —  —  —  
     
Total Q2 20216  —  —  120  
     
 Q3 2021 
 Ships Scheduled for (2):Off-hire
 DrydockBallast Water Treatment SystemsScrubbersDays (3)
LR22  —  —  40  
LR12  —  —  40  
MR—  —  —  —  
Handymax—  —  —  —  
     
Total Q3 20214  —  —  80  
     
 Q4 2021 
 Ships Scheduled for (2):Off-hire
 Drydock Ballast Water Treatment SystemsScrubbersDays (3)
LR22  —  1  80  
LR12  —  —  40  
MR—  —  8  293  
Handymax—  —  —  —  
     
Total Q4 20214  —  9  413  
     
 FY 2022 
 Ships Scheduled for (2):Off-hire
 Drydock Ballast Water Treatment SystemsScrubbersDays (3)
LR25  —  —  100  
LR1—  —  5  200  
MR11  5  5  402  
Handymax—  —  —  —  
     
Total FY 202216  5  10  702  

(1) The number of vessels in these tables 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 may vary as drydock, ballast water treatment system installation and scrubber installation times are finalized.
(2) 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. 
(3)  Represents total estimated off-hire days during the period, including vessels that commenced work in a previous period.

Debt

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

 In thousands of U.S. DollarsOutstanding Principal
as of June 30, 2020		Drawdowns and
(repayments), net		Outstanding Principal
as of September 30, 2020		Drawdowns and (repayments), netOutstanding Principal
as of November 4, 2020
1KEXIM Credit Facility (3)$62,158  $(20,436) $41,722  —   $41,722  
2ING Credit Facility (1)197,195  465   197,660  (1,925) 195,735  
32018 NIBC Credit Facility33,131  (1,033) 32,098  (1,032) 31,066  
42017 Credit Facility (7)124,867  (32,620) 92,247  —   92,247  
5Credit Agricole Credit Facility86,444  (2,142) 84,302  —   84,302  
6ABN AMRO / K-Sure Credit Facility43,753  (962) 42,791  —   42,791  
7Citibank / K-Sure Credit Facility91,025  (2,103) 88,922  —   88,922  
8ABN / SEB Credit Facility (2)100,824  (1,311) 99,513  —   99,513  
9Hamburg Commercial Credit Facility41,961  (823) 41,138  —   41,138  
10Prudential Credit Facility53,152  (1,387) 51,765  (924) 50,841  
112019 DNB / GIEK Credit Facility30,871  (979) 29,892  —   29,892  
12BNPP Sinosure Credit Facility (3)64,886  24,895   89,781  (4,623) 85,158  
132020 $225.0 Million Credit Facility (4)101,200  41,165   142,365  23,925   166,290  
14Ocean Yield Lease Financing144,100  (2,778) 141,322  (951) 140,371  
15CMBFL Lease Financing (4)54,609  (54,609) —  —   —  
16BCFL Lease Financing (LR2s) (5)89,037  (498) 88,539  (777) 87,762  
17CSSC Lease Financing (4)220,562  (4,328) 216,234  (27,578) 188,656  
18CSSC Scrubber Lease Financing (6)8,232  131   8,363  (1,437) 6,926  
19BCFL Lease Financing (MRs) (5)82,032  (1,161) 80,871  (1,020) 79,851  
202018 CMBFL Lease Financing131,496  (3,251) 128,245  —   128,245  
21$116.0 Million Lease Financing (5)102,538  3,509   106,047  (730) 105,317  
22AVIC Lease Financing121,413  (2,949) 118,464  —   118,464  
23China Huarong Lease Financing117,000  (3,375) 113,625  —   113,625  
24$157.5 Million Lease Financing130,871  (3,535) 127,336  —   127,336  
25COSCO Lease Financing72,600  (1,925) 70,675  —   70,675  
262020 CMB Lease Financing (7)—  45,383   45,383   45,383  
27IFRS 16 - Leases  - 7 Handymax6,792  (2,279) 4,513  —   4,513  
28IFRS 16 - Leases  - 3 MR40,617  (1,840) 38,777  —   38,777  
29$670.0 Million Lease Financing (8)586,141  20,534   606,675  (4,193) 602,482  
30Unsecured Senior Notes Due 202528,100  —   28,100  —   28,100  
31Convertible Notes Due 2022 (9)203,500  (52,271) 151,229  —   151,229  
 Gross debt outstanding$3,171,107  $(62,513) 3,108,594  $(21,265) $3,087,329  
 Cash and cash equivalents250,592  —   218,095  —    209,694  
 Net debt$2,920,515  $(62,513) $2,890,499  $(21,265) $2,877,635  

(1) In July 2020, the Company drew an aggregate of $3.3 million under the scrubber portion of its $251.4 million credit facility with ING Bank N.V. to partially finance the purchase and installation of scrubbers on two MRs and one LR2 that are currently part of this arrangement.  The drawdowns of  approximately $1.1 million per vessel bear interest at LIBOR plus a margin of 1.95%.  One MR will be repaid in seven quarterly principal payments of approximately $0.1 million with the balance due upon maturity in June 2022.  The other two vessels will be repaid in two quarterly principal payments of approximately $0.7 million in aggregate with the balance due upon maturity in March 2021. 

(2) In July 2020, the Company drew $1.6 million from its upsized ABN / SEB Credit Facility to partially finance the purchase and installation of a scrubber on one of its vessels.  The upsized portion of this facility matures in June 2023, bears interest at LIBOR plus a margin of 2.60% per annum and is expected to be repaid in equal quarterly installments of approximately $0.1 million per vessel, with a balloon payment due at maturity. 

