STNG - Earnings call 4 2023 | Scorpio Tankers Inc.

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Operator

Hello, and welcome today's Scorpio Tankers Inc. Fourth Quarter 2023 Conference Call. I would now like to turn the call over to James Doyle, Head of Corporate Development and IR. Please go ahead, sir.

James Doyle

Thank you for joining us today. Tankers XXXX Scorpio Conference the to Fourth Earnings Quarter Call. Welcome

Chris are call Cameron Chief Officer; earnings Officer. press with on fourth the is issued Emanuele today, Actual Mackey, Chief we Earlier me may on Operating release, President; results On quarter such Bugbee, today Lauro, risk today, our February of Financial scorpiotankers.com. Robert Executive Chief available information which Avella, our on discussed as from involve materially The differ statements. that this XXXX, may information contain and those website, and in statements uncertainty. call is based forth forward-looking Officer; XX, set

Tankers' and statement at available filings, and a of earnings which sec.gov. as the scorpiotankers.com For should Scorpio review release uncertainties, disclosure these SEC in the forward-looking risks are press discussion as you well

webcast participants on recorded Call broadcasted playback archive being of advised also audio page XX on being of is the website the be are call An for for days. our this is conference approximately the Investor that will the purposes. made Relations and available Internet live of

a on giving the we page Presentations. short under will slides to and today. be is available The be After at Investor scorpiotankers.com Reports will We These also Q&A. will Relations the presentation webcast. on available the presentation go presentation,

For the please two. number limit those questions, asking of questions to

queue. rejoin If have the question, additional you please an

our to like introduce Executive Chief Officer, I'd Now Lauro. Emanuele

Emanuele Lauro

today. joining Thank appreciate James, you, us time. We thank for everybody, you, your and

We another of pleased year strong financial are report results. another to and quarter

million of and adjusted in quarter net company in income. EBITDA In $XXX than XXXX, generated the the $XXX million adjusted more fourth

intact. the supply The environment still A than million adjusted are products. maritime increasing have a fundamentals, XXXX, demand in constrained last remain year adjusted global an Those rate generated company full and in more a curve. income. refined $XXX $XXX the years strong refining EBITDA for which dislocated created X net capacity over and the million For

to levels water supply has attacks the strong seen Sea demand vessels. a we've on the this, Red sanctions to in rerouting tightened low and fleet and in led Canal, This the addition further against In the had of Panama inefficient which more curve. made Russia,

flow cash the have been significant. as of our an Scorpio company. also sheet for transformative environments rate balance They the are The The to quality stronger continues become investment elevated improve. from and Tankers and has

remains primary Deleveraging our and has been focus.

last million today, quarter the debt company the total In just has by our lease And we $X billion. by we positioned well below the X years, debt in reduced of levels. debt. financing stands at very shade net first feel almost and billion billion, $X.X $XXX repay at these XXXX, Over will and our $X.X a

$XXX per Over dividends, $XX $XXX and the X includes to shareholders. share This have XXXX million which years, last through through returned in share repurchases we been roughly or million alone. has returned

we Today, now which fourth dividend, quarterly have increase our XXXX. is our announced This share. $X.XX since in is another increase per

years. to product expect low the which we've X in the tanker robust global and experienced fundamentals, forward, support growth we fleet limited Looking strong last demand inventories,

to to James, for the support, James please? continued brief like like you thank a turn I you. just Thank would I'd for your presentation. to now and call

James Doyle

please. Slide X, Emanuele. you, Thank

limited the fourth fleet last In this changes increasing the inventories, years, environment. to rate capacity low a For X refining has demand, and robust growth quarter, led continued.

market, Asia. runs Red Europe in rates which lower MR through season $XX,XXX before improved the ] slightly maintenance an U.S. East Middle refining after were in lifted moving of offset to rates disruptions the increased Our December any per by Sea. from and [ in up $XX,XXX early X the rates day the as end strength golf

Middle East this very tankers The Europe maintenance Asia outlook in constructive. working to down U.S. us global the product now. the behind refinery month. wind peak Today, as remains maintenance starts inventories, in for and maintenance for MRs rates through With are U.S. lifting peak low

led have flows of disruptions trade mentioned, Emanuele supply. to and has new As rerouting further vessels, tightened which

headline without products. for would refined demand this strong be However, not possible

