Scorpio Tankers Inc. Announces Financial Results for the First Quarter of 2021 and Declaration of a Quarterly Dividend
MONACO, May 07, 2021 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers" or the "Company") today reported its results for the three months ended March 31, 2021. The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.10 per share on the Company’s common stock.
Results for the three months ended March 31, 2021 and 2020
For the three months ended March 31, 2021, the Company had a net loss of $62.4 million, or $1.15 basic and diluted loss per share. For the three months ended March 31, 2021, the Company had an adjusted net loss (see Non-IFRS Measures section below) of $57.3 million, or $1.05 basic and diluted loss per share, which excludes from the net loss $3.9 million, or $0.07 per basic and diluted share, of losses recorded on the transaction to exchange $62.1 million in aggregate principal amount of its existing Convertible Notes due 2022 for $62.1 million in aggregate principal amount of new Convertible Notes due 2025, described in detail below, and $1.3 million, or $0.02 per basic and diluted share, write-offs of deferred financing fees related to the refinancing of certain credit facilities.
For the three months ended March 31, 2020, the Company had net income of $46.6 million, or $0.85 basic and $0.82 diluted earnings per share. There were no Non-IFRS adjustments to the net income for the three months ended March 31, 2020.
Declaration of Dividend
On May 6, 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about June 15, 2021 to all shareholders of record as of May 21, 2021 (the record date). As of May 6, 2021, there were 58,369,516 common shares of the Company outstanding.
Summary of First Quarter and Other Recent Significant Events
Below is a summary of the average daily Time Charter Equivalent ("TCE") revenue (see Non-IFRS Measures section below) and duration of contracted pool voyages and time charters for the Company's vessels thus far in the second quarter of 2021 as of the date hereof (See footnotes to "Other operating data" table below for the definition of daily TCE revenue):
Total | ||||
Pool | Average daily | % of Days | ||
LR2 | $14,700 | 48 % | ||
LR1 | $13,700 | 41 % | ||
MR | $13,000 | 52 % | ||
Handymax | $11,900 | 42 % | ||
Below is a summary of the average daily TCE revenue earned by the Company's vessels in each of the pools during the first quarter of 2021:
Pool | Average daily TCE revenue | |
LR2 | $11,980 | |
LR1 | $11,292 | |
MR | $11,326 | |
Handymax | $9,065 | |
In March 2021, the Company completed the exchange of $62.1 million in aggregate principal amount of its Convertible Notes due 2022 for $62.1 million in aggregate principal amount of new 3.00% Convertible Notes due 2025 (the "Convertible Notes due 2025"), pursuant to separate, privately negotiated, agreements with certain holders of the Convertible Notes due 2022. Simultaneously, the Company issued and sold $76.1 million in aggregate principal amount of Convertible Notes due 2025 pursuant to separate, privately negotiated, agreements with certain investors in a private offering.
In January 2021, the Company entered into a note distribution agreement with B. Riley Securities, Inc., as sales agent, pursuant to which the Company may offer and sell, from time to time, up to $75.0 million of additional aggregate principal amount of its 7.00% Senior Unsecured Notes due 2025 (the "Senior Notes due 2025"). Since the inception of this program and through the date of this press release, the Company issued $17.9 million aggregate principal amount of additional Senior Notes due 2025 for aggregate net proceeds (net of sales agent commissions and offering expenses) of $17.5 million.
The Company has received a commitment to refinance the existing indebtedness on two LR2s, which is expected to raise $20.5 million in new liquidity (after the repayment of existing debt). These refinancings are expected to close before the end of the second quarter of 2021.
The Company is also in discussions with financial institutions to further increase its liquidity by up to $46.7 million in connection with the refinancing of 11 vessels.
In addition to the above, the Company has $20.0 million of additional liquidity available (after the repayment of existing debt) from previously announced financings that have been committed. These drawdowns are expected to occur at varying points in the future as these financings are tied to scrubber installations on the Company’s vessels.
The Company has $280.1 million in cash and cash equivalents as of May 6, 2021.
March 2021 Exchange Offer and New Issuance of Convertible Notes
In March 2021, the Company completed the exchange of $62.1 million in aggregate principal amount of Convertible Notes due 2022 for $62.1 million in aggregate principal amount of the Convertible Notes due 2025, pursuant to separate, privately negotiated, agreements with certain holders of the Convertible Notes due 2022 (the "March 2021 Exchange"). Simultaneously with the March 2021 Exchange, the Company issued and sold $76.1 million in aggregate principal amount of Convertible Notes due 2025 pursuant to separate, privately negotiated, agreements with certain investors in a private offering (the "March 2021 Convertible Notes Offering").
The Convertible Notes due 2025 are the Company's senior, unsecured obligations and bear interest at a rate of 3.00% per year. Interest is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2021. The Convertible Notes due 2025 will mature on May 15, 2025, unless earlier converted, redeemed or repurchased in accordance with their terms.
The conversion rate of the Convertible Notes due 2025 is initially 26.6617 common shares per $1,000 principal amount of Convertible Notes due 2025 (equivalent to an initial conversion price of approximately $37.507 per common share), and is subject to adjustment upon the occurrence of certain events as set forth in the indenture governing the Convertible Notes due 2025 (such as the payment of dividends).
Commencing on the issue date of the Convertible Notes due 2025, principal will accrete on the principal amount, compounded semi-annually, at a rate of approximately 5.52% per annum, which principal amount, together with any accretions thereon, is the “Accreted Principal Amount”. The Accreted Principal Amount at maturity will equal 125.3% of par, which together with the 3.00% interest rate, compounds to a yield-to-maturity of approximately 8.25%.
The Convertible Notes due 2025 are freely convertible at the option of the holder and prior to the close of business on the 5th business day immediately preceding the maturity date. Upon conversion of the Convertible Notes due 2025, holders will receive shares of the Company's common stock. The Company may, subject to certain exceptions, redeem the Convertible Notes due 2025 for cash, if at any time the per share volume-weighted average price of our common shares equals or exceeds 125.4% of the conversion price then in effect on (i) each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the trading day immediately before the applicable redemption date; and (ii) the trading day immediately before such date of the redemption notice.
The Company recorded a loss on the extinguishment of the Convertible Notes due 2022 of $3.9 million as a result of the March 2021 Exchange, which primarily arose from the difference between the carrying value and the face value of the Convertible Notes due 2022 on the date of the exchange.
Distribution Agreement of Additional Senior Notes due 2025
In January 2021, the Company entered into a note distribution agreement (the “Distribution Agreement”) with B. Riley Securities, Inc., as sales agent (the “Agent”), under which the Company may offer and sell, from time to time, up to an additional $75.0 million aggregate principal amount of its Senior Notes due 2025 (the "Additional Notes").
Any Additional Notes sold will be issued under the Indenture pursuant to which the Company previously issued $28.1 million aggregate principal amount of the Senior Notes due 2025 on May 29, 2020 (the "Initial Notes"). The Additional Notes will have the same terms as (other than date of issuance), form a single series of debt securities with and have the same CUSIP number and be fungible with, the Initial Notes immediately upon issuance, including for purposes of notices, consents, waivers, amendments and any other action permitted under the Indenture. The Senior Notes due 2025 are listed on the New York Stock Exchange (the “NYSE”) under the symbol "SBBA."
Sales of the Additional Notes may be made over a period of time, and from time to time, through the Agent, in transactions involving an offering of the Senior Notes due 2025 into the existing trading market at prevailing market prices.
During the first quarter of 2021, the Company issued $14.1 million in aggregate principal amount of Additional Notes for aggregate net proceeds (net of sales agent commissions and offering expenses) of $13.8 million. Since the inception of this program and through the date of this press release, the Company issued $17.9 million aggregate principal amount of Additional Notes for aggregate net proceeds (net of sales agent commissions and offering expenses) of $17.5 million.
Diluted Weighted Number of Shares
The computation of earnings or loss per share is determined by taking into consideration the potentially dilutive shares arising from (i) the Company’s equity incentive plan, and (ii) the Company’s Convertible Notes due 2022 and Convertible Notes due 2025. These potentially dilutive shares are excluded from the computation of earnings or loss per share to the extent they are anti-dilutive.
