MONACO --(Marketwired - November 14, 2016) - Scorpio Tankers Inc. (
Results for the three months ended September 30, 2016 and 2015
For the three months ended September 30, 2016, the Company's adjusted net loss (see Non-IFRS Measures section below) was $18.3 million, or $0.11 basic and diluted loss per share, which excludes from net loss (i) an aggregate write-off of $9.0 million of deferred financing fees and (ii) a $0.2 million unrealized gain on derivative financial instruments. The adjustments resulted in an aggregate reduction of the Company's net loss by $8.8 million or $0.06 basic and diluted loss per share. For the three months ended September 30, 2016, the Company had a net loss of $27.1 million, or $0.17 basic and diluted loss per share.
For the three months ended September 30, 2015, the Company's adjusted net income was $88.1 million (see non-IFRS Measures section below), or $0.53 basic and $0.46 diluted earnings per share, which excludes (i) a gain of $1.2 million resulting from the sale of the Company's investment in Dorian LPG Ltd. ("Dorian"), (ii) a gain of $1.4 million resulting from the early termination of the contract on a time chartered-in vessel, (iii) a reserve of $1.4 million for a pool bunker supplier in bankruptcy, (iv) a $2.0 million write-off of deferred financing fees, (v) a loss on the sale of a vessel of $2.0 million , (vi) an unrealized loss on derivative financial instruments of $35,000 and (vii) a gain of $46,000 resulting from the repurchase of $1.5 million face value of the Company's Convertible Senior Notes due 2019 (the "Convertible Notes"). The adjustments resulted in an aggregate increase of the Company's net income by $2.9 million or $0.02 basic and diluted earnings per share. For the three months ended September 30, 2015, the Company had net income of $85.2 million, or $0.51 basic and $0.44 diluted earnings per share.
Results for the nine months ended September 30, 2016 and 2015
For the nine months ended September 30, 2016, the Company's adjusted net income (see Non-IFRS Measures section below) was $18.7 million, or $0.12 basic and $0.11 diluted earnings per share, which excludes from net income (i) a $2.1 million loss on sales of vessels, (ii) an aggregate write-off of $14.5 million of deferred financing fees, (iii) a $1.6 million unrealized gain on derivative financial instruments and (iv) a $1.0 million aggregate gain recorded on the repurchase of $10.0 million aggregate principal amount of the Company's Convertible Notes. The adjustments resulted in an aggregate increase of net income by $14.0 million or $0.09 basic and $0.08 diluted earnings per share. For the nine months ended September 30, 2016, the Company had net income of $4.8 million, or $0.03 basic and diluted earnings per share.
For the nine months ended September 30, 2015, the Company's adjusted net income was $184.9 million (see non-IFRS Measures section below), or $1.15 basic and $1.01 diluted earnings per share, which excludes (i) a gain of $1.2 million resulting from the sale of the Company's investment in Dorian, (ii) a gain of $1.4 million resulting from the early termination of a contract on a time chartered-in vessel, (iii) a reserve of $1.4 million for a pool bunker supplier in bankruptcy, (iv) a $2.0 million write-off of deferred financing fees, (v) a net loss of $35,000 related to the gains and losses on the sales of four vessels , (vi) an unrealized loss on derivative financial instruments of $0.6 million and (vii) a gain of $46,000 resulting from the repurchase of $1.5 million face value of the Company's Convertible Notes. The adjustments resulted in an aggregate increase of the Company's net income by $1.4 million or $0.01 basic and $0.00 diluted loss per share. For the nine months ended September 30, 2015, the Company had net income of $183.5 million, or $1.14 basic and $1.01 diluted earnings per share.
Declaration of Dividend
On November 10, 2016, the Company's Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on or about December 22, 2016 to all shareholders as of November 25, 2016 (the record date). As of November 11, 2016, there were 174,629,755 shares outstanding.
Diluted Weighted Number of Shares
Diluted earnings per share is determined using the if-converted method. Under this method, the Company assumes that the Convertible Notes (which were issued in June 2014) are converted into common shares at the beginning of each period and the interest and non-cash amortization expense associated with these notes of $5.4 million and $16.2 million during the three and nine months ended September 30, 2016, respectively, are not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.
For the three and nine months ended September 30, 2016, the Company's basic weighted average number of shares were 160,844,168 and 160,902,344, respectively. The weighted average number of shares, both diluted and under the if-converted method, were anti-dilutive for the three months ended September 30, 2016 as the Company incurred a net loss. The Company's diluted weighted average number of shares for the nine months ended September 30, 2016 was 166,839,648 which excludes the impact of the Convertible Notes since the if-converted method was anti-dilutive. As of the date hereof, the Convertible Notes are not eligible for conversion.
Summary of Recent and Third Quarter Significant Events
TCE Revenues
- Below is a summary of the average daily TCE revenue and duration for voyages fixed thus far in the fourth quarter of 2016 as of the date hereof:
- For the LR2s in the pool: approximately $13,000 per day for 60% of the days
- For the LR1 in the pool: approximately $14,000 per day for 50% of the days
- For the MRs in the pool: approximately $10,500 per day for 50% of the days
- For the Handymaxes in the pool: approximately $7,000 per day for 50% of the days
- Below is a summary of the average daily TCE revenue earned during the third quarter of 2016:
- For the LR2s in the pool: $18,793 per revenue day
- For the LR1 in the pool: $10,547 per revenue day
- For the MRs in the pool: $12,254 per revenue day
- For the Handymaxes in the pool: $9,450 per revenue day
Dividend Payment
In September 2016, the Company paid a quarterly cash dividend on the Company's common stock of $0.125 per share.
Management Agreements
In September 2016, the Company entered into an agreement to amend its Administrative Services Agreement with Scorpio Services Holding Limited ("SSH") and its Master Agreement with Scorpio Commercial Management ("SCM") and Scorpio Ship Management ("SSM"). Under the terms of the amendments, among other things, (i) the fee of 1% payable to SSH upon any future vessel sale or purchase will be eliminated; and (ii) the fees due for a termination of the commercial and technical management arrangements in the event of the sale of one or more vessels, provided it does not amount to a change of control of the Company, have been reduced from two years of management fees to a three month notice period and three months of management fees payable to SCM and SSM. There was no consideration payable by the Company for these amendments. The effective date of these amendments was September 29, 2016.
The independent members of the Company's Board of Directors unanimously approved the amendments to the Administrative Services Agreement and Master Agreement described in the preceding paragraph. SSH, SCM and SSM are entities related to the Company.