(3) In September 2020, the Company drew $24.9 million under its BNPP Sinosure Credit Facility to partially finance the purchase and installation of scrubbers on 13 vessels. This borrowing is collateralized by one of its LR2 product tankers which was previously financed under the KEXIM Credit Facility.  The Company repaid the outstanding debt of $16.2 million on the KEXIM Credit Facility related to this vessel as part of this transaction.

A total of approximately $91.9 million has been drawn and there is $45.7 million of remaining availability under the BNPP Sinosure Credit Facility.  Each drawdown is split evenly into two facilities, (i) a commercial facility (the "Commercial Facility"), and (ii) a Sinosure facility (the "Sinosure Facility"), which is being funded by the lenders under the Commercial Facility and insured by the China Export & Credit Insurance Corporation ("Sinosure").   The BNPP Sinosure Credit Facility is split into 70 tranches each of which represent the lesser of 85% of the purchase and installation price of 70 scrubbers, or $1.9 million per scrubber (not to exceed 65% of the fair market value of the collateral vessels).  The Sinosure Facility and the Commercial Facility bear interest at LIBOR plus a margin of 1.80% and 2.80% per annum, respectively.  The remaining availability under this loan facility is available for en bloc drawdowns on December 15, 2020 and March 15, 2021.  The Sinosure Facility is expected to be repaid in 10 equal semi-annual installments and the Commercial Facility is expected to be repaid at the final maturity date of the facility, or October 2025.

(4) In September 2020 the Company drew $43.7 million from its 2020 $225.0 Million Credit Facility to refinance the existing debt on two LR2s that were previously financed under the CMBFL Lease Financing arrangement. The Company repaid $54.0 million on the CMBFL Lease Financing arrangement as part of this transaction. In connection with this repayment, approximately $2.0 million was released from restricted cash that was previously held in a deposit account under the terms and conditions of the CMBFL Lease Financing Arrangement.

In October 2020, the Company drew down $23.9 million from its 2020 $225.0 Million Credit Facility to refinance the existing debt on an LR2 product tanker that was previously financed under the CSSC Lease Financing arrangement.  The Company repaid $27.8 million (including a 2% prepayment fee) on the CSSC Lease Financing arrangement as part of this transaction.  

The remaining availability under the 2020 $225.0 Million Credit Facility is expected to be used to refinance the existing debt on two of the Company's vessels and scrubbers on two LR2s.  This facility has a final maturity of five years from the closing date of the loan, bears interest at LIBOR plus a margin, and is expected to be repaid in equal quarterly installments of approximately $0.6 million per vessel per quarter with a balloon payment due at maturity.  The remaining terms and conditions, including financial covenants, are similar to the Company’s existing credit facilities.

(5) In July 2020, the Company drew an aggregate of $9.4 million on these agreements to partially finance the purchase and installation of scrubbers on five vessels as follows: (i) $1.8 million on one vessel under the BCFL Lease Financing (LR2s) arrangement; (ii)  $1.9 million on one vessel under the BCFL Lease Financing (MRs) arrangement; and (iii) $5.7 million on three vessels under the  $116.0 Million Lease Financing arrangement.  Each agreement will be for a fixed term of three years at the rate of up to $1,910 per vessel per day to be allocated to principal and interest.

(6) In August 2020, the Company drew down an aggregate of $1.6 million from its upsized lease financing agreement with CSSC to partially finance the purchase and installation of scrubbers on one of the Company’s vessels.  The upsized portion of the lease financing bears interest at LIBOR plus a margin of 3.8% per annum, matures two years from the date of the drawdown and will be repaid in monthly installment payments of approximately $0.5 million in aggregate.

(7) In September 2020, the Company executed an agreement with CMB Financial Leasing Co., Ltd to sell and leaseback two MR product tankers. The aggregate borrowing amount under the arrangement was $45.4 million, which was drawn in September 2020. A portion of the proceeds were utilized to repay $30.1 million of the outstanding indebtedness relating to these two vessels under the 2017 Credit Facility.  

Under the agreement, each vessel is subject to a seven year bareboat charter agreement. The lease financing bears interest at LIBOR plus a margin of 3.20% and is expected to be repaid in 28 equal quarterly repayments of approximately $0.4 million per vessel.  The Company has purchase options to re-acquire each of the subject vessels during the bareboat charter period, with the first of such options exercisable on the third anniversary date from the delivery date of the respective vessel.   

This transaction is being accounted for as a financing transaction under IFRS 9 as the transaction does not qualify as a ‘sale’ under IFRS 15 given the Company’s right to repurchase the asset during the lease period.  Accordingly, no gain or loss is recorded, and the Company will continue to recognize the vessel as an asset and recognize a financial liability (i.e. debt) for the consideration received (similar to the Company’s other sale and leaseback transactions). 

(8)  In September 2020, the Company took delivery of a scrubber-fitted MR product tanker (STI Maximus) under an eight-year bareboat lease.  The leasehold interest in this vessel was acquired as part of the Trafigura Transaction and a $35.2 million lease liability was recorded at the commencement date of these leases, which is being accounted for as a lease liability under IFRS 16.

(9) Between July 1, 2020 and September 7, 2020, the Company repurchased $52.3 million face value of its Convertible Notes due 2022 at an average price of $894.12 per $1,000 principal amount, or $46.7 million.

