Exhibit 1
Scorpio Tankers Inc. Announces Financial Results for the Third Quarter of 2014 and Newbuilding Vessel Deliveries
MONACO—(Marketwired - Oct 27, 2014) - Scorpio Tankers Inc. (NYSE:STNG) (“Scorpio Tankers,” or the “Company”) today reported its results for the three and nine months ended September 30, 2014.
Results for the three months ended September 30, 2014 and 2013
For the three months ended September 30, 2014, the Company had a net loss of $1.2 million, or $0.01 basic and diluted loss per share. The Company’s adjusted net loss was $1.2 million (see Non-GAAP Measure section below), or $0.01 basic and diluted loss per share, excluding a $0.1 million, or $0.00 per share unrealized gain on derivative financial instruments.
For the three months ended September 30, 2013, the Company had net income of $0.7 million, or $0.00 basic and diluted earnings per share. The Company’s adjusted net income was $0.6 million (see Non-GAAP Measure section below), or $0.00 basic and diluted earnings per share, excluding a $0.1 million, or $0.00 per share unrealized gain on derivative financial instruments.
Results for the nine months ended September 30, 2014 and 2013
For the nine months ended September 30, 2014, the Company had net income of $51.6 million, or $0.29 basic and $0.28 diluted earnings per share. The Company’s adjusted net loss was $10.6 million (see Non-GAAP Measure section below), or $0.06 basic and diluted loss per share, which excludes (i) a gain of $51.4 million, or $0.29 per share, resulting from the previously announced sales of seven Very Large Crude Carriers (‘VLCCs’) under construction, (ii) a gain of $10.9 million, or $0.06 per share, resulting from the previously announced acquisition of 7,500,000 common shares of the Company in exchange for 3,422,665 shares of Dorian, (iii) a write-off of $0.3 million, or $0.00 per share, for deferred financing fees relating to the repayment of the STI Spirit Credit Facility in April 2014 and (iv) an unrealized gain on derivative financial instruments of $0.2 million or $0.00 per share.
For the nine months ended September 30, 2013, the Company had net income of $11.2 million or $0.08 basic and diluted earnings per share. The Company’s adjusted net income was $10.8 million (see Non-GAAP Measure section below), or $0.08 basic and diluted earnings per share, excluding a $0.5 million, or $0.00 per share unrealized gain on derivative financial instruments.
Stock Buyback Program
Since July 28, 2014, the Company has acquired $67.5 million of its common shares that are being held as treasury shares, in the open market at an average price of $8.64 per share.
During 2014, the Company has acquired an aggregate of 36,729,136 of its common shares that are being held as treasury shares, which include (i) 19,101,536 common shares that were purchased in the open market at an average price of $9.06 per share, (ii) 7,500,000 common shares that were acquired in exchange for 3,422,665 shares in Dorian and (iii) 10,127,600 common shares that were acquired in conjunction with the Company’s offering of $360 million of Convertible Senior Notes due 2019 in June 2014. There are currently 164,436,411 shares outstanding.
The Company has $82.5 million remaining under its stock buyback program as of the date of this press release. The Company expects to repurchase these shares in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any shares.
Summary of Recent and Third Quarter Significant Events:
| | • | | Recently took delivery of two ice-class 1A Handymax tankers,STI Wembley andSTI Battersea,from Hyundai Mipo Dockyard Co. Ltd. (“HMD”). Including the previously announced deliveries ofSTI Mayfair andSTI Yorkville, the Company has taken delivery of four product tankers in October 2014. |
| | • | | Took delivery of 17 vessels (four LR2, eight MR, and five ice-class 1A Handymax) during the third quarter of 2014, includingSTI St. Charles, a newbuilding MR product tanker that we purchased in August 2014 and was delivered from SPP in September 2014. |
| | • | | Participated in the previously announced offering of $125,250,000 in aggregate principal amount of floating rate guaranteed notes due 2019 (the “KEXIM Notes”) in July 2014. The KEXIM Notes reduced KEXIM’s funding obligations under the Company’s KEXIM Credit Facility, and will reduce the Company’s borrowing costs under such facility by 1.55% per year |
| | • | | Paid a quarterly cash dividend on the Company’s common stock of $0.10 per share in September 2014. |
Vessel deliveries
In October 2014, the Company took delivery of four product tankers. STI Yorkville andSTI Mayfair, MR product tankers, were delivered from HMD and SPP, respectively andSTI Wembley andSTI Battersea, ice-class 1A Handymax product tankers, were delivered from HMD. Upon delivery,STI Yorkville andSTI Mayfair each commenced a time charter for up to 120 days at approximately $18,000 per day andSTI Wembley andSTI Battersea each commenced a time charter for up to 120 days at approximately $15,000 per day.
The Company has taken delivery of 21 vessels under its Newbuilding Program with HMD, SPP, Daewoo Shipbuilding & Marine Engineering Co. Ltd. (“DSME”) and Hyundai Samho Heavy Industries Co. Ltd. (“HSHI”) since June 30, 2014. These deliveries are summarized as follows:
| | | | | | | | | | |
| | | | Name | | Month delivered | | Type | | Shipyard |
| | | | |
| | 1 | | | STI Powai | | July 2014 | | MR | | HMD |
| | 2 | | | STI Aqua | | July 2014 | | MR | | SPP |
| | 3 | | | STI Pimlico | | July 2014 | | Handymax | | HMD |
| | 4 | | | STI Elysees | | July 2014 | | LR2 | | HSHI |
| | 5 | | | STI Dama | | August 2014 | | MR | | SPP |
| | 6 | | | STI Olivia | | August 2014 | | MR | | HMD |
| | 7 | | | STI Mythos | | August 2014 | | MR | | HMD |
| | 8 | | | STI Hackney | | August 2014 | | Handymax | | HMD |
| | 9 | | | STI Acton | | September 2014 | | Handymax | | HMD |
| | 10 | | | STI Fulham | | September 2014 | | Handymax | | HMD |
| | 11 | | | STI Camden | | September 2014 | | Handymax | | HMD |
| | 12 | | | STI Benicia(1) | | September 2014 | | MR | | SPP |
| | 13 | | | STI Regina | | September 2014 | | MR | | SPP |
| | 14 | | | STI St. Charles | | September 2014 | | MR | | SPP |
| | 15 | | | STI Madison | | September 2014 | | LR2 | | HSHI |
| | 16 | | | STI Park | | September 2014 | | LR2 | | HSHI |
| | 17 | | | STI Orchard | | September 2014 | | LR2 | | DSME |
| | 18 | | | STI Mayfair | | October 2014 | | MR | | SPP |
| | 19 | | | STI Yorkville | | October 2014 | | MR | | HMD |
| | 20 | | | STI Wembley | | October 2014 | | Handymax | | HMD |
| | 21 | | | STI Battersea | | October 2014 | | Handymax | | HMD |
| (1) | After delivery, this vessel began a one year time charter at a rate level consistent with current one year time charter contracts which includes a profit sharing mechanism whereby earnings in excess of the base time charter rate are split between the charterer and us. |
Time charter-in update
In September 2014, we time chartered-in an LR2 tanker that is currently under construction in South Korea with delivery expected in January 2015. Upon delivery from the shipyard, the vessel will be chartered-in for one year at $21,050 per day. We also have an option to extend the charter for one year at $22,600 per day.
