STNG - Earnings call transcript Q4 2024

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Operator

Good day and welcome to the Scorpio Tankers Fourth Quarter 2024 Conference Call.

[Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to James Doyle, Head of Corporate Development and IR. Please go ahead.

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; Officer; with Officer. the Chief Emanuele Dencker Mackey, Chief Nielsen, Lars me Operating President; On Bugbee, today Lauro, Commercial Financial Robert Executive Chief Avella, Officer;

Earlier call quarter press that is February information of is our based release, those The information XX, fourth website, uncertainty. in Actual -- and set material materially today, may risk statements on on involve our scorpiotankers.com. issued contain XXXX; discussed today, which statements. we may earnings forth available on forward-looking such differ and this as results may from

of as these disclosure the being made filings which Scorpio For of page is risks a website and statement of playback uncertainties, are purposes. available the this Internet the in at approximately you discussion All of conference that and press should advised archive scorpiotankers.com webcast call on is participants recorded days. earnings investor are XX relations forward-looking well for live for Tankers' on review the the sec.gov. broadcast the will also audio our being SEC An available be and as release

presentation giving presentation, we & relations will go We presentation will the Q&A. the the After will Instructions] on webcast. The is a available also on today. slides page, be scorpiotankers.com, The Presentations. at Reports short investor under be [Operator available to

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

Emanuele Lauro

for you, with Thank or morning afternoon, thank James. Good being and good us today. everyone, you

million quarter, report adjusted $XX results. of the to net and income. generated quarter year $XXX million financial adjusted EBITDA are a the a and strong in in pleased fourth strong company In We

and in generated year adjusted in net $XXX full XXXX, income. $XXX million the For million adjusted we've EBITDA

was another operationally Scorpio strategically. transformational financially, XXXX Tankers and for year

and our $XX,XXX balance indebtedness cash our revolving expanding million, our strengthened by debt significantly to per reducing by day. $XXX lowering sheet capacity daily have We breakeven

and cash million capacity. undrawn billion, $XXX at revolving comprising stands in now of $X.X liquidity million Our $XXX in

For DHT. investment excludes clarity: our This in

during more XXXX. our the which longer efficiently we surveys Operationally, their operate the for docks, more earnings. of adversely special dry solely completed is Following vessels impacts This of XX voyages docks, will dry these and no than vessels repositioning need half and dry-docking fleet

sold In prices, vessels, age and were we XX vessels addition, of profile which attractive improving many the at thereby fleet. older of the

the of balance with example understanding in being that COVID-XX triggered downturns prime industry unexpected We are our constructive market black it. swan our cyclical by often events, outlook a

thrive That we sheet, result, also a to to said, flexibility rate any financial company a want As strong with environment. position act under maintain balance the opportunistically. and can we

lag we market and price year, $XX million million to stake share the dividends. DHT, in Recently, the capitalizing $XXX increased company fundamentals on repurchases to share its During of and rates. we shareholders: our tanker in million $XXX crude improving returned relative

continue We view an to opportunity. as this attractive investment

Our strong believe oil crude both low remains are a refined and we products With exceptionally positioned. outlook fleet, we liquidity for well and young positive. leverage,

to remarks like turn And to are would With this, Bugbee. my the concluded. call Robert I

Robert Bugbee

afternoon. or Good Emanuele. Thanks, good morning, everybody,

that about, going speculative let's don't we're the that things believe we and say, What about strong to what morning do really this of try that what from, separate know even what conviction think I know is know we most is to we are we metric, hypothetical. see have cash, sort operating given that we or actually the the remember, is profitable. positive that, for is on cash, company QX as guidance, shareholders. and we cash are our opposed The to important EPS. operating as us, book The about we can us operating what's

liquidity. current We have very strong

stronger even undrawn have We liquidity.

no for come and years newbuilding to have financed CapEx We requirements. are fully

more dry dock efficient as of vessels this result days and dry-docking period -- quarter, ] next in more extensive which an will the Emanuele years. said, are over [ lower X We on-hire we're completing costs,

So forward. is going a the last to asset in months, this when comparison you XX of think that

low know company. and breakevens, This about, will cash lower. cash sure about We take we have -- and very operating we work the what to is even those

We make the ahead. have to best know created we of that optionality opportunities also the

are We the itself. on constructive very product market

no that we cognizant control, or have answers. policies. et of to think clarity now to follows. changes However, to capital thinking are say the understand know do know but even cases, that know present give is our so on predict And in we we many either not right allocation, urgency tweaks right we see announcements; It in not not events I or our nor emotion, is not necessity not to of do nor is inability now than geopolitical -- it also cetera; questions, or various we just as do even the different other

change will We not our policy. dividend

out dividend. We will not pay an extraordinary

acquiring We nor are not ships. ordering thinking of

ready, buy are to if think however, We we shares our we should. own

capital for choice. are acquiring go do remained and this, our as bought is adjacent remains The either-or of companies. have it's in [ however. an ] former We could on acquisition This the because It's okay an we can asset. balance have to if sheet a is we to, asset. invest of -- amount own wanted addition shares, see as DHT It it in We different, DHT. an are us, market not that asset. willing ahead -- to our an from so balance small sheet They to

clearly take great creating to prioritized liquidity balance the opportunities. strong and extremely very sheet ability an of with any advantage have We

We vessels. emotion, a down. be and cannot continue on change sentiment do changing the in a operation come monitor future will short-term in we risk expect premiums policy our the as to simply but events focus beneficiary and trade to the safe We of

much. very and you James Thank to back now pass I'll this Chris.