Set forth below are the estimated expected future principal repayments on the Company's outstanding indebtedness as of September 30, 2020, which includes principal amounts due under secured credit facilities, Convertible Notes due 2022, lease financing arrangements, the Senior Notes due 2025, and lease liabilities under IFRS 16 (which also include actual payments made during the fourth quarter of 2020 and through November 4, 2020): 

 In millions of U.S. dollars As of September 30, 2020 (1)
Q4 2020 - principal payments made through November 4, 2020 $45.2
Q4 2020 - remaining principal payments 33.1
Q1 2021 (2) 144.4
Q2 2021 (3) 103.2
Q3 2021 68.8
Q4 2021 73.3
2022 and thereafter 2,640.6
  $3,108.6

(1) Amounts represent the principal payments due on the Company’s outstanding indebtedness as of September 30, 2020 and do not incorporate the impact of any of the Company’s new financing initiatives which have not closed as of that date.

(2) Repayments include the maturities of the Company's KEXIM Credit Facility for $42.1 million and two tranches of the ING Credit Facility for $29.6 million.  As of the date of this press release, the Company has received commitments to refinance the amounts borrowed on the KEXIM Credit Facility (the timing of this refinancing may be impacted by the timing of installations of scrubbers on certain vessels).  The Company is currently in discussions to refinance the ING Credit Facility.   

(3) Repayments include the maturity of the Company's 2018 NIBC Credit Facility for $30.0 million.  The Company is currently in discussions to refinance the 2018 NIBC Credit Facility.   

Explanation of Variances on the Third Quarter of 2020 Financial Results Compared to the Third Quarter of 2019

For the three months ended September 30, 2020, the Company recorded a net loss of $20.2 million compared to a net loss of $45.3 million for the three months ended September 30, 2019. 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 September 30, 2020 and 2019:   
   For the three months ended September 30,
In thousands of U.S. dollars 2020 2019
 Vessel revenue $177,250  $136,067 
 Voyage expenses (592) (2,055)
 TCE revenue $176,658  $134,012 
  • TCE revenue for the three months ended September 30, 2020 increased by $42.6 million to $176.7 million, from $134.0 million for the three months ended September 30, 2019. Overall average TCE revenue per day increased to $15,100 per day during the three months ended September 30, 2020, from $13,560 per day during the three months ended September 30, 2019.  This increase was primarily the result of relative strength in the larger LR2 and LR1 vessel classes as floating storage contracts, increased light distillate volumes to the far east, and increased arbitrage opportunities drove demand for these types of vessels.

    The increase in TCE revenue in the third quarter of 2020 as compared to the third quarter of 2019 was also affected by an increase in the number of the Company's vessels to an average of 134.1 operating vessels during the three months ended September 30, 2020 from an average of 119.7 operating vessels during the three months ended September 30, 2019.  This increase was the result of the Trafigura Transaction, whereby the Company acquired the leasehold interests in 19 vessels (11 MRs, four LR2s, and four MRs then under construction). Three of the MRs acquired that were then under construction were delivered in the first quarter of 2020 and one of the MRs was delivered in September 2020.

  • Vessel operating costs for the three months ended September 30, 2020 increased by $14.8 million to $85.8 million, from $71.0 million for the three months ended September 30, 2019.  This increase was primarily due to the Trafigura Transaction whereby the Company acquired the leasehold interests in 19 vessels in September 2019 (11 MRs, four LR2s, and four MRs then under construction).  Three of the MRs acquired that were then under construction were delivered in the first quarter of 2020 and thus operated for the entirety of the third quarter of 2020 and one MR was delivered in September 2020.

    Vessel operating costs per day increased to $6,950 per day for the three months ended September 30, 2020 from $6,449 per day for the three months ended September 30, 2019.  This increase was largely driven by the impact of the implementation of worldwide travel restrictions in response to the COVID-19 pandemic, which resulted in the extension and prolongation of the crew contracts on many of the Company's vessels.  During the third quarter of 2020, the Company incurred increased travel costs and crew wages as the seafarers impacted by these restrictions were repatriated and awarded extended stay bonuses.  Additionally, certain repairs and maintenance expenditures, along with purchases of spares and stores increased during the third quarter of 2020 as the onset of the COVID-19 pandemic in March 2020 resulted in delays in the procurement and delivery of necessary supplies.
  • Depreciation expense - owned or sale leaseback vessels for the three months ended September 30, 2020 increased by $4.0 million to $49.4 million, from $45.4 million for the three months ended September 30, 2019.  The increase was due to the Company's drydock, scrubber and ballast water treatment system installations that have taken place over the preceding 12-month period.  Depreciation expense in future periods is expected to increase as the Company continues the installation of ballast water treatment systems and/or scrubbers on certain of its vessels in 2020 and beyond. The Company expects to depreciate the majority of the cost of this equipment over each vessel's remaining useful life. 

  • Depreciation expense - right of use assets for the three months ended September 30, 2020 increased by $5.9 million to $12.2 million from $6.3 million for the three months ended September 30, 2019.  Depreciation expense - right of use assets reflects the straight-line depreciation expense recorded under IFRS 16 - Leases.  Right of use asset depreciation expense increased as a result of the Trafigura Transaction.  Three of the MRs acquired that were then under construction were delivered in the first quarter of 2020 and one MR was delivered at the end of September 2020.  All of the vessels acquired as part of the Trafigura Transaction are being accounted for as right of use assets under IFRS 16 - Leases.  The right of use asset depreciation for these vessels is approximately $0.2 million per MR per month and $0.3 million per LR2 per month.  In addition to the leasehold interests acquired as part of the Trafigura Transaction, the Company also had three MRs and five Handymax leases that were accounted for under IFRS 16 during the third quarter of 2020.  The bareboat charters on one of these Handymax vessels expired in July 2020. 