The impact of the Convertible Notes due 2022 and Convertible Notes due 2025 on earnings or loss per share is computed using the if-converted method. Under this method, the Company first includes the potentially dilutive impact of restricted shares issued under the Company’s equity incentive plan, and then assumes that its Convertible Notes due 2022 and Convertible Notes due 2025, which were issued in May and July 2018 and March 2021, respectively, were converted into common shares at the beginning of each period. The if-converted method also assumes that the interest and non-cash amortization expense associated with these notes of $3.1 million during the three months ended March 31, 2021 were not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.
The Company's basic weighted average number of shares outstanding were 54,318,792 for the three months ended March 31, 2021. There were 56,019,369 weighted average shares outstanding including the potentially dilutive impact of restricted shares, and 60,168,137 weighted average shares outstanding under the if-converted method. Since the Company was in a net loss position, the potentially dilutive shares arising from both the Company’s restricted shares and under the if-converted method, were anti-dilutive for purposes of calculating the loss per share. Accordingly, basic weighted average shares outstanding were used to calculate both basic and diluted loss per share for this period.
COVID-19
Initially, the onset of the COVID-19 pandemic in March 2020 resulted in a sharp reduction in economic activity and a corresponding reduction in the global demand for oil and refined petroleum products. This period of time was marked by extreme volatility in the oil markets and the development of a steep contango in the prices of oil and refined petroleum products. Consequently, an abundance of arbitrage and floating storage opportunities opened up, which resulted in record increases in spot TCE rates late in the first quarter of 2020 and throughout the second quarter of 2020. These market dynamics, which were driven by arbitrage trading rather than underlying consumption, led to a build-up of global oil and refined petroleum product inventories.
In June 2020, as underlying oil markets stabilized and global economies began to recover, the excess inventories that built up during this period began to slowly unwind. Nevertheless, global demand for oil and refined petroleum products remained subdued as governments around the world continued to impose travel restrictions and other measures in an effort to curtail the spread of the virus. These market conditions had an adverse impact on the demand for our vessels beginning in the third quarter of 2020 and continuing through the first quarter of 2021. Recently, the easing of restrictive measures and successful roll-out of vaccines in certain countries have begun to stimulate oil demand and have manifested into sequential improvements in market conditions to start the second quarter of 2021.
We expect that the COVID-19 virus will continue to cause volatility in the commodities markets. The scale and duration of these circumstances is unknowable but could have a material impact on our earnings, cash flow and financial condition in 2021. An estimate of the impact on our results of operations and financial condition cannot be made at this time.
$250 Million Securities Repurchase Program
In September 2020, 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, in addition to its common shares, currently consist of its Senior Notes due 2025 (NYSE: SBBA), which were originally issued in May 2020, Convertible Notes due 2022, which were issued in May and July 2018, and Convertible Notes due 2025, which were issued in March 2021. No securities have been repurchased under the new program since its inception through the date of this press release.
Conference Call
The Company has scheduled a conference call on May 7, 2021 at 8:30 AM Eastern Daylight Time and 2:30 PM Central European Summer Time. The dial-in information is as follows:
US Dial-In Number: +1 (855) 861-2416
International Dial-In Number: +1 (703) 736-7422
Conference ID: 1796885
Participants should dial into the call 10 minutes before the scheduled time. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.
There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Webcast URL: https://edge.media-server.com/mmc/p/7nx97or2
Current Liquidity
As of May 6, 2021, the Company had $280.1 million in unrestricted cash and cash equivalents.
Drydock, Scrubber and Ballast Water Treatment Update
Set forth below is a table summarizing the drydock, scrubber, and ballast water treatment system activity that occurred during the first quarter of 2021 and that is in progress as of April 1, 2021:
Number of | Drydock | Ballast Water | Scrubbers | Aggregate | Aggregate Off- | |
Completed in the first quarter of 2021 | ||||||
LR2 | 3 | 3 | — | 1 | $6.2 | 76 |
LR1 | 3 | 3 | — | — | 3.2 | 61 |
MR | — | — | — | — | — | — |
Handymax | — | — | — | — | — | — |
6 | 6 | — | 1 | $9.4 | 137 | |
In progress as of April 1, 2021 | ||||||
LR2 | 1 | 1 | — | — | $0.2 | 1 |
LR1 | — | — | — | — | — | — |
MR | — | — | — | — | — | — |
Handymax | — | — | — | — | — | — |
1 | 1 | — | — | $0.2 | 1 |
(1) Aggregate costs for vessels completed in the quarter represent the total costs incurred, some of which may have been incurred in prior periods. Aggregate costs for vessels in progress as of April 1, 2021 represent the total costs incurred through that date, some of which may have been incurred in prior periods.
Set forth below are the estimated expected payments to be made for the Company's drydocks, ballast water treatment system installations, and scrubber installations through 2022 (which also include actual payments made during the first quarter of 2021 and through May 6, 2021):
In millions of U.S. dollars | As of March 31, 2021 (1) (2) | |
Q2 2021 - payments made through May 6, 2021 | $ | 1.8 |
Q2 2021 - remaining payments | 8.6 | |
Q3 2021 | 10.1 | |
Q4 2021 | 6.1 | |
FY 2022 | 40.5 | |
(1) Includes estimated cash payments for drydocks, ballast water treatment system installations and scrubber installations. These amounts include installment payments that are due in advance of the scheduled service and may be scheduled to occur in quarters prior to the actual installation. In addition to these installment payments, these amounts also include estimates of the installation costs of such systems. The timing of the payments set forth are estimates only and may vary as the timing of the related drydocks and installations finalize.
(2) Based upon the commitments received to date, which include the remaining availability under certain financing transactions that have been previously announced, the Company expects to raise approximately $20.0 million of aggregate additional liquidity to finance the purchase and installations of scrubbers (after the repayment of existing debt) once all of the agreements are closed and drawn. These drawdowns are expected to occur at varying points in the future as these financings are tied to scrubber installations on the Company’s vessels.
Set forth below are the estimated expected number of ships and estimated expected off-hire days for the Company's drydocks, ballast water treatment system installations, and scrubber installations (1):
Q2 2021 | ||||||||
Ships Scheduled for (2): | Off-hire | |||||||
Drydock | Ballast Water | Scrubbers | Days (3) | |||||
LR2 | 4 | — | — | 80 | ||||
LR1 | 3 | — | — | 60 | ||||
MR | — | — | — | — | ||||
Handymax | — | — | — | — | ||||
Total Q2 2021 | 7 | — | — | 140 | ||||
Q3 2021 | ||||||||
Ships Scheduled for (2): | Off-hire | |||||||
Drydock | Ballast Water | Scrubbers | Days (3) | |||||
LR2 | 2 | — | — | 40 | ||||
LR1 | 2 | — | — | 40 | ||||
MR | — | — | — | — | ||||
Handymax | — | — | — | — | ||||
Total Q3 2021 | 4 | — | — | 80 | ||||
Q4 2021 | ||||||||
Ships Scheduled for (2): | Off-hire | |||||||
Drydock | Ballast Water | Scrubbers | Days (3) | |||||
LR2 | 2 | — | — | 40 | ||||
LR1 | 2 | — | — | 40 | ||||
MR | — | — | — | — | ||||
Handymax | — | — | — | — | ||||
Total Q4 2021 | 4 | — | — | 80 | ||||
FY 2022 | ||||||||
Ships Scheduled for (2): | Off-hire | |||||||
Drydock | Ballast Water | Scrubbers | Days (3) | |||||
LR2 | 5 | — | 1 | 140 | ||||
LR1 | — | — | 3 | 120 | ||||
MR | 11 | 5 | 4 | 320 | ||||
Handymax | — | — | — | — | ||||
Total FY 2022 | 16 | 5 | 8 | 580 | ||||
(1) The number of vessels in these tables reflect a certain amount of overlap where certain vessels are expected to be drydocked and have ballast water treatment systems and/or scrubbers installed simultaneously. Additionally, the timing set forth may vary as drydock, ballast water treatment system installation and scrubber installation times are finalized.
