Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers", or the
"Company") today reported its results for the three months and year
ended December 31, 2018. 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 and that it
intends to redeem in full its 8.25% Senior Unsecured Notes, which
are scheduled to mature in June 2019.
Share and per share results included herein have
been retroactively adjusted to reflect the one for ten reverse
stock split of the Company's common shares, which took effect on
January 18, 2019.
Results for the three months ended December
31, 2018 and 2017
For the three months ended December 31, 2018, the
Company's adjusted net loss (see Non-IFRS Measures section below)
was $17.4 million, or $0.38 basic and diluted loss per share, which
excludes from the net loss a $0.3 million, or $0.01
per basic and diluted share, write-off of deferred financing
fees. For the three months ended December 31, 2018, the Company had
a net loss of $17.7 million, or $0.38 basic and diluted loss per
share.
For the three months ended December 31, 2017, the
Company's adjusted net loss (see Non-IFRS Measures section below)
was $39.2 million, or $1.38 basic and diluted loss
per share, which excludes from the net loss (i) $1.3
million of transaction costs related to the merger with Navig8
Product Tankers Inc ("NPTI") and (ii) a $1.0
million write-off of deferred financing fees. The adjustments
resulted in an aggregate reduction of the Company’s net loss
by $2.3 million, or $0.08 per basic and diluted
share. For the three months ended December 31, 2017, the Company
had a net loss of $41.5 million, or $1.46 basic and
diluted loss per share.
Results for the year ended December 31,
2018 and 2017
For the year ended December 31, 2018, the Company's
adjusted net loss was $158.7 million (see Non-IFRS
Measures section below), or $4.56 basic and diluted loss
per share, which excludes from the net loss (i) an aggregate loss
of $17.8 million recorded on the Company's exchange of an
aggregate of $203.5 million of its convertible notes in the second
and third quarters of 2018, (ii) a $13.2 million write-off of
deferred financing fees, and (iii) $0.3 million of
transaction costs related to the merger with NPTI. The
adjustments resulted in an aggregate reduction of the Company's net
loss by $31.3 million or $0.90 per basic and
diluted share. For the year ended December 31, 2018, the
Company had a net loss of $190.1 million,
or $5.46 basic and diluted loss per share.
For the year ended December 31, 2017, the Company's
adjusted net loss was $101.7 million (see Non-IFRS
Measures section below), or $4.72 basic and diluted loss
per share, which excludes from the net loss (i) a $23.3
million loss on sales of vessels, (ii) $36.1
million of transaction costs related to the merger with NPTI,
(iii) a $5.4 million gain recorded on the purchase of the
four NPTI subsidiaries that own four LR1 tankers, and (iv)
a $2.5 million write-off of deferred financing fees. The
adjustments resulted in an aggregate reduction of the Company's net
loss by $56.5 million, or $2.62 per basic and
diluted share. For the year ended December 31, 2017, the
Company had a net loss of $158.2 million,
or $7.35 basic and diluted loss per share.
Intention to redeem all of the Company's
8.25% Senior Unsecured Notes due June 2019
The Company has announced that it has issued a
notice of redemption for all $57,500,000 aggregate principal amount
of its 8.25% Senior Unsecured Notes due June 2019 (the "Senior
Notes Due June 2019") to be redeemed on March 18, 2019 (the
"Redemption Date"). The redemption price of the Senior Notes
Due June 2019 is equal to 100% of the principal amount to be
redeemed, plus accrued and unpaid interest to, but excluding, the
Redemption Date. A notice of redemption is being distributed to all
registered holders of the Senior Notes Due June 2019 by Deutsche
Bank Trust Company Americas.
January 2019 Reverse Stock
Split
On January 18, 2019, the Company effected a
one-for-ten reverse stock split. The Company's shareholders
approved the reverse stock split and change in authorized common
shares at the Company's special meeting of shareholders held
on January 15, 2019. Pursuant to this reverse stock split, the
total number of authorized common shares was reduced to 150.0
million shares and common shares outstanding were reduced from
513,975,324 shares to 51,397,470 shares (which reflects adjustments
for fractional share settlements). The par value was not adjusted
as a result of the reverse stock split. All share and per
share information contained in this press release has been
retroactively adjusted to reflect the reverse stock split.
The Company believes that the increased market
price for its common shares as a result of implementing the reverse
stock split has and will improve the marketability and liquidity of
the Company's common shares and will encourage interest and trading
in the Company's common shares. In addition, the Company believes
that a number of institutional investors and investment funds are
reluctant to invest, and in some cases may be prohibited from
investing, in lower-priced stocks and that brokerage firms are
reluctant to recommend lower-priced stocks to their clients. By
effecting a reverse stock split, the Company believes it may be
able to raise the market price of its common shares to a level
where its common shares could be viewed more favorably by potential
investors. Other investors may also be dissuaded from purchasing
lower-priced stocks because brokerage commissions, as a percentage
of the total transaction, tend to be higher for lower-priced
stocks. A higher share price after a reverse stock split could
alleviate this concern.
There can be no assurance that the reverse stock
split will achieve any of the desired results.
Declaration of Dividend
On February 13, 2019, the Company's Board of
Directors declared a quarterly cash dividend of $0.10 per common
share, payable on or about March 28, 2019 to all shareholders of
record as of March 13, 2019 (the record date). As of
February 13, 2019, there were 51,397,470 common shares
outstanding.
Summary of Other Recent and Fourth Quarter
Significant Events
- Below is a summary of the average
daily Time Charter Equivalent (TCE) revenue (see Non-IFRS Measures
section below) and duration for voyages fixed for the Company's
vessels thus far in the first quarter of 2019 as of the date hereof
(See footnotes to 'Other operating data' table below for the
definition of daily TCE revenue):-- For the LR2s in the pool:
approximately $24,000 per day for 60% of the days.-- For the LR1s
in the pool: approximately $19,000 per day for 55% of the days.--
For the MRs in the pool: approximately $17,000 per day for 55% of
the days.-- For the ice-class 1A and 1B Handymaxes in the pool:
approximately $18,000 per day for 50% of the days.
- Below is a summary of the average
daily TCE revenue earned on the Company's vessels during the fourth
quarter of 2018:-- For the LR2s in the pool: $15,948 per revenue
day. -- For the LR1s in the pool: $13,548 per revenue day.-- For
the MRs in the pool: $14,338 per revenue day.-- For the ice-class
1A and 1B Handymaxes in the pool: $14,749 per revenue day.
- During November 2018, December 2018
and January 2019, the Company repurchased 1,351,265 of its common
shares at an average price of $17.20 per share under its Securities
Repurchase Program.
- From August 2018 through November 2018, the Company entered
into agreements with two separate suppliers to retrofit a total of
77 of the Company's tankers with Exhaust Gas Cleaning Systems
("Scrubbers"), which are expected to be installed throughout 2019
and 2020. The Company also obtained options to retrofit 18
additional tankers under these agreements. The total estimated
investment for these systems, including estimated installation
costs, is expected to be between $2.0 and $2.5 million per vessel
and the Company is currently in discussions with potential lenders
to finance a portion (approximately 60-70%) of these
investments. The Company's estimates of future payments and
offhire days under these agreements are described below under the
heading Drydock, Scrubber and Ballast Water Treatment Update.
- In December 2018, the Company paid a quarterly cash dividend
with respect to the fourth quarter of 2018 on the Company's common
stock of $0.10 per share.