  • General and administrative expenses for the three months ended September 30, 2020, increased by $0.6 million to $15.9 million, from $15.3 million for the three months ended September 30, 2019.  This increase was primarily due to the growth in the Company's fleet resulting from the Trafigura Transaction. 

  • Financial expenses for the three months ended September 30, 2020 decreased by $7.7 million to $35.2 million, from $42.9 million for the three months ended September 30, 2019.  The decrease was primarily driven by significant decreases in LIBOR rates, which underpin all of the Company's variable rate borrowings, and which have collapsed since the onset of the COVID-19 pandemic. 

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

  For the three months ended September 30, For the nine months ended September 30,
In thousands of U.S. dollars except per share and share data2020 2019 2020 2019
Revenue       
 Vessel revenue$177,250  $136,067  $777,656  $482,703 
         
Operating expenses       
 Vessel operating costs(85,752) (70,967) (246,973) (209,119)
 Voyage expenses(592) (2,055) (7,718) (3,678)
 Charterhire—  —  —  (4,399)
 Depreciation - owned or sale leaseback vessels(49,377) (45,392) (144,320) (133,575)
 Depreciation - right of use assets(12,166) (6,250) (38,972) (14,280)
 General and administrative expenses(15,861) (15,296) (51,870) (46,536)
 Total operating expenses(163,748) (139,960) (489,853) (411,587)
Operating income13,502  (3,893) 287,803  71,116 
Other (expense) and income, net       
 Financial expenses(35,191) (42,865) (119,084) (138,948)
 Gain on repurchase of Convertible Notes1,013  —  1,013  — 
 Financial income208  1,582  1,068  7,426 
 Other expenses, net285  (113) (417) (126)
 Total other expense, net(33,685) (41,396) (117,420) (131,648)
Net (loss) / income$(20,183) $(45,289) $170,383  $(60,532)
         
(Loss) / Earnings per share       
         
 Basic$(0.37) $(0.93) $3.11  $(1.25)
 Diluted$(0.37) $(0.93) $2.95  $(1.25)
 Basic weighted average shares outstanding54,905,361  48,529,024  54,800,402  48,251,159 
 Diluted weighted average shares outstanding (1)54,905,361  48,529,024  61,578,016  48,251,159 

(1) The computation of diluted earnings per share includes the effect of potentially dilutive unvested shares of restricted stock and the Convertible Notes due 2022 for the three and nine months ended September 30, 2020.  The effect of potentially dilutive securities relating to the Company's Convertible Notes due 2022 was included in the computation of diluted earnings per share for the nine months ended September 30, 2020 as their effect was dilutive under the if-converted method.  The dilutive effects of unvested shares of restricted stock and the potentially dilutive securities relating to the Company’s Convertible Notes due 2022 were excluded from the computation of diluted earnings per share for the three months ended September 30, 2020 and the three and nine months ended September 30, 2019 because their effect would have been anti-dilutive.


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

 As of
In thousands of U.S. dollarsSeptember 30, 2020 December 31, 2019
Assets   
Current assets   
Cash and cash equivalents$218,095  $202,303 
Accounts receivable59,814  78,174 
Prepaid expenses and other current assets12,402  13,855 
Inventories9,034  8,646 
Total current assets299,345  302,978 
Non-current assets   
Vessels and drydock4,044,288  4,008,158 
Right of use assets819,444  697,903 
Other assets71,422  131,139 
Goodwill11,539  11,539 
Restricted cash10,291  12,293 
Total non-current assets4,956,984  4,861,032 
Total assets$5,256,329  $5,164,010 
Current liabilities   
Current portion of long-term debt$199,407  $235,482 
Lease liability - sale and leaseback vessels128,979  122,229 
Lease liability - IFRS 1660,511  63,946 
Accounts payable13,807  23,122 
Accrued expenses31,709  41,452 
Total current liabilities434,413  486,231 
Non-current liabilities   
Long-term debt981,631  999,268 
Lease liability - sale and leaseback vessels1,109,378  1,195,494 
Lease liability - IFRS 16589,452  506,028 
Total non-current liabilities2,680,461  2,700,790 
Total liabilities3,114,874  3,187,021 
Shareholders' equity   
Issued, authorized and fully paid-in share capital:   
Share capital655  646 
Additional paid-in capital2,849,635  2,842,446 
Treasury shares(480,172) (467,057)
Accumulated deficit(228,663) (399,046)
Total shareholders' equity2,141,455  1,976,989 
Total liabilities and shareholders' equity$5,256,329  $5,164,010 