(2) Represents the number of vessels scheduled to commence drydock, ballast water treatment system, and/or scrubber installations during the period. It does not include vessels that commenced work in prior periods but will be completed in the subsequent period.
(3) Represents total estimated off-hire days during the period, including vessels that commenced work in a previous period.
Debt
Set forth below is a summary of the principal balances of the Company’s outstanding indebtedness as of the dates presented.
In thousands of U.S. Dollars | Outstanding | Drawdowns and | Outstanding | Drawdowns and | Outstanding | |||||||||||||
1 | KEXIM Credit Facility (1) | $ | 15,931 | $ | (15,931 | ) | $ | — | — | $ | — | |||||||
2 | ING Credit Facility (2)(3)(4)(8) | 191,348 | (121,001 | ) | 70,347 | — | 70,347 | |||||||||||
3 | 2018 NIBC Credit Facility (4) | 31,066 | (31,066 | ) | — | — | — | |||||||||||
4 | Credit Agricole Credit Facility | 82,160 | (2,142 | ) | 80,018 | — | 80,018 | |||||||||||
5 | ABN AMRO / K-Sure Credit Facility | 41,827 | (963 | ) | 40,864 | — | 40,864 | |||||||||||
6 | Citibank / K-Sure Credit Facility | 86,818 | (2,104 | ) | 84,714 | — | 84,714 | |||||||||||
7 | ABN / SEB Credit Facility (2) | 97,856 | (3,087 | ) | 94,769 | (16,076 | ) | 78,693 | ||||||||||
8 | Hamburg Commercial Credit Facility | 40,315 | (823 | ) | 39,492 | — | 39,492 | |||||||||||
9 | Prudential Credit Facility | 50,378 | (1,386 | ) | 48,992 | (924 | ) | 48,068 | ||||||||||
10 | 2019 DNB / GIEK Credit Facility | 52,563 | (1,778 | ) | 50,785 | — | 50,785 | |||||||||||
11 | BNPP Sinosure Credit Facility (5) | 94,733 | 1,915 | 96,648 | (5,167 | ) | 91,481 | |||||||||||
12 | 2020 $225.0 Million Credit Facility | 208,890 | (5,250 | ) | 203,640 | — | 203,640 | |||||||||||
13 | 2021 $21.0 Million Credit Facility (1) | — | 21,000 | 21,000 | — | 21,000 | ||||||||||||
14 | Ocean Yield Lease Financing | 138,508 | (2,733 | ) | 135,775 | (911 | ) | 134,864 | ||||||||||
15 | BCFL Lease Financing (LR2s) (6) | 86,197 | 1,277 | 87,474 | (895 | ) | 86,579 | |||||||||||
16 | CSSC Lease Financing | 134,308 | (2,732 | ) | 131,576 | (911 | ) | 130,665 | ||||||||||
17 | CSSC Scrubber Lease Financing | 4,443 | (980 | ) | 3,463 | (327 | ) | 3,136 | ||||||||||
18 | BCFL Lease Financing (MRs) (6) | 77,748 | 2,394 | 80,142 | (1,250 | ) | 78,892 | |||||||||||
19 | 2018 CMBFL Lease Financing | 124,993 | (3,252 | ) | 121,741 | (836 | ) | 120,905 | ||||||||||
20 | $116.0 Million Lease Financing (6) | 103,801 | (401 | ) | 103,400 | (848 | ) | 102,552 | ||||||||||
21 | AVIC Lease Financing | 119,732 | (3,332 | ) | 116,400 | — | 116,400 | |||||||||||
22 | China Huarong Lease Financing (7) | 110,250 | 5,791 | 116,041 | — | 116,041 | ||||||||||||
23 | $157.5 Million Lease Financing | 123,800 | (3,536 | ) | 120,264 | — | 120,264 | |||||||||||
24 | COSCO Lease Financing | 68,750 | (1,925 | ) | 66,825 | — | 66,825 | |||||||||||
25 | 2020 CMBFL Lease Financing | 44,573 | (810 | ) | 43,763 | — | 43,763 | |||||||||||
26 | 2020 TSFL Lease Financing | 47,250 | (831 | ) | 46,419 | — | 46,419 | |||||||||||
27 | 2020 SPDBFL Lease Financing | 96,500 | (1,624 | ) | 94,876 | — | 94,876 | |||||||||||
28 | 2021 AVIC Lease Financing (4) | — | 97,325 | 97,325 | — | 97,325 | ||||||||||||
29 | 2021 CMBFL Lease Financing (2) | — | 58,800 | 58,800 | 20,250 | 79,050 | ||||||||||||
30 | 2021 TSFL Lease Financing (3) | — | 57,663 | 57,663 | — | 57,663 | ||||||||||||
31 | IFRS 16 - Leases - 7 Handymax (9) | 2,247 | (2,247 | ) | — | — | — | |||||||||||
32 | IFRS 16 - Leases - 3 MR | 36,936 | (1,843 | ) | 35,093 | (623 | ) | 34,470 | ||||||||||
33 | $670.0 Million Lease Financing | 593,291 | (11,134 | ) | 582,157 | (3,993 | ) | 578,164 | ||||||||||
34 | Unsecured Senior Notes Due 2025 (10) | 28,100 | 14,133 | 42,233 | 3,755 | 45,988 | ||||||||||||
35 | Convertible Notes Due 2022 (11) | 151,229 | (62,088 | ) | 89,141 | — | 89,141 | |||||||||||
36 | Convertible Notes Due 2025 (11) | — | 138,188 | 138,188 | — | 138,188 | ||||||||||||
Gross debt outstanding | $ | 3,086,541 | $ | 113,487 | $ | 3,200,028 | $ | (8,756 | ) | $ | 3,191,272 | |||||||
Cash and cash equivalents | 187,511 | 269,538 | 280,053 | |||||||||||||||
Net debt | $ | 2,899,030 | $ | 2,930,490 | $ | 2,911,219 | ||||||||||||
(1) In February 2021, the Company drew down $21.0 million on a term loan facility with a European financial institution (the "2021 $21.0 Million Credit Facility"). The proceeds of this loan facility were used to refinance the outstanding debt on an LR2 product tanker, STI Madison, that was previously financed under the KEXIM Credit Facility. The Company repaid the outstanding indebtedness of $15.9 million related to this vessel on the KEXIM Credit Facility in January 2021 upon its maturity. The 2021 $21.0 Million Credit Facility has a final maturity of December 2022, bears interest at LIBOR plus a margin of 2.65% per annum, and is scheduled to be repaid in equal quarterly installments of approximately $0.6 million, with a balloon payment due upon maturity. The remaining terms and conditions, including financial covenants, are similar to those set forth in our existing credit facilities.
(2) In March 2021, the Company received a commitment to sell and leaseback four Handymax vessels (STI Comandante, STI Brixton, STI Pimlico and STI Finchley) and one MR vessel (STI Westminster) from CMB Financial Leasing Co. Ltd, or CMBFL (the "2021 CMBFL Lease Financing"). In March 2021, the Company closed on the sale and leaseback of the four aforementioned Handymax vessels for aggregate proceeds of $58.8 million. The Company repaid the outstanding indebtedness of $46.7 million related to these vessels on the ING Credit Facility as part of these transactions. In April 2021, the Company closed on the sale and leaseback of STI Westminster for aggregate proceeds of $20.25 million. The Company repaid the outstanding indebtedness of $16.1 million related to this vessel on the ABN/SEB Credit Facility as part of this transaction.
Under the 2021 CMBFL Lease Financing, each vessel is subject to a seven-year bareboat charter-in agreement. The lease financings bear interest at LIBOR plus a margin of 3.25% per annum for the Handymax vessels and 3.20% for the MR vessel and are scheduled to be repaid in equal quarterly principal installments of approximately $0.3 million per each Handymax vessel and $0.4 million for the MR vessel. Each agreement contains purchase options to re-acquire each of the subject vessels beginning on the third anniversary date from the delivery date of the respective vessel, with a purchase option for each vessel upon the expiration of each agreement. The remaining terms and conditions, including financial covenants, are similar to those set forth in the Company's other sale and leaseback arrangements.