Slide barrels and demand edu global of gasoline [ January expect January averaged this we [ demand [indiscernible] seaborne increases than XX.X expected be refined million naphtha X, which products ], extremely demand product X.X for ] day by exports. higher and product has day refined strong, million surpass average Global XXXX been is XXXX so please. to barrels increased XXXX million per to as barrels and by driven continue. has in X.X per exports on day, refined is per diesel will levels.

barrels low to Slide continue Given into. higher only met imports through And will the are global X, but have traveling increased, just inventories, be please. increased longer imports. not consumption

While refining demand capacity is dislocated. is more pre-Covid levels, above

and capacity biggest Opening the export-oriented certain East and offset of been in increases and exports, of to increase One ton deficit refineries less parts have new million diesel all in has Asia of been the an challenges seaborne America of X in miles North Europe, of has Latin Europe, miles. ton India. per diesel. a closing and America have refineries in day. Capacity led in Africa closures by export-oriented efficient Middle older, -- barrels

have proposing imports seen XXXX. of in have lost large We -- this in the X Australia is increased production above refineries where already

refinery will in it and was close day per into expected converted Scotland oil barrel be to is week, at terminal. Last a announced XXX,XXX fuel

miles. Excluding increased the to over demand the XXXX capacity words, ton ton flows have exports other and Russian has changes X% in to mile impact of structural compared refining continue miles, increased In and levels. ton and reshape

capacity and market. supply ton XX, the demand exacerbated Disruptions fundamentals demand supply have Slide As and vessel strong increases, please. is tightened. in our mile reduced

product, trades. difficult non-sanctioned premium and benefit the product many vessels will parried of their will history. trades Russian which of the have refined ] This [ and age older tankers trading that of XXX given time vessels are continue to has First, returning supply a servicing to

number to Lake, to moving allowed travel Canal product canal feeds through transit ] day which day. this reduction to Gatan XXX,XXX [ the of Panama resulted longer the in needing in discipline. ships Panama led XX to has reduction In the in barrels of levels fourth from water of the lower per Canal refined Second, XX the the quarter, a a a and

the going Canal. reduced through Sea the attacks have Third, the XX, volumes Suez in please. Slide Red

seaborne the to Before in from product Russia. supply tanker XX% because of Europe attacks given Sea, trade. X East barrels Middle than X million a barrels distillate higher on about years million of was increase commercial in day vessels [ this refined And million the to coming were on sanctions prior day, the Canal the the X each ] to product Suez Red roughly of global XX% transit

day going Hope Cape length by the around with to The Canal vessels XX, of ] vessels volume XX% has the February. and the of to route, more Many rates. Slide are the please. XX%. around fleet rerouting inefficient to on of barrels [ per dropping higher the XXX,XXX first week for Depending leading this good made can voyage supply today increase tightening

is order book XX% current of fleet. the New

started orders future systems slow long New to expensive and lead about to regulation. delivery have given satisfy times uncertainty new environmental prices for propulsion building

XXXX, years will trading the fleet By equivalent clean of products is fleet order this with of of MRs years average X year. the today, older. book addition, tons majority The is vessels XX% in than tankers XXX per going each is of clean the aging. age the will fleet today is book XX be with vessels for LRX X% fleet tanker to and the and the the and trading XX XX the In XX%. of years effective Also, product XX million less order LRX fleet year, of XX% be the the old Starting years deadweight older. product turn year, of current

Using be lowest X supply. less growth than fleet, assumptions expected of to X.X% around normal fleet X.X%, growth This close XXXX. is scrapping Seaborne fleet in expected increase X% and average, respectively, Slide year's since and XXXX age on vastly X%. and the XXXX ton-mile the relative and and grow XX, the to demand to to will please. fleet exports are XXXX the in outpacing

and precedented. With against time X-year and in constructive our high product the remain global inventories, dislocation confluence low rates limited to of evidence system, of increasing collectively turn is that structural like financial I regulations, through slides. miles charter flows, exports rerouting are would The factors there miles refinery at environmental outlook that, individually, to go ton fleet today's to constrained curve. demand, one In X- ton the levels. growth, increasing Chris the in over addition, of upcoming it export market and and customers' supply

Chris Avella

afternoon, XX, Thank Slide James, everyone. good and morning, you, good please.