James Doyle

Thank you, Robert.

to could please If we X. go Slide

are geopolitical the This generating in has other across developments, rates, and uncertainty outlook today's flow. free their are with year, is fleet tankers global to start average. market X-year the increased coupled only volatile outlook market tariffs, remained for As continues constructive fundamentals a for are markets market. markets. of to product tanker Global remained the Refinery have Demand Emanuele a underlying political positive. our all Robert this age, and created the cash And Recent constructive. the accelerating below but to and sanctions not inventories highlighted, contributing product strong at refined shifts closures products leadership, in strong. but

X, to X Slide year, This expect for we to by please. day. close products to Demand barrels continues increase per grow. refined million demand

this the demand are these volume in also distance barrels not January, per has exports seeing which traveling exports, just of XX million Furthermore, the but averaged in seaborne are increased. it's We record grown, that levels. day over barrels strength near has

to of harder newer capacity And close. older in for last significant Middle that many Compared demand compete global investment when like including million expected please. barrels reshaping X, capacity operating year, them lower have is costs. flows to been require have of this to year, of the Slide to capital refineries changes Asia East XX% operational, in Russia, X increased and XXXX refining regions due over with makes remain last This which refining much the levels, these trade ton-mile XX%, to decade. refineries excluding Russia, this it and and

lost is refining more as capacity As we imports. ton-miles with result, replaced add expect to which production a incremental will close,

In On on This the pause Houthis ceasefire non-Israeli And in January and and XX, how response unclear respond. Sea. will announced the the temporary Israel situation Red attacks to temporary fragile. Hamas Houthis the Slide please. transiting vessels ceasefire. will XX, a X-week it's agreed evolve remains a how

Good Canal of transit Hope. As the bypass around the of Cape Suez now, product and tankers continue to

energy please. imports, XX, announced for Slide tariffs Last and the XX were on which then postponed Canadian week, days. on tariffs U.S. Mexican XX% XX%

is optimized crude, million from the U.S. for million Although barrels the output currently XXX,XXX heavier the million this, refineries of and are X producer day world's most arrive barrels of its crude barrels pipeline. crude Of U.S. ship, X.X day via blends. per of light, Canada the from is per other imports heavy domestic largest day sweet and via Mexico. per while oil, X The crude

it could X. product From costs the imports replace into X away, further increasing a replaced Canadian be standpoint, imports PADD for crude be refinery reduce difficult could Seaborne from pipeline to refiners but PADD would crude The imports would of need each Northeast and barrels additional require likely come seaborne XXX,XXX U.S. imports also and products If from day. imports replaced Canada be runs disrupted, product from to U.S. refined to Europe. the

to also In product addition, U.S. refined would Mexico which the from day, if need suppliers. distant then increase barrels would diverted elsewhere each replace turn more of XXX,XXX exports Mexico in to ton-miles.

product they significantly trade could these the and increasing crude by by status reshape and shifting final shipping remains elevated distances patterns. -- flows While tariffs uncertain, of

to barrels product. a Russia, Slide sanctions last consistent exports. tankers, X crude crude XX% which targeting Iran These tankers in of XX, early individuals, China oil companies on Iranian to and crude announced and million imported XXX oil January, sanctions an please. of were And predominantly and Russian carrying Russian announced India strategy its oil refined OFAC In actions and with XXXX, involved China. on In some put from Trump's pressure exports. reduce day are additional Trump week, shipping

tanker older can crude X% and barrels the under scrapping OFAC per sanctioned of million refined Biden. barrels reduction also constructive for the and Any transporting fleet. almost product fleet fleet products day is term, tanker tonnage. last the Under of while and Today, per fell sanctioned day, crude exports vessels Trump's Iranian vessels of to crude total tanker in non-sanctioned rising the accelerate X.X XXX,XXX to is XX%

East which Nevertheless, America of a Slide imports predominantly product. barrels which there been Russia per Russian serving to agreement, Europe since it's would time vessels Middle Russian peace Latin steady, older whether predominantly absorbing And price is increase day. from do, XX. Since difficult many will have refined product the on have if unclear the remained a Russian insurance XXX,XXX carried X.X not given products, loading and vessels they Russian have non-sanctioned imports. European Western XXXX, been a February trading The Russian exports markets Africa, and product product day limitations. benefit million and age, with declined Russian XXXX of cap have many more in could day XXX million have which the barrels products their of If barrels. are tankers per history, Russia. barrels X.X maintenance vessels exports serving trading have EU's

old, X.X demonstrate total relevant X.X old, barrels addressable these a X.X time barrels years years market age. to this, carried as trading built they of decline. MR the fleet The Russian At vessels decline closer years. vessels million X,XXX growth per And than XX. could per By of [ the more refined And to clearly carried they ships ] to of effective this reach would vessels year. (sic) diminishes X.X pattern as million transport volumes, without XX XX in older XX XXXX this than XX% XX less product Slide the than barrels, By be product. of number lower will refined a million one XXXX, even vessels argue be anticipated XX%. compared decline that, probably old. could be without years Thus, scrapping, older year,