This transaction is being accounted for as a financing transaction under IFRS 9 as the transaction does not qualify as a ‘sale’ under IFRS 15 given the Company’s right to repurchase the asset during the lease period. Accordingly, no gain or loss is recorded, and the Company will continue to recognize the vessel as an asset and recognize a financial liability (i.e. debt) for the consideration received (similar to the Company’s other sale and leaseback transactions).
(3) In March 2021, the Company closed on the sale and leaseback of three MR vessels (STI Black Hawk, STI Notting Hill and STI Pontiac) with Taiping & Sinopec Financial Leasing Co., Ltd. for aggregate proceeds of $57.7 million (the "2021 TSFL Lease Financing"). The Company repaid the outstanding indebtedness of $40.7 million related to these vessels on the ING Credit Facility as part of these transactions.
Under the 2021 TSFL Lease Financing, each vessel is subject to a seven-year bareboat charter-in agreement. The lease financings bear interest at LIBOR plus a margin of 3.20% per annum and are scheduled to be repaid in equal quarterly principal installments of approximately $0.4 million per vessel. Each agreement contains purchase options to re-acquire each of the subject vessels beginning on the second anniversary date from the delivery date of the respective vessel, with a purchase option for each vessel upon the expiration of each agreement. The remaining terms and conditions, including financial covenants, are similar to those set forth in the Company's other sale and leaseback arrangements.
This transaction is being accounted for as a financing transaction under IFRS 9 as the transaction does not qualify as a ‘sale’ under IFRS 15 given the Company’s right to repurchase the asset during the lease period. Accordingly, no gain or loss is recorded, and the Company will continue to recognize the vessel as an asset and recognize a financial liability (i.e. debt) for the consideration received (similar to the Company’s other sale and leaseback transactions).
(4) In February 2021, the Company closed on the sale and leaseback of two vessels (STI Memphis and STI Soho) with AVIC International Leasing Co., Ltd. for aggregate proceeds of $44.2 million. The Company repaid the outstanding indebtedness of $30.0 million related to these vessels on the 2018 NIBC Credit Facility as part of these transactions. Additionally, in March 2021, the Company closed on the sale and leaseback of two additional vessels (STI Lombard and STI Osceola) under the 2021 AVIC Lease Financing for aggregate proceeds of $53.1 million. The Company repaid the outstanding indebtedness of $29.6 million related to these vessels on the ING Credit Facility as part of these transactions. These sale and leaseback transactions are collectively referred to as the “2021 AVIC Lease Financing”.
Under the 2021 AVIC Lease Financing, each vessel is subject to a nine-year bareboat charter-in agreement. The lease financings bear interest at LIBOR plus a margin of 3.45% per annum and are scheduled to be repaid in equal aggregate quarterly repayments of approximately $1.8 million. Each agreement contains purchase options to re-acquire each of the subject vessels beginning on the second anniversary date from the delivery date of the respective vessel, with a purchase obligation upon the expiration of each agreement. Additionally, we are required to deposit with the lessor, 1% of the borrowing amount, or $1.0 million in aggregate. The remaining terms and conditions, including financial covenants, are similar to those set forth in the Company's other sale and leaseback arrangements.
This transaction is being accounted for as a financing transaction under IFRS 9 as the transaction does not qualify as a ‘sale’ under IFRS 15 given the Company’s right to repurchase the asset during the lease period. Accordingly, no gain or loss is recorded, and the Company will continue to recognize the vessel as an asset and recognize a financial liability (i.e. debt) for the consideration received (similar to the Company’s other sale and leaseback transactions).
(5) In January 2021, the Company signed an agreement to extend the availability period under this loan facility to June 15, 2022 from March 15, 2021. In March 2021, the Company drew down $1.9 million from the BNPP Sinosure Credit Facility to partially finance the purchase and installation of a scrubber on a MR product tanker.
(6) In January 2021, the Company drew down an aggregate of $11.4 million, which consisted of (i) $3.8 million under the BCFL Lease Financing (LR2s); (ii) $5.8 million under the BCFL Lease Financing (MRs) and (iii) $1.9 million under the $116.0 Million Lease Financing to partially finance the purchase and installations of scrubbers on six product tankers. All of these scrubber related borrowings are scheduled to be repaid over a period of three years from each drawdown date in fixed monthly installments (which includes interest) of approximately $50,000 to $60,000 per vessel.
(7) In January 2021, the Company drew down $10.0 million from the China Huarong Lease Financing to partially finance the purchase and installations of scrubbers on five MR product tankers. These borrowings bear interest at LIBOR plus a margin of 3.50% and are scheduled to be repaid in equal quarterly installments of approximately $0.2 million per vessel through November 2023.
(8) In January 2021, the Company drew down $2.1 million from its ING Credit Facility to partially finance the purchase and installations of scrubbers on two LR2 product tankers. These borrowings bear interest at LIBOR plus a margin of 1.95% and are scheduled to be repaid in equal quarterly installments of approximately $0.2 million per vessel through June 2022.
(9) The remaining terms on the bareboat-in agreements for Handymax vessels under these agreements expired in March 2021.
(10) In January 2021, the Company entered into the Distribution Agreement with the Agent, under which the Company may offer and sell, from time to time, up to an additional $75.0 million aggregate principal amount Additional Notes. The Additional Notes will have the same terms as (other than date of issuance), form a single series of debt securities with and have the same CUSIP number and be fungible with, the Initial Notes immediately upon issuance. Sales of the Additional Notes may be made over a period of time, and from time to time, through the Agent, in transactions involving an offering of the Senior Notes due 2025 into the existing trading market at prevailing market prices. During the first quarter of 2021, the Company issued $14.1 million aggregate principal amount of Additional Notes for aggregate net proceeds (net of sales agent commissions and offering expenses) of $13.8 million. Since inception of this program and through the date of this press release, the Company issued $17.9 million aggregate principal amount of Additional Notes for aggregate net proceeds (net of sales agent commissions and offering expenses) of $17.5 million.
(11) In March 2021, the Company completed the exchange of approximately $62.1 million in aggregate principal amount of Convertible Notes due 2022 for approximately $62.1 million in aggregate principal amount of Convertible Notes due 2025 as part of the March 2021 Exchange. Simultaneously with the March 2021 Exchange, the Company issued and sold $76.1 million in aggregate principal amount of Convertible Notes due 2025 as part of the March 2021 Convertible Notes Offering.
The conversion rate of the Convertible Notes due 2025 is initially 26.6617 common shares per $1,000 principal amount of Convertible Notes due 2025 (equivalent to an initial conversion price of approximately $37.507 per common share), and is subject to adjustment upon the occurrence of certain events as set forth in the indenture governing the Convertible Notes due 2025 (such as the payment of dividends).
Commencing on the issue date of the Convertible Notes due 2025, principal will accrete on the principal amount, compounded semi-annually, at a rate of approximately 5.52% per annum, which principal amount, together with any accretions thereon, is the “Accreted Principal Amount”. The Accreted Principal Amount at maturity will equal 125.3% of par, which together with the 3.00% interest rate, compounds to a yield-to-maturity of approximately 8.25%.
The Company recorded a loss on the extinguishment of the Convertible Notes due 2022 of $3.9 million as a result of the March 2021 Exchange which primarily arose from the difference between the carrying value and the face value of the Convertible Notes due 2022 on the date of the exchange.
Set forth below are the estimated expected future principal repayments on the Company's outstanding indebtedness as of March 31, 2021, which includes principal amounts due under the Company's secured credit facilities, Convertible Notes due 2022, Convertible Notes due 2025, lease financing arrangements, Senior Notes due 2025, and lease liabilities under IFRS 16 (which also include actual payments made during the first quarter of 2021 and through May 6, 2021):
In millions of U.S. dollars | As of March 31, 2021 (1) | ||
Q2 2021 - principal payments made through May 6, 2021 (2) | $ | 32.8 | |
Q2 2021 - remaining principal payments | 61.1 | ||
Q3 2021 | 72.9 | ||
Q4 2021 | 77.9 | ||
Q1 2022 (3) | 90.7 | ||
Q2 2022 (4) | 265.4 | ||
Q3 2022 (5) | 86.7 | ||
Q4 2022 (6) | 123.1 | ||
2023 and thereafter | 2,389.4 | ||
$ | 3,200.0 | ||
(1) Amounts represent the principal payments due on the Company’s outstanding indebtedness as of March 31, 2021 and do not incorporate the impact of any of the Company’s new financing initiatives which have not closed as of that date.