Debt refinancings and agreements
During the third quarter of 2016, the Company refinanced the aggregate outstanding indebtedness of $396.8 million under its 2013 Credit Facility and Newbuilding Credit Facility. As part of these transactions, the Company drew down an aggregate of $418.8 million under its NIBC Credit Facility, 2016 Credit Facility and DVB Credit Facility. Furthermore, the Company amended certain financial covenants under its K-Sure, KEXIM and 2011 Credit Facilities to make them similar to the financial covenants set forth under these new credit facilities. The Company also received a commitment for a new credit facility in November 2016. These facilities are summarized below.
2016 Credit Facility
In August 2016, the Company executed a loan facility with ABN AMRO Bank N.V, Nordea Bank Finland plc, acting through its New York branch, and Skandinaviska Enskilda Banken AB. The loan facility was fully drawn in September 2016, and the aggregate proceeds of $288.0 million were used to refinance the existing indebtedness on 16 MR product tankers.
The loan facility consists of a term loan of $192.0 million and a revolving credit facility of $96.0 million. Repayments on the term loan facility will be made in equal, consecutive quarterly installments of $6.8 million through September 2018 and $6.0 million for each quarter thereafter with a final balloon payment due at the maturity date of September 2021. All amounts borrowed under the revolving credit facility are due at the maturity date of September 2021. The facility bears interest at LIBOR plus a margin of 2.50% per annum.
This facility includes financial covenants that require the Company to maintain:
- Minimum liquidity of not less than the greater of (a) $25.0 million or (b) $250,000 per time chartered-in vessel plus $500,000 per owned vessel.
- Minimum consolidated tangible net worth of not less than $1.0 billion plus:
- 25% of cumulative, positive consolidated net income for each quarter commencing on or after January 1, 2016; and
- 50% of the net proceeds of any new equity issues on or after January 1, 2016.
- The ratio of net debt to total capitalization no greater than 0.60 to 1.00.
- The ratio of EBITDA to net cash interest expense greater than 2.50 to 1.00, calculated on a trailing four quarter basis.
- The aggregate of the fair market value of the vessels provided as collateral under the facility shall at all times be no less than 140% of the then aggregate outstanding principal amount of the loans under the credit facility.
The remaining terms and conditions are similar to those in the Company's existing credit facilities.
NIBC Credit Facility
In June 2016, the Company executed a term loan facility with NIBC Bank N.V. This facility was fully drawn in July 2016, and the proceeds of $40.8 million were used to refinance the existing indebtedness on two MR product tankers. The facility will be repaid in eight quarterly installments of $1.0 million, followed by 12 quarterly installments of $0.8 million, and the remainder is due on maturity, which is June 2021. The facility bears interest at LIBOR plus a margin of 2.50% per annum. The remaining terms and conditions, including financial covenants, are similar to those set forth above in the Company's 2016 Credit Facility.
DVB Credit Facility
In September 2016, the Company executed a loan facility with DVB Bank SE. The loan facility was fully drawn in September 2016, and the aggregate proceeds of $90.0 million were used to refinance the existing indebtedness on four MR product tankers. The facility will be repaid in equal, quarterly principal repayments of $1.6 million, has a final maturity of August 2017 and bears interest at LIBOR plus a margin of 1.60% per annum. The remaining terms and conditions, including financial covenants, are similar to those set forth above in the Company's 2016 Credit Facility.
HSH Credit Facility
In November 2016, the Company received a commitment from HSH Nordbank AG for a loan facility of up to $34 million. The loan facility is expected to be used to refinance the existing indebtedness on two MR product tankers, has a final maturity of five years from the first drawdown date, and bears interest at LIBOR plus a margin of 2.50% per annum. The availability is expected to be used to finance up to 60% of the fair market value of the respective vessels. The remaining terms and conditions, including financial covenants, are similar to those set forth above in the Company's 2016 Credit Facility. The loan facility is subject to customary conditions precedent and the execution of definitive documentation.
$250 Million Securities Repurchase Program
In May 2015, the Company's Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company's securities, which currently consist of its (i) Convertible Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (
Since July 1, 2016 through the date of this press release, the Company has repurchased an aggregate of 657,154 of its common shares at an average price of $4.26 per share; the repurchased shares are being held as treasury shares. There were 174,629,755 common shares issued and outstanding as of November 11, 2016.
Time Charter-in Update
In October 2016, the Company time chartered-in a 2006 built MR product tanker for one year at $13,500 per day. The Company also has an option to extend the charter for an additional year at $15,000 per day.
In September 2016, the Company time chartered-in two 2011 built MR product tankers, each for two years at $15,250 per day. The Company also has an option to extend each charter for an additional year at $16,000 per day.
In July 2016, the Company time chartered-in a 2013 built MR product tanker for one year at $15,800 per day. The Company also has an option to extend the charter for an additional year at $17,000 per day.
In July 2016, the Company extended the time charter-in agreement for an LR2 product tanker that is currently time chartered-in for an additional six months at $18,500 per day effective September 2016. The Company also has an option to extend the charter for an additional six months at $20,550 per day.
Fleet update
In July 2016, one of the Company's Handymax tankers, STI Brixton, was arrested in connection with alleged damage of underwater equipment at a port. Any costs incurred to repair the alleged damage to the equipment are expected to be covered by insurance. This vessel was offhire for approximately 32 days as a result of this incident.
Conference Call
The Company will have a conference call on November 14, 2016 at 10:30 AM Eastern Standard Time and 4:30 PM Central European Time.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-877-857-6173 (U.S.) or +1-719-325-4870 (International). The conference participant passcode is 1819898. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.
Slides and Audio Webcast:
There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com . Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Webcast URL: https://www.webcaster4.com/Webcast/Page/610/18229
Current Liquidity As of November 11, 2016, the Company had $119.4 million in cash.