- In October 2018, the Company closed on the previously announced
agreement to refinance seven of its vessels through a $157.5
million lease financing arrangement. This transaction is
described below and was part of the Company's previously announced
refinancing initiatives.
- In October 2018, the Company raised net proceeds
of approximately $319.6 million in an underwritten public
offering of 18.2 million shares of common stock (including 2.0
million shares of common stock issued when the underwriters
partially exercised their overallotment option to purchase
additional shares) at a public offering price
of $18.50 per share. Scorpio Bulkers Inc., or SALT,
and Scorpio Services Holding Limited, or SSH, each a related party,
purchased 5.4 million common shares and 0.5 million common shares,
respectively, at the public offering price.
$157.5 Million Sale and
Leaseback
In July 2018, the Company agreed to sell and
leaseback six MR product tankers (STI San Antonio, STI Benicia, STI
St. Charles, STI Yorkville, STI Mayfair and STI Duchessa) and one
LR2 product tanker (STI Alexis) to an international financial
institution. The borrowing amount under the arrangement was
$157.5 million in aggregate, and these agreements, which have been
accounted for as financing arrangements, closed in October
2018. In September 2018, the Company repaid the outstanding
indebtedness for two vessels consisting of $14.2 million on the HSH
Credit Facility and $13.6 million on the K-Sure Credit Facility, in
advance of the October closing of these transactions. Upon closing,
the remaining proceeds were partially utilized to repay the
outstanding indebtedness of $59.2 million on the 2016 Credit
Facility and the outstanding indebtedness of $25.8 million on the
DVB 2017 Credit Facility for the remaining five vessels.
Each agreement is for a fixed term of seven years,
and the Company has options to purchase the vessels beginning at
the end of the third year of each agreement. The leases bear
interest at LIBOR plus a margin of 3.0% per annum and will be
repaid in equal quarterly principal installments of $0.5 million
per MR and $0.6 million for the LR2. Each agreement also has
a purchase obligation at the end of the seventh year. The
Company is subject to certain additional terms and conditions under
this arrangement, including financial covenants, which are similar
to those set forth in its existing lease financing
arrangements.
$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 (i)
Convertible Notes due 2019, which were issued in June 2014, (ii)
Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in
May 2014, (iii) Senior Notes Due June 2019 (NYSE: SBBC), which were
issued in March 2017, and (iv) Convertible Notes due 2022, which
were issued in May and July 2018.
Since January 2018 through the date of this press
release, the Company has acquired an aggregate of 1,351,265 of its
common shares at an average price of $17.20 per share; the
repurchased shares are being held as treasury shares. There are
51,397,470 shares outstanding as of February 13, 2019.
As of the date hereof, the Company has the
authority to purchase up to an additional $123.8 million of its
securities under its Securities Repurchase Program. The Company may
repurchase its securities in the open market, at times and prices
that are considered to be appropriate by the Company, but is not
obligated under the terms of the Securities Repurchase Program to
repurchase any of its securities.
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 2019 and Convertible Notes due 2022
(which were issued in June 2014 and May 2018, respectively) were
converted into common shares at the beginning of each period and
the interest and non-cash amortization expense associated with
these notes of $6.0 million and $23.5 million during the three
months and year ended December 31, 2018, respectively, were not
incurred. Conversion is not assumed if the results of this
calculation are anti-dilutive.
For the three months and year ended December 31,
2018, the Company's basic weighted average number of shares was
46,382,795 and 34,824,311, respectively. The weighted average
number of shares, both diluted and under the if-converted method,
were anti-dilutive for the three months and year ended December 31,
2018, respectively, as the Company incurred net losses.
As of the date hereof, the Convertible Notes due
2019 and Convertible Notes due 2022 are not eligible for
conversion.
Conference Call
The Company has scheduled a conference call on
February 14, 2019 at 8:30 AM Eastern Standard Time and 2:30 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: 8498535
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.
Slides and Audio Webcast:
There will also be a simultaneous live webcast over
the internet, through the Scorpio Tankers Inc. website
www.scorpiotankers.com. Participants to the live webcast should
register on the website approximately 10 minutes prior to the start
of the webcast.
Webcast URL:
https://edge.media-server.com/m6/p/p9aq9fjc
Current Liquidity
As of February 13, 2019, the Company had
$607.4 million in unrestricted cash and cash equivalents.
Drydock, Scrubber and Ballast Water
Treatment Update
Two of the Company's 2014 built MRs entered drydock
for their class required special survey at the end of December
2018. These drydocks were completed in January 2019.
Set forth below are the expected, estimated
payments through 2020 for the Company's drydocks, ballast water
treatment system installations, and scrubber installations:
| In millions of USD |
As of February 13, 2019 (1) |
| Q1 2019 |
$ |
29.9 |
| Q2 2019 |
56.3 |
| Q3 2019 |
71.2 |
| Q4 2019 |
89.8 |
| FY 2020 |
81.8 |
(1) Includes estimated
cash payments for drydock, ballast water treatment systems and
scrubbers. 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.
Set forth below are the expected, estimated
number of ships and estimated offhire days for the Company's
drydocks ("DD"), ballast water treatment installations (“BWTS”),
and scrubber installations (2):
| |
Q1 2019 |
|
| |
Ships Scheduled for: |
Offhire |
| |
DD |
BWTS |
Scrubbers |
Days |
|
LR2 |
— |
— |
2 |
72 |
|
LR1 |
— |
— |
— |
— |
|
MR* |
3 |
2 |
1 |
76 |
|
Handymax |
— |
— |
— |
— |
| |
|
|
|
|
| Q1
2019 |
3 |
2 |
3 |
148 |
* Q1 2019 MR drydocks include two vessels which
entered drydock at the end of December 2018 and concluded in
January 2019.
| |
Q2 2019 |
|
| |
Ships Scheduled for: |
Offhire |
| |
DD |
BWTS |
Scrubbers |
Days |
|
LR2 |
— |
— |
6 |
168 |
|
LR1 |
— |
— |
3 |
84 |
|
MR |
7 |
5 |
7 |
189 |
|
Handymax |
2 |
2 |
— |
40 |
| |
|
|
|
|
| Q2
2019 |
9 |
7 |
16 |
481 |
| |
|
|
|
|
| |
Q3 2019 |
|
| |
Ships Scheduled for: |
Offhire |
| |
DD |
BWTS |
Scrubbers |
Days |
|
LR2 |
5 |
4 |
10 |
279 |
|
LR1 |
— |
— |
3 |
84 |
|
MR |
6 |
4 |
6 |
162 |
|
Handymax |
5 |
5 |
— |
100 |
| |
|
|
|
|
| Q3
2019 |
16 |
13 |
19 |
625 |
| |
|
|
|
|
| |
Q4 2019 |
|
| |
Ships Scheduled for: |
Offhire |
| |
DD |
BWTS |
Scrubbers |
Days |
|
LR2 |
10 |
8 |
12 |
329 |
|
LR1 |
— |
— |
1 |
28 |
|
MR |
10 |
9 |
10 |
270 |
|
Handymax |
5 |
5 |
— |
100 |
| |
|
|
|
|
| Q4
2019 |
25 |
22 |
23 |
727 |
| |
|
|
|
|
| |
FY 2020 |
|
| |
Ships Scheduled for: |
Offhire |
| |
DD |
BWTS |
Scrubbers |
Days |
|
LR2 |
7 |
— |
8 |
217 |
|
LR1 |
5 |
— |
5 |
135 |
|
MR |
4 |
4 |
21 |
584 |
|
Handymax |
2 |
2 |
— |
40 |
| |
|
|
|
|
| 2020
Total |
18 |
6 |
34 |
976 |
(2) The number of vessels in these tables
reflect a certain amount of overlap where certain vessels may 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.