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

 For the nine months ended September 30,
In thousands of U.S. dollars2020 2019
Operating activities   
Net income / (loss)$170,383  $(60,532)
Depreciation - owned or finance leased vessels144,320  133,575 
Depreciation - right of use assets38,972  14,280 
Amortization of restricted stock22,134  20,707 
Amortization of deferred financing fees4,823  5,673 
Write-off of deferred financing fees and unamortized discounts on sale and leaseback facilities1,268  711 
Accretion of convertible notes6,623  9,162 
Accretion of fair value measurement on debt assumed in business combinations2,598  2,725 
Gain on repurchases of convertible notes(1,013) — 
 390,108  126,301 
Changes in assets and liabilities:   
Increase in inventories(388) (1,231)
Decrease in accounts receivable18,359  8,060 
Decrease / (increase) in prepaid expenses and other current assets1,452  (1,023)
Decrease / (increase) in other assets1,058  (3,289)
(Decrease) / increase in accounts payable(4,820) 7,899 
(Decrease) / increase in accrued expenses(3,029) 3,731 
 12,632  14,147 
Net cash inflow from operating activities402,740  140,448 
Investing activities   
Drydock, scrubber, ballast water treatment system and other vessel related payments (owned, finance leased and bareboat-in vessels)(152,614) (128,569)
Net cash outflow from investing activities(152,614) (128,569)
Financing activities   
Debt repayments(540,732) (230,123)
Issuance of debt450,610  — 
Debt issuance costs(11,011) (1,701)
Principal repayments on lease liability - IFRS 16(60,424) (18,450)
Decrease / (increase) in restricted cash2,002  (9)
Repurchase / repayment of convertible notes(46,737) (144,974)
Gross proceeds from issuance of common stock2,601  50,000 
Equity issuance costs(26) (329)
Dividends paid(17,502) (15,464)
Repurchase of common stock(13,115) (1) 
Net cash outflow from financing activities(234,334) (361,051)
Increase / (decrease) in cash and cash equivalents15,792  (349,172)
Cash and cash equivalents at January 1,202,303  593,652 
Cash and cash equivalents at September 30,$218,095  $244,480 


Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three and nine months ended September 30, 2020 and 2019
(unaudited)

  For the three months ended September 30, For the nine months ended September 30,
  2020 2019 2020 2019
Adjusted EBITDA(1)   (in thousands of U.S. dollars except Fleet Data) $82,109  $54,484  $492,812  $239,552 
         
Average Daily Results        
TCE per day(2) $15,100  $13,560  $22,447  $15,538 
Vessel operating costs per day(3) $6,950  $6,449  $6,649  $6,426 
         
LR2        
TCE per revenue day (2) $19,182  $15,974  $30,492  $18,689 
Vessel operating costs per day(3) $7,227  $6,683  $6,876  $6,726 
Average number of vessels 42.0  38.2  42.0  38.1 
         
LR1        
TCE per revenue day (2) $17,619  $12,942  $24,899  $15,243 
Vessel operating costs per day(3) $6,933  $6,297  $6,834  $6,350 
Average number of vessels 12.0  12.0  12.0  12.0 
         
MR        
TCE per revenue day (2) $13,512  $13,531  $18,515  $14,246 
Vessel operating costs per day(3) $6,829  $6,220  $6,472  $6,230 
Average number of vessels 62.0  48.5  61.6  48.3 
         
Handymax        
TCE per revenue day (2) $9,892  $9,760  $16,990  $13,057 
Vessel operating costs per day(3) $6,736  $6,642  $6,605  $6,375 
Average number of vessels 18.1  21.0  20.0  21.0 
         
Fleet data        
Average number of vessels 134.1  119.7  135.6  119.3 
         
Drydock        
Drydock, scrubber, ballast water treatment system and other vessel related payments for owned, sale leaseback and bareboat chartered-in vessels (in thousands of U.S. dollars) $32,809  $68,881  $152,614  $128,569 


(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, finance leased or chartered-in less the number of days the vessel is 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 the owned, finance leased or bareboat chartered-in vessels, before deducting available days due to off-hire days and days in drydock. Operating days is a measurement that is only applicable to our owned, finance leased or bareboat chartered-in vessels, not our time chartered-in vessels.