In September 2014, we extended the time charter on an LR1 tanker that is currently time chartered-in. The term of the agreement is for one year at $15,000 per day beginning in November 2014.
In September 2014, we extended the time charter on a Handymax tanker that is currently time chartered-in. The term of the agreement is for an additional year at $13,500 per day beginning in March 2015.
In August 2014, we extended the time charter on an LR2 tanker that is currently time chartered-in. The term of the agreement is for six months at $15,500 per day effective November 2014.
In August 2014, we extended the time charter on an LR2 tanker that is currently time chartered-in. The term of the agreement is for six months at $17,500 per day beginning in September 2014.
In July 2014, we extended the time charter on an LR2 tanker that is currently time chartered-in. The term of the agreement is for one year at $17,550 per day beginning in September 2014.
KEXIM Guaranteed Notes due 2019
On July 18, 2014, Seven and Seven Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”), completed an offering of $125,250,000 in aggregate principal amount of floating rate guaranteed notes due 2019 (the “KEXIM Notes”) in a private offering to qualified institutional buyers pursuant to the Securities Act and in offshore transactions complying with Regulation S under the Securities Act. The KEXIM Notes were issued in connection with the Company’s KEXIM Credit Facility and will reduce KEXIM’s funding obligations and the Company’s borrowing costs under such facility by 1.55% per year.
Payment of 100% of all regularly scheduled installments of principal of, and interest on, the KEXIM Notes are guaranteed by The Export-Import Bank of Korea (“KEXIM”), a statutory juridical entity established under The Export-Import Bank of Korea Act of 1969, as amended, in the Republic of Korea.
The KEXIM Notes are currently listed on the Singapore Exchange Securities Trading Limited (the “SGX-ST”). The Notes will not be listed on any other securities exchange, listing authority or quotation system.
Current Liquidity
As of October 27, 2014, the Company had $84.0 million in cash.
Debt
We made the following drawdowns from our credit facilities in July, August, September and October 2014:
| | | | | | | | | | |
| | | | Credit facility | | Drawdown amount
(in $ millions) | | | Collateral |
| | 1 | | | 2013 Credit Facility | | $ | 19.8 | | | STI Aqua |
| | 2 | | | 2013 Credit Facility | | | 19.8 | | | STI Dama |
| | 3 | | | 2013 Credit Facility | | | 19.5 | | | STI Mythos |
| | 4 | | | 2013 Credit Facility | | | 19.5 | | | STI Benicia |
| | 5 | | | 2013 Credit Facility | | | 19.8 | | | STI Regina |
| | 6 | | | 2013 Credit Facility | | | 19.5 | | | STI St. Charles |
| | 7 | | | 2013 Credit Facility | | | 19.5 | | | STI Yorkville |
| | 8 | | | 2013 Credit Facility | | | 18.0 | | | STI Wembley |
| | 9 | | | KEXIM Credit Facility | | | 18.8 | | | STI Pimlico |
| | 10 | | | KEXIM Credit Facility | | | 30.3 | | | STI Elysees |
| | 11 | | | KEXIM Credit Facility | | | 30.3 | | | STI Madison |
| | 12 | | | KEXIM Credit Facility | | | 18.8 | | | STI Hackney |
| | 13 | | | KEXIM Credit Facility | | | 19.0 | | | STI Acton |
| | 14 | | | KEXIM Credit Facility | | | 18.8 | | | STI Fulham |
| | 15 | | | KEXIM Credit Facility | | | 30.3 | | | STI Park |
| | 16 | | | KEXIM Credit Facility | | | 29.7 | | | STI Orchard |
| | 17 | | | KEXIM Credit Facility | | | 18.8 | | | STI Camden |
| | 18 | | | K-Sure Credit Facility | | | 19.8 | | | STI Powai |
| | 19 | | | K-Sure Credit Facility | | | 19.8 | | | STI Olivia |
| | 20 | | | K-Sure Credit Facility | | | 20.4 | | | STI Mayfair |
| | 21 | | | K-Sure Credit Facility | | | 18.9 | | | STI Battersea |
As of October 27, 2014, the Company’s outstanding debt balance, and amount available to draw, is as follows:
| | | | | | | | | | | | |
| | | As of
September 30, 2014 | | | As of
October 27, 2014 | |
| In thousands of U.S. dollars | | Amount
outstanding | | | Amount
outstanding | | | Amount
available | |
2010 Revolving Credit Facility | | $ | 43,562 | | | $ | 43,562 | | | $ | — | |
2011 Credit Facility | | | 110,895 | | | | 110,895 | | | | — | |
Newbuilding Credit Facility | | | 79,340 | | | | 79,340 | | | | — | |
2013 Credit Facility | | | 276,327 | | | | 313,827 | | | | 207,000 | (1) |
K-Sure Credit Facility | | | 79,200 | | | | 118,480 | | | | 339,788 | (2) |
KEXIM Credit Facility | | | 252,075 | | | | 252,075 | | | | 177,525 | (3) |
Senior Unsecured Notes | | | 53,750 | | | | 53,750 | | | | — | |
Convertible Senior Notes | | | 360,000 | | | | 360,000 | | | | — | (4) |
| | | | | | | | | | | | |
Total | | $ | 1,255,149 | | | $ | 1,331,929 | | | $ | 724,313 | |
| | | | | | | | | | | | |
| (1) | Availability can be used to finance the lesser of 60% of the contract price for a qualifying newbuilding vessel or such vessel’s fair market value at the date of drawdown. |
| (2) | Availability can be used to finance the lesser of 60% of the newbuilding contract price and 74% of the fair market value of the relevant vessel specified in the agreement. |
| (3) | Availability can be used to finance the lesser of 60% of the newbuilding contract price and 74% of the fair market value of the relevant vessel specified in the agreement. Includes $125.3 million of floating rate guaranteed notes due 2019 issued by Seven and Seven Ltd. in July 2014. |
| (4) | $61.3 million of this amount has been attributed to the conversion feature of the Convertible Senior Notes and recorded within additional paid in capital on the consolidated balance sheet as of September 30, 2014. |
Newbuilding Program
During the third quarter of 2014, the Company made $451.2 million of installment payments on its newbuilding vessels. The Company currently has 27 newbuilding vessel orders with HMD, SPP, HSHI and DSME (14 MRs, five Handymax ice class 1-A tankers and eight LR2s). The estimated future payment dates and amounts are as follows*:
| | | | |
Q4 2014 | | $ | 353.4 | million** |
Q1 2015 | | | 273.5 | |
Q2 2015 | | | 139.4 | |
| | | | |
Total | | $ | 766.3 | million |
| | | | |
| * | These are estimates only and are subject to change as construction progresses. |
| ** | $83.4 million has been paid prior to the date of this press release. |
Explanation of Variances on the Third Quarter of 2014 Financial Results Compared to the Third Quarter of 2013
For the three months ended September 30, 2014, the Company recorded a net loss of $1.2 million compared to net income of $0.7 million in the three months ended September 30, 2013. The following were the significant changes between the two periods:
| | • | | Time charter equivalent, or TCE revenue, a non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management. The following table depicts TCE revenue for the three months ended September 30, 2014 and 2013: |
| | | | | | | | |
| | | For the three months ended
September 30, | |
| | | 2014 | | | 2013 | |
| In thousands of U.S. dollars | | | | | | |
Vessel revenue | | $ | 82,891 | | | $ | 57,756 | |
Voyage expenses | | | (902 | ) | | | (1,249 | ) |
| | | | | | | | |
TCE revenue | | $ | 81,989 | | | $ | 56,507 | |
| | | | | | | | |
| | • | | TCE revenue increased $25.5 million to $82.0 million. This increase was primarily driven by an increase in the average number of operating vessels (owned and time chartered-in) to 58.6 from 42.3 for the three months ended September 30, 2014 and 2013, respectively along with an increase in time charter equivalent revenue per day to $15,264 per day from $14,557 per day for the three months ended September 30, 2014 and 2013, respectively (see the breakdown of daily TCE averages below). |
| | • | | Vessel operating costs increased $9.8 million to $20.9 million from $11.1 million for the three months ended September 30, 2014 and 2013, respectively. This increase was primarily driven by an increase in the Company’s owned fleet to an average of 33.7 vessels from 17.3 vessels for the three months ended September 30, 2014 and 2013, respectively. The increase was offset by an overall decrease in vessel operating costs per day to $6,705 per day from $6,851 per day for the three months ended September 30, 2014 and 2013, respectively (see the breakdown of daily TCE averages below). |
| | • | | Charterhire expense increased $1.1 million to $32.9 million from $31.9 million for the three months ended September 30, 2014 and 2013, respectively. The increase is a result of a shift in the mix of time chartered-in vessels towards larger vessel classes (LR1 and LR2) offset by a reduction in exposure towards smaller vessel classes (Handymax and MR) for the three months ended September 30, 2014 and 2013, respectively. See the Company’s Fleet List below for the terms of these agreements. |
| | • | | Depreciation expense increased $5.2 million to $11.6 million from $6.4 million for the three months ended September 30, 2014 and 2013, respectively. This increase was primarily the result of an increase in the average number of owned vessels to 33.7 from 17.3 for the three months ended September 30, 2014 and 2013, respectively. |
| | • | | General and administrative expenses increased $5.2 million to $11.7 million from $6.5 million for the three months ended September 30, 2014 and 2013, respectively. This increase was driven by a $3.8 million increase in the amortization of restricted stock (non-cash) and an overall increase in other general and administrative expenses due to the significant growth in the Company’s fleet and Newbuilding Program. |
| | • | | Financial expenses increased $6.2 million to $6.7 million from $0.5 million primarily as a result in an increase in the Company’s debt balance for the three months ended September 30, 2014 and 2013, respectively. Total debt outstanding, net of deferred financing fees, was $1.2 billion at September 30, 2014 compared to $171.3 million at September 30, 2013. |
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Profit 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 data | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Revenue | | | | | | | | | | | | | | | | |
Vessel revenue | | $ | 82,891 | | | $ | 57,756 | | | $ | 217,070 | | | $ | 154,213 | |
| | | | |
Operating expenses | | | | | | | | | | | | | | | | |
Vessel operating costs | | | (20,933 | ) | | | (11,137 | ) | | | (47,683 | ) | | | (27,635 | ) |
Voyage expenses | | | (902 | ) | | | (1,249 | ) | | | (5,427 | ) | | | (3,782 | ) |
Charterhire | | | (32,941 | ) | | | (31,877 | ) | | | (109,334 | ) | | | (79,345 | ) |
Depreciation | | | (11,574 | ) | | | (6,377 | ) | | | (24,896 | ) | | | (16,665 | ) |
General and administrative expenses | | | (11,676 | ) | | | (6,522 | ) | | | (34,300 | ) | | | (14,571 | ) |
Gain on sale of VLCCs | | | — | | | | — | | | | 51,419 | | | | — | |
Gain on sale of Dorian shares | | | — | | | | — | | | | 10,924 | | | | — | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | (78,026 | ) | | | (57,162 | ) | | | (159,297 | ) | | | (141,998 | ) |
| | | | | | | | | | | | | | | | |
Operating income | | | 4,865 | | | | 594 | | | | 57,773 | | | | 12,215 | |
| | | | | | | | | | | | | | | | |
Other (expense) and income, net | | | | | | | | | | | | | | | | |
Financial expenses | | | (6,683 | ) | | | (448 | ) | | | (7,554 | ) | | | (2,323 | ) |
Realized gain on derivative financial instruments | | | — | | | | 3 | | | | 17 | | | | 25 | |
Unrealized gain on derivative financial instruments | | | 75 | | | | 118 | | | | 187 | | | | 483 | |
Financial income | | | 103 | | | | 400 | | | | 172 | | | | 950 | |
Share of income from associate | | | 462 | | | | — | | | | 1,036 | | | | — | |
Other expenses, net | | | 19 | | | | — | | | | (34 | ) | | | (106 | ) |
| | | | | | | | | | | | | | | | |