and highlighted, been a transformative have rate we strong from cash for have As environment significant the company. flows

after equilibrium XXXX resilient. of product that rates reflection Over the the XXXX. found market been last years, a tanker events X was strong a of have

into quarter was chart normalized uptick the the be in impact winter the the marked by left recent As in largely demand of upper and seen illustrates the quarter will fourth heading our months. events results. XXXX the a The Sea in Red seasonal of first in

billion X by billion. and reduced have $X generated we outstanding last in $X.X over gross EBITDA the debt Over our years,

In alone, million quarter of returned addition quarterly to share during we we in XXXX, dividend that, since the have to of the shareholders have fourth form or XXX%. and share $XX $XXX XXXX per repurchases. approximately And dividends by increased our

please. Slide XX,

progress respect. we have stated remains this focus, past, the and we have deleveraging As in primary meaningful our made in

at the December chart XXXX, the left As our XX, stood debt at gross billion. outstanding on $X.X illustrates

balance into today, more away lower this shows the composition same traditional the billion. The financing on progression, debt. mix more of greater the in bank $X.X flexibility. and but our importantly, of expensive financing and highlights lease transitioning with As is from costs the chart right shift

XXXX, of on debt our repurchasing margins back, million. of at Today, outstanding financing bearing obligations $X.X and end XXX we our at financing second our the over stand billion bring financing basis to more just of obligations lease now quarter. Once under of $XXX consisted vessels million, points down to these have $XX obligations will XX, lease approximately lease December committed the repurchases average. and arrangements XX between leased complete, Looking

considerable points carries debt, margins obligations average. on more our have XXX secured We portion of a lower-cost lease of and into basis refinanced than bank less traditional which

We of today. million of any million to highlight also the time newer debt and at credit this repay want $XXX loans available conditions flexibility, company terms including is to these ability revolving and the the $XXX which of that with greater provide

we've have our but flexible financing sum, cost not leverage, more at balance forms traditional In through only sheet XX, simplified our terms. Slide more please. and we of lower also reduced

do Looking in and the $XXX.X quarter the and of XXXX. unscheduled million $XXX.X of lease first fourth unscheduled And far we to debt in work the quarter we heels the of lease of and XXXX. million in of lease end obligations on debt second now have thus the repayments still of repurchasing comes have ahead, quarter. committed This to more as million between $XXX repayments

Over pro XXX carrying facility the points. million our committed we our from respectively. and period, $XXX.X billion from margins our $XX $X million forma $X.X basis facility, repurchases, $X.X On drew billion a net below same at credit million $XX.X and stands after lease basis, and debt considering our gross billion, each credit

Moreover, the we with on vessels, purchase buildings on and no our CapEx to install have and of options expiration of new manageable XX order scrubbers requirements.

operating company Slide significant XX, has The please. leverage.

across $XXX per almost quarter first generate per billion. cash $XX,XXX million coverage company XXXX averaging flow $XX,XXX over per that charters day. the fleet, $X.X is Our per $XX,XXX and free including day, day, close time the At to in year of can

to balanced ways that, call like turn cash seek breakeven Q&A. a has with the prudent and in And over it Additionally, we rate our I'd reduce to and to to declined, manner. continue

Operator

[Operator John Chappell from with Instructions] first question Our comes Evercore.

Jonathan Chappell

the the just to targets on out, group. net don't it open this obviously. to to laid a who clearly, first There's be kind quarter. take world one, at the part Chris I But of as of not some year, at uncertainty if debt the in point the right going early more are the in this now, of lot wants know achieved end

there's some a how the uncertainty plays helped here. lot you out world think, repayment, on So been turbocharge debt of but accelerate I that's the in kind of rates, from

just months about allocation, shift do X lot target X, given in targets were versus the a you net we debt continuing to capital ago where and maybe the earlier maybe of today? levels markets attaining see volatility and talked further versus So deleverage in those you how

Robert Bugbee

Robert. John,

that asking It's a a that's ourselves. we're question. think obviously I question great

shareholders I now, in extraordinary market of this is with and management fortunate position returns. that think that providing right a

the is improving. and cash the so we is know And one in thing our sheet coming is balance

earnings. will closed have to Sea continue will not extraordinary no We idea really whether as or this to the continue, helping Red and be will effectively

intend say don't that lot to think target I yet. difficult reached is market I you think we so that environment the buildings capital situation make our happy and return comment reaching on regard decisions right not target. it would that We We're do new when that to we the looking with And do haven't what now. in we're a a of to to to have