Debt Set forth below is a summary of the Company's outstanding indebtedness as of the dates presented:
| In millions of U.S. dollars | Outstanding as of June 30, 2016 | Drawdowns and repayments, net | Outstanding as of September 30, 2016 | Drawdowns and repayments, net | Outstanding as of November 11, 2016 | Availability as of November 11, 2016 | |||||||||
| 2011 Credit Facility | $ | 97.0 | $ | (2.0 | ) | $ | 95.0 | $ | - | $ | 95.0 | $ | - | ||
| Newbuilding Credit Facility (1) | 68.8 | (68.8 | ) | - | - | - | - | ||||||||
| 2013 Credit Facility (2) | 328.0 | (328.0 | ) | - | - | - | - | ||||||||
| K-Sure Credit Facility (3) | 348.3 | (30.9 | ) | 317.4 | - | 317.4 | - | ||||||||
| KEXIM Credit Facility | 383.4 | (16.8 | ) | 366.6 | - | 366.6 | - | ||||||||
| ING Credit Facility | 128.7 | (2.2 | ) | 126.5 | (1.1 | ) | 125.4 | - | |||||||
| ABN AMRO Credit Facility | 135.0 | (2.3 | ) | 132.7 | (1.8 | ) | 130.9 | - | |||||||
| BNP Paribas Credit Facility | 33.4 | (0.6 | ) | 32.8 | - | 32.8 | - | ||||||||
| Credit Suisse Credit Facility | - | - | - | - | - | 61.2 | |||||||||
| Scotiabank Credit Facility | 33.3 | (0.6 | ) | 32.7 | - | 32.7 | - | ||||||||
| NIBC Credit Facility (4) | - | 40.8 | 40.8 | (1.0 | ) | 39.8 | - | ||||||||
| 2016 Credit Facility (5) | 288.0 | 288.0 | - | 288.0 | - | ||||||||||
| DVB Credit Facility (6) | 90.0 | 90.0 | - | 90.0 | - | ||||||||||
| 2020 senior unsecured notes | 53.8 | - | 53.8 | - | 53.8 | - | |||||||||
| 2017 senior unsecured notes | 51.8 | - | 51.8 | - | 51.8 | - | |||||||||
| Convertible Notes | 348.5 | - | 348.5 | - | 348.5 | - | |||||||||
| $ | 2,010.0 | $ | (33.4 | ) | $ | 1,976.6 | $ | (3.9 | ) | $ | 1,972.7 | $ | 61.2 | ||
| (1) | Activity for the Newbuilding Credit Facility includes the aggregate repayment of $68.8 million as part of the refinancing of the remaining outstanding borrowings for STI Amber, STI Topaz, STI Ruby and STI Garnet . |
| (2) | Activity for the 2013 Credit Facility includes the following repayments in connection with the refinancing of all outstanding borrowings thereunder: (i) an aggregate of $36.9 million related to STI Fontvieille and STI Ville , which were refinanced in July 2016 and (ii) an aggregate of $291.1 million related to STI Opera, STI Texas City, STI Meraux, STI San Antonio, STI Virtus, STI Venere, STI Aqua, STI Dama, STI Benicia, STI Regina, STI St. Charles, STI Yorkville, STI Wembley, STI Alexis, STI Milwaukee, and STI Seneca, which were refinanced in September 2016. |
| (3) | Activity for the K-Sure Credit Facility includes an unscheduled principal repayment of $16.0 million and a scheduled principal repayment of $14.9 million that were each made in July 2016. |
| (4) | In June 2016, the Company executed a loan facility with NIBC Bank N.V. This facility was fully drawn in July 2016, and the proceeds of $40.8 million were used to refinance the existing indebtedness on STI Ville and STI Fontvieille . |
| (5) | In August 2016, the Company executed a loan facility with ABN AMRO Bank N.V, Nordea Bank Finland plc, acting through its New York branch, and Skandinaviska Enskilda Banken AB. The loan facility was fully drawn in September 2016, and the aggregate proceeds of $288.0 million were used to refinance the existing indebtedness on STI Amber, STI Topaz, STI Ruby, STI Garnet, STI Opera, STI Texas City, STI Meraux, STI San Antonio, STI Virtus, STI Venere, STI Aqua, STI Dama, STI Benicia, STI Regina, STI St. Charles, and STI Yorkville . |
| (6) | In September 2016, the Company executed a loan facility with DVB Bank SE. The loan facility was fully drawn in September 2016, and the aggregate proceeds of $90.0 million were used to refinance the existing indebtedness on STI Alexis, STI Milwaukee, STI Seneca, and STI Wembley . |
Newbuilding Program
The Company currently has ten newbuilding vessel orders (eight MRs and two LR2s) with Hyundai Mipo Dockyard Co., Ltd. ("HMD") and Sungdong Shipbuilding and Marine Engineering Co., Ltd. ("SSME"), which the Company refers to as its Newbuilding Program.
During the third quarter of 2016, the Company made installment payments of $7.2 million relating to vessels under its Newbuilding Program.
Set forth below are the installment payments that have been made and are expected to be made in the fourth quarter of 2016 and future installment payments *:
| In millions of U.S. dollars | ||
| Q4 2016 - installment payments made to date | $ | 5.5 |
| Q4 2016 - remaining installment payments | 34.9 | |
| Q1 2017 | 63.5 | |
| Q2 2017 | 28.7 | |
| Q3 2017 | 68.2 | |
| Q4 2017 | 50.5 | |
| Q1 2018 | 21.6 | |
| Total | $ | 272.9 |
*These are estimates only and are subject to change as construction progresses.
Explanation of Variances on the Third Quarter of 2016 Financial Results Compared to the Third Quarter of 2015
For the three months ended September 30, 2016, the Company recorded a net loss of $27.1 million compared to net income of $85.3 million for the three months ended September 30, 2015. The following were the significant changes between the two periods:
- Time charter equivalent, or TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management. The following table depicts TCE revenue for the three months ended September 30, 2016 and 2015:
| For the three months ended September 30, | ||||||||
| In thousands of U.S. dollars | 2016 | 2015 | ||||||
| Vessel revenue | $ | 114,336 | $ | 228,142 | ||||
| Voyage expenses | (330 | ) | (933 | ) | ||||
| TCE revenue | $ | 114,006 | $ | 227,209 | ||||
- TCE revenue decreased $113.2 million to $114.0 million from $227.2 million for the three months ended September 30, 2016 and 2015, respectively. This decrease was driven by a decrease in time charter equivalent revenue per day to $13,737 per day from $26,777 per day for the three months ended September 30, 2016 and 2015, respectively (see the breakdown of daily TCE below). TCE revenue per day decreased across all of our operating segments as low refining margins, high inventory levels and a lack of arbitrage opportunities have resulted in reduced global product tanker demand.
- Vessel operating costs increased $0.9 million to $45.9 million from $45.0 million for the three months ended September 30, 2016 and 2015, respectively. Overall vessel operating costs per day increased slightly to $6,482 per day from $6,279 per day for the three months ended September 30, 2016 and 2015, respectively (see the breakdown of daily vessel operating costs below).
- Charterhire expense decreased $3.0 million to $21.0 million from $24.0 million for the three months ended September 30, 2016 and 2015, respectively. This decrease was primarily driven by a decrease in the Company's time chartered-in fleet to an average of 13.3 vessels from 16.0 vessels for the three months ended September 30, 2016 and 2015, respectively.
