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Scorpio Tankers Inc. Announces Financial Results for the Fourth Quarter of 2018, Declaration of a Quarterly Dividend, and Notice for the Redemption of its 8.25% Senior Unsecured Notes due June 2019

Scorpio Tankers Inc. Announces Financial Results for the Fourth Quarter of 2018, Declaration of a Quarterly Dividend, and Notice for the Redemption of its 8.25% Senior Unsecured Notes due June 2019

MONACO, Feb. 14, 2019 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (STNG) ("Scorpio Tankers", or the "Company") today reported its results for the three months and year ended December 31, 2018.  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 and that it intends to redeem in full its 8.25% Senior Unsecured Notes, which are scheduled to mature in June 2019.

Share and per share results included herein have been retroactively adjusted to reflect the one for ten reverse stock split of the Company's common shares, which took effect on January 18, 2019.

Results for the three months ended December 31, 2018 and 2017

For the three months ended December 31, 2018, the Company's adjusted net loss (see Non-IFRS Measures section below) was $17.4 million, or $0.38 basic and diluted loss per share, which excludes from the net loss a $0.3 million, or $0.01 per basic and diluted share, write-off of deferred financing fees. For the three months ended December 31, 2018, the Company had a net loss of $17.7 million, or $0.38 basic and diluted loss per share.

For the three months ended December 31, 2017, the Company's adjusted net loss (see Non-IFRS Measures section below) was $39.2 million, or $1.38 basic and diluted loss per share, which excludes from the net loss (i) $1.3 million of transaction costs related to the merger with Navig8 Product Tankers Inc ("NPTI") and (ii) a $1.0 million write-off of deferred financing fees. The adjustments resulted in an aggregate reduction of the Company’s net loss by $2.3 million, or $0.08 per basic and diluted share. For the three months ended December 31, 2017, the Company had a net loss of $41.5 million, or $1.46 basic and diluted loss per share.

Results for the year ended December 31, 2018 and 2017

For the year ended December 31, 2018, the Company's adjusted net loss was $158.7 million (see Non-IFRS Measures section below), or $4.56 basic and diluted loss per share, which excludes from the net loss (i) an aggregate loss of $17.8 million  recorded on the Company's exchange of an aggregate of $203.5 million of its convertible notes in the second and third quarters of 2018, (ii) a $13.2 million write-off of deferred financing fees, and (iii) $0.3 million of transaction costs related to the merger with NPTI.  The adjustments resulted in an aggregate reduction of the Company's net loss by $31.3 million or $0.90 per basic and diluted share. For the year ended December 31, 2018, the Company had a net loss of $190.1 million, or $5.46 basic and diluted loss per share.

For the year ended December 31, 2017, the Company's adjusted net loss was $101.7 million (see Non-IFRS Measures section below), or $4.72 basic and diluted loss per share, which excludes from the net loss (i) a $23.3 million loss on sales of vessels, (ii) $36.1 million of transaction costs related to the merger with NPTI, (iii) a $5.4 million gain recorded on the purchase of the four NPTI subsidiaries that own four LR1 tankers, and (iv) a $2.5 million write-off of deferred financing fees. The adjustments resulted in an aggregate reduction of the Company's net loss by $56.5 million, or $2.62 per basic and diluted share.  For the year ended December 31, 2017, the Company had a net loss of $158.2 million, or $7.35 basic and diluted loss per share.

Intention to redeem all of the Company's 8.25% Senior Unsecured Notes due June 2019

The Company has announced that it has issued a notice of redemption for all $57,500,000 aggregate principal amount of its 8.25% Senior Unsecured Notes due June 2019 (the "Senior Notes Due June 2019") to be redeemed on March 18, 2019 (the "Redemption Date").  The redemption price of the Senior Notes Due June 2019 is equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the Redemption Date. A notice of redemption is being distributed to all registered holders of the Senior Notes Due June 2019 by Deutsche Bank Trust Company Americas.