So the long-term as -- confident, time, has fundamentals. out, James same we're at the but in pointed

base the the we open however, answer it company still moment is basis, with think operation what our a So the the of down put It would of take let's that unrealistic rest -- think the the days that are wind we running time to be the at case market we're position routes to way might moment everybody where And share is were as will of say, the would the if strong. shipping operational that, basic open together. would we be I'd we Sea on the very be, to, that will quarter. at call the are from what company to we Red happy tomorrow. And for basic

expect we MRs so assumption, days the that a is to assumption and $XX,XXX base be lot on we you for $XX,XXX day would were product X to unfixed And a internally the I've for days. working around case under given is around our

healthy. So that's

you So towards best do. the taking is, on debt distracting very and just now a of moving we say a not I the yes, time. -- the then right are to the the thing think we deleveraged fast we're to where but what ourselves our want of right keep certainly And that eye -- Whether on have choices, company would those state thinking the whatever at be what goal now mission lot can choices down. best

Jonathan Chappell

Okay. That makes sense.

maybe shape going follow-up, my may strategy For helps your us thoughts pretty well. small, on as this seem it like forward but

scrubber options expire. Letting those

to scrubbers. first guys the You were one implement of

those the fit technology the that days going they much that you'd are returns implemented expire, going to like much and you from that market any options as start to spot very are believe you we market just returns the to enough You monetize have read XXX behind those to diminish letting XX do maybe and type of this your of that Or just environment rather scrubbers read on Do believe exposure that you the vessels. By to have the forward? than think operating scrubber in are better those may older maybe those forward? premium? that ships fleet in secondhand ships don't core

Robert Bugbee

question, good like you would That's a Cameron, to start?

Cameron Mackey

all. John. Thanks, to Sure. yes It's

obviously go us they date. it's number that So options, of a declaring into those had an not expiration considerations and

cost sale. potential like the that vessels stay have some asset the the installing are we to And not eye The muted But is come and could age keen expected values optionality. are more and all. it's fleet through here and monetizing extremely potentially down and further way. yes obviously, to high. extend a here it's we of spreads rather The So opportunity of that to have scrubbers

all yes your So it points. is really to

Operator

question Nokta Omar Jeffries. from comes next with Our

Omar Nokta

Suez just earn that LRXs the thus of Canal or the in And quarter, And you've what if to the is maybe for the real about $XX,XXX. beyond you that basically rest above could itself the you've to earned you think Red resolves for quick, Is $XX,XXX and the that's mind just just of quarter could I what the rest day were you Sea the guided, wanted the just in far? rest to MRs do of clarifying the quarter your you're that for assumption, tomorrow. right? ask, for how Robert, your perhaps believe that assuming or of wouldn't day think, John situation you assumption operating but what earn saying, rest the year, I

Robert Bugbee

Correct. We left. only the quarter of X/X have

Just over XX% to XX%.

lot, those it that So know the right and significantly are are that's now -- above you numbers where weighted right above and the those a why way, rates we now please. rates

So come we where not science, would that's a -- out. it's how that's perfect but we

Omar Nokta

guess I'm it guided Red that from a Yes. you seen is which implication you've the impact booked thus the are I limited thus that have at far those has what far, from the just I guess perspective what looking above Sea.

Robert Bugbee

happening? just to no would time you and X, -- would either questions was route, at closure the which isn't waiting or weeks, standing X at mean there all. they a the the doesn't of we're longer Yes, answer with. to a drinks it analysts the because that in people going bar would Sea we have way Every And for would sell by impact begin takes group because product put reading you the Red first bar canal it shareholders, a it the day, Seuz well, that Why affect the to we an of of changes and a x. answer little take number obstacle to market

So it took a little time.

we're So sense, Red would open a was stopped that tomorrow, time. same it Sea the take saying if little if in the again, you it,

did doing we we sea That's red earn the weeks, let's or earn could minimum the saying, how we're calculated. you trailing all So X that's what in X a the, more for next the is at what do tomorrow. we weeks, think open if less so say,

Omar Nokta

Okay. here just a off with guess Red that. Sticking Sea, in a seeing we've diversions sense. been I of recent just That then at slower makes accelerate of weeks the a follow-up And start. the bit

that the just you're fleet a Scorpio, And terms region is of you impactful an guess, the I is But the all that currently then Scorpio's in I say, say, that you for highlighted avoiding James, for how risks? itself? market, of, know Sea Red terms In of, area, Scorpio is. deployment, for broader given active how