Fleet list as of November 4, 2020

 Vessel Name Year Built DWT Ice class Employment Vessel type Scrubber 
 Owned, sale leaseback and bareboat chartered-in vessels         
1STI Brixton 2014 38,734   1A  SHTP (1) Handymax N/A 
2STI Comandante 2014 38,734   1A  SHTP (1) Handymax N/A 
3STI Pimlico 2014 38,734   1A  SHTP (1) Handymax N/A 
4STI Hackney 2014 38,734   1A  SHTP (1) Handymax N/A 
5STI Acton 2014 38,734   1A  SHTP (1) Handymax N/A 
6STI Fulham 2014 38,734   1A  SHTP (1) Handymax N/A 
7STI Camden 2014 38,734   1A  SHTP (1) Handymax N/A 
8STI Battersea 2014 38,734   1A  SHTP (1) Handymax N/A 
9STI Wembley 2014 38,734   1A  SHTP (1) Handymax N/A 
10STI Finchley 2014 38,734   1A  SHTP (1) Handymax N/A 
11STI Clapham 2014 38,734   1A  SHTP (1) Handymax N/A 
12STI Poplar 2014 38,734   1A  SHTP (1) Handymax N/A 
13STI Hammersmith 2015 38,734   1A  SHTP (1) Handymax N/A 
14STI Rotherhithe 2015 38,734   1A  SHTP (1) Handymax N/A 
15STI Amber 2012 49,990   — SMRP (2) MR Yes 
16STI Topaz 2012 49,990   — SMRP (2) MR Not Yet Installed 
17STI Ruby 2012 49,990   — SMRP (2) MR Not Yet Installed 
18STI Garnet 2012 49,990   — SMRP (2) MR Yes 
19STI Onyx 2012 49,990   — SMRP (2) MR Yes 
20STI Fontvieille 2013 49,990   — SMRP (2) MR Not Yet Installed 
21STI Ville 2013 49,990   — SMRP (2) MR Not Yet Installed 
22STI Duchessa 2014 49,990   — SMRP (2) MR Not Yet Installed 
23STI Opera 2014 49,990   — SMRP (2) MR Not Yet Installed 
24STI Texas City 2014 49,990   — SMRP (2) MR Yes 
25STI Meraux 2014 49,990   — SMRP (2) MR Yes 
26STI San Antonio 2014 49,990   — SMRP (2) MR Yes 
27STI Venere 2014 49,990   — SMRP (2) MR Yes 
28STI Virtus 2014 49,990   — SMRP (2) MR Yes 
29STI Aqua 2014 49,990   — SMRP (2) MR Yes 
30STI Dama 2014 49,990   — SMRP (2) MR Yes 
31STI Benicia 2014 49,990   — SMRP (2) MR Yes 
32STI Regina 2014 49,990   — SMRP (2) MR Yes 
33STI St. Charles 2014 49,990   — SMRP (2) MR Yes 
34STI Mayfair 2014 49,990   — SMRP (2) MR Yes 
35STI Yorkville 2014 49,990   — SMRP (2) MR Yes 
36STI Milwaukee 2014 49,990   — SMRP (2) MR Yes 
37STI Battery 2014 49,990   — SMRP (2) MR Yes 
38STI Soho 2014 49,990   — SMRP (2) MR Yes 
39STI Memphis 2014 49,990   — SMRP (2) MR Yes 
40STI Tribeca 2015 49,990   — SMRP (2) MR Yes 
41STI Gramercy 2015 49,990   — SMRP (2) MR Yes 
42STI Bronx 2015 49,990   — SMRP (2) MR Yes 
43STI Pontiac 2015 49,990   — SMRP (2) MR Yes 
44STI Manhattan 2015 49,990   — SMRP (2) MR Yes 
45STI Queens 2015 49,990   — SMRP (2) MR Yes 
46STI Osceola 2015 49,990   — SMRP (2) MR Yes 
47STI Notting Hill 2015 49,687   1B SMRP (2) MR Yes 
48STI Seneca 2015 49,990   — SMRP (2) MR Yes 
49STI Westminster 2015 49,687   1B SMRP (2) MR Yes 
50STI Brooklyn 2015 49,990   — SMRP (2) MR Yes 
51STI Black Hawk 2015 49,990   — SMRP (2) MR Yes 
52STI Galata 2017 49,990   — SMRP (2) MR Yes 
53STI Bosphorus 2017 49,990   — SMRP (2) MR Not Yet Installed 
54STI Leblon 2017 49,990   — SMRP (2) MR Yes 
55STI La Boca 2017 49,990   — SMRP (2) MR Yes 
56STI San Telmo 2017 49,990   1B SMRP (2) MR Not Yet Installed 
57STI Donald C Trauscht 2017 49,990   1B SMRP (2) MR Not Yet Installed 
58STI Esles II 2018 49,990   1B SMRP (2) MR Not Yet Installed 
59STI Jardins 2018 49,990   1B SMRP (2) MR Not Yet Installed 
60STI Magic 2019 50,000   — SMRP (2) MR Yes 
61STI Majestic 2019 50,000   — SMRP (2) MR Yes 
62STI Mystery 2019 50,000   — SMRP (2) MR Yes 
63STI Marvel 2019 50,000   — SMRP (2) MR Yes 
64STI Magnetic 2019 50,000   — SMRP (2) MR Yes 
65STI Millennia 2019 50,000   — SMRP (2) MR Yes 
66STI Master 2019 50,000   — SMRP (2) MR Yes 
67STI Mythic 2019 50,000   — SMRP (2) MR Yes 
68STI Marshall 2019 50,000   — SMRP (2) MR Yes 
69STI Modest 2019 50,000   — SMRP (2) MR Yes 
70STI Maverick 2019 50,000   — SMRP (2) MR Yes 
71STI Miracle 2020 50,000   — SMRP (2) MR Yes 
72STI Maestro 2020 50,000   — SMRP (2) MR Yes 
73STI Mighty 2020 50,000   — SMRP (2) MR Yes 
74STI Maximus 2020 50,000   — SMRP (2) MR Yes 
75STI Excel 2015 74,000   — SLR1P (3) LR1 Not Yet Installed 
76STI Excelsior 2016 74,000   — SLR1P (3) LR1 Not Yet Installed 
77STI Expedite 2016 74,000   — SLR1P (3) LR1 Not Yet Installed 
78STI Exceed 2016 74,000   — SLR1P (3) LR1 Not Yet Installed 
79STI Executive 2016 74,000   — SLR1P (3) LR1 Yes 
80STI Excellence 2016 74,000   — SLR1P (3) LR1 Yes 
81STI Experience 2016 74,000   — SLR1P (3) LR1 Not Yet Installed 
82STI Express 2016 74,000   — SLR1P (3) LR1 Yes 
83STI Precision 2016 74,000   — SLR1P (3) LR1 Yes 
84STI Prestige 2016 74,000   — SLR1P (3) LR1 Yes 
85STI Pride 2016 74,000   — SLR1P (3) LR1 Yes 
86STI Providence 2016 74,000   — SLR1P (3) LR1 Yes 
87STI Elysees 2014 109,999   — SLR2P (4) LR2 Yes 
88STI Madison 2014 109,999   — SLR2P (4) LR2 Yes 
89STI Park 2014 109,999   — SLR2P (4) LR2 Yes 
90STI Orchard 2014 109,999   — SLR2P (4) LR2 Yes 
91STI Sloane 2014 109,999   — SLR2P (4) LR2 Yes 
92STI Broadway 2014 109,999   — SLR2P (4) LR2 Yes 
93STI Condotti 2014 109,999   — SLR2P (4) LR2 Yes 
94STI Rose 2015 109,999   — SLR2P (4) LR2 Yes 
95STI Veneto 2015 109,999   — SLR2P (4) LR2 Yes 
96STI Alexis 2015 109,999   — SLR2P (4) LR2 Yes 
97STI Winnie 2015 109,999   — SLR2P (4) LR2 Yes 
98STI Oxford 2015 109,999   — SLR2P (4) LR2 Yes 
99STI Lauren 2015 109,999   — SLR2P (4) LR2 Yes 
100STI Connaught 2015 109,999   — SLR2P (4) LR2 Yes 
101STI Spiga 2015 109,999   — SLR2P (4) LR2 Yes 
102STI Savile Row 2015 109,999   — SLR2P (4) LR2 Yes 
103STI Kingsway 2015 109,999   — SLR2P (4) LR2 Yes 
104STI Carnaby 2015 109,999   — SLR2P (4) LR2 Yes 
105STI Solidarity 2015 109,999   — SLR2P (4) LR2 Not Yet Installed 
106STI Lombard 2015 109,999   — SLR2P (4) LR2 Yes 
107STI Grace 2016 109,999   — SLR2P (4) LR2 Not Yet Installed 
108STI Jermyn 2016 109,999   — SLR2P (4) LR2 Not Yet Installed 
109STI Sanctity 2016 109,999   — SLR2P (4) LR2 Yes 
110STI Solace 2016 109,999   — SLR2P (4) LR2 Yes 
111STI Stability 2016 109,999   — SLR2P (4) LR2 Not Yet Installed 
112STI Steadfast 2016 109,999   — SLR2P (4) LR2 Yes 
113STI Supreme 2016 109,999   — SLR2P (4) LR2 Not Yet Installed 
114STI Symphony 2016 109,999   — SLR2P (4) LR2 Yes 
115STI Gallantry 2016 113,000   — SLR2P (4) LR2 Yes 
116STI Goal 2016 113,000   — SLR2P (4) LR2 Yes 
117STI Nautilus 2016 113,000   — SLR2P (4) LR2 Yes 
118STI Guard 2016 113,000   — SLR2P (4) LR2 Yes 
119STI Guide 2016 113,000   — SLR2P (4) LR2 Yes 
120STI Selatar 2017 109,999   — SLR2P (4) LR2 Yes 
121STI Rambla 2017 109,999   — SLR2P (4) LR2 Yes 
122STI Gauntlet 2017 113,000   — SLR2P (4) LR2 Yes 
123STI Gladiator 2017 113,000   — SLR2P (4) LR2 Yes 
124STI Gratitude 2017 113,000   — SLR2P (4) LR2 Yes 
125STI Lobelia 2019 110,000   — SLR2P (4) LR2 Yes 
126STI Lotus 2019 110,000   — SLR2P (4) LR2 Yes 
127STI Lily 2019 110,000   — SLR2P (4) LR2 Yes 
128STI Lavender 2019 110,000   — SLR2P (4) LR2 Yes 
129Sky 2007 37,847   1A  SHTP (1) Handymax N/A(5)
130Steel 2008 37,847   1A  SHTP (1) Handymax N/A(5)
131Stone I 2008 37,847   1A  SHTP (1) Handymax N/A(5)
132Style 2008 37,847   1A  SHTP (1) Handymax N/A(5)
133STI Beryl 2013 49,990   — SMRP (2) MR Not Yet Installed(6)
134STI Le Rocher 2013 49,990   — SMRP (2) MR Not Yet Installed(6)
135STI Larvotto 2013 49,990   — SMRP (2) MR Not Yet Installed(6)
               