- Depreciation expense increased $1.2 million to $30.7 million from $29.5 million for the three months ended September 30, 2016 and 2015, respectively. This increase was primarily driven by the mix of the Company's vessels as the average number of owned LR2s (which have a higher depreciation expense than MRs) increased to 21.0 from 17.3 while the average number of owned MRs decreased to 42.0 from 45.4 for the three months ended September 30, 2016 and 2015, respectively.
- General and administrative expenses decreased $5.9 million to $12.5 million from $18.4 million for the three months ended September 30, 2016 and 2015, respectively. This decrease was primarily driven by reductions in compensation expense (which includes a reduction in restricted stock amortization).
- Financial expenses increased $5.7 million to $31.2 million from $25.5 million for the three months ended September 30, 2016 and 2015, respectively. This increase was primarily the result of an aggregate write-off of $9.0 million of deferred financing fees as a result of the debt refinancings described above. This increase was partially offset by an increase in the amount of interest capitalized of $0.7 million and a decrease in interest expense as average debt outstanding decreased to $1.9 billion from $2.0 billion for the three months ended September 30, 2016 and 2015, respectively.
- Unrealized gains and losses on derivative financial instruments relate to the change in the fair value of the profit or loss agreement on one of the Company's time chartered-in vessels with a third party who neither owns nor operates the vessel.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Income
(unaudited)
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||||
| In thousands of U.S. dollars except per share and share data | 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Revenue | ||||||||||||||||||
| Vessel revenue | $ | 114,336 | $ | 228,142 | $ | 416,678 | $ | 577,312 | ||||||||||
| Operating expenses | ||||||||||||||||||
| Vessel operating costs | (45,915 | ) | (45,017 | ) | (140,187 | ) | (123,639 | ) | ||||||||||
| Voyage expenses | (330 | ) | (933 | ) | (1,158 | ) | (4,139 | ) | ||||||||||
| Charterhire | (21,011 | ) | (24,014 | ) | (55,341 | ) | (78,660 | ) | ||||||||||
| Depreciation | (30,686 | ) | (29,525 | ) | (90,775 | ) | (76,483 | ) | ||||||||||
| General and administrative expenses | (12,491 | ) | (18,433 | ) | (42,593 | ) | (47,586 | ) | ||||||||||
| Loss on sales of vessels | - | (2,054 | ) | (2,078 | ) | (35 | ) | |||||||||||
| Gain on sale of Dorian shares | - | 1,179 | - | 1,179 | ||||||||||||||
| Total operating expenses | (110,433 | ) | (118,797 | ) | (332,132 | ) | (329,363 | ) | ||||||||||
| Operating income | 3,903 | 109,345 | 84,546 | 247,949 | ||||||||||||||
| Other (expense) and income, net | ||||||||||||||||||
| Financial expenses | (31,150 | ) | (25,549 | ) | (82,381 | ) | (65,447 | ) | ||||||||||
| Realized gain on derivative financial instruments | - | - | - | 55 | ||||||||||||||
| Unrealized gain / (loss) on derivative financial instruments | 169 | (35 | ) | 1,600 | (577 | ) | ||||||||||||
| Financial income | 59 | 48 | 1,163 | 126 | ||||||||||||||
| Other income (expenses), net | (96 | ) | 1,442 | (166 | ) | 1,428 | ||||||||||||
| Total other expense, net | (31,018 | ) | (24,094 | ) | (79,784 | ) | (64,415 | ) | ||||||||||
| Net (loss) / income | $ | (27,115 | ) | $ | 85,251 | $ | 4,762 | $ | 183,534 | |||||||||
| Earnings per share | ||||||||||||||||||
| Basic | $ | (0.17 | ) | $ | 0.51 | $ | 0.03 | $ | 1.14 | |||||||||
| Diluted | $ | (0.17 | ) | $ | 0.44 | $ | 0.03 | $ | 1.01 | |||||||||
| Basic weighted average shares outstanding | 160,844,168 | 167,237,928 | 160,902,344 | 160,637,016 | ||||||||||||||
| Diluted weighted average shares outstanding (1) | 160,844,168 | 205,323,322 | 166,839,648 | 198,110,118 | ||||||||||||||
(1) Diluted weighted average shares outstanding, assuming conversion of the Company's Convertible Notes, were 198,219,733 and 198,992,474 for the three and nine months ended September 30, 2016, respectively. Diluted weighted average shares outstanding, assuming conversion of the Company's Convertible Notes, were 198,219,733 and 198,992,474 for the three and nine months ended September 30, 2016, respectively. Diluted earnings per share under the if-converted method was anti-dilutive for both of these periods.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
| As of | ||||||||
| In thousands of U.S. dollars | September 30, 2016 | December 31, 2015 | ||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 138,992 | $ | 200,970 | ||||
| Accounts receivable | 48,498 | 69,017 | ||||||
| Prepaid expenses and other current assets | 11,021 | 3,585 | ||||||
| Derivative financial instruments | 345 | - | ||||||
| Inventories | 5,905 | 6,575 | ||||||
| Total current assets | 204,761 | 280,147 | ||||||
| Non-current assets | ||||||||
| Vessels and drydock | 2,943,939 | 3,087,753 | ||||||
| Vessels under construction | 123,238 | 132,218 | ||||||
| Other assets | 20,892 | 23,337 | ||||||
| Total non-current assets | 3,088,069 | 3,243,308 | ||||||
| Total assets | $ | 3,292,830 | $ | 3,523,455 | ||||
| Current liabilities | ||||||||
| Current portion of long-term debt | $ | 305,260 | $ | 124,503 | ||||
| Finance lease liability | - | 53,372 | ||||||
| Accounts payable | 12,525 | 25,683 | ||||||
| Accrued expenses | 19,415 | 32,643 | ||||||
| Derivative financial instruments | - | 1,175 | ||||||
| Total current liabilities | 337,200 | 237,376 | ||||||
| Non-current liabilities | ||||||||
| Long-term debt | 1,596,067 | 1,872,114 | ||||||
| Derivative financial instruments | - | 80 | ||||||
| Total non-current liabilities | 1,596,067 | 1,872,194 | ||||||
| Total liabilities | 1,933,267 | 2,109,570 | ||||||
| Shareholders' equity | ||||||||
| Issued, authorized and fully paid-in share capital: | ||||||||
| Share capital | 2,247 | 2,224 | ||||||
| Additional paid-in capital | 1,751,806 | 1,729,314 | ||||||
| Treasury shares | (443,816 | ) | (427,311 | ) | ||||