(2) Repayments include the payment of $16.1 million on the ABN / SEB Credit Facility which was made as part of the refinancing of the amounts borrowed for STI Westminster, which was sold and leased back under the 2021 CMBFL Lease Financing in April 2021.
(3) Repayments include the maturity of the outstanding debt related to one vessel under the Citi/K-Sure Credit Facility of $19.3 million.
(4) Repayments include the maturity of the outstanding debt related to (i) three vessels under the Citi/K-Sure Credit Facility of $57.6 million in aggregate, (ii) the Company's Convertible Notes due 2022 of $89.1 million, and (iii) three vessels under the ING Credit Facility of $44.8 million in aggregate.
(5) Repayments include the maturity of the outstanding debt related to one vessel under the ABN AMRO/K-Sure Credit Facility of $18.4 million.
(6) Repayments include the maturity of the outstanding debt related to (i) one vessel under the ABN AMRO/K-Sure Credit Facility of $17.2 million and (ii) one vessel under the Credit Agricole Credit Facility of $16.5 million..
Explanation of Variances on the First Quarter of 2021 Financial Results Compared to the First Quarter of 2020
For the three months ended March 31, 2021, the Company recorded a net loss of $62.4 million compared to net income of $46.6 million for the three months ended March 31, 2020. The following were the significant changes between the two periods:
TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot voyages, time charters, and pool charters), and it provides useful information to investors and management. The following table sets forth TCE revenue for the three months ended March 31, 2021 and 2020:
For the three months ended March 31, | ||||||||||
In thousands of U.S. dollars | 2021 | 2020 | ||||||||
Vessel revenue | $ | 134,165 | $ | 254,167 | ||||||
Voyage expenses | (1,385 | ) | (4,220 | ) | ||||||
TCE revenue | $ | 132,780 | $ | 249,947 | ||||||
TCE revenue for the three months ended March 31, 2021 decreased by $117.2 million to $132.8 million, from $249.9 million for the three months ended March 31, 2020. Overall average TCE revenue per day decreased to $11,166 per day during the three months ended March 31, 2021, from $22,644 per day during the three months ended March 31, 2020. Given the onset of the COVID-19 pandemic, market fundamentals and underlying TCE revenue during these periods differed significantly.
TCE revenue for the three months ended March 31, 2021 reflected the adverse market conditions brought on by the COVID-19 pandemic. Demand for crude and refined petroleum products remained low during this period as inventories that built up during 2020 continued to be drawn, and most countries throughout the world continued to implement restrictive policies in an effort to control the spread of the virus.
TCE revenue for the three months ended March 30, 2020 reflected strong market conditions that were the result of (i) the January 1, 2020 implementation date of the IMO low sulfur emissions standards and (ii) the initial market conditions brought on by the onset of the COVID-19 pandemic in March 2020. Supply and demand dynamics shifted favorably during the fourth quarter of 2019 and early in the first quarter of 2020, driven by the January 1, 2020 implementation date of the International Maritime Organization’s (“IMO”) low sulfur emissions standards. The implementation of these standards impacted the trade flows of both crude and refined petroleum products which, combined with favorable supply and demand dynamics at the time, resulted in improvements in daily spot market TCE rates.
Towards the end of the first quarter of 2020, travel restrictions and other preventive measure to control the spread of the COVID-19 pandemic resulted in a precipitous decline in oil demand. Lack of corresponding production and refinery cuts resulted in a supply glut of oil and refined petroleum products, which was exacerbated by extreme oil price volatility from the Russia-Saudi Arabia oil price war. The oversupply of petroleum products and contango in oil prices led to record floating storage and arbitrage opportunities of both crude and refined petroleum products. These market conditions had a disruptive impact on the supply and demand balance of product tankers, resulting in significant and prolonged spikes in spot TCE rates which persisted through the second quarter of 2020.
Vessel operating costs for the three months ended March 31, 2021 remained consistent, increasing slightly by $1.8 million to $83.3 million, from $81.5 million for the three months ended March 31, 2020. Vessel operating costs were impacted by a net decrease of 1.5 average vessels for the three months ended March 31, 2021 when compared to the three months ended March 31, 2020. This decrease was due to the redelivery of three Handymax vessels upon the expiration of their bareboat charters in the second and third quarters of 2020, and the redelivery of four Handymax vessels in March 2021. Offsetting this decrease was the delivery of four MRs under bareboat charter-in agreements; three of which were delivered during the first quarter of 2020, and one was delivered during the third quarter of 2020.
Vessel operating costs per day increased to $6,891 per day for the three months ended March 31, 2021 from $6,592 per day for the three months ended March 31, 2020. This increase was primarily attributable to (i) costs incurred to transition technical managers for certain MRs that were acquired from Trafigura Maritime Logistics Pte. Ltd. in 2019, and (ii) costs incurred upon the expiration of the bareboat charters on four Handymax vessels in March 2021.
Depreciation expense - owned or sale leaseback vessels for the three months ended March 31, 2021 increased by $1.9 million to $48.8 million, from $46.8 million for the three months ended March 31, 2020. The increase was due to the Company's drydock, scrubber and ballast water treatment system installations that have taken place over the preceding 12-month period.
Depreciation expense - right of use assets for the three months ended March 31, 2021 decreased $1.4 million to $11.8 million from $13.2 million for the three months ended March 31, 2020. Depreciation expense - right of use assets reflects the straight-line depreciation expense recorded under IFRS 16 - Leases. Right of use asset depreciation expense was impacted by the delivery of four vessels that were previously under construction (three MRs in the first quarter of 2020 and one MR in the third quarter of 2020), offset by the redelivery of three Handymax vessels upon the expiration of their bareboat charters in the second and third quarters of 2020 and four Handymax vessels at the end of the first quarter of 2021. The Company had four LR2s, 18 MRs, and four Handymax vessels (whose leases expired in March 2021) that were accounted for under IFRS 16 - Leases during the three months ended March 31, 2021. The right of use asset depreciation for these vessels is approximately $0.2 million per MR and $0.3 million per LR2 per month.
General and administrative expenses for the three months ended March 31, 2021, decreased by $3.7 million to $13.6 million, from $17.3 million for the three months ended March 31, 2020. This decrease was due to an overall reduction in costs during the three months ended March 31, 2021, including reductions in restricted stock amortization and compensation expenses.
Financial expenses for the three months ended March 31, 2021 decreased by $10.7 million to $34.1 million, from $44.8 million for the three months ended March 31, 2020. The decrease was primarily driven by significant decreases in LIBOR rates, which underpin all of the Company's variable rate borrowings, and which have collapsed since the onset of the COVID-19 pandemic.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statements of Income or Loss
(unaudited)
For the three months ended March 31, | ||||||||||
In thousands of U.S. dollars except per share and share data | 2021 | 2020 | ||||||||
Revenue | ||||||||||
Vessel revenue | $ | 134,165 | $ | 254,167 | ||||||
Operating expenses | ||||||||||
Vessel operating costs | (83,302 | ) | (81,463 | ) | ||||||
Voyage expenses | (1,385 | ) | (4,220 | ) | ||||||
Depreciation - owned or sale leaseback vessels | (48,784 | ) | (46,841 | ) | ||||||
Depreciation - right of use assets | (11,841 | ) | (13,197 | ) | ||||||
General and administrative expenses | (13,560 | ) | (17,261 | ) | ||||||
Total operating expenses | (158,872 | ) | (162,982 | ) | ||||||
Operating income | (24,707 | ) | 91,185 | |||||||
Other (expense) and income, net | ||||||||||
Financial expenses | (34,067 | ) | (44,765 | ) | ||||||
Loss on Convertible Notes exchange | (3,856 | ) | — | |||||||
Financial income | 225 | 565 | ||||||||
Other income and (expense), net | 11 | (358 | ) | |||||||
Total other expense, net | (37,687 | ) | (44,558 | ) | ||||||
Net (loss) / income | $ | (62,394 | ) | $ | 46,627 | |||||
(Loss) / Earnings per share | ||||||||||
Basic | $ | (1.15 | ) | $ | 0.85 | |||||
Diluted | $ | (1.15 | ) | $ | 0.82 | |||||
Basic weighted average shares outstanding | 54,318,792 | 54,667,211 | ||||||||
Diluted weighted average shares outstanding (1) | 54,318,792 | 61,692,830 | ||||||||
(1) The computation of diluted loss per share for the three months ended March 31, 2021 excludes the effect of potentially dilutive unvested shares of restricted stock and the Convertible Notes due 2022 and Convertible Notes due 2025 because their effect would have been anti-dilutive. The computation of diluted earnings per share for the three months ended March 31, 2020 includes the effect of potentially dilutive unvested shares of restricted stock and the effect of the Convertible Notes due 2022 under the if-converted method.