 Total owned, sale leaseback and bareboat chartered-in fleet DWT   9,374,548         


(1)This vessel operates 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 the Scorpio LR1 Pool, or SLR1P. SLR1P is a Scorpio Pool and is operated by SCM. SLR1P and SCM are related parties to the Company.
(4)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.
(5)In March 2019, we entered into a new bareboat charter-in agreement on a previously bareboat chartered-in vessel. The term of the agreement is for two years at a bareboat rate of $6,300 per day. The agreement is expected to expire on March 31, 2021.
(6)In April 2017, we sold and leased back this vessel, on a bareboat basis, for a period of up to eight years for $8,800 per day.  The sales price was $29.0 million per vessel, and we have the option to purchase this vessel beginning at the end of the fifth year of the agreement through the end of the eighth year of the agreement, at market-based prices. Additionally, a deposit of $4.35 million per vessel was retained by the buyer and will either be applied to the purchase price of the vessel if a purchase option is exercised or refunded to us at the expiration of the agreement.

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 2019 and 2020 were as follows: 

Date paidDividends per common
share
March 2019$0.100
June 2019$0.100
September 2019$0.100
December 2019$0.100
March 2020$0.100
June 2020$0.100
September 2020$0.100

On November 3, 2020, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about December 14, 2020 to all shareholders of record as of November 23, 2020 (the record date).  As of November 4, 2020, there were 58,000,147 common shares of the Company outstanding.

$250 Million Securities Repurchase Program

In May 2015, the Company's Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company's securities which, in addition to its common shares, currently consist of its Senior Notes due 2025 (NYSE: SBBA), which were issued in May 2020, and Convertible Notes due 2022, which were issued in May and July 2018.