January 2019 Reverse Stock Split

On January 18, 2019, the Company effected a one-for-ten reverse stock split. The Company's shareholders approved the reverse stock split and change in authorized common shares at the Company's special meeting of shareholders held on January 15, 2019. Pursuant to this reverse stock split, the total number of authorized common shares was reduced to 150.0 million shares and common shares outstanding were reduced from 513,975,324 shares to 51,397,470 shares (which reflects adjustments for fractional share settlements). The par value was not adjusted as a result of the reverse stock split.  All share and per share information contained in this press release has been retroactively adjusted to reflect the reverse stock split.

The Company believes that the increased market price for its common shares as a result of implementing the reverse stock split has and will improve the marketability and liquidity of the Company's common shares and will encourage interest and trading in the Company's common shares. In addition, the Company believes that a number of institutional investors and investment funds are reluctant to invest, and in some cases may be prohibited from investing, in lower-priced stocks and that brokerage firms are reluctant to recommend lower-priced stocks to their clients. By effecting a reverse stock split, the Company believes it may be able to raise the market price of its common shares to a level where its common shares could be viewed more favorably by potential investors. Other investors may also be dissuaded from purchasing lower-priced stocks because brokerage commissions, as a percentage of the total transaction, tend to be higher for lower-priced stocks. A higher share price after a reverse stock split could alleviate this concern.

There can be no assurance that the reverse stock split will achieve any of the desired results.

Declaration of Dividend

On February 13, 2019, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about March 28, 2019 to all shareholders of record as of March 13, 2019 (the record date).  As of February 13, 2019, there were 51,397,470 common shares outstanding.

Summary of Other Recent and Fourth Quarter Significant Events

  • Below is a summary of the average daily Time Charter Equivalent (TCE) revenue (see Non-IFRS Measures section below) and duration for voyages fixed for the Company's vessels thus far in the first quarter of 2019 as of the date hereof (See footnotes to 'Other operating data' table below for the definition of daily TCE revenue):

    -- For the LR2s in the pool: approximately $24,000 per day for 60% of the days.

    -- For the LR1s in the pool: approximately $19,000 per day for 55% of the days.

    -- For the MRs in the pool: approximately $17,000 per day for 55% of the days.

    -- For the ice-class 1A and 1B Handymaxes in the pool: approximately $18,000 per day for 50% of the days.

  • Below is a summary of the average daily TCE revenue earned on the Company's vessels during the fourth quarter of 2018:

    -- For the LR2s in the pool: $15,948 per revenue day.

    -- For the LR1s in the pool: $13,548 per revenue day.

    -- For the MRs in the pool: $14,338 per revenue day.

    -- For the ice-class 1A and 1B Handymaxes in the pool: $14,749 per revenue day.

  • During November 2018, December 2018 and January 2019, the Company repurchased 1,351,265 of its common shares at an average price of $17.20 per share under its Securities Repurchase Program.

  • From August 2018 through November 2018, the Company entered into agreements with two separate suppliers to retrofit a total of 77 of the Company's tankers with Exhaust Gas Cleaning Systems ("Scrubbers"), which are expected to be installed throughout 2019 and 2020.  The Company also obtained options to retrofit 18 additional tankers under these agreements. The total estimated investment for these systems, including estimated installation costs, is expected to be between $2.0 and $2.5 million per vessel and the Company is currently in discussions with potential lenders to finance a portion (approximately 60-70%) of these investments.  The Company's estimates of future payments and offhire days under these agreements are described below under the heading Drydock, Scrubber and Ballast Water Treatment Update.

  • In December 2018, the Company paid a quarterly cash dividend with respect to the fourth quarter of 2018 on the Company's common stock of $0.10 per share.

  • In October 2018, the Company closed on the previously announced agreement to refinance seven of its vessels through a $157.5 million lease financing arrangement.  This transaction is described below and was part of the Company's previously announced refinancing initiatives.