Total other expense, net | | | (6,024 | ) | | | 73 | | | | (6,176 | ) | | | (971 | ) |
| | | | | | | | | | | | | | | | |
Net (loss) / income | | $ | (1,159 | ) | | $ | 667 | | | $ | 51,597 | | | $ | 11,244 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings / (loss) per share | | | | | | | | | | | | | | | | |
| | | | |
Basic | | $ | (0.01 | ) | | $ | 0.00 | | | $ | 0.29 | | | $ | 0.08 | |
Diluted | | $ | (0.01 | ) | | $ | 0.00 | | | $ | 0.28 | | | $ | 0.08 | |
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
| | | | | | | | |
| | | As of | |
| In thousands of U.S. dollars | | September 30, 2014 | | | December 31, 2013 | |
Assets | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 140,541 | | | $ | 78,845 | |
Accounts receivable | | | 80,133 | | | | 72,542 | |
Prepaid expenses and other current assets | | | 4,040 | | | | 2,277 | |
Inventories | | | 4,562 | | | | 2,857 | |
Vessels held for sale | | | 11,980 | | | | 82,649 | |
| | | | | | | | |
Total current assets | | | 241,256 | | | | 239,170 | |
| | | | | | | | |
Non-current assets | | | | | | | | |
Vessels and drydock | | | 1,496,572 | | | | 530,270 | |
Vessels under construction | | | 484,704 | | | | 649,526 | |
Other assets | | | 31,791 | | | | 17,907 | |
Investment in associate | | | 154,714 | | | | 209,803 | |
| | | | | | | | |
Total non-current assets | | | 2,167,781 | | | | 1,407,506 | |
| | | | | | | | |
Total assets | | $ | 2,409,037 | | | $ | 1,646,676 | |
| | | | | | | | |
| | |
Current liabilities | | | | | | | | |
Current portion of long-term debt | | | 98,512 | | | | 10,453 | |
Debt related to vessels held for sale | | | 5,906 | | | | 21,397 | |
Accounts payable | | | 14,263 | | | | 20,696 | |
Accrued expenses | | | 12,321 | | | | 7,251 | |
Derivative financial instruments | | | 321 | | | | 689 | |
| | | | | | | | |
Total current liabilities | | | 131,323 | | | | 60,486 | |
| | | | | | | | |
Non-current liabilities | | | | | | | | |
Long term debt | | | 1,057,744 | | | | 135,279 | |
Derivative financial instruments | | | — | | | | 188 | |
| | | | | | | | |
Total non-current liabilities | | | 1,057,744 | | | | 135,467 | |
| | | | | | | | |
Total liabilities | | | 1,189,067 | | | | 195,953 | |
| | | | | | | | |
| | |
Shareholders’ equity | | | | | | | | |
Issued, authorized and fully paid in share capital: | | | | | | | | |
Share capital | | | 2,023 | | | | 1,999 | |
Additional paid in capital | | | 1,563,056 | | | | 1,536,945 | |
Treasury shares | | | (316,519 | ) | | | (7,938 | ) |
Hedging reserve | | | (116 | ) | | | (212 | ) |
Accumulated deficit | | | (28,474 | ) | | | (80,071 | ) |
| | | | | | | | |
Total shareholders’ equity | | | 1,219,970 | | | | 1,450,723 | |
| | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 2,409,037 | | | $ | 1,646,676 | |
| | | | | | | | |
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
| | | | | | | | |
| | | For the nine months ended
September 30, | |
| In thousands of U.S. dollars | | 2014 | | | 2013 | |
Operating activities | | | | | | | | |
Net income | | $ | 51,597 | | | $ | 11,244 | |
Gain on sale of VLCCs | | | (51,419 | ) | | | — | |
Gain on sale of Dorian shares | | | (10,924 | ) | | | — | |
Depreciation | | | 24,896 | | | | 16,665 | |
Amortization of restricted stock | | | 22,068 | | | | 6,738 | |
Amortization of deferred financing fees | | | 2,307 | | | | 538 | |
Straight-line adjustment for charterhire expense | | | 3 | | | | 7 | |
Share of income from associate | | | (1,036 | ) | | | — | |
Unrealized gain on derivative financial instruments | | | (187 | ) | | | (483 | ) |
Amortization of acquired time charter contracts | | | 277 | | | | — | |
Accretion of convertible senior notes | | | 2,680 | | | | — | |
| | | | | | | | |
| | | 40,262 | | | | 34,709 | |
| | | | | | | | |
Changes in assets and liabilities: | | | | | | | | |
Drydock payments | | | (1,290 | ) | | | (1,448 | ) |
Increase in inventories | | | (1,705 | ) | | | (1,328 | ) |
Increase in accounts receivable | | | (7,591 | ) | | | (37,523 | ) |
Increase in prepaid expenses and other current assets | | | (793 | ) | | | (2,942 | ) |
Increase in other assets | | | (969 | ) | | | (395 | ) |
Increase in accounts payable | | | 252 | | | | 1,337 | |
Increase / (decrease) in accrued expenses | | | 6,140 | | | | (29 | ) |
Interest rate swap termination payment | | | (274 | ) | | | — | |
| | | | | | | | |
| | | (6,230 | ) | | | (42,328 | ) |
| | | | | | | | |
Net cash inflow / (outflow) from operating activities | | | 34,032 | | | | (7,619 | ) |
| | | | | | | | |
Investing activities | | | | | | | | |
Acquisition of vessels and payments for vessels under construction | | | (927,166 | ) | | | (585,182 | ) |
Proceeds from disposal of vessels | | | 213,670 | | | | — | |
| | | | | | | | |
Net cash outflow from investing activities | | | (713,496 | ) | | | (585,182 | ) |
| | | | | | | | |
Financing activities | | | | | | | | |
Debt repayments | | | (64,381 | ) | | | (24,102 | ) |
Issuance of debt | | | 789,949 | | | | 52,050 | |
Debt issuance costs | | | (41,104 | ) | | | (12,266 | ) |
Proceeds from issuance of convertible senior notes | | | 360,000 | | | | 983,537 | |
Convertible senior notes issuance costs | | | (10,986 | ) | | | — | |
Equity issuance costs | | | (42 | ) | | | (35,531 | ) |
Dividends paid | | | (50,746 | ) | | | (10,684 | ) |
Repurchase of common stock | | | (241,530 | ) | | | — | |
| | | | | | | | |
Net cash inflow from financing activities | | | 741,160 | | | | 953,004 | |
| | | | | | | | |
Increase in cash and cash equivalents | | | 61,696 | | | | 360,203 | |
Cash and cash equivalents at January 1, | | | 78,845 | | | | 87,165 | |
| | | | | | | | |
Cash and cash equivalents at September 30, | | $ | 140,541 | | | $ | 447,368 | |
| | | | | | | | |
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three and nine months ended September 30, 2014 and 2013
(unaudited)
| | | | | | | | | | | | | | | | |