| Retained earnings | 49,326 | 109,658 | ||||||
| Total shareholders' equity | 1,359,563 | 1,413,885 | ||||||
| Total liabilities and shareholders' equity | $ | 3,292,830 | $ | 3,523,455 | ||||
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
| For the nine months ended September 30, | ||||||||
| In thousands of U.S. dollars | 2016 | 2015 | ||||||
| Operating activities | ||||||||
| Net income | $ | 4,762 | $ | 183,535 | ||||
| Gain on sale of Dorian shares | - | (1,179 | ) | |||||
| Loss / (gain) on sales of vessels | 2,078 | (2,016 | ) | |||||
| Write down of vessels held for sale | - | 2,054 | ||||||
| Depreciation | 90,775 | 76,483 | ||||||
| Amortization of restricted stock | 23,076 | 24,793 | ||||||
| Amortization of deferred financing fees | 25,398 | 12,806 | ||||||
| Unrealized (gain)/loss on derivative financial instruments | (1,600 | ) | 577 | |||||
| Amortization of acquired time charter contracts | 65 | 447 | ||||||
| Accretion of Convertible Notes | 8,650 | 8,284 | ||||||
| Gain on repurchase of Convertible Notes | (994 | ) | (46 | ) | ||||
| 152,210 | 305,738 | |||||||
| Changes in assets and liabilities: | ||||||||
| Decrease / (increase) in inventories | 781 | (2,051 | ) | |||||
| Decrease / (increase) in accounts receivable | 20,519 | (8,289 | ) | |||||
| Increase in prepaid expenses and other current assets | (7,500 | ) | (4,842 | ) | ||||
| Decrease / (increase) in other assets | 2,078 | (9,247 | ) | |||||
| Increase in accounts payable | 119 | 5,909 | ||||||
| Decrease in accrued expenses | (12,868 | ) | (1,134 | ) | ||||
| Interest rate swap termination payment | - | (128 | ) | |||||
| 3,129 | (19,782 | ) | ||||||
| Net cash inflow from operating activities | 155,339 | 285,956 | ||||||
| Investing activities | ||||||||
| Acquisition of vessels and payments for vessels under construction | (111,785 | ) | (858,575 | ) | ||||
| Proceeds from disposal of vessels | 158,175 | 72,880 | ||||||
| Proceeds from sale of Dorian shares | - | 142,435 | ||||||
| Deposit returned for vessel purchases | - | (31,277 | ) | |||||
| Net cash inflow / (outflow) from investing activities | 46,390 | (674,537 | ) | |||||
| Financing activities | ||||||||
| Debt repayments | (728,922 | ) | (189,790 | ) | ||||
| Issuance of debt | 565,028 | 608,800 | ||||||
| Debt issuance costs | (9,797 | ) | (7,916 | ) | ||||
| Repayment of Convertible Notes | (8,393 | ) | (1,632 | ) | ||||
| Gross proceeds from issuance of common stock | - | 159,747 | ||||||
| Equity issuance costs | (24 | ) | (7,489 | ) | ||||
| Dividends paid | (65,094 | ) | (64,894 | ) | ||||
| Repurchase of common stock | (16,505 | ) | (51,348 | ) | ||||
| Net cash (outflow) / inflow from financing activities | (263,707 | ) | 445,478 | |||||
| (Decrease) / increase in cash and cash equivalents | (61,978 | ) | 56,897 | |||||
| Cash and cash equivalents at January 1, | 200,970 | 116,143 | ||||||
| Cash and cash equivalents at September 30, | $ | 138,992 | $ | 173,040 | ||||
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three and nine months ended September 30, 2016 and 2015
(unaudited)
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||
| Adjusted EBITDA (1) (in thousands of U.S. dollars) | $ | 42,081 | $ | 150,839 | $ | 200,309 | $ | 349,563 | ||||
| Average Daily Results | ||||||||||||
| Time charter equivalent per day (2) | $ | 13,737 | $ | 26,777 | $ | 16,932 | $ | 23,910 | ||||
| Vessel operating costs per day (3) | $ | 6,482 | $ | 6,279 | $ | 6,560 | $ | 6,440 | ||||
| Aframax/LR2 | ||||||||||||
| TCE per revenue day (2) | $ | 19,142 | $ | 38,848 | $ | 22,274 | $ | 32,185 | ||||
| Vessel operating costs per day (3) | $ | 6,652 | $ | 6,441 | $ | 6,671 | $ | 6,639 | ||||
| Average number of owned vessels | 21.0 | 17.3 | 20.1 | 13.2 | ||||||||
| Average number of time chartered-in vessels | 2.0 | 3.4 | 2.0 | 4.6 | ||||||||
| Panamax/LR1 | ||||||||||||
| TCE per revenue day (2) | $ | 10,547 | $ | 20,883 | $ | 18,177 | $ | 21,884 | ||||
| Vessel operating costs per day (3) | - | - | - | $ | 8,676 | |||||||
| Average number of owned vessels | - | - | - | 0.9 | ||||||||
| Average number of time chartered-in vessels | 1.0 | 3.8 | 0.9 | 4.4 | ||||||||
| MR | ||||||||||||
| TCE per revenue day (2) | $ | 12,539 | $ | 24,655 | $ | 15,907 | $ | 22,619 | ||||
| Vessel operating costs per day (3) | $ | 6,420 | $ | 6,213 | $ | 6,569 | $ | 6,317 | ||||
| Average number of owned vessels | 42.0 | 45.4 | 43.9 | 41.1 | ||||||||
| Average number of time chartered-in vessels | 5.3 | 3.9 | 4.4 | 3.5 | ||||||||
| Handymax | ||||||||||||
| TCE per revenue day (2) | $ | 10,274 | $ | 20,319 | $ | 13,130 | $ | 20,038 | ||||
| Vessel operating costs per day (3) | $ | 6,424 | $ | 6,236 | $ | 6,365 | $ | 6,470 | ||||
| Average number of owned vessels | 14.0 | 15.0 | 14.0 | 15.0 | ||||||||
| Average number of time chartered-in vessels | 5.0 | 5.0 | 4.4 | 6.0 | ||||||||
| Fleet data | ||||||||||||
| Average number of owned vessels | 77.0 | 77.8 | 78.0 | 70.2 | ||||||||
| Average number of time chartered-in vessels | 13.3 | 16.0 | 11.7 | 18.5 | ||||||||
| (1) | See Non-IFRS Measures section below. |
| (2) | Freight rates are commonly measured in the shipping industry in terms of time charter equivalent per day (or TCE per day), which is calculated by subtracting voyage expenses, including bunkers and port charges, from vessel revenue and dividing the net amount (time charter equivalent revenues) by the number of revenue days in the period. Revenue days are the number of days the vessel is owned less the number of days the vessel is off-hire for drydock and repairs. |
| (3) | Vessel operating costs per day represent vessel operating costs excluding non-recurring expenses (for example insurance deductible expenses for repairs) divided by the number of days the vessel is owned during the period. |
Fleet list as of November 11, 2016
| Vessel Name | Year Built | DWT | Ice class | Employment | Vessel type | |||||||
| Owned vessels | ||||||||||||