  • In October 2018, the Company raised net proceeds of approximately $319.6 million in an underwritten public offering of 18.2 million shares of common stock (including 2.0 million shares of common stock issued when the underwriters partially exercised their overallotment option to purchase additional shares) at a public offering price of $18.50 per share.  Scorpio Bulkers Inc., or SALT, and Scorpio Services Holding Limited, or SSH, each a related party, purchased 5.4 million common shares and 0.5 million common shares, respectively, at the public offering price.

$157.5 Million Sale and Leaseback

In July 2018, the Company agreed to sell and leaseback six MR product tankers (STI San Antonio, STI Benicia, STI St. Charles, STI Yorkville, STI Mayfair and STI Duchessa) and one LR2 product tanker (STI Alexis) to an international financial institution.  The borrowing amount under the arrangement was $157.5 million in aggregate, and these agreements, which have been accounted for as financing arrangements, closed in October 2018.  In September 2018, the Company repaid the outstanding indebtedness for two vessels consisting of $14.2 million on the HSH Credit Facility and $13.6 million on the K-Sure Credit Facility, in advance of the October closing of these transactions. Upon closing, the remaining proceeds were partially utilized to repay the outstanding indebtedness of $59.2 million on the 2016 Credit Facility and the outstanding indebtedness of $25.8 million on the DVB 2017 Credit Facility for the remaining five vessels.

Each agreement is for a fixed term of seven years, and the Company has options to purchase the vessels beginning at the end of the third year of each agreement.  The leases bear interest at LIBOR plus a margin of 3.0% per annum and will be repaid in equal quarterly principal installments of $0.5 million per MR and $0.6 million for the LR2.  Each agreement also has a purchase obligation at the end of the seventh year.  The Company is subject to certain additional terms and conditions under this arrangement, including financial covenants, which are similar to those set forth in its existing lease financing arrangements.

$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, in addition to its common shares, currently consist of its (i) Convertible Notes due 2019, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (SBNA), which were issued in May 2014, (iii) Senior Notes Due June 2019 (SBBC), which were issued in March 2017, and (iv) Convertible Notes due 2022, which were issued in May and July 2018.

Since January 2018 through the date of this press release, the Company has acquired an aggregate of 1,351,265 of its common shares at an average price of $17.20 per share; the repurchased shares are being held as treasury shares. There are 51,397,470 shares outstanding as of February 13, 2019.

As of the date hereof, the Company has the authority to purchase up to an additional $123.8 million of its securities under its Securities Repurchase Program. The Company may repurchase its securities in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the Securities Repurchase Program to repurchase any of its securities.

Diluted Weighted Number of Shares

Diluted earnings per share is determined using the if-converted method. Under this method, the Company assumes that its Convertible Notes due 2019 and Convertible Notes due 2022 (which were issued in June 2014 and May 2018, respectively) were converted into common shares at the beginning of each period and the interest and non-cash amortization expense associated with these notes of $6.0 million and $23.5 million during the three months and year ended December 31, 2018, respectively, were not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.

For the three months and year ended December 31, 2018, the Company's basic weighted average number of shares was 46,382,795 and 34,824,311, respectively.  The weighted average number of shares, both diluted and under the if-converted method, were anti-dilutive for the three months and year ended December 31, 2018, respectively, as the Company incurred net losses.

As of the date hereof, the Convertible Notes due 2019 and Convertible Notes due 2022 are not eligible for conversion.

Conference Call

The Company has scheduled a conference call on February 14, 2019 at 8:30 AM Eastern Standard Time and 2:30 PM Central European 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: 8498535

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.

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://edge.media-server.com/m6/p/p9aq9fjc 

Current Liquidity

As of February 13, 2019, the Company had $607.4 million in unrestricted cash and cash equivalents.

Drydock, Scrubber and Ballast Water Treatment Update

Two of the Company's 2014 built MRs entered drydock for their class required special survey at the end of December 2018.  These drydocks were completed in January 2019.