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
As of | |||||||||
In thousands of U.S. dollars | March 31, 2021 | December 31, 2020 | |||||||
Assets | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 269,538 | $ | 187,511 | |||||
Accounts receivable | 45,086 | 33,017 | |||||||
Prepaid expenses and other current assets | 9,092 | 12,430 | |||||||
Inventories | 8,104 | 9,261 | |||||||
Total current assets | 331,820 | 242,219 | |||||||
Non-current assets | |||||||||
Vessels and drydock | 3,964,122 | 4,002,888 | |||||||
Right of use assets | 794,970 | 807,179 | |||||||
Other assets | 97,274 | 92,145 | |||||||
Goodwill | 8,900 | 8,900 | |||||||
Restricted cash | 5,293 | 5,293 | |||||||
Total non-current assets | 4,870,559 | 4,916,405 | |||||||
Total assets | $ | 5,202,379 | $ | 5,158,624 | |||||
Current liabilities | |||||||||
Current portion of long-term debt | $ | 105,861 | $ | 172,705 | |||||
Lease liability - sale and leaseback vessels | 151,446 | 131,736 | |||||||
Lease liability - IFRS 16 | 54,442 | 56,678 | |||||||
Accounts payable | 14,796 | 12,863 | |||||||
Accrued expenses | 27,891 | 32,193 | |||||||
Total current liabilities | 354,436 | 406,175 | |||||||
Non-current liabilities | |||||||||
Long-term debt | 966,309 | 971,172 | |||||||
Lease liability - sale and leaseback vessels | 1,311,604 | 1,139,713 | |||||||
Lease liability - IFRS 16 | 562,146 | 575,796 | |||||||
Total non-current liabilities | 2,840,059 | 2,686,681 | |||||||
Total liabilities | 3,194,495 | 3,092,856 | |||||||
Shareholders' equity | |||||||||
Issued, authorized and fully paid-in share capital: | |||||||||
Share capital | 656 | 656 | |||||||
Additional paid-in capital | 2,854,716 | 2,850,206 | |||||||
Treasury shares | (480,172 | ) | (480,172 | ) | |||||
Accumulated deficit | (367,316 | ) | (304,922 | ) | |||||
Total shareholders' equity | 2,007,884 | 2,065,768 | |||||||
Total liabilities and shareholders' equity | $ | 5,202,379 | $ | 5,158,624 | |||||
Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited)
For the three months ended March 31, | |||||||||
In thousands of U.S. dollars | 2021 | 2020 | |||||||
Operating activities | |||||||||
Net (loss) / income | $ | (62,394 | ) | $ | 46,627 | ||||
Depreciation - owned or finance leased vessels | 48,784 | 46,841 | |||||||
Depreciation - right of use assets | 11,841 | 13,197 | |||||||
Amortization of restricted stock | 6,192 | 7,845 | |||||||
Amortization of deferred financing fees | 1,825 | 1,458 | |||||||
Write-off of deferred financing fees and unamortized discounts on sale and leaseback facilities | 1,275 | — | |||||||
Accretion of convertible notes | 1,922 | 2,258 | |||||||
Accretion of fair value measurement on debt assumed in business combinations | 847 | 878 | |||||||
Loss on Convertible Notes exchange | 3,856 | — | |||||||
14,148 | 119,104 | ||||||||
Changes in assets and liabilities: | |||||||||
Decrease / (increase) in inventories | 1,157 | (1,221 | ) | ||||||
Increase in accounts receivable | (12,069 | ) | (70,363 | ) | |||||
(Increase) / decrease in prepaid expenses and other current assets | (600 | ) | 2,080 | ||||||
(Increase) / decrease in other assets | (147 | ) | 46 | ||||||
Increase / (decrease) in accounts payable | 2,428 | (675 | ) | ||||||
Decrease in accrued expenses | (6,745 | ) | (4,869 | ) | |||||
(15,976 | ) | (75,002 | ) | ||||||
Net cash (outflow) / inflow from operating activities | (1,828 | ) | 44,102 | ||||||
Investing activities | |||||||||
Drydock, scrubber, ballast water treatment system and other vessel related payments (owned, finance leased and bareboat-in vessels) | (16,601 | ) | (63,486 | ) | |||||
Net cash outflow from investing activities | (16,601 | ) | (63,486 | ) | |||||
Financing activities | |||||||||
Debt repayments | (224,757 | ) | (108,617 | ) | |||||
Issuance of debt | 273,421 | 73,946 | |||||||
Debt issuance costs | (3,643 | ) | (1,783 | ) | |||||
Principal repayments on lease liability - IFRS 16 | (14,856 | ) | (20,772 | ) | |||||
Issuance of convertible notes | 76,100 | — | |||||||
Dividends paid | (5,809 | ) | (5,868 | ) | |||||
Net cash inflow / (outflow) from financing activities | 100,456 | (63,094 | ) | ||||||
Increase / (decrease) in cash and cash equivalents | 82,027 | (82,478 | ) | ||||||
Cash and cash equivalents at January 1, | 187,511 | 202,303 | |||||||
Cash and cash equivalents at March 31, | $ | 269,538 | $ | 119,825 | |||||
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three months and three months ended March 31, 2021 and 2020
(unaudited)
For the three months ended March 31, | |||||||
2021 | 2020 | ||||||
Adjusted EBITDA(1) (in thousands of U.S. dollars except Fleet Data) | $ | 42,121 | $ | 158,710 | |||
Average Daily Results | |||||||
TCE per day(2) | $ | 11,166 | $ | 22,644 | |||
Vessel operating costs per day(3) | $ | 6,891 | $ | 6,592 | |||
LR2 | |||||||
TCE per revenue day (2) | $ | 11,947 | $ | 25,914 | |||
Vessel operating costs per day(3) | $ | 6,675 | $ | 6,742 | |||
Average number of vessels | 42.0 | 42.0 | |||||
LR1 | |||||||
TCE per revenue day (2) | $ | 11,228 | $ | 20,296 | |||
Vessel operating costs per day(3) | $ | 6,646 | $ | 6,678 | |||
Average number of vessels | 12.0 | 12.0 | |||||
MR | |||||||
TCE per revenue day (2) | $ | 11,281 | $ | 20,866 | |||
Vessel operating costs per day(3) | $ | 6,974 | $ | 6,422 | |||
Average number of vessels | 63.0 | 60.8 | |||||
Handymax | |||||||
TCE per revenue day (2) | $ | 8,844 | $ | 22,564 | |||
Vessel operating costs per day(3) | $ | 7,280 | $ | 6,734 | |||
Average number of vessels | 17.3 | 21.0 | |||||
Fleet data | |||||||
Average number of vessels | 134.3 | 135.8 | |||||
Drydock | |||||||
Drydock, scrubber, ballast water treatment system and other vessel related payments for owned, sale leaseback and bareboat chartered-in vessels (in thousands of U.S. dollars) | $ | 16,601 | $ | 63,486 | |||
(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, finance leased or chartered-in less the number of days the vessel is off-hire for drydock and repairs. |
(3) | Vessel operating costs per day represent vessel operating costs divided by the number of operating days during the period. Operating days are the total number of available days in a period with respect to the owned, finance leased or bareboat chartered-in vessels, before deducting available days due to off-hire days and days in drydock. Operating days is a measurement that is only applicable to our owned, finance leased or bareboat chartered-in vessels, not our time chartered-in vessels. |
Fleet list as of May 6, 2021
Vessel Name | Year | DWT | Ice | Employment | Vessel type | Scrubber | ||||||||
Owned, sale leaseback and bareboat chartered-in vessels | ||||||||||||||
1 | STI Brixton | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
2 | STI Comandante | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
3 | STI Pimlico | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
4 | STI Hackney | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
5 | STI Acton | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
6 | STI Fulham | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
7 | STI Camden | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
8 | STI Battersea | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
9 | STI Wembley | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
10 | STI Finchley | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
11 | STI Clapham | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
12 | STI Poplar | 2014 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
13 | STI Hammersmith | 2015 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
14 | STI Rotherhithe | 2015 | 38,734 | 1A | SHTP (1) | Handymax | N/A | |||||||
15 | STI Amber | 2012 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
16 | STI Topaz | 2012 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
17 | STI Ruby | 2012 | 49,990 | — | SMRP (2) | MR | Not Yet Installed | |||||||
18 | STI Garnet | 2012 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
19 | STI Onyx | 2012 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
20 | STI Fontvieille | 2013 | 49,990 | — | SMRP (2) | MR | Not Yet Installed | |||||||
21 | STI Ville | 2013 | 49,990 | — | SMRP (2) | MR | Not Yet Installed | |||||||
22 | STI Duchessa | 2014 | 49,990 | — | SMRP (2) | MR | Not Yet Installed | |||||||
23 | STI Opera | 2014 | 49,990 | — | SMRP (2) | MR | Not Yet Installed | |||||||
24 | STI Texas City | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
25 | STI Meraux | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
26 | STI San Antonio | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
27 | STI Venere | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
28 | STI Virtus | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
29 | STI Aqua | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
30 | STI Dama | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
31 | STI Benicia | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
32 | STI Regina | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
33 | STI St. Charles | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