Robert Bugbee

that to front. do back We

last question the operational. more -- maybe So is

like you'd if that Cam, take to maybe, one. So

Cameron Mackey

to. happy Sure,

regards that today saying to without our Sea, policy our Red but risks cargo goes vessels, we avoid it the for with particularly having So personnel. are unacceptable the a rigid there and

transiting Saudi we Gulf That don't or to our trade or not observations, Sea very we X said, been true middle the Sea a for of Western any active fixing being So are Northern Aiden Southern vessels nor are for the with we obviously a Red vessels that's area about because And avoid now. month the today. Arabia. Red it's

know. anybody those we Sea. what to with I posture change And the regards of don't the Southern to just think resuming market addition, our Red cannot in conditions would don't predict of transit knows. We

So every we We're policy information look to just expect something for And transiting not no assessing no. today, but we best answer the at It's have. there day we foreseeable that is up, continue [ as wake the latest we and we the per future, ]. risk is go. as And rate of se.

Robert Bugbee

put And Omar, then It's of I'll don't -- go to get strong strong. first with these thing a back you weeks, that here the other a with refinery I have question. Year. regard are to very and of in last to as the the to is New U.S. negative markets on cash Chinese is couple The that a Gulf your enormous. part look, overhang we're flow bullish. them context turnaround the had people [indiscernible] want have markets super

would start our up conditions you to to talk remain, So they the that trading would rates -- to expect start if week. next were firming if desk, firm

unusual have is a some light on. switch. like This situations very We not going

down time. because could down. we and over piece It light the [ like sort out will these ] market there to take will and be a was there place. of XX% people what saying itself they and some The tweet It Hamas not all react The pear the Palestine is day, like doing? there switch. between saw fleet other in doing Israel What the was trend when stock

really have big You changes.

voyage. MRs sure And of U.S. for is Gulf, This is going tanker all special profile had awful from is very revenue even quarter same and not now to the way have long leading to the fixed in will are I'm tankers any we we we've from second are the booking Scorpio be an of Japan, to all that fixing. right product the We -- fixed product type that we X different. not X the Tankers. companies that that

from [ We Anchor Argentina, have tankers China product fixed to to Singapore from ].

have mind this week, just We Singapore this is a York. buried from New time. fixed blind product to for Those are and long vessels earlier tankers

intents position scrapped. not those quarter, They're the this for all on quarter. purposes going this of and the any to For rest vessels for as be balance be list may of well

tomorrow. up -- that taking the -- the transiting balance for are you closed should So next turnarounds shut away going But so go trade closed and Red the week, finished, Suez is next I tomorrow. product market now. to assumption taking Year not on I'm open and Chinese it's expect is markets refinery New from mean, tomorrow If still and the Sea where position I'm that to week if and is even they be

will We're this circumstances show not balance show is from and strength under to we from trying almost And the a certainly enormous trying how strong to not finish fundamentals to we're trying because of be mission we're play of sheet to point. So any the -- that here. is deleverage that our market negative the this underneath.

Operator

question Next with Lewis from BTIG. comes Greg

Gregory Lewis

interesting, term, where appetite has kind they is kind to the of in time kind some the -- or I guess Robert, rates go longer maybe what's is for and charter that? from kind terms anything opportunities in are. like the longer appetite? any some charter months, any an of exciting, Or customers what of of of Obviously, not What of time X-plus there been longer voyages. alluding And market? disruptive you maybe to looking it, this year depth like but the started i.e., the maybe X maybe market

Robert Bugbee

what's for because to have had much. this out And going charters themselves the do rates present discount And long. out yesterday's so end, don't of there simply that course. And they're for wanting breaks, haven't Their front know things at years, even I position there. would the to you think that's your there depth there's in that market. to we X very they happen

need now there's a on market I recognition that wants yesterday's fix point says, no where $XX,XXX, it ship get fixing right a going for a discount straight tough it's LRX properly months, to where way $XX,XXX you raised for the is have in a little you of rate owner to X-year and out the for "Well, situation an from for to X, gun could charter a me spot the unless it bit charter a the because $XX,XXX that's day be fix market was if where some X.X charter $XX,XXX, reflected So in before. a

I think it's itself market different. are liquidity S&P reasonably prices have up, and S&P S&P liquid. -- ironically, The gone reflecting the the prices is is is market market