Set forth below are the expected, estimated payments through 2020 for the Company's drydocks, ballast water treatment system installations, and scrubber installations:

In millions of USD As of February 13, 2019 (1)
Q1 2019 $ 29.9
Q2 2019 56.3
Q3 2019 71.2
Q4 2019 89.8
FY 2020 81.8

(1)     Includes estimated cash payments for drydock, ballast water treatment systems and scrubbers.  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.

Set forth below are the expected, estimated number of ships and estimated offhire days for the Company's drydocks ("DD"), ballast water treatment installations (“BWTS”), and scrubber installations (2):

  Q1 2019  
  Ships Scheduled for: Offhire
  DD BWTS Scrubbers Days
LR2 2 72
LR1
MR* 3 2 1 76
Handymax
         
Q1 2019 3 2 3 148

* Q1 2019 MR drydocks include two vessels which entered drydock at the end of December 2018 and concluded in January 2019.

  Q2 2019  
  Ships Scheduled for: Offhire
  DD BWTS Scrubbers Days
LR2 6 168
LR1 3 84
MR 7 5 7 189
Handymax 2 2 40
         
Q2 2019 9 7 16 481
         
  Q3 2019  
  Ships Scheduled for: Offhire
  DD BWTS Scrubbers Days
LR2 5 4 10 279
LR1 3 84
MR 6 4 6 162
Handymax 5 5 100
         
Q3 2019 16 13 19 625
         
  Q4 2019  
  Ships Scheduled for: Offhire
  DD BWTS Scrubbers Days
LR2 10 8 12 329
LR1 1 28
MR 10 9 10 270
Handymax 5 5 100
         
Q4 2019 25 22 23 727
         
  FY 2020  
  Ships Scheduled for: Offhire
  DD BWTS Scrubbers Days
LR2 7 8 217
LR1 5 5 135
MR 4 4 21 584
Handymax 2 2 40
         
2020 Total 18 6 34 976

(2) The number of vessels in these tables reflect a certain amount of overlap where certain vessels may 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.

Debt

Set forth below is a summary of the Company’s outstanding indebtedness as of the dates presented:

  In thousands of U.S. dollars   Outstanding
as of
September
30, 2018
Drawdowns,
and
(repayments),
net
Outstanding
as of
December
31, 2018
Drawdowns,
and
(repayments),
net
Outstanding
as of
February
13, 2019
1 KEXIM Credit Facility   299,300     299,300   (4,300 ) 295,000  
2 ABN AMRO Credit Facility   102,646   (2,138 ) 100,508   (1,602 ) 98,906  
3 ING Credit Facility   147,361   (3,185 ) 144,176   (1,071 ) 143,105  
4 $35.7 Million Term Loan Facility   35,658   (808 ) 34,850   (808 ) 34,042  
5 2016 Credit Facility   59,189   (59,189 )      
6 2017 Credit Facility   147,398   (2,632 ) 144,766     144,766  
7 DVB 2017 Credit Facility   25,800   (25,800 )      
8 Credit Agricole Credit Facility   101,437   (2,142 ) 99,295     99,295  
9 ABN AMRO/K-Sure Credit Facility   50,492   (962 ) 49,530     49,530  
10 Citi/K-Sure Credit Facility   105,754   (2,104 ) 103,650     103,650  
11 ABN AMRO/SEB Credit Facility   117,700   (2,875 ) 114,825     114,825  
12 Ocean Yield Lease Financing   162,947   (2,685 ) 160,262   (921 ) 159,341  
13 CMBFL Lease Financing   63,198   (1,227 ) 61,971     61,971  
14 BCFL Lease Financing (LR2s)   102,633   (1,844 ) 100,789   (617 ) 100,172  
15 CSSC Lease Financing   250,854   (4,328 ) 246,526   (1,442 ) 245,084  
16 BCFL Lease Financing (MRs)   101,478   (2,647 ) 98,831   (920 ) 97,911  
17 2018 CMB Lease Financing   139,071   (2,528 ) 136,543   (2,529 ) 134,014  
18 $116.0 Million Lease Financing
  114,255   (1,582 ) 112,673   (558 ) 112,115  
19 AVIC International Lease Financing   142,052   (2,949 ) 139,103     139,103  
20 China Huarong Shipping Lease Financing   140,625   (3,375 ) 137,250     137,250  
21 $157.5 Million Lease Financing     152,086   152,086     152,086  
22 $88.0 Million Lease Financing   86,075   (1,925 ) 84,150     84,150  
23 2020 Senior Unsecured Notes   53,750     53,750     53,750  
24 2019 Senior Unsecured Notes   57,500     57,500     57,500  
25 Convertible Notes due 2019   145,000     145,000     145,000  
26 Convertible Notes due 2022   203,500     203,500     203,500  
      $ 2,955,673   $ 25,161   $ 2,980,834   $ (14,768 ) $ 2,966,066  
                                   