XX. Slide

trade. of overestimating for While in an the crude aging we XXXX, is years. the of older of newbuilds, the Today, the this expect XX book fleet, oil LRX order book. accounts all order will underestimating XX% continue half of of oil Many XX% now fleet the the XX% market; fleet and capacity be to impacts than and book including crude of LRXs operate are vessels. the larger current By order the the given the

If year, average Last were X%. at next annually around all a in clean the vessels of the and would the market, growth X% X last Slide X%; annual operate growth rate increased fleet has XX years. over increased to XX, LRX newbuild please. compound years, over over ton-mile demand

is when as fleet scrapping year trade per be However, to in reductions catalysts growth sanctions and the broader Nevertheless, and market closer factors, outlook. oil as tonnage. our and and a factoring servicing X.X% even ton-miles. could constructive in effective crude developments tighten older balance Several supportive without mild the proxy further of LRXs favorable such tariffs, for increase these supply geopolitical could supply-demand

I'll And with turn it Chris. to over that,

Chris Avella

or Good good James. everyone. morning you, afternoon, Thank

on an past adjusted and we million year, basis. in $XXX generated net please. XX, IFRS This income $XXX in million have Slide EBITDA

the vessels. of vessels age sold Most includes the of sale gain XX net vessels older prices. years XX These being were of year the XX greater. vessels cyclically of or Our high were $XXX almost for at income on million vintage, these XX with

million. to by balance us enabled by continue reducing have our results $XXX our strengthen levels These sheet debt to

the In company's have we paid purchased in dividends the $XX of $XXX in million addition to this, stock XXXX, market. million during and common open

Next slide, please.

left and on quarter thus profile. the continued we our fourth the quarter shows to the of chart The in far During steps take balance sheet. to liquidity have first our strengthen XXXX,

billion $X.X include by DHT. million This if made is was release. you investment of revolving of of by $X.X liquidity our over the level previously This partially facility liquidity We our over credit of press have access in XX execution vessels. to of in this as a $XXX the billion date unencumbered recent is secured which new possible

is currently first in with points and basis of facility, debt, we amortization this of tenor, low execution cost February of the through financing for X with it this a have years. a XXXX. While XXX low-cost undrawn, facility a bears no the locked X-year when Through margin secured of access to drawn;

this December million progression of the balance just of to almost on XX, release. the of since Chart of XXXX, which declined right debt $X.X press net has date shows billion $XXX a our debt the net as

optimize affords also of further low us flexibility having strength, cost demonstration move of opportunity a capital when present windows the to structure financial to leverage While is our capital. themselves quickly of this

market year demonstrates the willingness seize this opportunity. into entrance of to Our January Nordic an in our such bond

left outstanding shows The please. this chart slide, Next by on debt of type. the slide our

As our sources emphasized, have sought capital to we multiple and a with strategy funding away lower-cost we of previously financing, flexibility. from into flexible, Moreover, low-flexibility diverse more expensive, lending. have shift bank lease been structure has

June we notes $XX A our market. announced, proceeds senior recently used be we this of of $XXX bond unsecured redeem notes are existing portion from mature previously issued which will to the the year. unsecured a senior this to in million coupon due X.X% As offering million X-year bond Nordic of in at

income markets using the of liquidity, refinancing bonds our us Nordic for with a issuance the to could capital been Nordic existing structure into easily bond these fixed bonds the retired compelling market. these our was have diversify opportunity in While the

credit of all coupled these for favorable credit knowledgeable Over of the opened of in have a strengthening past developments is economic corporate tightened us investor in X the spread base lock backdrop the in a efforts given company sheet set of and testament unsecured was was market. bond and strengthening as U.S. oversubscribed terms a any balance and sheets. the to set issuance This conditions macro opportunity for it financing and dollar-denominated lowest with balance profile the our for a the on spreads against at a and well This favorable markets shipping world. over bond conditions issuing corporate around to robust -- in environment The past the cost years, interest favorable credit our record year, conditions. the the rare the Nordic rate combination bonds Nordic with

liquidity keeping these our this credit bond us bridge the the The credit Nordic would net revolving through ability into has potentially drawn of this discretion, unsecured debt our a under of debt is given redraw costs to redeem have gross at $XXX the both enhancement resulting to liquidity balance XXXX. of facility. the a The chart right of effect combined which readily credit our cash proceeds reducing March of $X the shows debt balance of through the senior keep on the service of portion bond bridge $XXX.X as Nordic pay million to existing and position our breakeven with outstanding end notes, rates million shows principal of our of of million. of needed and facilities $XXX revolver deployment of debt a low. the to debt billion interest available issuance our and facility This

slide, Next please.

highly as that obligations into take any does of at not been credit end XXXX today. not Our unscheduled less per into of account repayments than through revolving have committed $XX million quarter. facilities debt repayment the are manageable This

the going work for over set company forward. to XX% operating far only with of this the the completed the each vessel company the dry Not during dock of periodic has efficiency throughout for these lighter days, fewer XXXX. is off-hire expected does up special a surveys Additionally, fleet enhance on docks dry recently schedule performed XXXX but the

day, sheet benefit us excess balance potential: in in X to our $XXX up leverage flow of the even our this, per breakeven flow our strength $XXX have year. to company company cash To positions us year. At And The flow generate commonplace per the spikes given continue levels. $XXX our to from challenging to years. generate can low flow $XX,XXX million rate past to environments at rates per over per cash $XX,XXX been operating per that up in Further million generation up in $XX,XXX please. can company spot can cash day, cash slide, to generate million to Next the in At cash year. per enables generate the illustrate cash day,