Gregory Lewis

Cam Panama it there. could the like a rates like longer-term that water be seems issue It still I Okay. Super James here. of talk the helpful. in in been more what a about low kind mean And could Canal. I Could Canal little maybe we've seeing talking maybe you are Atlantic. guys you or be of know the a seems that bit lot Suez or impacting

James Doyle

would Cam, take like this? to you

Cameron Mackey

in Sure. the Thanks, structures Greg. It absolutely affecting Atlantic. is rate

of guess with The and situation it's Panamanians can an is certainty. any is to trying something quarter, in water or the lake. the analysis educated later are Our the second plan the see but that not El Nino, can any that earliest is we forecast redirect we improvement into on exacerbated by

allow Panamanians but the what -- our guess. know increase don't it transits into the to lake for the to take rainfall water and redirection between we of best the would So the that's other just

Operator

with Samuel with proceed JP Morgan. We Bland

Samuel Bland

coming MR, your this -- the disruption, in I very Red on on is, question you'd in but of MRs LRX guess, see, first sort we've big I patterns the is let's rates one take The second each? that ask less trading of and reaction what could And Sea expect to I'll up seen the go that in know, the that. don't maybe given Or after one then the of weeks? one

Robert Bugbee

think we as happened expect. would I it's Yes, exactly

the the U.S. yes, thing what in are preparation move And wants cargo. Chinese less that starts absorbed maximum after it the MR that less that's that, it and of carries And against this when up of for plus First actually there vessel go to we've the seen to when couple all, the getting around, now first the LRXs. strikes, -- up then And -- everybody happens are weeks. situation refinery last moved Year. New there market Gulf

bullish So that's like a sign. very

for takes starting for to same to -- be time It a another the space the MRs one LRXs a the the and to for getting cargoes see actually way you've And filled little move. time it the split between in way took little so to LRX.

Samuel Bland

on going footnote, there's to band see years. a good market. to I of a Okay. years Understood. just strong those you expecting hopefully I why be XXXX, get XXXX in might second sort of period, would I slippage the Slide is XX% the this slippage on but can the why we expect question net on be slippage in what growth fleet guess graph we're XX% XX. want assumption And across is to which

James Doyle

dates. always don't but of Sam, lot that order book you there's the delivery end have a vessels of on the at in the slippage vessels, year get certain firm

don't 'XX something like ordered later So we that QX on promising the or there were lot date the a delivery just it. and QX in a years have in maybe or of vessels specifics

estimate when our of best these So will vessels it's deliver.

Operator

Ken with next Our of question from comes Hoexter Bank America.

Ken Hoexter

Robert a lower. kind of last where you've You've day kind Maybe that a you talk gone bit right? think little Jean guess can from[ talked it $ or about that before about see do [ ], now, about ]XX,XXX levels of just breakeven $ to I [ getting talk quarter. trending? where down you you So ]XX,XXX is now.

Robert Bugbee

] talk about where we'll think we and [ the we're not go. to give want I $XX,XXX happy to

are I think focused going we'll interest you amortization levels. it's And extent they just should that debt where we reducing The that happen. we than rather and say, say to and that just your to. say I -- breakeven -- than paying think that they're the we'll amortization debt reducing on better down where exact are costs our are

Ken Hoexter

rates certain to I bit this Is Okay. rates how out somewhat understand want is Maybe isolated lot to well spread on on now? talk guess, in of Sea I now. adjustment have discussion. just that kind Red a on a Is it impact just the And the globally and process lanes? adjusted? timing about, still just it the is rate

Robert Bugbee

breadth strong. up depth is routes the it's space are that's what's strong. -- The All very product -- across of so

Ken Hoexter

then. And Okay.

Robert Bugbee

the Many, very that, turnarounds stronger one drawn of U.S. I've talent Obviously, going many assisted so the situation. has let's the market crazy because really But been that's not the through though MRs. on I has different Europe and routes. strong, of described routes, it's Asia, because been of say, being even but MRs New it's Asia in is though some because inside even the being refinery to Gulf the mean, Europe the is strong, Chinese still Year that's

And I from finally a Russian on little U.S. help the oil getting being sanction tough Russian we're think and trading frankly, ships.