Debt
Set forth below is a summary of the Company’s
outstanding indebtedness as of the dates presented:
| |
In thousands of U.S.
dollars |
|
Outstanding as of September 30,
2018 |
Drawdowns, and (repayments), net |
Outstanding as of December 31,
2018 |
Drawdowns, and (repayments), net |
Outstanding as of February 13,
2019 |
| 1 |
KEXIM Credit
Facility |
|
299,300 |
|
— |
|
299,300 |
|
(4,300 |
) |
295,000 |
|
| 2 |
ABN AMRO Credit
Facility |
|
102,646 |
|
(2,138 |
) |
100,508 |
|
(1,602 |
) |
98,906 |
|
| 3 |
ING Credit
Facility |
|
147,361 |
|
(3,185 |
) |
144,176 |
|
(1,071 |
) |
143,105 |
|
| 4 |
$35.7 Million Term Loan
Facility |
|
35,658 |
|
(808 |
) |
34,850 |
|
(808 |
) |
34,042 |
|
| 5 |
2016 Credit
Facility |
|
59,189 |
|
(59,189 |
) |
— |
|
— |
|
— |
|
| 6 |
2017 Credit
Facility |
|
147,398 |
|
(2,632 |
) |
144,766 |
|
— |
|
144,766 |
|
| 7 |
DVB 2017 Credit
Facility |
|
25,800 |
|
(25,800 |
) |
— |
|
— |
|
— |
|
| 8 |
Credit Agricole Credit
Facility |
|
101,437 |
|
(2,142 |
) |
99,295 |
|
— |
|
99,295 |
|
| 9 |
ABN AMRO/K-Sure Credit
Facility |
|
50,492 |
|
(962 |
) |
49,530 |
|
— |
|
49,530 |
|
| 10 |
Citi/K-Sure Credit
Facility |
|
105,754 |
|
(2,104 |
) |
103,650 |
|
— |
|
103,650 |
|
| 11 |
ABN AMRO/SEB Credit
Facility |
|
117,700 |
|
(2,875 |
) |
114,825 |
|
— |
|
114,825 |
|
| 12 |
Ocean Yield Lease
Financing |
|
162,947 |
|
(2,685 |
) |
160,262 |
|
(921 |
) |
159,341 |
|
| 13 |
CMBFL Lease
Financing |
|
63,198 |
|
(1,227 |
) |
61,971 |
|
— |
|
61,971 |
|
| 14 |
BCFL Lease Financing
(LR2s) |
|
102,633 |
|
(1,844 |
) |
100,789 |
|
(617 |
) |
100,172 |
|
| 15 |
CSSC Lease
Financing |
|
250,854 |
|
(4,328 |
) |
246,526 |
|
(1,442 |
) |
245,084 |
|
| 16 |
BCFL Lease Financing
(MRs) |
|
101,478 |
|
(2,647 |
) |
98,831 |
|
(920 |
) |
97,911 |
|
| 17 |
2018 CMB Lease
Financing |
|
139,071 |
|
(2,528 |
) |
136,543 |
|
(2,529 |
) |
134,014 |
|
| 18 |
$116.0
Million Lease Financing |
|
114,255 |
|
(1,582 |
) |
112,673 |
|
(558 |
) |
112,115 |
|
| 19 |
AVIC International
Lease Financing |
|
142,052 |
|
(2,949 |
) |
139,103 |
|
— |
|
139,103 |
|
| 20 |
China Huarong Shipping
Lease Financing |
|
140,625 |
|
(3,375 |
) |
137,250 |
|
— |
|
137,250 |
|
| 21 |
$157.5 Million Lease
Financing |
|
— |
|
152,086 |
|
152,086 |
|
— |
|
152,086 |
|
| 22 |
$88.0
Million Lease Financing |
|
86,075 |
|
(1,925 |
) |
84,150 |
|
— |
|
84,150 |
|
| 23 |
2020 Senior Unsecured
Notes |
|
53,750 |
|
— |
|
53,750 |
|
— |
|
53,750 |
|
| 24 |
2019 Senior Unsecured
Notes |
|
57,500 |
|
— |
|
57,500 |
|
— |
|
57,500 |
|
| 25 |
Convertible Notes due
2019 |
|
145,000 |
|
— |
|
145,000 |
|
— |
|
145,000 |
|
| 26 |
Convertible Notes due
2022 |
|
203,500 |
|
— |
|
203,500 |
|
— |
|
203,500 |
|
| |
|
|
$ |
2,955,673 |
|
$ |
25,161 |
|
$ |
2,980,834 |
|
$ |
(14,768 |
) |
$ |
2,966,066 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Set forth below are the expected, estimated
future principal repayments on the Company's outstanding
indebtedness which includes principal amounts due under lease
financing arrangements:
| In
millions of U.S. dollars |
As of February 13, 2019 |
| Q1 2019 - principal
payments made to date |
$ |
14.8 |
|
| Q1 2019 - remaining
principal payments (1) |
105.6 |
|
| Q2 2019 |
46.4 |
|
| Q3 2019 (2) |
208.4 |
|
| Q4 2019 |
46.6 |
|
| Q1 2020 |
63.5 |
|
| Q2 2020 (3) |
100.6 |
|
| Q3 2020 (4) |
149.0 |
|
| Q4 2020 |
44.4 |
|
| 2021 and
thereafter |
2,201.5 |
|
| |
|
| |
$ |
2,980.8 |
|
(1) Repayments include $57.5 million due
as part of the early redemption of the Company's Senior Notes Due
June 2019.
(2) Repayments include $145.0 million due
upon the maturity of the Company's Convertible Notes due 2019.
(3) Repayments include $53.8 million due
upon the maturity of the Company's Senior Unsecured Notes due
2020.
(4) Repayments include $87.7 million due
upon the maturity of the Company's ABN AMRO Credit Facility.
Explanation of Variances on the Fourth
Quarter of 2018 Financial Results Compared to the Fourth Quarter of
2017
For the three months ended December 31, 2018,
the Company recorded a net loss of $17.7 million compared to a net
loss of $41.5 million for the three months ended December 31, 2017.
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
charters, time charters, and pool charters), and it provides useful
information to investors and management. The following table
depicts TCE revenue for the three months ended December 31, 2018
and 2017:
| |
|
|
|
| |
|
|
For the three months ended December
31, |
| In
thousands of U.S. dollars |
|
2018 |
|
2017 |
| |
Vessel revenue |
|
$167,525 |
|
|
$148,394 |
|
| |
Voyage expenses |
|
(304 |
) |
|
(3,013 |
) |
| |
TCE
revenue |
|
$ |
167,221 |
|
|
$ |
145,381 |
|
- TCE revenue for the three months ended
December 31, 2018 increased $21.8 million to $167.2 million, from
$145.4 million for the three months ended December 31, 2017. This
increase was the result of an improvement in TCE revenue per day,
which increased to $15,008 per day during the three months ended
December 31, 2018, from $12,805 per day during the three months
ended December 31, 2017. The fourth quarter of 2018,
particularly November and December, reflected a dramatic
improvement in the product tanker market, which had experienced
significant headwinds since the latter half of 2016. The
positive trends developed as a result of a confluence of factors,
including (i) increased U.S. Gulf exports to Latin America, (ii)
the opening of arbitrage windows on several trading routes, (iii)
the reduction of oil prices followed by a reduction in refined
commodities leading to an increase in demand for refined
commodities, (iv) the continued drawdown of global product
inventories thus increasing the need for imports at the points of
consumption, and (v) strength in the crude tanker market earlier in
the quarter resulting in certain product tankers transitioning to
the trading of crude and related cargos. This increase in TCE
revenue per day was partially offset by a reduction of the
Company's fleet to an average of 121.9 operating vessels during the
three months ended December 31, 2018 from an average of 125.5
operating vessels during the three months ended December 31, 2017,
which was the result of the redelivery of 10 time chartered-in
vessels throughout 2018.