| | | For the three months
ended September 30, | | | For the nine months
ended September 30, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Adjusted EBITDA(1)(in thousands of U.S. dollars) | | $ | 25,077 | | | $ | 10,830 | | | $ | 45,282 | | | $ | 35,537 | |
| | | | |
Average Daily Results | | | | | | | | | | | | | | | | |
Time charter equivalent per day(2) | | | 15,264 | | | | 14,557 | | | | 14,683 | | | | 15,388 | |
Vessel operating costs per day(3) | | | 6,705 | | | | 6,851 | | | | 6,956 | | | | 6,656 | |
| | | | |
Aframax/LR2 | | | | | | | | | | | | | | | | |
TCE per revenue day(2) | | | 19,375 | | | | 10,876 | | | | 16,390 | | | | 12,803 | |
Vessel operating costs per day(3) | | | 6,594 | | | | 9,112 | | | | 7,419 | | | | 7,799 | |
| | | | |
Panamax/LR1 | | | | | | | | | | | | | | | | |
TCE per revenue day(2) | | | 17,034 | | | | 13,349 | | | | 16,700 | | | | 13,519 | |
Vessel operating costs per day(3) | | | 7,928 | | | | 8,174 | | | | 8,739 | | | | 7,570 | |
| | | | |
MR | | | | | | | | | | | | | | | | |
TCE per revenue day(2) | | | 14,457 | | | | 17,304 | | | | 13,626 | | | | 17,706 | |
Vessel operating costs per day(3) | | | 6,673 | | | | 5,956 | | | | 6,592 | | | | 5,930 | |
| | | | |
Handymax | | | | | | | | | | | | | | | | |
TCE per revenue day(2) | | | 13,056 | | | | 13,029 | | | | 13,879 | | | | 14,246 | |
Vessel operating costs per day(3) | | | 6,122 | | | | 7,157 | | | | 6,969 | | | | 6,690 | |
| | | | |
Fleet data | | | | | | | | | | | | | | | | |
Average number of owned vessels | | | 33.7 | | | | 17.3 | | | | 25.0 | | | | 14.9 | |
Average number of time chartered-in vessels | | | 24.9 | | | | 25.0 | | | | 27.7 | | | | 21.1 | |
| | | | |
Drydock | | | | | | | | | | | | | | | | |
Expenditures for drydock (in thousands of U.S. dollars) | | | — | | | | — | | | $ | 1,290 | | | | — | |
| (1) | See Non-GAAP Measure section below |
| (2) | Freight rates are commonly measured in the shipping industry in terms of time charter equivalent per day (or TCE per day), which is calculated by subtracting voyage expenses, |
| | including bunkers and port charges, from vessel revenue and dividing the net amount (time charter equivalent revenues) by the number of revenue days in the period. Revenue days are the number of days the vessel is owned less the number of days the vessel is off-hire for drydock and repairs. |
| (3) | Vessel operating costs per day represent vessel operating costs excluding non-recurring expenses (for example insurance deductible expenses for repairs) divided by the number of days the vessel is owned during the period. |
Fleet List as of October 27, 2014
| | | | | | | | | | | | | | | | |
| | | | Vessel Name | | Year
Built | | DWT | | | Ice
class | | Employment | | Vessel type |
| | | | Owned vessels | | | | | | | | | | | | |
| | 1 | | | STI Highlander | | 2007 | | | 37,145 | | | 1A | | SHTP (1) | | Handymax |
| | 2 | | | STI Brixton | | 2014 | | | 38,000 | | | 1A | | SHTP (1) | | Handymax |
| | 3 | | | STI Comandante | | 2014 | | | 38,000 | | | 1A | | SHTP (1) | | Handymax |
| | 4 | | | STI Pimlico | | 2014 | | | 38,000 | | | 1A | | Spot | | Handymax |
| | 5 | | | STI Hackney | | 2014 | | | 38,000 | | | 1A | | SHTP (1) | | Handymax |
| | 6 | | | STI Acton | | 2014 | | | 38,000 | | | 1A | | Spot | | Handymax |
| | 7 | | | STI Fulham | | 2014 | | | 38,000 | | | 1A | | Spot | | Handymax |
| | 8 | | | STI Camden | | 2014 | | | 38,000 | | | 1A | | Spot | | Handymax |
| | 9 | | | STI Battersea | | 2014 | | | 38,000 | | | 1A | | Spot | | Handymax |
| | 10 | | | STI Wembley | | 2014 | | | 38,000 | | | 1A | | Spot | | Handymax |
| | 11 | | | STI Amber | | 2012 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 12 | | | STI Topaz | | 2012 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 13 | | | STI Ruby | | 2012 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 14 | | | STI Garnet | | 2012 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 15 | | | STI Onyx | | 2012 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 16 | | | STI Sapphire | | 2013 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 17 | | | STI Emerald | | 2013 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 18 | | | STI Beryl | | 2013 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 19 | | | STI Le Rocher | | 2013 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 20 | | | STI Larvotto | | 2013 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 21 | | | STI Fontvieille | | 2013 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 22 | | | STI Ville | | 2013 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 23 | | | STI Duchessa | | 2014 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 24 | | | STI Opera | | 2014 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 25 | | | STI Texas City | | 2014 | | | 52,000 | | | — | | Time Charter (5) | | MR |
| | 26 | | | STI Meraux | | 2014 | | | 52,000 | | | — | | Time Charter (6) | | MR |
| | 27 | | | STI Chelsea | | 2014 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 28 | | | STI Lexington | | 2014 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 29 | | | STI San Antonio | | 2014 | | | 52,000 | | | — | | Time Charter (6) | | MR |
| | 30 | | | STI Venere | | 2014 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 31 | | | STI Virtus | | 2014 | | | 52,000 | | | — | | Spot | | MR |
| | 32 | | | STI Powai | | 2014 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 33 | | | STI Aqua | | 2014 | | | 52,000 | | | — | | Spot | | MR |
| | 34 | | | STI Dama | | 2014 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 35 | | | STI Olivia | | 2014 | | | 52,000 | | | — | | SMRP(4) | | MR |
| | 36 | | | STI Mythos | | 2014 | | | 52,000 | | | — | | Spot | | MR |
| | 37 | | | STI Benicia | | 2014 | | | 52,000 | | | — | | Time Charter (6) | | MR |
| | 38 | | | STI Regina | | 2014 | | | 52,000 | | | — | | Spot | | MR |