  • Between July 1, 2020 and September 7, 2020, the Company repurchased $52.3 million face value of its Convertible Notes due 2022  at an average price of $894.12 per $1,000 principal amount, or $46.7 million.
  • In September 2020, the Company acquired an aggregate of 1,170,000 of its common shares at an average price of $11.18 per share for a total of $13.1 million.  The repurchased shares are being held as treasury shares.

In September 2020, 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 securities.  The aforementioned repurchases of common stock and our convertible notes were executed under the previous securities repurchase program which has since been terminated and any future purchases of the Company's securities will be made under the new $250 million securities repurchase program.

About Scorpio Tankers Inc. 

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns, finance leases or bareboat charters-in 135 product tankers (42 LR2 tankers, 12 LR1 tankers, 63 MR tankers and 18 Handymax tankers) with an average age of 4.9 years. 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

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 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 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 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 Third Quarter of 2020 Financial Results Compared to the Third Quarter of 2019".  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 / (Loss) to Adjusted Net Income / (Loss)

   For the three months ended September 30, 2020
     Per share Per share
In thousands of U.S. dollars except per share data Amount  basic  diluted
 Net loss $(20,183) $(0.37) $(0.37)
 Adjustment:      
 Write-off of deferred financing fees and unamortized discounts on sale and leaseback facilities 955  0.02  0.02 
 Gain on repurchase of Convertible Notes (1,013) (0.02) (0.02)
 Adjusted net loss $(20,241) $(0.37) $(0.37)


   For the three months ended September 30, 2019
     Per share Per share
In thousands of U.S. dollars except per share data Amount  basic  diluted
 Net loss $(45,289) $(0.93) $(0.93)
 Adjustment:      
    Deferred financing fees write-off 443  0.01  0.01 
 Adjusted net loss $(44,846) $(0.92) $(0.92)


   For the nine months ended September 30, 2020
     Per share Per share
In thousands of U.S. dollars except per share data Amount  basic  diluted
 Net income $170,383  $3.11  $2.95 
 Adjustments:      
 Write-off of deferred financing fees and unamortized discounts on sale and leaseback facilities 1,268  0.02  0.02 
 Gain on repurchase of Convertible Notes (1,013) $(0.02) $(0.02)
 Adjusted net income $170,638  $3.11  $2.95 


   For the nine months ended September 30, 2019
     Per share Per share
In thousands of U.S. dollars except per share data Amount  basic  diluted
 Net loss $(60,532) $(1.25) $(1.25)
 Adjustment:      
    Deferred financing fees write-off 718  0.01  0.01 
 Adjusted net loss $(59,814) $(1.24) $(1.24)

Reconciliation of Net Income / (Loss) to Adjusted EBITDA

   For the three months ended September 30, For the nine months ended September 30,
In thousands of U.S. dollars 2020 2019 2020 2019
 Net  (loss) / income $(20,183) $(45,289) $170,383  $(60,532)
    Financial expenses 35,191  42,865  119,084  138,948 
    Financial income (208) (1,582) (1,068) (7,426)
    Depreciation - owned or finance leased vessels 49,377  45,392  144,320  133,575 
  Depreciation - right of use assets 12,166  6,250  38,972  14,280 
    Amortization of restricted stock 6,779  6,848  22,134  20,707 
    Gain on repurchase of Convertible Notes  (1,013) —  (1,013) — 
 Adjusted EBITDA $82,109  $54,484  $492,812  $239,552 

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 management, length and severity of the ongoing novel coronavirus (COVID-19) outbreak, 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, 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.

Scorpio Tankers Inc.
212-542-1616

 

FAQ

What were Scorpio Tankers' earnings results for Q3 2020?

Scorpio Tankers reported a net loss of $20.2 million for Q3 2020, improving from a loss of $45.3 million in Q3 2019.

What is Scorpio Tankers' dividend payout schedule?

The company declared a quarterly cash dividend of $0.10 per share, payable on December 14, 2020, to shareholders of record as of November 23, 2020.

What impact did the COVID-19 pandemic have on Scorpio Tankers?

COVID-19 led to significant reductions in global oil demand, impacting the company's earnings and TCE rates, which are expected to remain volatile.

What is the outlook for Scorpio Tankers' earnings in 2020?

The company indicated that the ongoing volatility due to COVID-19 may materially impact its earnings and cash flow for the remainder of 2020.

How much liquidity has Scorpio Tankers secured recently?

Scorpio Tankers has committed financing to increase liquidity by approximately $63.9 million, with plans to raise an additional $75 million.

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Scorpio Tankers Inc.

NYSE:STNG

STNG Rankings

#1785 Ranked by Market Cap
#1010 Ranked by Dividends

STNG Latest News

Oct 29, 2024
Scorpio Tankers Inc. Announces Financial Results for the Third Quarter of 2024 and the Declaration of a Dividend
Oct 18, 2024
Scorpio Tankers Inc. Announces That on October 29, 2024, the Company Plans to Issue Its Third Quarter 2024 Results and Have a Conference Call
Oct 1, 2024
Scorpio Tankers Announces Vessel Sale Agreement
Sep 26, 2024
Scorpio Tankers Inc. Announces Purchase of Call Options by the President of the Company
Sep 9, 2024
Scorpio Tankers Inc. Announces an Update to its Securities Repurchase Program

STNG Stock Data

2.66B
43.47M
13.87%
71.84%
7.21%
Oil & Gas Midstream
Energy
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United States of America
Monaco