- Vessel operating costs for the three
months ended December 31, 2018 decreased $3.6 million to $71.2
million, from $74.8 million for the three months ended December 31,
2017. This decrease was primarily due to take over costs that
the Company incurred for 10 vessels acquired from NPTI that
transitioned technical management during the three months ended
December 31, 2017. These costs included additional crew
severance and repatriation costs along with the costs for new
spares, stores and other supplies. No such costs were
incurred during the three months ended December 31, 2018.This
decrease was partially offset by an increase in the average number
of owned and bareboat chartered-in vessels for the three months
ended December 31, 2018 to 119.0 vessels from 116.7 vessels for the
three months ended December 31, 2017, which is due to the delivery
of two vessels under the Company's newbuilding program during the
first quarter of 2018.
- Charterhire expense for the three
months ended December 31, 2018 decreased $7.3 million to $10.6
million, from $18.0 million for the three months ended December 31,
2017. This decrease was the result of a decrease in the
number of time chartered-in vessels during those periods. The
Company's time and bareboat chartered-in fleet consisted of an
average of 2.9 time chartered-in vessels and 10.0 bareboat
chartered-in vessels for the three months ended December 31, 2018,
and the Company's time and bareboat chartered-in fleet consisted of
an average of 8.8 time chartered-in vessels and 10.0 bareboat
chartered-in vessels for the three months ended December 31,
2017. The average daily base rates on the Company's time
chartered-in fleet during the three months ended December 31, 2018
and December 31, 2017 were $13,517 per vessel per day and
$13,681 per vessel per day, respectively. The average daily
base rates for the Company's bareboat chartered-in fleet during the
three months ended December 31, 2018 and December 31, 2017
were $7,656 per vessel per day and $7,362 per vessel per day,
respectively.
- Depreciation expense for the three
months ended December 31, 2018 increased $1.1 million to $44.6
million, from $43.5 million for the three months ended December 31,
2017. This increase was primarily driven by the delivery of
two MRs under the Company's newbuilding program in January
2018.
- Financial expenses for the three
months ended December 31, 2018 increased $9.5 million to $48.2
million, from $38.6 million for the three months ended December 31,
2017. The increase in financial expenses was primarily a result of
(i) increases in LIBOR rates as compared to the three months ended
December 31, 2017, (ii) an increase in the Company's average debt
to $2.9 billion during the three months ended December 31, 2018
from $2.8 billion during the three months ended December 31, 2017
as a result of the Company's previously announced refinancing
initiatives and (iii) increased borrowing costs associated with the
Company's lease financing arrangements that were entered into
during 2018.
Scorpio Tankers Inc. and
SubsidiariesCondensed Consolidated Statements of
Income or Loss(unaudited)
| |
For the three months ended December
31, |
|
For the year ended December 31, |
| In
thousands of U.S. dollars except per share and share data |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Vessel revenue |
$ |
167,525 |
|
|
$ |
148,394 |
|
|
$ |
585,047 |
|
|
$ |
512,732 |
|
| |
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
| |
Vessel operating
costs |
(71,219 |
) |
|
(74,824 |
) |
|
(280,460 |
) |
|
(231,227 |
) |
| |
Voyage expenses |
(304 |
) |
|
(3,013 |
) |
|
(5,146 |
) |
|
(7,733 |
) |
| |
Charterhire |
(10,644 |
) |
|
(17,959 |
) |
|
(59,632 |
) |
|
(75,750 |
) |
| |
Depreciation |
(44,592 |
) |
|
(43,535 |
) |
|
(176,723 |
) |
|
(141,418 |
) |
| |
General and
administrative expenses |
(12,927 |
) |
|
(11,370 |
) |
|
(52,272 |
) |
|
(47,511 |
) |
| |
Loss on sale of
vessels |
— |
|
|
— |
|
|
— |
|
|
(23,345 |
) |
| |
Merger transaction
related costs |
— |
|
|
(1,299 |
) |
|
(272 |
) |
|
(36,114 |
) |
| |
Bargain purchase
gain |
— |
|
|
— |
|
|
— |
|
|
5,417 |
|
| |
Total operating
expenses |
(139,686 |
) |
|
(152,000 |
) |
|
(574,505 |
) |
|
(557,681 |
) |
|
Operating income / (loss) |
27,839 |
|
|
(3,606 |
) |
|
10,542 |
|
|
(44,949 |
) |
|
Other (expense) and income, net |
|
|
|
|
|
|
|
| |
Financial expenses |
(48,156 |
) |
|
(38,619 |
) |
|
(186,628 |
) |
|
(116,240 |
) |
| |
Loss on exchange of
convertible notes |
— |
|
|
— |
|
|
(17,838 |
) |
|
— |
|
| |
Realized loss on
derivative financial instruments |
— |
|
|
— |
|
|
— |
|
|
(116 |
) |
| |
Financial income |
2,908 |
|
|
384 |
|
|
4,458 |
|
|
1,538 |
|
| |
Other expenses,
net |
(259 |
) |
|
332 |
|
|
(605 |
) |
|
1,527 |
|
| |
Total other expense,
net |
(45,507 |
) |
|
(37,903 |
) |
|
(200,613 |
) |
|
(113,291 |
) |
| Net
loss |
$ |
(17,668 |
) |
|
$ |
(41,509 |
) |
|
$ |
(190,071 |
) |
|
$ |
(158,240 |
) |
| |
|
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Basic |
$ |
(0.38 |
) |
|
$ |
(1.46 |
) |
|
$ |
(5.46 |
) |
|
$ |
(7.35 |
) |
| |
Diluted |
$ |
(0.38 |
) |
|
$ |
(1.46 |
) |
|
$ |
(5.46 |
) |
|
$ |
(7.35 |
) |
| |
Basic weighted average
shares outstanding |
46,382,795 |
|
|
28,366,872 |
|
|
34,824,311 |
|
|
21,533,340 |
|
| |
Diluted weighted
average shares outstanding (1) |
46,382,795 |
|
|
28,366,872 |
|
|
34,824,311 |
|
|
21,533,340 |
|
(1) The dilutive effect of (i) unvested
shares of restricted stock and (ii) the potentially dilutive
securities relating to the Company's Convertible Notes due 2019 and
Convertible Notes due 2022 were excluded from the computation of
diluted earnings per share for the three months and year ended
December 31, 2018 because their effect would have been
anti-dilutive. Weighted average shares under the if-converted
method (which includes the potential dilutive effect of the
unvested shares of restricted stock, the Convertible Notes due
2019, and the Convertible Notes due 2022) were 53,232,552 and
40,788,217 for the three months and year ended December 31, 2018,
respectively.