Thank today. for call call your presentation like -- to everyone, turn Q&A. I'd And over time. our to that, you, concludes This with for the

Operator

[Operator Omar from from comes Instructions] Jefferies. Your first Nokta question

Omar Nokta

put thus that mid-sized that so all that in I place, far. result there's A segment, given especially sort any lot Russia that's your happening have Iran; about comments you big been about question guess chunk unknowns. whether this or of are ago, we've strategy is the noticed the all and terms Scorpio which that this anything seen. in few front. of basically just I geo, the this, as a basically of James talked count And on Clearly, impact negate we the newbuildings that them of trade in weeks sanctions appreciate of from year, sticking the to the suggests Robert, change macro ongoing, were of the kind maybe guess things a sanctions presentation. in or just on if the deliver Aframax LRX flows been an of a

Robert Bugbee

sanctions that would implementation is these shipping actual like the all think? answer rates add the I'll whatever you And would is -- Lars, you headline the and I to only effect Lars that, the on delayed. are but that make let comment there's

Lars Nielsen

sanctions would. filters Omar, had the Yes, interest look this round the of through. only first sanctions, XX, massive we impact on ships right? were XX that of And If first takes bit the the And we I that market. one, of that obviously as is second at of a all, little said, round. first a it as under Robert a -- time had

hitting doubt in particular turning an of that of there There ships, in increase in lot STS the or ships places. then Other seen waiting off no mid-size And et rerouting ships more other region. The is have floating ships round cetera. Mediterranean, finding the in the for sanctions second that Turkey around, storage. we is are is Brazil, a are

interesting think be move going wind-down a I for the we India, as which the massive buyer kind out Russian a also to to in is going March. it's to of period, crude, how that see of pan start as -- to has particular been into

is it's ships a doubt sanctioned. being lot that lot that There a no of ships. are There's of

overall because going were it more that really to hits as the seeing follow. hit be on way probably rates We're that anticipate I supply think actual fleet. implemented either or think same you a And kind move the of the sanctioned I where well. to phase it's -- of of the it's of full, see, next this will not first one in sanctions And so fleet. not XX.X% did suddenly that constraint that the kind yet. for less there start of We that kind segment, is sure, the seeing follows into X% we Aframaxes, in can that in this we this the being entire of as is is

got market -- So lot in doubt no there's Or on you've be this the a you Iranian the angle. that of sanctions certainly heading. different might There's see got Russia. you put the And angles. where OPEC interest all you've

Omar Nokta

It Yes. makes sense.

just underwent early stay And year. follow-up in the to dry-dockings and something still separately: a tuned You the on. it's process So last

last correctly. at I you planning that drove forward. if ships, think, sounds bunch that the of of a more the least you XX it do at year? clearly what give you XX think Can start That's year, to you than, sense brought so I I recall a like were the

Robert Bugbee

Lars, Cam?

Cameron Mackey

asset the one Yes, take into is in And goes the right the obviously that of position. let's we're at head fair our say, primary the and have Europe I us. right issues dry-dock of going is there's at can our planning unavailable in to bit dry-docking. Red try Sea given binary to most parts Omar, a place time out -- favored And to about that. of rather China whether you an position positioning or that

average if at the given XX- up market collaboration the move the view. So chartering opportunities situations of will time, to exist to our and on planning allow. all a about commercial that with that And view at like depends the time, on the also it the forward try we XX-day them

Lars Nielsen

fleet on once obviously course this future. there's where when optimized add on is I'd Yes. look you forward to undertake, extensive quite of that. ahead, to well still probably probably just And clearly, effort. from yourself dry of Doing that 'XX, like future. planning cycles in in every moving undertaking. big terms to one this XX the a and shipping I'd which majority dock dry-docked a where for dry something. XXXX are I of add coming sit is get largest like our docks mean some we no We the half have And where the of especially a for has point that hump, in obviously dry to that is but of dock, undertaken. we're at I steadily we is first company additional you've ships positioned the ever the doubt over massive we've

Operator

The next Jon Evercore Chappell ISI. from from question comes

Jonathan Chappell

Chris, going Robert drive to to your breakevens you're said lower. in cash his comments continue that

in inflation of business. ton from of anything capital do of with structure? here? getting how to expensive efficiency me on the levels fleet, heavy done understand financing. it you the the Is the current taken the along is the already more lease you're Or there from maybe have cetera? lower mean help you Norway. I lines There's lifting bond the et You've you've new in Can a cost

Chris Avella

I mentioned fleet to the financing. is one we are consideration main on you of coming revolving really is million I of dry this, vessels operate thing that the have efficiency dock going of into And thing. that mean take Well, efficiently, out over yes. have $XXX more credit. to think drawn but I Jon, the

we our further. is we And down liquidity I that could that's even drive target so amortizing, sort would we our those breakevens if of credit some going -- the we And X and into of position think just pay really take forward on facilities. that, area