I think too. that's good,

Ken Hoexter

in end and What timing. thought if Robert, I in talking terms How point, at happens pricing. reopening what want we guess, I and the to the they to do quickly get about of were just you in base assumption understand Russia into of vessels? the war model, Ukraine and get you'll some on market? will your terms if Red kind those reabsorbed happens forward Sea right, of

Robert Bugbee

maintain it's your Panama Yes, mean because get to if embedded. easier. getting slightly just any certain Russia, sold and sort shortly. can But excuses we very East Russia, for position be will I to all looking on because a you're of about more Russia, seem doesn't Middle phenomenon now whether is that's course. you're been I doubt of worried That And together there hold be

moment at is sanction interest slowing no and getting up. is is As in down the showing to no tougher Ukraine I interest the said, Putin showing giving U.S. the in related

So time and oh, that don't other we curve that have a[ again. you that the things fleet just everything taken to how longer the through because in go go you've Thanks, the back then we through, don't accept that the that's -- over go anyway. also Europe a the anyway, of go the Russia. this in to think can't imagine affect market going have I you've and to still even rush We'll it so to back here much little just I how growth you coming in aging to, got back yes, this And if great. see product you're back starts trades before was got and more take ] going I bit,

Ken Hoexter

just your start don't me charter if rate the argument, your understand any again market of return want where are is in would out elevated adjust not why last part or So just assumption, you to in contracts? of kind help assuming any a right, the tell they it case Is relationship. to locking me base rates, you is that in at

Robert Bugbee

-- a elevated the related I've assuming that talked longer East. the only You're was any don't and I thing. Russian is market about the over think that rates to related elevated Middle to

little a was over rates. the of that now. is -- high charter bit think rate. the right hasn't the really are a these $XX,XXX is right be moved. not sort now, would extended elevated ship because vessel very, sitting The I saying, let's they happened, But $XX,XXX, because the $XX,XXX, a The very and that so this could day this is rates all the day charterer reason before there And for example. are say, $XX,XXX say, of charter, earn, let's

a very will rate for those to be at heightened in would new yet rather rates front give the for want X-year time. every isn't discount. XX calculation would does not the charter because pay different such the big continue the ship the ready a to with now charter have the the certainty more But the a minutes have whether changes that long than the charter owner away announcement all So at of

as The does. nobody same

bid the right But So wide point the some down almost length, now. market would that therefore, like will stock is trade offer expect. settle too let's in, next over weeks, just no X it's say, X, I

Operator

Our next from with Morkedal Securities. question Clarksons comes Frode

Frode Morkedal

strong up Red But that haven't Congrats first right? quarter coming guess the tomorrow. it talked -- even for lot I but back case guess Sea, opens we ships $XX,XXX I I'm to to all you continue, curious this your the a I it, should seen appreciate figure quarter. better hear about the upside if worked. and and

So what how last? do should go impact the could potential could high you rates be, this have any idea

Robert Bugbee

that's Well, I noway. know going

at $XXX,XXX ]. [ at [ see piece he over company Traxon analyst has And Frode of in ]. that guy [ said rates names the last called certain Norwegian an person very ]. right early of a the this sort day we fixtures As X that could Frode in been end and year

think I the on So we've of So take done I comment following quite your can Upside care right? guidance, to well we're itself. don't think upside. going

Frode Morkedal

I guess.

Robert Bugbee

product. Congratulations on coal your

Frode Morkedal

all new you just lanes mentioned, observed standard question final we on is the routes. My trade the

do -- to you for new what of on which type and if are example, but the curious So -- you see routes LRXs, emerging. hear

Robert Bugbee

order. you're You've slightly in -- very more are some just seeing -- LRX

just You've very, things that cool. seen were very are some

from discharging you've that example, AG Sorry, we all Hamburg. about the discharge in So for gone back in really have then Europe around and to days the it's It's That okay. it's chip, is loaded from in are reload around X gone way well, and kind discharging to loading Cape one to East Cape and from the going Amsterdam away going Africa seen, of come AG example, the vessels in in for Europe, AG.

out then that the voyages of things routes vessels and towards are that seen back voyages. where are out lucrative you've Asia that related to to able are you're the Australia or in bring And indexes very AG X,

Frode Morkedal

very Great. That's Perfect. interesting

Operator

Burke next question Our B. with from Riley FBR. Liam comes

Liam Burke

NAV. buybacks levels increasing Your And coming your debt allocation sort part as dividend a percent are you from capital been a is balance of has have between to your of you that of how payout where target that start strategy How steadily stated much a down? going as quarter-to-quarter. your of