Scorpio Tankers Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets(unaudited)
| |
|
|
| |
As of |
| In thousands of U.S.
dollars |
December 31, 2018 |
|
December 31, 2017 |
|
Assets |
|
|
|
|
|
|
| Current
assets |
|
|
|
|
|
|
| Cash and cash
equivalents |
$ |
593,652 |
|
|
$ |
186,462 |
|
| Accounts
receivable |
67,207 |
|
|
65,458 |
|
| Prepaid expenses and
other current assets |
18,182 |
|
|
17,720 |
|
| Inventories |
8,300 |
|
|
9,713 |
|
| Total current
assets |
687,341 |
|
|
279,353 |
|
| Non-current
assets |
|
|
|
| Vessels and
drydock |
3,997,789 |
|
|
4,090,094 |
|
| Vessels under
construction |
— |
|
|
55,376 |
|
| Other assets |
75,210 |
|
|
50,684 |
|
| Goodwill |
11,539 |
|
|
11,482 |
|
| Restricted cash |
12,285 |
|
|
11,387 |
|
| Total
non-current assets |
4,096,823 |
|
|
4,219,023 |
|
| Total
assets |
$ |
4,784,164 |
|
|
$ |
4,498,376 |
|
| Current
liabilities |
|
|
|
| Current portion of
long-term debt |
$ |
297,934 |
|
|
$ |
113,036 |
|
| Finance lease
liability |
114,429 |
|
|
50,146 |
|
| Accounts payable |
11,865 |
|
|
13,044 |
|
| Accrued expenses |
22,973 |
|
|
32,838 |
|
| Total current
liabilities |
447,201 |
|
|
209,064 |
|
| Non-current
liabilities |
|
|
|
| Long-term debt |
1,192,000 |
|
|
1,937,018 |
|
| Finance lease
liability |
1,305,952 |
|
|
666,993 |
|
| Total
non-current liabilities |
2,497,952 |
|
|
2,604,011 |
|
| Total
liabilities |
2,945,153 |
|
|
2,813,075 |
|
| Shareholders'
equity |
|
|
|
| Issued, authorized and
fully paid-in share capital: |
|
|
|
| Share capital |
5,776 |
|
|
3,766 |
|
| Additional paid-in
capital |
2,648,599 |
|
|
2,283,591 |
|
| Treasury shares |
(467,056 |
) |
|
(443,816 |
) |
| Accumulated deficit
(1) |
(348,308 |
) |
|
(158,240 |
) |
| Total
shareholders' equity |
1,839,011 |
|
|
1,685,301 |
|
| Total
liabilities and shareholders' equity |
$ |
4,784,164 |
|
|
$ |
4,498,376 |
|
(1) Accumulated deficit reflects the impact
of the adoption of IFRS 15, Revenue from Contracts with Customers,
which is effective for annual periods beginning on January 1,
2018. The standard may be applied retrospectively to each
prior period presented or retrospectively with the cumulative
effect recognized as of the date of adoption (the "modified
retrospective method"). We have applied the modified retrospective
method upon the date of transition. Accordingly, the
cumulative effect of the application of this standard resulted in a
$3,888 reduction in the opening balance of Accumulated deficit on
January 1, 2018.
Scorpio Tankers Inc. and
SubsidiariesCondensed Consolidated Statements of
Cash Flows(unaudited)
| |
For the year ended December 31, |
| In thousands of U.S.
dollars |
2018 |
|
|
2017 |
| Operating
activities |
|
|
|
|
|
|
|
| Net loss |
$ |
(190,071 |
) |
|
$ |
(158,240 |
) |
| Loss on sales of
vessels |
— |
|
|
23,345 |
|
| Depreciation |
176,723 |
|
|
141,418 |
|
| Amortization of
restricted stock |
25,547 |
|
|
22,385 |
|
| Amortization of
deferred financing fees |
10,541 |
|
|
13,381 |
|
| Write-off of deferred
financing fees |
13,212 |
|
|
2,467 |
|
| Bargain purchase
gain |
— |
|
|
(5,417 |
) |
| Share-based transaction
costs |
— |
|
|
5,973 |
|
| Accretion of
convertible notes |
13,225 |
|
|
12,211 |
|
| Accretion of fair value
measurement on debt assumed from NPTI |
3,779 |
|
|
1,478 |
|
| Loss on exchange of
convertible notes |
17,838 |
|
|
— |
|
| |
70,794 |
|
|
59,001 |
|
| Changes in assets and
liabilities: |
|
|
|
| Decrease / (increase)
in inventories |
1,535 |
|
|
(1,319 |
) |
| Increase in accounts
receivable |
(1,788 |
) |
|
(1,478 |
) |
| (Increase) / decrease
in prepaid expenses and other current assets |
(163 |
) |
|
12,219 |
|
| Increase in other
assets |
(1,226 |
) |
|
(22,651 |
) |
| (Decrease) / increase
in accounts payable |
(1,382 |
) |
|
3,694 |
|
| Decrease in accrued
expenses |
(9,980 |
) |
|
(7,665 |
) |
| |
(13,004 |
) |
|
(17,200 |
) |
| Net cash inflow
from operating activities |
57,790 |
|
|
41,801 |
|
| Investing
activities |
|
|
|
| Acquisition of vessels
and payments for vessels under construction |
(26,057 |
) |
|
(258,311 |
) |
| Proceeds from disposal
of vessels |
— |
|
|
127,372 |
|
| Net cash paid for the
merger with NPTI |
— |
|
|
(23,062 |
) |
| Drydock, scrubber and
BWTS payments (owned and bareboat-in vessels) |
(26,680 |
) |
|
(5,922 |
) |
| Net cash
outflow from investing activities |
(52,737 |
) |
|
(159,923 |
) |
| Financing
activities |
|
|
|
| Debt repayments |
(865,594 |
) |
|
(546,296 |
) |
| Issuance of debt |
1,007,298 |
|
|
525,642 |
|
| Debt issuance
costs |
(23,056 |
) |
|
(11,758 |
) |
| Refund of debt issuance
costs due to early debt repayment |
2,826 |
|
|
— |
|
| Increase in restricted
cash |
(897 |
) |
|
(2,279 |
) |
| Gross proceeds from
issuance of common stock |
337,000 |
|
|
303,500 |
|
| Equity issuance
costs |
(17,073 |
) |
|
(15,056 |
) |
| Dividends paid |
(15,127 |
) |
|
(9,561 |
) |
| Redemption of NPTI
Redeemable Preferred Shares |
— |
|
|
(39,495 |
) |
| Repurchase of common
stock |
(23,240 |
) |
|
— |
|
| Net cash inflow
from financing activities |
402,137 |
|
|
204,697 |
|
| Increase in
cash and cash equivalents |
407,190 |
|
|
86,575 |
|
| Cash and cash
equivalents at January 1, |
186,462 |
|
|
99,887 |
|
| Cash and cash
equivalents at December 31, |
$ |
593,652 |
|
|
$ |
186,462 |
|
Scorpio Tankers Inc. and
SubsidiariesOther operating data for the three
months and year ended December 31, 2018 and
2017(unaudited)
| |
|
For the three months ended December
31, |
|
For the year ended December 31, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| Adjusted
EBITDA(1) (in thousands of U.S. dollars) |
|
$ |
78,316 |
|
|
$ |
46,464 |
|
|
$ |
212,479 |
|
|
$ |
174,307 |
|
| Average Daily
Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Time charter equivalent
per day(2) |
|
$ |
15,008 |
|
|
$ |
12,805 |
|
|
$ |
12,782 |
|
|
$ |
13,146 |
|
| Vessel operating costs
per day(3) |
|
$ |
6,505 |
|
|
$ |
6,971 |
|
|
$ |
6,463 |
|
|
$ |
6,559 |
|
| |
|
|
|
|
|
|
|
|
| LR2 |
|
|
|
|
|
|
|
|
| TCE per revenue day
(2) |
|
$ |
16,228 |
|
|
$ |
15,005 |
|
|
$ |
13,968 |
|
|
$ |
14,849 |
|
| Vessel operating costs
per day(3) |
|
$ |
6,574 |
|
|
$ |
7,187 |
|
|
$ |
6,631 |
|
|
$ |
6,705 |
|
| Average number of owned
or finance leased vessels |
|
38.0 |
|
|
38.0 |
|
|
38.0 |
|
|
27.5 |
|
| Average number of time
chartered-in vessels |
|
1.0 |
|
|
1.0 |
|
|
1.5 |
|
|
1.2 |
|
| |
|
|
|
|
|
|
|
|
| LR1 |
|
|
|
|
|
|
|
|
| TCE per revenue day
(2) |
|
$ |
13,548 |
|
|
$ |
11,275 |
|
|
$ |
10,775 |
|
|
$ |
11,409 |
|
| Vessel operating costs
per day(3) |
|
$ |
6,595 |
|
|
$ |
7,488 |
|
|
$ |
6,608 |
|
|
$ |
7,073 |
|