| | 39 | | | STI St. Charles | | 2014 | | | 52,000 | | | — | | Spot | | MR |
| | 40 | | | STI Mayfair | | 2014 | | | 52,000 | | | — | | Spot | | MR |
| | 41 | | | STI Yorkville | | 2014 | | | 52,000 | | | — | | Spot | | MR |
| | 42 | | | STI Harmony | | 2007 | | | 73,919 | | | 1A | | SPTP (2) | | LR1 |
| | 43 | | | STI Heritage | | 2008 | | | 73,919 | | | 1A | | SPTP (2) | | LR1 |
| | 44 | | | Venice | | 2001 | | | 81,408 | | | 1C | | SPTP (2) | | Post-Panamax |
| | 45 | | | STI Elysees | | 2014 | | | 109,999 | | | — | | SLR2P (3) | | LR2 |
| | 46 | | | STI Madison | | 2014 | | | 109,999 | | | — | | SLR2P (3) | | LR2 |
| | 47 | | | STI Park | | 2014 | | | 109,999 | | | — | | SLR2P (3) | | LR2 |
| | 48 | | | STI Orchard | | 2014 | | | 109,999 | | | — | | SLR2P (3) | | LR2 |
| | | | | | | | | | | | | | | | |
| | | | Total owned DWT | | | | | 2,660,387 | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Vessel Name | | Year
Built | | DWT | | | Ice
class | | | Employment | | Vessel type | | Daily
Base Rate | | | Expiry (7) |
| | | | Time chartered-in vessels | | | | | | | | | | | | | | | | | | | | |
| | 49 | | | Kraslava | | 2007 | | | 37,258 | | | | 1B | | | SHTP (1) | | Handymax | | $ | 13,650 | | | 18-May-15 |
| | 50 | | | Krisjanis Valdemars | | 2007 | | | 37,266 | | | | 1B | | | SHTP (1) | | Handymax | | $ | 13,650 | | | 14-Apr-15 (8) |
| | 51 | | | Jinan | | 2003 | | | 37,285 | | | | — | | | SHTP (1) | | Handymax | | $ | 12,600 | | | 28-Apr-15 |
| | 52 | | | Iver Prosperity | | 2007 | | | 37,412 | | | | — | | | SHTP (1) | | Handymax | | $ | 12,500 | | | 03-Mar-16 (9) |
| | 53 | | | Histria Azure | | 2007 | | | 40,394 | | | | — | | | SHTP (1) | | Handymax | | $ | 13,550 | | | 04-Apr-15 |
| | 54 | | | Histria Coral | | 2006 | | | 40,426 | | | | — | | | SHTP (1) | | Handymax | | $ | 13,550 | | | 17-Jul-15 |
| | 55 | | | Histria Perla | | 2005 | | | 40,471 | | | | — | | | SHTP (1) | | Handymax | | $ | 13,550 | | | 15-Jul-15 |
| | 56 | | | Targale | | 2007 | | | 49,999 | | | | — | | | SMRP(4) | | MR | | $ | 14,850 | | | 17-May-15 (10) |
| | 57 | | | Nave Orion | | 2013 | | | 49,999 | | | | — | | | SMRP(4) | | MR | | $ | 14,300 | | | 25-Mar-15 (11) |
| | 58 | | | Gan-Trust | | 2013 | | | 51,561 | | | | — | | | SMRP(4) | | MR | | $ | 16,250 | | | 06-Jan-16 (12) |
| | 59 | | | Usma | | 2007 | | | 52,684 | | | | 1B | | | SMRP(4) | | MR | | $ | 14,500 | | | 03-Jan-15 |
| | 60 | | | SN Federica | | 2003 | | | 72,344 | | | | — | | | SPTP (2) | | LR1 | | $ | 11,250 | | | 15-May-15 (13) |
| | 61 | | | SN Azzura | | 2003 | | | 72,344 | | | | — | | | SPTP (2) | | LR1 | | $ | 13,600 | | | 25-Dec-14 |
| | 62 | | | King Douglas | | 2008 | | | 73,666 | | | | — | | | SPTP (2) | | LR1 | | $ | 14,000 | | | 08-Nov-15 (14) |
| | 63 | | | Hellespont Progress | | 2006 | | | 73,728 | | | | — | | | SPTP (2) | | LR1 | | $ | 15,000 | | | 18-Mar-15 (15) |
| | 64 | | | FPMC P Eagle | | 2009 | | | 73,800 | | | | — | | | SPTP (2) | | LR1 | | $ | 14,525 | | | 09-Sep-15 |
| | 65 | | | FPMC P Hero | | 2011 | | | 99,995 | | | | — | | | SLR2P (3) | | LR2 | | $ | 15,250 | | | 02-May-15 (16) |
| | 66 | | | FPMC P Ideal | | 2012 | | | 99,993 | | | | — | | | SLR2P (3) | | LR2 | | $ | 15,500 | | | 09-Jan-15 |
| | 67 | | | Swarna Jayanti | | 2010 | | | 104,895 | | | | — | | | SLR2P (3) | | LR2 | | $ | 15,000 | | | 11-Mar-15 (17) |
| | 68 | | | TBN Densa Crocodile | | 2015 | | | 105,408 | | | | — | | | SLR2P (3) | | LR2 | | $ | 21,050 | | | 30-Jan-16 (18) |
| | 69 | | | Densa Alligator | | 2013 | | | 105,708 | | | | — | | | SLR2P (3) | | LR2 | | $ | 17,550 | | | 17-Sep-15 (19) |
| | 70 | | | Khawr Aladid | | 2006 | | | 106,003 | | | | — | | | SLR2P (3) | | LR2 | | $ | 15,400 | | | 11-Jul-15 |
| | 71 | | | Fair Seas | | 2008 | | | 115,406 | | | | — | | | SLR2P (3) | | LR2 | | $ | 17,500 | | | 10-Mar-15 |
| | 72 | | | Southport | | 2008 | | | 115,462 | | | | — | | | SLR2P (3) | | LR2 | | $ | 15,700 | | | 10-Dec-14 |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Total time chartered-in DWT | | | | | 1,693,507 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | Newbuildings currently under construction | | | | | | | | | | |
| | | | Vessel Name | | Yard | | DWT | | | Ice
class | | Vessel type |
| | | | Product tankers | | | | | | | | | | |
| | | | | |
| | 73 | | | Hull 2477 - TBN STI Finchley | | HMD (20) | | | 38,000 | | | 1A | | Handymax |
| | 74 | | | Hull 2478 - TBN STI Clapham | | HMD (20) | | | 38,000 | | | 1A | | Handymax |
| | 75 | | | Hull 2479 - TBN STI Poplar | | HMD (20) | | | 38,000 | | | 1A | | Handymax |
| | 76 | | | Hull 2499 - TBN STI Hammersmith | | HMD (20) | | | 38,000 | | | 1A | | Handymax |
| | 77 | | | Hull 2500 - TBN STI Rotherhithe | | HMD (20) | | | 38,000 | | | 1A | | Handymax |
| | 78 | | | Hull 2445 - TBN STI Milwaukee | | HMD (20) | | | 52,000 | | | — | | MR |
| | 79 | | | Hull 2461 - TBN STI Battery | | HMD (20) | | | 52,000 | | | — | | MR |
| | 80 | | | Hull 2474 - TBN STI Pontiac | | HMD (20) | | | 52,000 | | | — | | MR |
| | 81 | | | Hull 2490 - TBN STI Osceola | | HMD (20) | | | 52,000 | | | — | | MR |
| | 82 | | | Hull 2492 - TBN STI Notting Hill | | HMD (20) | | | 52,000 | | | — | | MR |
| | 83 | | | Hull 2493 - TBN STI Westminster | | HMD (20) | | | 52,000 | | | — | | MR |
| | 84 | | | Hull 2475 - TBN STI Seneca | | HMD (20) | | | 52,000 | | | — | | MR |
| | 85 | | | Hull S1143 - TBN STI Tribeca | | SPP (21) | | | 52,000 | | | — | | MR |
| | 86 | | | Hull S1144 - TBN STI Soho | | SPP (21) | | | 52,000 | | | — | | MR |
| | 87 | | | Hull S1169 - TBN STI Manhattan | | SPP (21) | | | 52,000 | | | — | | MR |
| | 88 | | | Hull S1170 - TBN STI Queens | | SPP (21) | | | 52,000 | | | — | | MR |
| | 89 | | | Hull S1145 - TBN STI Gramercy | | SPP (21) | | | 52,000 | | | — | | MR |
| | 90 | | | Hull S1167 - TBN STI Bronx | | SPP (21) | | | 52,000 | | | — | | MR |