Robert Bugbee

we between would our to allocation human the you what until and to not strategy just of dividends. simply departmentation do We're goal [ going buybacks stock achieve capital ] comment and

it So through been dividends. increasing we're -- And we've of is and that of we not regular last the believed than all other say do adding improved the -- in regularly that. now, increases a strength always year, really that company. the I as just or right We've underlying -- dividend now. the anything dividend recognition wouldn't it again like a it think I to

Liam Burke

there's or import tankers stepped -- Obviously, And that crude up shaking been the a of an talk been over product see an it much export advantage? about Red both you How or or a how time? India to do export and Okay. of as your as lot out has importer Sea.

James Doyle

you want do this? to me Robert, take

Robert Bugbee

Yes, of course.

James Doyle

is refining often Liam, they in impact. have product, refineries great planning around the probably complex on question. Well, refinery a most Jamnagar I world, a X India think advanced depending the of the X.X the Middle day include fair world, We and answer of added sometimes capacity. had to one they're and in is very people that. focus a add And the the will But barrels in the East. just region, on capacity bit advanced of positive export most million they to it's million

of a next expanded So is that's similar to and Middle the in the probably seen which the have East, growth ton miles, impact similar region. impact we India,

Operator

next Chris Bank. comes with question Deutsche Our Robertson with

Christopher Robertson

This Ben for Bank. here Deutsche is on Moore Roberts at calling Chris

or dividend upward your wanted special the Sea, especially put prioritizing pressure latest disruptions to strong rates. outlined pay a in thoughts, on the it's very share fundamentals on repurchases, what in Red are And down? the given over tanker CapEx debt We You've ask, maybe market.

Robert Bugbee

I Chris. really missed sorry, really I'm question. the sorry. I'm

Christopher Robertson

you've you strong latest tanker to repurchases, Oh, And debt to about upward that's yes, special might ask Red over CapEx rates, very market. I'm like We and ask, we outlined things share prioritizing wanted in especially dividend the put a wanted Sea, in paydown? given the sorry. other how assumptions fundamentals thinking on be the pressure

Robert Bugbee

sort ourselves. will mission about where think and we -- I paying want not until really to restate until of to to it get down we debt, this we the of we're we finish Yes. get going really

-- It's we're of secondly, have going opportunities it. we Now to to not way. possible never set see and telegraph of what the

already say There no is out the going place. -- to pay and going say, on regular it tend dividend everybody. intend dividend ] to going buy we're out [ we're whatever "Oh, extraordinary or that out back got to to to stock we're I'm this going to way come we ex pay start we're the -- So to we act this my just going buyback We've have or in to much done. raise to

So day one we're going not and to wake say, -- we're to up happy. guys, we're going "Hey, not

Now what this this be is do. to to is going we're going --

Christopher Robertson

from disruption and you're how just what just might a reached please maybe seeing the forward, can play you terms peak product as it And and in thoughts your of follow-up, least hearing. whether out we've looking discuss tankers throughout year, at

Robert Bugbee

wake ago, been see years I morning wonderful up and X through on February think no that's a absolutely When years in we wonderful X X ago years we've cars we or one ago, transit in the road we and question. wonderful Red Sea walk where now a then and no planes And sitting inhibited, in are we've a transit and sky. Ukraine got between Russia, the long-term the situation Panama inhibited. Canal late

about risk And East other situation better. -- whole over that spilling Palestine-Israel talks Middle some argue it situation, areas. not of no worse, one the the the into is getting And

now it's to way because of disruption now. So the of beyond impossible say we've I anyway reached X peak we're think right the disruption that done deviation

if the it's every all on Wall is really we complacency time oil for virtually We facts not It's are, that's look we there's the hard of back is biweekly like the in a but me a announcement say, new has hoping worse at these don't. X, on talk and situation to Street wishing the it's dislocation. the all we've better. as and got yes, relatively Street So whole price. dovish, peak October basis, go And bank things space not Wall reached

Operator

question-and-answer James any the turn This I now for Doyle concludes like remarks. over closing to would our back session. to conference

James Doyle

all listening. a all have day. great Hope you Thank for you

Operator

attending concluded. today's The for conference has presentation. now Thank you

disconnect. now may You

Scorpio Tankers (STNG) 14 Feb 242023 Q4 Earnings call transcript