| Average number of owned
or finance leased vessels |
|
12.0 |
|
|
12.0 |
|
|
12.0 |
|
|
4.9 |
|
| Average number of time
chartered-in vessels |
|
— |
|
|
— |
|
|
— |
|
|
0.4 |
|
| |
|
|
|
|
|
|
|
|
| MR |
|
|
|
|
|
|
|
|
| TCE per revenue day
(2) |
|
$ |
14,412 |
|
|
$ |
12,377 |
|
|
$ |
12,589 |
|
|
$ |
12,975 |
|
| Vessel operating costs
per day(3) |
|
$ |
6,504 |
|
|
$ |
6,662 |
|
|
$ |
6,366 |
|
|
$ |
6,337 |
|
| Average number of owned
or finance leased vessels |
|
45.0 |
|
|
42.7 |
|
|
44.9 |
|
|
41.7 |
|
| Average number of time
chartered-in vessels |
|
1.9 |
|
|
5.9 |
|
|
4.3 |
|
|
6.7 |
|
| Average number of
bareboat chartered-in vessels |
|
3.0 |
|
|
3.0 |
|
|
3.0 |
|
|
2.1 |
|
| |
|
|
|
|
|
|
|
|
| Handymax |
|
|
|
|
|
|
|
|
| TCE per revenue day
(2) |
|
$ |
14,999 |
|
|
$ |
10,747 |
|
|
$ |
12,196 |
|
|
$ |
11,706 |
|
| Vessel operating costs
per day(3) |
|
$ |
6,331 |
|
|
$ |
6,956 |
|
|
$ |
6,295 |
|
|
$ |
6,716 |
|
| Average number of owned
or finance leased vessels |
|
14.0 |
|
|
14.0 |
|
|
14.0 |
|
|
14.0 |
|
| Average number of time
chartered-in vessels |
|
— |
|
|
2.0 |
|
|
0.5 |
|
|
2.0 |
|
| Average number of
bareboat chartered-in vessels |
|
7.0 |
|
|
7.0 |
|
|
7.0 |
|
|
6.1 |
|
| |
|
|
|
|
|
|
|
|
| Fleet
data |
|
|
|
|
|
|
|
|
| Average number of owned
or finance leased vessels |
|
109.0 |
|
|
106.7 |
|
|
108.9 |
|
|
88.0 |
|
| Average number of time
chartered-in vessels |
|
2.9 |
|
|
8.8 |
|
|
6.3 |
|
|
10.3 |
|
| Average number of
bareboat chartered-in vessels |
|
10.0 |
|
|
10.0 |
|
|
10.0 |
|
|
8.2 |
|
| |
|
|
|
|
|
|
|
|
|
Drydock |
|
|
|
|
|
|
|
|
| Drydock, scrubber, and
BWTS payments for owned or bareboat-in vessels (in thousands of
U.S. dollars) |
|
$ |
14,137 |
|
|
$ |
1,197 |
|
|
$ |
26,680 |
|
|
$ |
6,353 |
|
(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 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 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 February 13,
2019
| |
Vessel
Name |
Year Built |
DWT |
Ice class |
Employment |
Vessel type |
| |
Owned or finance leased
vessels |
|
|
|
|
|
| 1 |
|
STI Brixton |
2014 |
38,734 |
|
1A |
SHTP (1) |
Handymax |
| 2 |
|
STI Comandante |
2014 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 3 |
|
STI Pimlico |
2014 |
38,734 |
|
1A |
Time
Charter (5) |
Handymax |
| 4 |
|
STI Hackney |
2014 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 5 |
|
STI Acton |
2014 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 6 |
|
STI Fulham |
2014 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 7 |
|
STI Camden |
2014 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 8 |
|
STI Battersea |
2014 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 9 |
|
STI Wembley |
2014 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 10 |
|
STI Finchley |
2014 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 11 |
|
STI Clapham |
2014 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 12 |
|
STI Poplar |
2014 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 13 |
|
STI Hammersmith |
2015 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 14 |
|
STI Rotherhithe |
2015 |
38,734 |
|
1A |
SHTP
(1) |
Handymax |
| 15 |
|
STI Amber |
2012 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 16 |
|
STI Topaz |
2012 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 17 |
|
STI Ruby |
2012 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 18 |
|
STI Garnet |
2012 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 19 |
|
STI Onyx |
2012 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 20 |
|
STI Fontvieille |
2013 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 21 |
|
STI Ville |
2013 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 22 |
|
STI Duchessa |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 23 |
|
STI Opera |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 24 |
|
STI Texas City |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 25 |
|
STI Meraux |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 26 |
|
STI San Antonio |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 27 |
|
STI Venere |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 28 |
|
STI Virtus |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 29 |
|
STI Aqua |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 30 |
|
STI Dama |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 31 |
|
STI Benicia |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 32 |
|
STI Regina |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 33 |
|
STI St. Charles |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 34 |
|
STI Mayfair |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 35 |
|
STI Yorkville |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 36 |
|
STI Milwaukee |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 37 |
|
STI Battery |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 38 |
|
STI Soho |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 39 |
|
STI Memphis |
2014 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 40 |
|
STI Tribeca |
2015 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 41 |
|
STI Gramercy |
2015 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 42 |
|
STI Bronx |
2015 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 43 |
|
STI Pontiac |
2015 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 44 |
|
STI Manhattan |
2015 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 45 |
|
STI Queens |
2015 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 46 |
|
STI Osceola |
2015 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 47 |
|
STI Notting Hill |
2015 |
49,687 |
|
1B |
SMRP
(2) |
MR |
| 48 |
|
STI Seneca |
2015 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 49 |
|
STI Westminster |
2015 |
49,687 |
|
1B |
SMRP
(2) |
MR |
| 50 |
|
STI Brooklyn |
2015 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 51 |
|
STI Black Hawk |
2015 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 52 |
|
STI Galata |
2017 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 53 |
|
STI Bosphorus |
2017 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 54 |
|
STI Leblon |
2017 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 55 |
|
STI La Boca |
2017 |
49,990 |
|
— |
SMRP
(2) |
MR |
| 56 |
|
STI San Telmo |
2017 |
49,990 |
|
1B |
SMRP
(2) |
MR |
| 57 |
|
STI Donald C
Trauscht |
2017 |
49,990 |
|
1B |
SMRP
(2) |
MR |
| 58 |
|
STI Esles II |
2018 |
49,990 |
|
1B |
SMRP
(2) |
MR |
| 59 |
|
STI Jardins |
2018 |
49,990 |
|
1B |
SMRP
(2) |
MR |
| 60 |
|
STI Excel |
2015 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 61 |
|