34 | STI Mayfair | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
35 | STI Yorkville | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
36 | STI Milwaukee | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
37 | STI Battery | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
38 | STI Soho | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
39 | STI Memphis | 2014 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
40 | STI Tribeca | 2015 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
41 | STI Gramercy | 2015 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
42 | STI Bronx | 2015 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
43 | STI Pontiac | 2015 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
44 | STI Manhattan | 2015 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
45 | STI Queens | 2015 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
46 | STI Osceola | 2015 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
47 | STI Notting Hill | 2015 | 49,687 | 1B | SMRP (2) | MR | Yes | |||||||
48 | STI Seneca | 2015 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
49 | STI Westminster | 2015 | 49,687 | 1B | SMRP (2) | MR | Yes | |||||||
50 | STI Brooklyn | 2015 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
51 | STI Black Hawk | 2015 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
52 | STI Galata | 2017 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
53 | STI Bosphorus | 2017 | 49,990 | — | SMRP (2) | MR | Not Yet Installed | |||||||
54 | STI Leblon | 2017 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
55 | STI La Boca | 2017 | 49,990 | — | SMRP (2) | MR | Yes | |||||||
56 | STI San Telmo | 2017 | 49,990 | 1B | SMRP (2) | MR | Not Yet Installed | |||||||
57 | STI Donald C Trauscht | 2017 | 49,990 | 1B | SMRP (2) | MR | Not Yet Installed | |||||||
58 | STI Esles II | 2018 | 49,990 | 1B | SMRP (2) | MR | Not Yet Installed | |||||||
59 | STI Jardins | 2018 | 49,990 | 1B | SMRP (2) | MR | Not Yet Installed | |||||||
60 | STI Magic | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
61 | STI Majestic | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
62 | STI Mystery | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
63 | STI Marvel | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
64 | STI Magnetic | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
65 | STI Millennia | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
66 | STI Magister (formerly STI Master) | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
67 | STI Mythic | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
68 | STI Marshall | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
69 | STI Modest | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
70 | STI Maverick | 2019 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
71 | STI Miracle | 2020 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
72 | STI Maestro | 2020 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
73 | STI Mighty | 2020 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
74 | STI Maximus | 2020 | 50,000 | — | SMRP (2) | MR | Yes | |||||||
75 | STI Excel | 2015 | 74,000 | — | SLR1P (3) | LR1 | Not Yet Installed | |||||||
76 | STI Excelsior | 2016 | 74,000 | — | SLR1P (3) | LR1 | Not Yet Installed | |||||||
77 | STI Expedite | 2016 | 74,000 | — | SLR1P (3) | LR1 | Not Yet Installed | |||||||
78 | STI Exceed | 2016 | 74,000 | — | SLR1P (3) | LR1 | Not Yet Installed | |||||||
79 | STI Executive | 2016 | 74,000 | — | SLR1P (3) | LR1 | Yes | |||||||
80 | STI Excellence | 2016 | 74,000 | — | SLR1P (3) | LR1 | Yes | |||||||
81 | STI Experience | 2016 | 74,000 | — | SLR1P (3) | LR1 | Not Yet Installed | |||||||
82 | STI Express | 2016 | 74,000 | — | SLR1P (3) | LR1 | Yes | |||||||
83 | STI Precision | 2016 | 74,000 | — | SLR1P (3) | LR1 | Yes | |||||||
84 | STI Prestige | 2016 | 74,000 | — | SLR1P (3) | LR1 | Yes | |||||||
85 | STI Pride | 2016 | 74,000 | — | SLR1P (3) | LR1 | Yes | |||||||
86 | STI Providence | 2016 | 74,000 | — | SLR1P (3) | LR1 | Yes | |||||||
87 | STI Elysees | 2014 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
88 | STI Madison | 2014 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
89 | STI Park | 2014 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
90 | STI Orchard | 2014 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
91 | STI Sloane | 2014 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
92 | STI Broadway | 2014 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
93 | STI Condotti | 2014 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
94 | STI Rose | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
95 | STI Veneto | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
96 | STI Alexis | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
97 | STI Winnie | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
98 | STI Oxford | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
99 | STI Lauren | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
100 | STI Connaught | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
101 | STI Spiga | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
102 | STI Savile Row | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
103 | STI Kingsway | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
104 | STI Carnaby | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
105 | STI Solidarity | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
106 | STI Lombard | 2015 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
107 | STI Grace | 2016 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
108 | STI Jermyn | 2016 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
109 | STI Sanctity | 2016 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
110 | STI Solace | 2016 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
111 | STI Stability | 2016 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
112 | STI Steadfast | 2016 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
113 | STI Supreme | 2016 | 109,999 | — | SLR2P (4) | LR2 | Not Yet Installed | |||||||
114 | STI Symphony | 2016 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
115 | STI Gallantry | 2016 | 113,000 | — | SLR2P (4) | LR2 | Yes | |||||||
116 | STI Goal | 2016 | 113,000 | — | SLR2P (4) | LR2 | Yes | |||||||
117 | STI Nautilus | 2016 | 113,000 | — | SLR2P (4) | LR2 | Yes | |||||||
118 | STI Guard | 2016 | 113,000 | — | SLR2P (4) | LR2 | Yes | |||||||
119 | STI Guide | 2016 | 113,000 | — | SLR2P (4) | LR2 | Yes | |||||||
120 | STI Selatar | 2017 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
121 | STI Rambla | 2017 | 109,999 | — | SLR2P (4) | LR2 | Yes | |||||||
122 | STI Gauntlet | 2017 | 113,000 | — | SLR2P (4) | LR2 | Yes | |||||||
123 | STI Gladiator | 2017 | 113,000 | — | SLR2P (4) | LR2 | Yes | |||||||
124 | STI Gratitude | 2017 | 113,000 | — | SLR2P (4) | LR2 | Yes | |||||||
125 | STI Lobelia | 2019 | 110,000 | — | SLR2P (4) | LR2 | Yes | |||||||
126 | STI Lotus | 2019 | 110,000 | — | SLR2P (4) | LR2 | Yes | |||||||
127 | STI Lily | 2019 | 110,000 | — | SLR2P (4) | LR2 | Yes | |||||||
128 | STI Lavender | 2019 | 110,000 | — | SLR2P (4) | LR2 | Yes | |||||||
129 | STI Beryl | 2013 | 49,990 | — | SMRP (2) | MR | Not Yet Installed | (5) | ||||||
130 | STI Le Rocher | 2013 | 49,990 | — | SMRP (2) | MR | Not Yet Installed | (5) | ||||||
131 | STI Larvotto | 2013 | 49,990 | — | SMRP (2) | MR | Not Yet Installed | (5) | ||||||
Total owned, sale leaseback and bareboat chartered-in fleet DWT | 9,223,160 | |||||||||||||
(1 | ) | This vessel operates in the Scorpio Handymax Tanker Pool, or SHTP. SHTP is a Scorpio Pool and is operated by Scorpio Commercial Management S.A.M. (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, or SMRP. SMRP is a Scorpio Pool and is operated by SCM. SMRP and SCM are related parties to the Company. |
(3 | ) | This vessel operates in the Scorpio LR1 Pool, or SLR1P. SLR1P is a Scorpio Pool and is operated by SCM. SLR1P and SCM are related parties to the Company. |
(4 | ) | This vessel operates in or is expected to operate in the Scorpio LR2 Pool, or SLR2P. SLR2P is a Scorpio Pool and is operated by SCM. SLR2P and SCM are related parties to the Company. |
(5 | ) | In April 2017, we sold and leased back this vessel, on a bareboat basis, for a period of up to eight years for $8,800 per day. The sales price was $29.0 million per vessel, and we have the option to purchase this vessel beginning at the end of the fifth year of the agreement through the end of the eighth year of the agreement, at market-based prices. Additionally, a deposit of $4.35 million per vessel was retained by the buyer and will either be applied to the purchase price of the vessel if a purchase option is exercised or refunded to us at the expiration of the agreement. |
Dividend Policy
The declaration and payment of dividends is subject at all times to the discretion of the Company's Board of Directors. The timing and the amount of dividends, if any, depends on the Company's earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.