Jonathan Chappell

And Listen. going understand then than And the you. Okay. they at James, now, being last there's been a year were maybe lot right side for this basically your get I today on overestimated, for are point months. on X lower supply thing the rates time. the last but same that's

nice we So is of from continues you off landscape, Slide you grind Or I have the on revisit floor higher clearly back so Russia? XXXX a sense beginning standpoint? do to from ton-mile that there cyclical in think that where to geopolitical kind goes the that demand a of the the guess maybe lower, change demand peak, a 'XX. it's on in X, especially the the is, ton-mile is question including a chart It's don't here if it levels

Robert Bugbee

maybe James, do I one. Well, that if

speculate mean; if there trade like, we of not -- we whether a in and or goes a I And well, ] part. take; we'll I cannot will first was peace Russian make that necessarily that's outcome, know We and hold, indeed, just everything think know said what I that peace; buy don't don't It's don't an is and to -- before, that, Russia like even the it back we Jon, into even [ there's the all, peace on whether will that for negative. as that peace it ton-miles. will be where it form and assumption before; affect that thing. will So example,

we've we of case, our X forecasts. think we that we need company, on to right. so use had base and wouldn't money. there And we been that -- and do we why that I X, operating before need are deleverage that's are need don't taking going that to focused you're and -- for think high cash we're rates years. cash super when would but good that some things much thing breakeven the in -- I our That's don't you have the rate get not -- going to also breakevens, you're terms a don't those to we doing a had explosions; operating down rates a I so that make

So a is $XX,XXX we've gives more much rate today our today rate than of or for a bang done terms cash $XX,XXX in before. us buck operating --

choose that position. that's may say, people you assumptions, no superior a wise I anywhere, else, So that very because a for any think periods rates. their can place will even, But example; one but periods in is a have working own you be not we'll peace good assumption get there's or guarantee peace [ get let's somewhere ] have may

[ terms in returns I'd LRXs. XXs. in You they now very forward, prices of [ can't is much where same is that's than leverage. get still They're are years the doesn't mean up come great that stock going off can but time charters their product in ago on ] secure the tankers healthy, charter the more X at And ]. other XXs behind, it, And at rates. And paying you XXs, XX way their lower time, market at look time so but see which aren't in people there that the were

Operator

America. next from of Ken comes from Bank The Hoexter question

Ken Hoexter

on you the on that a your But investment. a view your in net on Is fleet? crude the DHT, there. just thoughts or you talk view of Maybe on can part management? Robert, about it of expanded that Is Emanuele, into market? your why some can moving thoughts investment In Maybe, -- them asset terms value particularly?

Robert Bugbee

rates, There's the -- a lot get Sure. period been seeing and of we And of crude the amount actual X product stated investment." we've disappointing. the of so the be VLCC a that lift have of And can back the especially expansion it product again that owners. where analysts, break market And going been for earnings however, as be we And better. VLCC reasons, until ton-miles. same And VLCC expected that from we're tankers, the years worked actually "So market, historically, then you outperform tanker case. the VLCCs. get our quite rates will stated, We've won't the that always smaller have where producing expecting rates And did seen oil tandem. out, in good together And hope X, as dynamics what MRs even before. recently surprisingly, Iran an up was other the VLCCs' to we've an just expense we're consistently not, is product to are a some of big isn't crude the to that sanctions that's to say, and there,

look It's And And it DHT very that a way what They that's then think, in of -- managing our a place. an predictable And in a And best like that's at is. investment. we had perform things. commercially. class. opinion, very we investment good is, DHT. in well It's is that,

Ken Hoexter

vessels and happens? Like, in change come to ]? of peace together of that and come to? does what half [ so what maybe you market? you're to get Robert, what you give just upfront, All great maybe, to Jon's back, debt. watched obviously on we Zelensky years, I Russia, back If -- Is there they Obviously calls of we've Putin, LRX, or and understand. of on happened I yesterday, Trump right. and the news, we Do past do that different XX% position. back mean Omar's, a Russia. what go the a with want in half Europe, team, forgot if concept them anything us And of to on on the point unknown so can I actually kind of I commenting want them not reducing now that a -- And is the XX%, maybe world, step it follow I Does history up this hosted but or saw Ukraine? can Chris just hits are X% question, guess, this like ever say, for job the MR view on

Robert Bugbee

realistic to, return in -- not the No, for can you -- form. to highly past -- [ complete there's nothing you nice but a to a any a it's get doubtful it's shorts and That's point whipped back thought wake help week, everybody that but not ], and going it's place. going to a up, thing, [ we're get to to is next ] whatever, to everything its be positions up that or into

statement on to wait the a that is have I you're it going the Russia. is factors, whole deliverability. a the in either back straight make fleet holiday peace." and "I more it way, hard It's in -- a statement, can't a to want can a that's And a to treaty, between dependence resort there peace see. -- the statement little mean imagine chain definitely for way. -- going so events Gaza, you can before, between imagine. host you're really a You if a want you a mean dark muted build there's part, demand reasons, is any make change, much -- that that to there that to was I there have goes Just not is response trade of X bit those and where long to but actual really but you likelihood route serving, long those to it the even that Europe -- of actual

Ken Hoexter

you was one can delay end sorry. than expected off-hire did even Or you you but had -- If out seemed -- days, follow-up get quick just docks? there more dry go at faster Yes. the there or did for out sorry, like the I than the there? push on -- perhaps expectation dock question. days It -- dry push they were Did

Robert Bugbee

No.