STI Excelsior |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 62 |
|
STI Expedite |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 63 |
|
STI Exceed |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 64 |
|
STI Executive |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 65 |
|
STI Excellence |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 66 |
|
STI Experience |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 67 |
|
STI Express |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 68 |
|
STI Precision |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 69 |
|
STI Prestige |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 70 |
|
STI Pride |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 71 |
|
STI Providence |
2016 |
74,000 |
|
— |
SLR1P
(3) |
LR1 |
| 72 |
|
STI Elysees |
2014 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 73 |
|
STI Madison |
2014 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 74 |
|
STI Park |
2014 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 75 |
|
STI Orchard |
2014 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 76 |
|
STI Sloane |
2014 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 77 |
|
STI Broadway |
2014 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 78 |
|
STI Condotti |
2014 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 79 |
|
STI Rose |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 80 |
|
STI Veneto |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 81 |
|
STI Alexis |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 82 |
|
STI Winnie |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 83 |
|
STI Oxford |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 84 |
|
STI Lauren |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 85 |
|
STI Connaught |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 86 |
|
STI Spiga |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 87 |
|
STI Savile Row |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 88 |
|
STI Kingsway |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 89 |
|
STI Carnaby |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 90 |
|
STI Solidarity |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 91 |
|
STI Lombard |
2015 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 92 |
|
STI Grace |
2016 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 93 |
|
STI Jermyn |
2016 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 94 |
|
STI Sanctity |
2016 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 95 |
|
STI Solace |
2016 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 96 |
|
STI Stability |
2016 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 97 |
|
STI Steadfast |
2016 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 98 |
|
STI Supreme |
2016 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 99 |
|
STI Symphony |
2016 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 100 |
|
STI Gallantry |
2016 |
113,000 |
|
— |
SLR2P
(4) |
LR2 |
| 101 |
|
STI Goal |
2016 |
113,000 |
|
— |
SLR2P
(4) |
LR2 |
| 102 |
|
STI Nautilus |
2016 |
113,000 |
|
— |
SLR2P
(4) |
LR2 |
| 103 |
|
STI Guard |
2016 |
113,000 |
|
— |
SLR2P
(4) |
LR2 |
| 104 |
|
STI Guide |
2016 |
113,000 |
|
— |
SLR2P
(4) |
LR2 |
| 105 |
|
STI Selatar |
2017 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 106 |
|
STI Rambla |
2017 |
109,999 |
|
— |
SLR2P
(4) |
LR2 |
| 107 |
|
STI Gauntlet |
2017 |
113,000 |
|
— |
SLR2P
(4) |
LR2 |
| 108 |
|
STI Gladiator |
2017 |
113,000 |
|
— |
SLR2P
(4) |
LR2 |
| 109 |
|
STI Gratitude |
2017 |
113,000 |
|
— |
SLR2P
(4) |
LR2 |
| |
|
|
|
|
|
|
| |
Total owned or finance
leased DWT |
|
7,883,190 |
|
|
|
|
| |
|
|
|
|
|
|
| |
Vessel
Name |
|
Year Built |
|
DWT |
|
Ice class |
|
Employment |
|
Vessel type |
|
Charter type |
|
Daily Base Rate |
|
Expiry (6) |
|
| |
Time or bareboat
chartered-in vessels |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 110 |
|
Silent |
|
2007 |
|
37,847 |
|
|
1A |
|
SHTP (1) |
|
Handymax |
|
Bareboat |
|
$ |
7,500 |
|
|
31-Mar-19 |
|
| 111 |
|
Single |
|
2007 |
|
37,847 |
|
|
1A |
|
SHTP
(1) |
|
Handymax |
|
Bareboat |
|
$ |
7,500 |
|
|
31-Mar-19 |
|
| 112 |
|
Star I |
|
2007 |
|
37,847 |
|
|
1A |
|
SHTP
(1) |
|
Handymax |
|
Bareboat |
|
$ |
7,500 |
|
|
31-Mar-19 |
|
| 113 |
|
Sky |
|
2007 |
|
37,847 |
|
|
1A |
|
SHTP
(1) |
|
Handymax |
|
Bareboat |
|
$ |
6,000 |
|
|
31-Mar-19 |
|
| 114 |
|
Steel |
|
2008 |
|
37,847 |
|
|
1A |
|
SHTP
(1) |
|
Handymax |
|
Bareboat |
|
$ |
6,000 |
|
|
31-Mar-19 |
|
| 115 |
|
Stone I |
|
2008 |
|
37,847 |
|
|
1A |
|
SHTP
(1) |
|
Handymax |
|
Bareboat |
|
$ |
6,000 |
|
|
31-Mar-19 |
|
| 116 |
|
Style |
|
2008 |
|
37,847 |
|
|
1A |
|
SHTP
(1) |
|
Handymax |
|
Bareboat |
|
$ |
6,000 |
|
|
31-Mar-19 |
|
| 117 |
|
STI Beryl |
|
2013 |
|
49,990 |
|
|
— |
|
SMRP (2) |
|
MR |
|
Bareboat |
|
$ |
8,800 |
|
|
18-Apr-25 |
(7) |
| 118 |
|
STI Le Rocher |
|
2013 |
|
49,990 |
|
|
— |
|
SMRP
(2) |
|
MR |
|
Bareboat |
|
$ |
8,800 |
|
|
21-Apr-25 |
(7) |
| 119 |
|
STI Larvotto |
|
2013 |
|
49,990 |
|
|
— |
|
SMRP
(2) |
|
MR |
|
Bareboat |
|
$ |
8,800 |
|
|
28-Apr-25 |
(7) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total time or bareboat
chartered-in DWT |
|
|
|
414,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total Fleet DWT |
|
|
|
8,298,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This vessel operates in the Scorpio Handymax
Tanker Pool, or SHTP. SHTP is a Scorpio Group Pool and is operated
by Scorpio Commercial Management S.A.M., or SCM. SHTP and SCM are
related parties to the Company.(2) This vessel operates in the
Scorpio MR Pool, or SMRP. SMRP is a Scorpio Group 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 Group Pool and is operated by SCM. SLR1P and SCM
are related parties to the Company.(4) This vessel operates in the
Scorpio LR2 Pool, or SLR2P. SLR2P is a Scorpio Group Pool and is
operated by SCM. SLR2P and SCM are related parties to the
Company.(5) This vessel is currently time chartered-out to an
unrelated third-party for three years at $18,000 per day. This time
charter is scheduled to expire in March 2019.(6) Redelivery from
the charterer is plus or minus 30 days from the expiry date.(7) 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, 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 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 amount of dividends, if any, depends on the
Company's earnings, financial condition, cash requirements and
availability, fleet renewal and expansion, restrictions in the loan
agreements, the provisions of Marshall Islands law affecting the
payment of dividends and other factors.