The Company's dividends paid during 2020 and 2021 were as follows:
Date paid | Dividends per common | |
March 2020 | $0.100 | |
June 2020 | $0.100 | |
September 2020 | $0.100 | |
December 2020 | $0.100 | |
March 2021 | $0.100 | |
On May 6, 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about June 15, 2021 to all shareholders of record as of May 21, 2021 (the record date). As of May 6, 2021, there were 58,369,516 common shares of the Company outstanding.
$250 Million Securities Repurchase Program
In September 2020, 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, in addition to its common shares, currently consist of its Senior Notes due 2025 (NYSE: SBBA), which were originally issued in May 2020, Convertible Notes due 2022, which were issued in May and July 2018, and Convertible Notes due 2025, which were issued in March 2021. No securities have been repurchased under the new program since its inception through the date of this press release.
At the Market Equity Offering Program
In November 2019, the Company entered into an “at the market” offering program (the "ATM Equity Program") pursuant to which it may sell up to $100 million of its common shares, par value $0.01 per share. As part of the ATM Equity Program, the Company entered into an equity distribution agreement dated November 7, 2019 (the “Sales Agreement”), with BTIG, LLC, as sales agent (the "Equity ATM Agent"). In accordance with the terms of the Sales Agreement, the Company may offer and sell its common shares from time to time through the Equity ATM Agent by means of ordinary brokers’ transactions on the NYSE at market prices, in block transactions, or as otherwise agreed upon by the Equity ATM Agent and the Company.
There is $97.4 million of remaining availability under the ATM Program as of May 6, 2021.
About Scorpio Tankers Inc.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns, finance leases or bareboat charters-in 131 product tankers (42 LR2 tankers, 12 LR1 tankers, 63 MR tankers and 14 Handymax tankers) with an average age of 5.3 years. Additional information about the Company is available at the Company's website www.scorpiotankers.com, which is not a part of this press release.
Non-IFRS Measures
Reconciliation of IFRS Financial Information to Non-IFRS Financial Information
This press release describes time charter equivalent revenue, or TCE revenue, adjusted net income or loss, and adjusted EBITDA, which are not measures prepared in accordance with IFRS ("Non-IFRS" measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors and other users of our financial statements, such as our lenders, with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
The Company believes that the presentation of TCE revenue, adjusted net income or loss with adjusted earnings per share, basic and diluted, and adjusted EBITDA are useful to investors or other users of our financial statements, such as our lenders, because they facilitate the comparability and the evaluation of companies in the Company’s industry. In addition, the Company believes that TCE revenue, adjusted net income or loss 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 TCE revenue, adjusted net income or loss with 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.
TCE revenue, on a historical basis, is reconciled above in the section entitled "Explanation of Variances on the First Quarter of 2021 Financial Results Compared to the First Quarter of 2020". The Company has not provided a reconciliation of forward-looking TCE revenue because the most directly comparable IFRS measure on a forward-looking basis is not available to the Company without unreasonable effort.
Reconciliation of Net Loss to Adjusted Net Loss
For the three months ended March 31, 2021 | ||||||||||||||||
Per share | Per share | |||||||||||||||
In thousands of U.S. dollars except per share data | Amount | basic | diluted | |||||||||||||
Net loss | $ | (62,394 | ) | $ | (1.15 | ) | $ | (1.15 | ) | |||||||
Adjustments: | ||||||||||||||||
Loss on Convertible Notes exchange | 3,856 | 0.07 | 0.07 | |||||||||||||
Write-off of deferred financing fees | 1,275 | $ | 0.02 | $ | 0.02 | |||||||||||
Adjusted net loss | $ | (57,263 | ) | $ | (1.05 | ) | (1) | $ | (1.05 | ) | (1) | |||||
(1) Summation difference due to rounding.
There were no Non-IFRS adjustments to the Net Income for the three months ended March 31, 2020.
Reconciliation of Net (Loss) / Income to Adjusted EBITDA
For the three months ended March 31, | ||||||||||
In thousands of U.S. dollars | 2021 | 2020 | ||||||||
Net (loss) / income | $ | (62,394 | ) | $ | 46,627 | |||||
Financial expenses | 34,067 | 44,765 | ||||||||
Loss on Convertible Notes exchange | 3,856 | — | ||||||||
Financial income | (225 | ) | (565 | ) | ||||||
Depreciation - owned or finance leased vessels | 48,784 | 46,841 | ||||||||
Depreciation - right of use assets | 11,841 | 13,197 | ||||||||
Amortization of restricted stock | 6,192 | 7,845 | ||||||||
Adjusted EBITDA | $ | 42,121 | $ | 158,710 | ||||||
Forward-Looking Statements
Matters discussed in this press release may constitute forward‐looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward‐looking statements in order to encourage companies to provide prospective information about their business. Forward‐looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "expect," "anticipate," "estimate," "intend," "plan," "target," "project," "likely," "may," "will," "would," "could" and similar expressions identify forward‐looking statements.
The forward‐looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although management believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, there can be no assurance that the Company will achieve or accomplish these expectations, beliefs or projections. The Company undertakes no obligation, and specifically declines any obligation, except as required by law, to publicly update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.
In addition to these important factors, other important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward‐looking statements include unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, length and severity of the ongoing novel coronavirus (COVID-19) outbreak, including its effect on demand for petroleum products and the transportation thereof, expansion and growth of the Company’s operations, risks relating to the integration of assets or operations of entities that it has or may in the future acquire and the possibility that the anticipated synergies and other benefits of such acquisitions may not be realized within expected timeframes or at all, the failure of counterparties to fully perform their contracts with the Company, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in the Company’s operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company’s vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off‐hires, and other factors. Please see the Company's filings with the SEC for a more complete discussion of certain of these and other risks and uncertainties.
Scorpio Tankers Inc.
212-542-1616