-- it please, a Cam... think was I

Cameron Mackey

classification sorry. timing The of may: If driven dry is by docks Essentially, The -- cannot regulated, so size. extend window. a special services beyond I they're you

within maybe them around not move XX, could days You long beyond but XX, minus that. plus,

Operator

from comes Lewis question next Greg BTIG. from The

Gregory Lewis

from Red cargoes, been think, of and had realizing trade? imagine Sea back they Obviously -- I a on has insure with and Houthis bit insurance impact that these Are something of kind to have there is general as earlier, could of the it's what kind a stay to some -- have through of fluid, but this What to what's an I the to at start some what's view like potentially get for more insuring the here? And there chomping in kind companies that insurers? you cargoes it's of comments these that, like the been guys, of Or a longer. drones like your, -- the -- long-lasting that like have great that going I ] to speculate, market us conversations [ a question. are on issue.

Cameron Mackey

a buyers insurance changes a There been And the give market so point market, have insurers different that any, as at shot. is any view The responsiveness market. sellers question its insurance [ That like to market ] the it's are insofar said, can doesn't the to price. of The cynical claims. efficient care. is any of agnostic. being and very I handle market, is environment, in

So increase or the market that, on you can volume. there but risk. in market volume to count insurance been there's their they'd yes, less is to idea an competitive as And pricing, like through agnostic share general

Gregory Lewis

And... Okay.

Lars Nielsen

to down, equivalent some the say, risk has is price I think I and here, or Greg. do, -- if just add And of companies important risk obviously you also well, price goes say -- price I'm the to may, risk. they also what if extent their generally all the down. the to going come sorry, is the insurance can I price that not it's up

that conundrum reflects that of still be. So reasonably is moral risk what might irrespective your high the

Gregory Lewis

any the LRX market order around about are to I Scorpio Any dollars?" done vessels, kind understood. of I'm is -- has by and of of way or alluded you tanker I and couple Aframax -- it is, from a "If we having kind Okay, cost period crude -- to And parcel even any can I any out going people how book. questions an that tanker, coat or company a historically one product with newbuilds views time think been back that crude the just why their million not guess work between kind guys an as was realizing way trade versus on over and all much that? forth of that like then of to ], ordered of Is you Is kind product? me LRX see operators and -- extra there thoughts order there [ of have

James Doyle

be idea. would difficult That a have one, Greg. No, really don't an we

over Aframax best thing have at been I LRX is LRXs. recently, X of the years, to think XX%, the X, just orders XX%, maybe last look

big coating of in of of issue really LRX think [ not the Aframax the LRXs, is the I optionality that an today ] of So cost fleet you. terms that gives have higher impossible it And size. the XX% yet of aftermarket crude in million in it's product, Xx X.X for It's a barrels not of oil that million crude servicing vessels these is market the versus day to XX so trade. some is

Operator

Ben question next from comes from The Stifel. Nolan

Benjamin Nolan

Yes, appreciate it.

couple So following I of got of -- I've Greg's actually on questions. things a maybe both

product. there on as that? So in VLCCs first crude then know recent well, of Any the have versus update I the product, through has traded of any on there going don't in some guys past, the sort there. you you're how about think Sea, starting and all, -- I the think on of past And actually, is are but know been that? Red yet, you -- dip approaching to ships their other toe into thoughts that are classes I Suezmaxes

Cameron Mackey

highly, you've I have would negotiation, evolves. of to a I the Red X that Sea fraught. see second ceasefire Phase window the think yourself eyes headlines but We of take the lot don't the of the any seen into a probably your it's Ben, casual can part question observer are say how highly of first. waiting on It's

whole, taking big we're to very as the cautious very, about as the transit Sea. approach Southern of some players, industry Red think again, a is the I as a container So the global not resuming but Western industry,

Benjamin Nolan

-- maybe yes. And James

Lars Nielsen

and try can I yes. --

Sorry. Go James. ahead,

James Doyle

Lars, you Lars. no, --

take You it.

Lars Nielsen

probably So differential was strong LRX voyage to VLCC million. other the spread probably a to quarter, the extremely going West, when and the the the beginning in and was from the of similar Middle market kind throughout type for a had margin of second between cargo LRXs LRX a putting ship that between on East, and of X the $XX X so using substantial X

to a VLCC incentive take the cargo was risk clean So moving pretty up distillate and on the apparent. of

Now VLCC as has a has margin is that there. moved extent, of also LRX larger longer to as market the market down, no drifted and kind up, the well Suezmaxes

pockets is as talked casual the There is data we from but at are happening different margin. between -- that's load you in of areas that in the not where can is and the about So clean-dirty terms right now. past, kind to have there that Aframax cannibalization of suggest condensates, the point certainly different change LRX to at

of into case in is second out that also what happens which of interesting tends a and newbuildings newbuildings the the with then the be to lot of And year, then which past the -- kind that, the moving the out the in all seen market LRX part with has we shipyards the are of cargoes one the coming -- X is of of only of where at delivered. for is markets, beginning moving also to XXXX, out at virgin West; Point tanks here there's being West. that And North going the East, Middle Asian or VLCCs general. into discount come a relative have

got at changes kind something This Suezmax you've Suezmax with is this in something we not the is potentially The on a the really contender of And of not And market honest: outlook. but that that market. year. terms our every is cannibalization, to that contend then single it's So anything market. be

the what VLCCs going terms kind forward. balances of think I is that's there's interesting of that only and that supply-demand thing X actually means in newbuilding