| | 91 | | | Hull S1168 - TBN STI Brooklyn | | SPP (21) | | | 52,000 | | | — | | MR |
| | 92 | | | Hull S706 - TBN STI Sloane | | HSHI (22) | | | 109,999 | | | — | | LR2 |
| | 93 | | | Hull S709 - TBN STI Condotti | | HSHI (22) | | | 109,999 | | | — | | LR2 |
| | 94 | | | Hull S710 - TBN STI Veneto | | HSHI (22) | | | 109,999 | | | — | | LR2 |
| | 95 | | | Hull S715 - TBN STI Oxford | | HSHI (22) | | | 109,999 | | | — | | LR2 |
| | 96 | | | Hull S716 - TBN STI Connaught | | HSHI (22) | | | 109,999 | | | — | | LR2 |
| | 97 | | | Hull 5395 - TBN STI Broadway | | DSME (23) | | | 109,999 | | | — | | LR2 |
| | 98 | | | Hull 5398 - TBN STI Winnie | | DSME (23) | | | 109,999 | | | — | | LR2 |
| | 99 | | | Hull 5399 - TBN STI Lauren | | DSME (23) | | | 109,999 | | | — | | LR2 |
| | | | | | | | | | | | | | |
| | | | Total newbuilding product tankers DWT | | | | | 1,797,992 | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | Total Fleet DWT | | | | | 6,151,886 | | | | | |
| | | | | | | | | | | | | | |
| (1) | This vessel operates in or is expected to operate in the Scorpio Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial Management (SCM). SHTP and SCM are related parties to the Company. |
| (2) | This vessel operates in or is expected to operate in the Scorpio Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related party to the Company. |
| (3) | This vessel operates in or is expected to operate in the Scorpio LR2 Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the Company. |
| (4) | This vessel operates in or is expected to operate in the Scorpio MR Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the Company. |
| (5) | This vessel is on a time charter agreement for two years, which also contains a 50% profit sharing provision whereby we split all of the vessel’s profits above the daily base rate with the charterer. |
| (6) | This vessel is on a time charter agreement for one year, which also contains a 50% profit sharing provision whereby we split all of the vessel’s profits above the daily base rate with the charterer. |
| (7) | Redelivery from the charterer is plus or minus 30 days from the expiry date. |
| (8) | The agreement also contains a 50% profit and loss sharing provision whereby we split all of the vessel’s profits and losses above or below the daily base rate with the vessel’s owner. |
| (9) | In September 2014, we declared an option to extend the charter for an additional year at $13,500 per day effective March 3, 2015. |
| (10) | We have options to extend the charter for up to two consecutive one year periods at $15,200 per day and $16,200 per day, respectively. |
| (11) | We have an option to extend the charter for an additional year at $15,700 per day. |
| (12) | The rate for the first year of this agreement was $15,750 per day, the rate for the second year is $16,250 per day, and the rate for the third year is $16,750 per day. We have options to extend the charter for up to two consecutive one year periods at $17,500 per day and $18,000 per day, respectively. |
| (13) | We have an option to extend the charter for an additional year at $12,500 per day. We have also entered into an agreement with the vessel’s owner whereby we split all of the vessel’s profits above the daily base rate. |
| (14) | In September 2014, we declared an option to extend the charter for an additional year at $15,000 per day effective November 8, 2014. |
| (15) | We have options to extend the charter for up to two consecutive one year periods at $16,250 per day and $17,250 per day, respectively. |
| (16) | In September 2014, we declared an option to extend the charter for an additional six months at $15,500 per day effective November 2, 2014. |
| (17) | We have an option to extend the charter for an additional six months at $16,250 per day. |
| (18) | This vessel is currently under construction and is scheduled to be delivered in January 2015. We have an option to extend the charter for an additional year at $22,600 per day. |
| (19) | In July 2014, we declared an option to extend the charter for an additional twelve months at $17,550 per day effective September 17, 2014. |
| (20) | These newbuilding vessels are being constructed at HMD (Hyundai Mipo Dockyard Co. Ltd. of South Korea). Six vessels are expected to be delivered in 2014 and six vessels in the first and second quarters of 2015. |
| (21) | These newbuilding vessels are being constructed at SPP (SPP Shipbuilding Co., Ltd. of South Korea). Three vessels are expected to be delivered in 2014 and four vessels in the first and second quarters of 2015. |
| (22) | These newbuilding vessels are being constructed at HSHI (Hyundai Samho Heavy Industries Co., Ltd). Three vessels are expected to be delivered in 2014 and two vessels in the first quarter of 2015. |
| (23) | These newbuilding vessels are being constructed at DSME (Daewoo Shipbuilding and Marine Engineering). One vessel is expected to be delivered in the fourth quarter of 2014 and two vessels in the second quarter of 2015. |
Business Strategy, Dividend Policy, and Stock Buyback Program
Business Strategy
The Company’s primary objectives are to profitably grow the business and emerge as a major operator of product tanker vessels. The Company intends to acquire modern, high-quality tankers through timely and selective acquisitions. The Company is currently concentrating on these sectors because of their attractive fundamentals which the Company believes includes:
| | • | | increasing demand for refined products. |
| | • | | increasing ton miles (distance between production and areas of demand), and |
Dividend Policy
The declaration and payment of dividends is subject at all times to the discretion of the Company’s board of directors. The timing and amount of dividends, if any, depends on the Company’s earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.