Set forth below are the expected, estimated future principal repayments on the Company's outstanding indebtedness which includes principal amounts due under lease financing arrangements:

 In millions of U.S. dollars As of February 13, 2019
Q1 2019 - principal payments made to date $ 14.8  
Q1 2019 - remaining principal payments (1) 105.6  
Q2 2019 46.4  
Q3 2019 (2) 208.4  
Q4 2019 46.6  
Q1 2020 63.5  
Q2 2020 (3) 100.6  
Q3 2020 (4) 149.0  
Q4 2020 44.4  
2021 and thereafter 2,201.5  
   
  $ 2,980.8  

(1)  Repayments include $57.5 million due as part of the early redemption of the Company's Senior Notes Due June 2019.

(2)  Repayments include $145.0 million due upon the maturity of the Company's Convertible Notes due 2019.

(3)  Repayments include $53.8 million due upon the maturity of the Company's Senior Unsecured Notes due 2020.

(4)  Repayments include $87.7 million due upon the maturity of the Company's ABN AMRO Credit Facility.

Explanation of Variances on the Fourth Quarter of 2018 Financial Results Compared to the Fourth Quarter of 2017

For the three months ended December 31, 2018, the Company recorded a net loss of $17.7 million compared to a net loss of $41.5 million for the three months ended December 31, 2017. 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 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 December 31, 2018 and 2017:
       
      For the three months ended December 31,
In thousands of U.S. dollars   2018   2017
  Vessel revenue   $167,525     $148,394  
  Voyage expenses   (304 )   (3,013 )
  TCE revenue   $ 167,221     $ 145,381  
  • TCE revenue for the three months ended December 31, 2018 increased $21.8 million to $167.2 million, from $145.4 million for the three months ended December 31, 2017. This increase was the result of an improvement in TCE revenue per day, which increased to $15,008 per day during the three months ended December 31, 2018, from $12,805 per day during the three months ended December 31, 2017.  The fourth quarter of 2018, particularly November and December, reflected a dramatic improvement in the product tanker market, which had experienced significant headwinds since the latter half of 2016.  The positive trends developed as a result of a confluence of factors, including (i) increased U.S. Gulf exports to Latin America, (ii) the opening of arbitrage windows on several trading routes, (iii) the reduction of oil prices followed by a reduction in refined commodities leading to an increase in demand for refined commodities, (iv) the continued drawdown of global product inventories thus increasing the need for imports at the points of consumption, and (v) strength in the crude tanker market earlier in the quarter resulting in certain product tankers transitioning to the trading of crude and related cargos.  This increase in TCE revenue per day was partially offset by a reduction of the Company's fleet to an average of 121.9 operating vessels during the three months ended December 31, 2018 from an average of 125.5 operating vessels during the three months ended December 31, 2017, which was the result of the redelivery of 10 time chartered-in vessels throughout 2018.