Benjamin Nolan

The and to to think, see reports. very second guys you let and question, vessels, call what then -- Handysize I rates ice-class we though, but helpful, again historically, do maybe broker is a the tend that getting would most my, in be especially I've in any relates that -- this are it, that say, And below my Russian trade. let's environment, way. for because of And was Robert, suspect that's ever lot -- it, the Lars, the they for in tended absolutely but be me of think remarks, scripted appreciate your I second the heard question. all, it, Lars. prepared first Well, by you I Got

creates the so that about really again you is how and category can but a And you aren't that what's doing, you you that blend maybe normalization? talk Russia, bit if know go to little of going differential, that was if think might a in, appreciating there you that just to the something guys sort benefit it of don't on a most with -- then but

Lars Nielsen

kind And STNG I no XX doubt XX Handysize think on the vessels controls in there's the dry-docked taken XXXX. out by mentioned the earning earlier say for the an et that's was that on, dry-docked it's vessels. the has and tradability important those impact -- positioning the et Cam plus all time cetera, cetera. were with potential we that ships, All of to of that that,

that considering of So the pretty of would moving completed, you for all as XX market I terms ships was the say and all -- going. done in it's had ships, the or size week counter have of to February, into where so of good second be think dry been we're then that, docks so to on, these now

kind of then clear this Finland, are To in in only in stuff the the the did It's out of a of maybe business out loading so Russian of et your cetera. question. quite is that, before well, terms and past, of ports, lot part ice second we we Baltic of constrained -- ports Finnish with Ukraine, the today, as

a at that obviously ships it's a have market sure, but so that will earnings less more non-ice Handy in lot are market, for say So of the the there's potential, classification. there I ice of time, same also

aging point introduced very age segment. few this of average interesting if is with you market at to fleet, a look the more ships on fleet, being for the think kind interesting I the Handy the fleet very -- on the is

Benjamin Nolan

right. All Well...

Robert Bugbee

in the sort restrictions I for so place that's the the I of the little about. in, know ], BPs, the think Totals, to -- don't about has that's the that's talking at difficulty many about to It's the aging there the to that are return moment, you're charterers are so hurdles -- are we're very, to of European whereas talking assumption for these sort [ highest highest the operation past [indiscernible], hurdles operators And the trade. like and that's world that past Lars, receivers to of going this traditional they the agree. where get related that people Ben, you'd have have -- because reasons very also get the exactly Shells, what -- in if those markets

Benjamin Nolan

very Right. I All it. right, appreciate well, helpful.

Operator

question next the And from Robertson comes from Bank. Chris Deutsche

Christopher Robertson

having percentage and though, a qualify with try gray I to EU fleet so Europe dark would regards I'll ETS the into to one and looking regulatory FuelEU end any greater European emissions And are call, geopolitical Russian given market the to of the the sanctions of trade towards and but observable getting regulations volumes vessels minute, impact of the just know even at this we're I issues? the trading regardless on curious just how trade not guess, here: or fleet product the it the for what ask make dynamic, quick just the on moment. the at of

Robert Bugbee

have you Guys, any do any idea? guys do have you --

Cameron Mackey

and look but really we society, are bar Western industry that the of we've comments calls, standards, extent the realm start part I'd I dark our that expectations far away, in in compensation welfare. and you what And -- made clear. should fleet can the do repair, we're about detail somehow asking bar, fleet, a is to beyond hurdle second stringent ease, they ships to which come market. happy previous to when your in that harken in and anticipate, classification, the is you compete at we -- to And pass, regulations dark if are, have we is the sanctions one think the which customer have So certainly the And shot clear the are operating some maintenance were number a Western back yes. on of was most you in whether like, I and to insurance, it, what take of at really to is any general seafarer question pass.

ever and again a at tolerances. looking of not a you're even to the that regulations customers So lot their but risk of their have because required because trade go; very them to for CapEx to distance very, West, and of in be considered long demands assets and

back. repeat about see you're first that we're age you it? And the relative that's get type question, you you'll the skeptical And those So of vessels and then -- of can before the to sorry. your merits investment many come of talking

Christopher Robertson

on with of the impact into observable product existing regulations kind Just the today is what step-up the the XXXX. trade and

Cameron Mackey

And to EU you're course, adjustment that, around I degrees but not placed market a is in what been added Lars it's or better of for will say seeing, maybe is complexity the of is, big general. just what ETS FuelEU, answer competition. in

regulatory So the environment harder harder this, just several to along compete. things last smaller for in other the have makes and over with it shipowners years, that happened

above -- would, say, look, is is anything, the it have I So market a it but does adjusting, consolidating impact.

operators so bigger And to bigger. complexity of really and and cost would smallers scale these And you the with expect get struggling the -- are the that and the regulations. owners the

Christopher Robertson

Got it. helpful... really That's

Lars Nielsen

here, number I'll a is interesting. Chris, give you quite which

going perspective from between difference and have the to have trade an terms to U.K., what Europe, the from Middle you trade EU you're the LRX pay the it $XXX,XXX. ETS going and including it to East; in EU non-EU to going and If to you're port is you're of an