On September 10, 2014, the Company paid a quarterly cash dividend on its common stock of $0.10 per share to all shareholders as of August 22, 2014 (the record date). On June 12, 2014, the Company paid a quarterly cash dividend on its common stock of $0.09 per share to all shareholders as of May 27, 2014 (the record date). On March 26, 2014, the Company paid a quarterly cash dividend on its common stock of $0.08 per share to all shareholders as of March 11, 2014 (the record date).
Share Buyback Program
On July 28, 2014, the Board of Directors of the Company approved a new stock buyback program with authorization to purchase up to $150 million of its common stock. This program replaced the stock buyback programs that were previously announced in July 2010, April 2014 and June 2014, which have been terminated.
The Company expects to repurchase these shares in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any shares.
Since July 28, 2014, the Company has purchased an aggregate of $67.5 million of shares in the open market at an average price of $8.64 per share during 2014 and has $82.5 million remaining under its stock buyback program as of the date of this press release.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 48 tankers (four LR2 tankers, two LR1 tankers, 10 Handymax tankers, 31 MR tankers, and one post-Panamax tanker) with an average age of 1.5 years, time charters-in 24 product tankers (eight LR2, five LR1, four MR and seven Handymax tankers), and has contracted for 27 newbuilding product tankers (14 MR, eight LR2, and five Handymax ice class-1A product tankers), 13 are expected to be delivered to the Company throughout 2014 and 14 in 2015. The Company also owns approximately 16% of Dorian LPG Ltd. Additional information about the Company is available at the Company’s websitewww.scorpiotankers.com, which is not a part of this press release.
Non-GAAP Measures
This press release describes adjusted net income and Adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. “Non-GAAP” measure). The Non-GAAP measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company’s management evaluates the Company’s operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
Adjusted net income / (loss)
| | | | | | | | | | | | | | | | |
| | | For the three months ended September 30, | |
| | | 2014 | | | 2013 | |
| In thousands of U.S. dollars except per share and share data | | Amount | | | Per share | | | Amount | | | Per share | |
Net (loss) / income | | $ | (1,159 | ) | | $ | (0.01 | ) | | $ | 667 | | | $ | 0.00 | |
Adjustments: | | | | | | | | | | | | | | | | |
Unrealized gain on derivative financial instruments | | | (75 | ) | | | (0.00 | ) | | | (118 | ) | | | (0.00 | ) |
| | | | | | | | | | | | | | | | |
Total adjustments | | | (75 | ) | | | (0.00 | ) | | | (118 | ) | | | (0.00 | ) |
| | | | | | | | | | | | | | | | |
Adjusted net (loss) / income | | $ | (1,234 | ) | | $ | (0.01 | ) | | $ | 549 | | | $ | 0.00 | |
| | | | | | | | | | | | | | | | |
| |
| | | For the nine months ended September 30, | |
| | | 2014 | | | 2013 | |
| | | Amount | | | Per share | | | Amount | | | Per share | |
Net income | | $ | 51,597 | | | $ | 0.29 | | | $ | 11,244 | | | $ | 0.08 | |
Adjustments: | | | | | | | | | | | | | | | | |
Deferred financing fees write-off - STI Spirit | | | 317 | | | | 0.00 | | | | — | | | | — | |
Unrealized gain on derivative financial instruments | | | (187 | ) | | | (0.00 | ) | | | (483 | ) | | | (0.00 | ) |
Gain on sale of VLCCs | | | (51,419 | ) | | | (0.29 | ) | | | — | | | | — | |
Gain on sale of Dorian shares | | | (10,924 | ) | | | (0.06 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total adjustments | | | (62,213 | ) | | | (0.35 | ) | | | (483 | ) | | | (0.00 | ) |
| | | | | | | | | | | | | | | | |
Adjusted net (loss) / income | | $ | (10,616 | ) | | $ | (0.06 | ) | | $ | 10,761 | | | $ | 0.08 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA
| | | | | | | | | | | | | | | | |
| | | For the three months
ended September 30, | | | For the nine months
ended September 30, | |
| In thousands of U.S. dollars | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Net (loss) / income | | $ | (1,159 | ) | | $ | 667 | | | $ | 51,597 | | | $ | 11,244 | |
Financial expenses | | | 6,683 | | | | 448 | | | | 7,554 | | | | 2,323 | |
Unrealized gain on derivative financial instruments | | | (75 | ) | | | (118 | ) | | | (187 | ) | | | (483 | ) |
Financial income | | | (103 | ) | | | (400 | ) | | | (172 | ) | | | (950 | ) |
Depreciation | | | 11,574 | | | | 6,377 | | | | 24,896 | | | | 16,665 | |
Depreciation component of our net profit from associate | | | 526 | | | | — | | | | 1,869 | | | | — | |
Amortization of restricted stock | | | 7,631 | | | | 3,856 | | | | 22,068 | | | | 6,738 | |
Gain on sale of VLCCs | | | — | | | | — | | | | (51,419 | ) | | | — | |
Gain on sale of Dorian shares | | | — | | | | — | | | | (10,924 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 25,077 | | | $ | 10,830 | | | $ | 45,282 | | | $ | 35,537 | |
| | | | | | | | | | | | | | | | |
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
Contact Information
Scorpio Tankers Inc.
212-542-1616