| 1 | STI Brixton | 2014 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 2 | STI Comandante | 2014 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 3 | STI Pimlico | 2014 | 38,734 | 1A | Time Charter (5) | Handymax | ||||||
| 4 | STI Hackney | 2014 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 5 | STI Acton | 2014 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 6 | STI Fulham | 2014 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 7 | STI Camden | 2014 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 8 | STI Battersea | 2014 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 9 | STI Wembley | 2014 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 10 | STI Finchley | 2014 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 11 | STI Clapham | 2014 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 12 | STI Poplar | 2014 | 38,734 | 1A | Time Charter (5) | Handymax | ||||||
| 13 | STI Hammersmith | 2015 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 14 | STI Rotherhithe | 2015 | 38,734 | 1A | SHTP (1) | Handymax | ||||||
| 15 | STI Amber | 2012 | 49,990 | - | SMRP(2) | MR | ||||||
| 16 | STI Topaz | 2012 | 49,990 | - | SMRP(2) | MR | ||||||
| 17 | STI Ruby | 2012 | 49,990 | - | SMRP(2) | MR | ||||||
| 18 | STI Garnet | 2012 | 49,990 | - | SMRP(2) | MR | ||||||
| 19 | STI Onyx | 2012 | 49,990 | - | SMRP(2) | MR | ||||||
| 20 | STI Sapphire | 2013 | 49,990 | - | SMRP(2) | MR | ||||||
| 21 | STI Emerald | 2013 | 49,990 | - | SMRP(2) | MR | ||||||
| 22 | STI Beryl | 2013 | 49,990 | - | SMRP(2) | MR | ||||||
| 23 | STI Le Rocher | 2013 | 49,990 | - | SMRP(2) | MR | ||||||
| 24 | STI Larvotto | 2013 | 49,990 | - | SMRP(2) | MR | ||||||
| 25 | STI Fontvieille | 2013 | 49,990 | - | SMRP(2) | MR | ||||||
| 26 | STI Ville | 2013 | 49,990 | - | SMRP(2) | MR | ||||||
| 27 | STI Duchessa | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 28 | STI Opera | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 29 | STI Texas City | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 30 | STI Meraux | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 31 | STI San Antonio | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 32 | STI Venere | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 33 | STI Virtus | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 34 | STI Aqua | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 35 | STI Dama | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 36 | STI Benicia | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 37 | STI Regina | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 38 | STI St. Charles | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 39 | STI Mayfair | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 40 | STI Yorkville | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 41 | STI Milwaukee | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 42 | STI Battery | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 43 | STI Soho | 2014 | 49,990 | - | SMRP(2) | MR | ||||||
| 44 | STI Memphis | 2014 | 49,995 | - | SMRP(2) | MR | ||||||
| 45 | STI Tribeca | 2015 | 49,990 | - | SMRP(2) | MR | ||||||
| 46 | STI Gramercy | 2015 | 49,990 | - | SMRP(2) | MR | ||||||
| 47 | STI Bronx | 2015 | 49,990 | - | SMRP(2) | MR | ||||||
| 48 | STI Pontiac | 2015 | 49,990 | - | SMRP(2) | MR | ||||||
| 49 | STI Manhattan | 2015 | 49,990 | - | SMRP(2) | MR | ||||||
| 50 | STI Queens | 2015 | 49,990 | - | SMRP(2) | MR | ||||||
| 51 | STI Osceola | 2015 | 49,990 | - | SMRP(2) | MR | ||||||
| 52 | STI Notting Hill | 2015 | 49,687 | 1B | Time Charter (6) | MR | ||||||
| 53 | STI Seneca | 2015 | 49,990 | - | SMRP(2) | MR | ||||||
| 54 | STI Westminster | 2015 | 49,687 | 1B | Time Charter (6) | MR | ||||||
| 55 | STI Brooklyn | 2015 | 49,990 | - | SMRP(2) | MR | ||||||
| 56 | STI Black Hawk | 2015 | 49,990 | - | SMRP(2) | MR | ||||||
| 57 | STI Elysees | 2014 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 58 | STI Madison | 2014 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 59 | STI Park | 2014 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 60 | STI Orchard | 2014 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 61 | STI Sloane | 2014 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 62 | STI Broadway | 2014 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 63 | STI Condotti | 2014 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 64 | STI Rose | 2015 | 109,999 | - | Time Charter (7) | LR2 | ||||||
| 65 | STI Veneto | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 66 | STI Alexis | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 67 | STI Winnie | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 68 | STI Oxford | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 69 | STI Lauren | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 70 | STI Connaught | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 71 | STI Spiga | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 72 | STI Savile Row | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 73 | STI Kingsway | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 74 | STI Carnaby | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 75 | STI Lombard | 2015 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 76 | STI Grace | 2016 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| 77 | STI Jermyn | 2016 | 109,999 | - | SLR2P (4) | LR2 | ||||||
| Total owned DWT | 4,951,234 | |||||||||||
| Vessel Name | Year Built | DWT | Ice class | Employ-ment | Vessel type | Daily Base Rate | Expiry (8) | |||||||||||
| Time chartered-in vessels | ||||||||||||||||||
| 78 | Kraslava | 2007 | 37,258 | 1B | SHTP (1) | Handymax | $17,000 | 02-Jun-17 | ||||||||||
| 79 | Krisjanis Valdemars | 2007 | 37,266 | 1B | SHTP (1) | Handymax | $17,000 | 02-Apr-17 | ||||||||||
| 80 | Silent | 2007 | 37,847 | 1A | SHTP (1) | Handymax | $15,600 | 21-Mar-19 | (9) | |||||||||
| 81 | Single | 2007 | 37,847 | 1A | SHTP (1) | Handymax | $15,600 | 24-Mar-19 | (9) | |||||||||
| 82 | Star I | 2007 | 37,847 | 1A | SHTP (1) | Handymax | $15,600 | 27-Mar-19 | (9) | |||||||||