Christopher Robertson

I'll right, All it appreciate over. okay, that. it, turn Got

Operator

from The Clarksons next Mørkedal question from comes Securities. Frode

Frode Morkedal

quick important it's a order discussed on an question topic. Just We book. but it,

great. call all there's maybe clearly owners and that Aframax book the So have X.X%, XX when seem -- talk right, to market, lot ordered head out it, LRXs case right? LRXs, all Page going that let's compelling all in all think into these is be, least my but assume been right. very to there So but is you a understanding that that -- all for of Aframax crude switching, you segment, all they laid order the slide of is an clean opted I to investors, is orders there's should So by crude At right? on the just -- few I a a

do transition, older question going this Is Or that there of this directly are -- newbuilds crude? these do you then switch be think plays all routing-out LRX how think So you into the out, really will of ships type is some into right? crude? this

James Doyle

Lars, do you want start? to

Lars Nielsen

just data of some kind I'll -- with on interesting So I'll yes. this. start kind of start

he great in fluidity start you volatility are moving The the resurgence And then there wants one they market is from that busy to differentials perspective, So been year. is markets. of of a difference move the over of $XXX,XXX, owner's a other. both have obviously This creates is that terms impacted when as February. on an on we they there's both. is And for will from time It parts looking want. charter of that a real the the the year seen, in between The those Aframax, bit LRX. an kind quite when to not fixing no clear. is charter for he if last and And we the have taking about Aframax concerned is X the a clear Aframax. there market, fungibility spot And market spread very as LRXs it it's into

at So if those look at look want to you it is very have in unison. you important to that, LRX/Aframaxes,

the great the these at is, look purely do kind book conjunction not think look Aframaxes, whatever the this of of you're making Aframaxes; LRX mistake So when to with if you look with huge, I or at together. in and LRXs aging in particular, is, say, at well, percentage is whatever fleet you the it XX a

James Doyle

a point. add would Yes. And great I just making Lars is

XX maybe I older so what and absolutely look tonnage, LRX older Aframax the lot then move newbuilds vessels the So I clean have the older that And in right. market fleet than there's, of but a you of fleet is into especially market, as some larger the see think, trade even the is today, at think the Lars than some XX% of fleet, you'll Aframax dirty the is years.

definitely this And you way in demand You Frode. for a it have appear. you them do, than to XX% assets that -- story at certainly supply substantially both as looks have less tells growth may a it well, the together, a look when where there's as

Frode Morkedal

the so could few arbitrage Yes, potential I final guess, great somewhat update. is question flows? reopening. be diminished East-to-West thing. months, appears might in a Sea the having have That's you that positive be think impacts Red positive to on indeed. on think do this maybe I past My Which this

Lars Nielsen

the is again. cargoes has turnaround if West. suddenly the hub where the few if [indiscernible] points of top through the over February, start flipped, being supply East. refinery last the in completing of here. refineries then I less, will first in huge I'll shut that add then on terms has flowing outlets incentive making a, one turnaround in both suddenly on and Number hub a cargo January, would you've of you over completed. Europe. Middle of moving with that, That in diesel then And end been you there and to then is by no more So or AG, And had of that of few was just That's you've suddenly opened produced, to so a diesel also distillate that, say and you months, real sentiment got start look Red lot the cargo kind part move Sea the in where a December -- cargoes,

Operator

question comes next Riley. Liam The from Burke from B.

Liam Burke

new flow of happy the Robert, most your I relatively LRX. at a size a Are strong recent Or opportunistic of the you in liquidity positioning your pretty guess fleet? light and cash position, divestitures? of with vessel are looking much sale was the still and you

Robert Bugbee

to sell the getting Both. this I think, willing if call's I value. good of on careers, the they for entire vessels fleet. with opportunistically the think size anyone we're positioning been And very mean happy and they're they've

Liam Burke

do talked Mid you capacity refinery see in to till event. East? a of sort out less-efficient in continuing this This state globally; been thing you've normal of James, ones. of a and China realignments reaches steady Okay. about multiyear older, and weighting shutting heavily the the How refinery it and has play

James Doyle

Look.

I think to continue. going it's

emerging online best the coming look: lack refining part markets. of capacity The new story So is about in the

has everybody not supposed medium-term terms that construction at full a was focused XXXX that world the that product of strong And back And you're probably so Then but COVID. before I shut it's So capacity, and refining powerful. environment in have lot still trade the demand should it other of longer-, starting or capacity came really then have to those starting to as you think side this closures on older and again. crack Dangote, in is it's XXXX. is the see

we call, capacity earnings million think X last we our this expected I said barrels to during of So close that year.

forward, and constructive to in million, on think X in it's the There's a Europe. it's And carried be and certainly capacity forward. U.S. can more to you're production, Now it's so that going ship, going going going make most have so more lost I China the of very to there's I still be more time, There's that in up closed. think

to We XX we haven't industry going new since for closely going and had of California necessarily any [ something be monitor that's impactful the we announcements it's kind forward. refineries and Phillips think our December, ] something in but

Operator

concluded. the presentation. and has now session, question-and-answer Thank our concludes this attending -- conference The today's for you

disconnect. now may You

Scorpio Tankers (STNG) 13 Feb 252024 Q4 Earnings call transcript