The Company's dividends paid during 2017 and 2018
were as follows:
| Date
paid |
Dividends pershare |
| March 2017 |
$0.100 |
| June
2017 |
$0.100 |
|
September 2017 |
$0.100 |
|
December 2017 |
$0.100 |
| March
2018 |
$0.100 |
| June
2018 |
$0.100 |
|
September 2018 |
$0.100 |
|
December 2018 |
$0.100 |
|
|
|
On February 13, 2019, the Company's Board of
Directors declared a quarterly cash dividend of $0.10 per share,
payable on or about March 28, 2019 to all shareholders of record as
of March 13, 2019 (the record date). As of February 13,
2019, there were 51,397,470 shares outstanding.
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 (i)
Convertible Notes due 2019, which were issued in June 2014, (ii)
Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in
May 2014, (iii) Senior Notes Due June 2019 (NYSE: SBBC), which were
issued in March 2017, and (iv) Convertible Notes due 2022 which
were issued in May and July 2018.
Since January 2018 through the date of this press
release, the Company has acquired an aggregate of 1,351,265 of its
common shares at an average price of $17.20 per share; the
repurchased shares are being held as treasury shares. There were
51,397,470 shares outstanding as of February 13, 2019.
As of the date hereof, the Company has the
authority to purchase up to an additional $123.8 million of its
securities under its Securities Repurchase Program. The Company may
repurchase its securities in the open market, at times and prices
that are considered to be appropriate by the Company, but is not
obligated under the terms of the Securities Repurchase Program to
repurchase any of its securities.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine
transportation of petroleum products worldwide. Scorpio Tankers
Inc. currently owns or finance leases 109 product tankers (38 LR2
tankers, 12 LR1 tankers, 45 MR tankers, 14 Handymax tankers) with
an average age of 3.5 years and time or bareboat charters-in 10
product tankers (three MR tankers and seven Handymax tankers).
Additional information about the Company is available at the
Company's website www.scorpiotankers.com, which is not a part of
this press release.
Non-IFRS Measures
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 (i.e. "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 time
charter equivalent 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 time charter
equivalent 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 time charter equivalent revenue, adjusted net income
or loss with the 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.
Time charter equivalent revenue is reconciled
above in the section entitled 'Explanation of Variances on the
Fourth Quarter of 2018 Financial Results Compared to the Fourth
Quarter of 2017'.
Reconciliation of Net Loss to Adjusted Net
Loss
| |
|
|
|
For the three months ended December 31,
2018 |
|
| |
|
|
|
|
|
Per share |
|
Per share |
|
| In
thousands of U.S. dollars except per share data |
|
Amount |
|
basic |
|
diluted |
|
| |
|
Net loss |
|
$ |
(17,668 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.38 |
) |
|
| |
|
Adjustment: |
|
|
|
|
|
|
|
| |
|
Deferred
financing fees write-off |
|
266 |
|
|
0.01 |
|
|
0.01 |
|
|
| |
|
Adjusted net loss |
|
$ |
(17,402 |
) |
|
$ |
(0.38 |
) |
(1) |
$ |
(0.38 |
) |
(1) |
| |
|
|
For the three months ended December 31,
2017 |
|
| |
|
|
|
|
Per share |
|
Per share |
|
| In
thousands of U.S. dollars except per share data |
|
Amount |
|
basic |
|
diluted |
|
| |
Net loss |
|
$ |
(41,509 |
) |
|
$ |
(1.46 |
) |
|
$ |
(1.46 |
) |
|
| |
Adjustments: |
|
|
|
|
|
|
|
| |
Merger
transaction related costs |
|
1,299 |
|
|
0.05 |
|
|
0.05 |
|
|
| |
Deferred
financing fees write-off |
|
970 |
|
|
0.03 |
|
|
0.03 |
|
|
| |
Adjusted net loss |
|
$ |
(39,240 |
) |
|
$ |
(1.38 |
) |
|
$ |
(1.38 |
) |
|
| |
|
For the year ended December 31,
2018 |
|
| In
thousands of U.S. dollars except per share data |
|
Amount |
|
Per share basic |
|
Per share
diluted |
|
| |
|
|
|
|
|
|
|
| Net loss |
|
$ |
(190,071 |
) |
|
$ |
(5.46 |
) |
|
|
(5.46 |
) |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
| |
Merger
transaction related costs |
|
272 |
|
|
0.01 |
|
|
0.01 |
|
|
| |
Deferred
financing fees write-off |
|
13,212 |
|
|
0.38 |
|
|
0.38 |
|
|
| |
Loss on
exchange of convertible notes |
|
17,838 |
|
|
0.51 |
|
|
0.51 |
|
|
| Adjusted net
loss |
|
$ |
(158,749 |
) |
|
$ |
(4.56 |
) |
|
$ |
(4.56 |
) |
|
| |
|
For the year ended December 31,
2017 |
|
| |
|
|
|
Per share |
|
Per share |
|
| In thousands of U.S.
dollars except per share data |
|
Amount |
|
basic |
|
diluted |
|
| Net
loss |
|
$ |
(158,240 |
) |
|
$ |
(7.35 |
) |
|
$ |
(7.35 |
) |
|
|
Adjustments: |
|
|
|
|
|
|
|
| Deferred
financing fees write-off |
|
2,467 |
|
|
0.11 |
|
|
0.11 |
|
|
| Merger
transaction related costs |
|
36,114 |
|
|
1.68 |
|
|
1.68 |
|
|
| Bargain
purchase gain |
|
(5,417 |
) |
|
(0.25 |
) |
|
(0.25 |
) |
|
| Loss on
sales of vessels |
|
23,345 |
|
|
1.08 |
|
|
1.08 |
|
|
| Adjusted
net loss |
|
$ |
(101,731 |
) |
|
$ |
(4.72 |
) |
(1) |
$ |
(4.72 |
) |
(1) |
(1) Summation differences due to rounding
Reconciliation of Net Loss to Adjusted
EBITDA
| |
|
For the three months ended December
31, |
|
For the year ended December 31, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| In thousands of U.S.
dollars |
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(17,668 |
) |
|
$ |
(41,509 |
) |
|
$ |
(190,071 |
) |
|
$ |
(158,240 |
) |
| Financial
expenses |
|
48,156 |
|
|
38,619 |
|
|
186,628 |
|
|
116,240 |
|
| Financial
income |
|
(2,908 |
) |
|
(384 |
) |
|
(4,458 |
) |
|
(1,538 |
) |
|
Depreciation |
|
44,592 |
|
|
43,535 |
|
|
176,723 |
|
|
141,418 |
|
| Merger
transaction related costs |
|
— |
|
|
1,299 |
|
|
272 |
|
|
36,114 |
|
| Bargain
purchase gain |
|
— |
|
|
— |
|
|
— |
|
|
(5,417 |
) |
|
Amortization of restricted stock |
|
6,144 |
|
|
4,904 |
|
|
25,547 |
|
|
22,385 |
|
| Loss on
sales of vessels |
|
— |
|
|
— |
|
|
— |
|
|
23,345 |
|
| Loss on
exchange of convertible notes |
|
— |
|
|
— |
|
|
17,838 |
|
|
— |
|
| Adjusted EBITDA |
|
$ |
78,316 |
|
|
$ |
46,464 |
|
|
$ |
212,479 |
|
|
$ |
174,307 |
|
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, 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
Scorpio Tankers (NYSE:SBNA)
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Scorpio Tankers (NYSE:SBNA)
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