| 83 | Miss Mariarosaria | 2011 | 47,499 | - | SMRP(2) | MR | $16,350 | 26-May-17 | ||||||||||
| 84 | Vukovar | 2015 | 49,990 | - | SMRP(2) | MR | $17,034 | 01-May-18 | ||||||||||
| 85 | Targale | 2007 | 49,999 | - | SMRP(2) | MR | $16,200 | 17-May-17 | ||||||||||
| 86 | Zefyros | 2013 | 49,999 | - | SMRP(2) | MR | $15,800 | 08-Jul-17 | (10) | |||||||||
| 87 | Gan-Trust | 2013 | 51,561 | - | SMRP(2) | MR | $17,500 | 06-Jan-17 | (11) | |||||||||
| 88 | CPO New Zealand | 2011 | 51,717 | - | SMRP(2) | MR | $15,250 | 12-Sep-18 | (12) | |||||||||
| 89 | CPO Australia | 2011 | 51,763 | - | SMRP(2) | MR | $15,250 | 01-Sep-18 | (12) | |||||||||
| 90 | Ance | 2006 | 52,622 | - | SMRP(2) | MR | $13,500 | 12-Oct-17 | (13) | |||||||||
| 91 | Hellespont Progress | 2006 | 73,728 | - | SPTP (3) | LR1 | $17,250 | 14-Mar-17 | ||||||||||
| 92 | Densa Crocodile | 2015 | 105,408 | - | SLR2P (4) | LR2 | $22,600 | 07-Feb-17 | (14) | |||||||||
| 93 | Densa Alligator | 2013 | 105,708 | - | SLR2P (4) | LR2 | $18,500 | 17-Mar-17 | (15) | |||||||||
| Total time chartered-in DWT | 878,059 | |||||||||||||||||
| Newbuildings currently under construction | ||||||||||
| Vessel Name | Yard | DWT | Vessel type | |||||||
| 94 | Hull 2601 - TBN STI Galata | HMD | (16) | 52,000 | MR | |||||
| 95 | Hull 2602 - TBN STI Bosphorus | HMD | (16) | 52,000 | MR | |||||
| 96 | Hull 2603 - TBN STI Leblon | HMD | (16) | 52,000 | MR | |||||
| 97 | Hull 2604 - TBN STI La Boca | HMD | (16) | 52,000 | MR | |||||
| 98 | Hull 2605 - TBN STI San Telmo | HMD | (16) | 52,000 | MR | |||||
| 99 | Hull 2606 - TBN STI Jurere | HMD | (16) | 52,000 | MR | |||||
| 100 | Hull 2607 - TBN STI Esles II | HMD | (16) | 52,000 | MR | |||||
| 101 | Hull 2608 - TBN STI Jardins | HMD | (16) | 52,000 | MR | |||||
| 102 | Hull S3120 - TBN STI Selatar | SSME | (17) | 109,999 | LR2 | |||||
| 103 | Hull S3121 - TBN STI Rambla | SSME | (17) | 109,999 | LR2 | |||||
| Total newbuilding product tankers DWT | 635,998 | |||||||||
| Total Fleet DWT | 6,465,291 |
| (1) | This vessel operates in or is expected to operate in the Scorpio Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial Management (SCM). SHTP and SCM are related parties to the Company. |
| (2) | This vessel operates in or is expected to operate in the Scorpio MR Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the Company. |
| (3) | This vessel operates in or is expected to operate in the Scorpio Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related party to the Company. |
| (4) | This vessel operates in or is expected to operate in the Scorpio LR2 Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the Company |
| (5) | This vessel is currently time chartered-out to an unrelated third-party for three years at $18,000 per day. This time charter is scheduled to expire in January 2019. |
| (6) | This vessel is currently time chartered-out to an unrelated third-party for three years at $20,500 per day. This time charter is scheduled to expire in December 2018. |
| (7) | This vessel is currently time chartered-out to an unrelated third-party for three years at $28,000 per day. This time charter is scheduled to expire in February 2019. |
| (8) | Redelivery from the charterer is plus or minus 30 days from the expiry date. |
| (9) | We have options to extend this charter for two consecutive one year periods at $16,500 and $17,500 per day, respectively. |
| (10) | We have an option to extend the charter for an additional year at $17,000 per day. |
| (11) | We have an option to extend the charter for an additional year at $18,000 per day. |
| (12) | We have an option to extend the charter for an additional year at $16,000 per day. |
| (13) | We have an option to extend the charter for an additional year at $15,000 per day. |
| (14) | We have entered into an agreement with a third party whereby we split all of the vessel's profits and losses above or below the daily base rate. |
| (15) | In July 2016, we entered into a new charter agreement for six months at $18,500 per day effective September 2016. We have an option to extend the charter for an additional six months at $20,550 per day. |
| (16) | These newbuilding vessels are being constructed at HMD (Hyundai Mipo Dockyard Co. Ltd. of South Korea). Seven vessels are expected to be delivered throughout 2017 and one vessel is expected to be delivered in the first quarter of 2018. |
| (17) | These newbuilding vessels are being constructed at SSME (Sungdong Shipbuilding & Marine Engineering Co., Ltd). One vessel is expected to be delivered in the fourth quarter of 2016 and one in the first quarter of 2017. |
Dividend Policy
The declaration and payment of dividends is subject at all times to the discretion of the Company's Board of Directors. The timing and amount of dividends, if any, depends on the Company's earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.
The Company's dividends paid during 2015 and 2016 were as follows:
| Date paid | Dividends per share | |
| March 2015 | $0.120 | |
| June 2015 | $0.125 | |
| September 2015 | $0.125 | |
| December 2015 | $0.125 | |
| March 2016 | $0.125 | |
| June 2016 | $0.125 | |
| September 2016 | $0.125 | |
On November 10, 2016, the Scorpio Tankers' Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on December 22, 2016 to all shareholders as of November 25, 2016 (the record date). As of November 11, 2016 there were 174,629,755 common shares issued and outstanding.
Securities Repurchase Program
In May 2015, the Company's Board of Directors authorized a new Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company's securities, which currently consist of its (i) Convertible Notes, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (
Since January 1, 2016 through the date of this press release, the Company has repurchased its securities as follows:
- An aggregate of 2,956,760 of its common shares at an average price of $5.58 per share; the repurchased shares are being held as treasury shares. There were 174,629,755 shares outstanding as of November 11, 2016.
- $10.0 million aggregate principal amount of its Convertible Notes at an average price of $839.28 per $1,000 principal amount.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 77 product tankers (21 LR2, 14 Handymax, and 42 MR tankers) with an average age of 2.1 years and time charters-in 16 product tankers (two LR2, one LR1, eight MR and five Handymax tankers). The Company has contracted for ten newbuilding product tankers (eight MR and two LR2 tankers). One LR2 is expected to be delivered in December 2016 and the second LR2 is expected to be delivered in the first quarter of 2017. The eight MRs are expected to be delivered throughout 2017 and the first quarter of 2018. Additional information about the Company is available at the Company's website www.scorpiotankers.com , which is not a part of this press release.
Non-IFRS Measures
Reconciliation of IFRS Financial Information to Non-IFRS Financial Information
This press release describes adjusted net income and adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. "Non-IFRS" measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
The Company believes that the presentation of adjusted net income with adjusted earnings per share, basic and diluted, and adjusted EBITDA are useful to investors because they facilitate the comparability and the evaluation of companies in the Company's industry. In addition, the Company believes that adjusted net income with adjusted earnings per share, basic and diluted, and adjusted EBITDA are useful in evaluating its operating performance compared to that of other companies in the Company's industry. The Company's definitions of adjusted net income with the adjusted earnings per share, basic and diluted, and adjusted EBITDA may not be the same as reported by other companies in the shipping industry or other industries.
Reconciliation of Net Income to Adjusted Net Income
| For the three months ended September 30, 2016 | ||||||||||||||
| In thousands of U.S. dollars except per share data | Amount | Per share basic | Per share diluted | |||||||||||
| Net loss | $ | (27,115 | ) | $ | (0.17 | ) | $ | (0.17 | ) | |||||
| Adjustments: | ||||||||||||||
| Deferred financing fees write-off | 8,978 | 0.06 | 0.06 | |||||||||||
| Unrealized gain on derivative financial instruments | (169 | ) | (0.00 | ) | (0.00 | ) | ||||||||
| Adjusted net loss | $ | (18,306 | ) | $ | (0.11 | ) | $ | (0.11 | ) | |||||
| For the three months ended September 30, 2015 | |||||||||||||||
| In thousands of U.S. dollars except per share data | Amount | Per share basic | Per share diluted | ||||||||||||
| Net income | $ | 85,251 | $ | 0.51 | $ | 0.44 | |||||||||
| Adjustments: | |||||||||||||||
| Deferred financing fees write-off | 2,009 | 0.01 | 0.01 | ||||||||||||
| Gain on sale of Dorian shares | (1,179) | (0.01) | (0.01) | ||||||||||||
| Loss on sales of vessels | 2,054 | 0.01 | 0.01 | ||||||||||||
| Gain on early termination of time chartered-in contract | (1,397) | (0.01) | (0.01) | ||||||||||||
| Reserve for pool bunker supplier in bankruptcy | 1,396 | 0.01 | 0.01 | ||||||||||||
| Unrealized loss on derivative financial instruments | 35 | 0.00 | 0.00 | ||||||||||||
| Gain on repurchase of convertible senior notes | (46) | (0.00) | (0.00) | ||||||||||||
| Adjusted net income | $ | 88,123 | $ | 0.53 | (1) | $ | 0.46 | (1) | |||||||
(1) Summation differences due to rounding
| For the nine months ended September 30, 2016 | |||||||||||||
| In thousands of U.S. dollars except per share data | Amount | Per share basic | Per share diluted | ||||||||||
| Net income | $ | 4,762 | $ | 0.03 | $ | 0.03 | |||||||
| Adjustments: | |||||||||||||
| Deferred financing fees write-off | 14,479 | 0.09 | 0.09 | ||||||||||
| Unrealized gain on derivative financial instruments | (1,600) | (0.01) | (0.01) | ||||||||||
| Gain on repurchase of Convertible Notes | (994) | (0.01) | (0.01) | ||||||||||
| Loss on sales of vessels | 2,078 | 0.01 | 0.01 | ||||||||||
| Adjusted net income | $ | 18,725 | $ | 0.12 | (1) | $ | 0.11 | ||||||
(1) Summation differences due to rounding
| For the nine months ended September 30, 2015 | |||||||||||||
| In thousands of U.S. dollars except per share data | Amount | Per share basic | Per share diluted | ||||||||||
| Net income | $ | 183,534 | $ | 1.14 | $ | 1.01 | |||||||
| Adjustments: | |||||||||||||
| Deferred financing fees write-off | 2,009 | 0.01 | 0.01 | ||||||||||
| Gain on sale of Dorian shares | (1,179) | (0.01) | (0.01) | ||||||||||
| Write-down of vessel held for sale/gain on sales of vessels | 35 | 0.00 | 0.00 | ||||||||||
| Gain on early termination of time chartered-in contract | (1,397) | (0.01) | (0.01) | ||||||||||
| Reserve for pool bunker supplier in bankruptcy | 1,396 | 0.01 | 0.01 | ||||||||||
| Unrealized loss on derivative financial instruments | 577 | 0.00 | 0.00 | ||||||||||
| Gain on repurchase of convertible senior notes | (46) | (0.00) | (0.00) | ||||||||||
| Adjusted net income | $ | 184,929 | $ | 1.15 | (1) | $ | 1.01 | ||||||
(1) Summation differences due to rounding
Reconciliation of Net Income to Adjusted EBITDA
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||
| In thousands of U.S. dollars | 2016 | 2015 | 2016 | 2015 | ||||||||||
| Net (loss) / income | $ | (27,115) | $ | 85,251 | $ | 4,762 | $ | 183,534 | ||||||
| Financial expenses | 31,150 | 25,549 | 82,381 | 65,447 | ||||||||||
| Unrealized (gain) / loss on derivative financial instruments | (169) | 35 | (1,600) | 577 | ||||||||||
| Financial income | (59) | (48) | (169) | (126) | ||||||||||
| Depreciation | 30,686 | 29,525 | 90,775 | 76,483 | ||||||||||
| Amortization of restricted stock | 7,588 | 9,653 | 23,076 | 24,793 | ||||||||||
| Loss on sales of vessels | - | 2,054 | 2,078 | 35 | ||||||||||
| Gain on repurchase of Convertible Notes | - | - | (994) | - | ||||||||||
| Gain on sale of Dorian shares | - | (1,179) | - | (1,179) | ||||||||||
| Gain on early termination of time chartered-in contract | - | (1,397) | - | (1,397) | ||||||||||
| Reserve for pool bunker supplier in bankruptcy | - | 1,396 | - | 1,396 | ||||||||||
| Adjusted EBITDA | $ | 42,081 | $ | 150,839 | $ | 200,309 | $ | 349,563 | ||||||
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
Scorpio Tankers Inc. 212-542-1616