  • Vessel operating costs for the three months ended December 31, 2018 decreased $3.6 million to $71.2 million, from $74.8 million for the three months ended December 31, 2017.  This decrease was primarily due to take over costs that the Company incurred for 10 vessels acquired from NPTI that transitioned technical management during the three months ended December 31, 2017.  These costs included additional crew severance and repatriation costs along with the costs for new spares, stores and other supplies.  No such costs were incurred during the three months ended December 31, 2018.

    This decrease was partially offset by an increase in the average number of owned and bareboat chartered-in vessels for the three months ended December 31, 2018 to 119.0 vessels from 116.7 vessels for the three months ended December 31, 2017, which is due to the delivery of two vessels under the Company's newbuilding program during the first quarter of 2018.

  • Charterhire expense for the three months ended December 31, 2018 decreased $7.3 million to $10.6 million, from $18.0 million for the three months ended December 31, 2017.  This decrease was the result of a decrease in the number of time chartered-in vessels during those periods.  The Company's time and bareboat chartered-in fleet consisted of an average of 2.9 time chartered-in vessels and 10.0 bareboat chartered-in vessels for the three months ended December 31, 2018, and the Company's time and bareboat chartered-in fleet consisted of an average of 8.8 time chartered-in vessels and 10.0 bareboat chartered-in vessels for the three months ended December 31, 2017.  The average daily base rates on the Company's time chartered-in fleet during the three months ended December 31, 2018 and December 31, 2017 were $13,517 per vessel per day and $13,681 per vessel per day, respectively.  The average daily base rates for the Company's bareboat chartered-in fleet during the three months ended December 31, 2018 and December 31, 2017 were $7,656 per vessel per day and $7,362 per vessel per day, respectively.

  • Depreciation expense for the three months ended December 31, 2018 increased $1.1 million to $44.6 million, from $43.5 million for the three months ended December 31, 2017.  This increase was primarily driven by the delivery of two MRs under the Company's newbuilding program in January 2018.

  • Financial expenses for the three months ended December 31, 2018 increased $9.5 million to $48.2 million, from $38.6 million for the three months ended December 31, 2017. The increase in financial expenses was primarily a result of (i) increases in LIBOR rates as compared to the three months ended December 31, 2017, (ii) an increase in the Company's average debt to $2.9 billion during the three months ended December 31, 2018 from $2.8 billion during the three months ended December 31, 2017 as a result of the Company's previously announced refinancing initiatives and (iii) increased borrowing costs associated with the Company's lease financing arrangements that were entered into during 2018.


Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statements of Income or Loss
(unaudited)

  For the three months ended
December 31,
  For the year ended
December 31,
In thousands of U.S. dollars except per share and share data 2018   2017   2018   2017
Revenue  
                         
  Vessel revenue $ 167,525     $ 148,394     $ 585,047     $ 512,732  
                 
Operating expenses              
  Vessel operating costs (71,219 )   (74,824 )   (280,460 )   (231,227 )
  Voyage expenses (304 )   (3,013 )   (5,146 )   (7,733 )
  Charterhire (10,644 )   (17,959 )   (59,632 )   (75,750 )
  Depreciation (44,592 )   (43,535 )   (176,723 )   (141,418 )
  General and administrative expenses (12,927 )   (11,370 )   (52,272 )   (47,511 )
  Loss on sale of vessels             (23,345 )
  Merger transaction related costs     (1,299 )   (272 )   (36,114 )
  Bargain purchase gain             5,417  
  Total operating expenses (139,686 )   (152,000 )   (574,505 )   (557,681 )
Operating income / (loss) 27,839     (3,606 )   10,542     (44,949 )
Other (expense) and income, net              
  Financial expenses (48,156 )   (38,619 )   (186,628 )   (116,240 )
  Loss on exchange of convertible notes         (17,838 )    
  Realized loss on derivative financial instruments             (116 )
  Financial income 2,908     384     4,458     1,538  
  Other expenses, net (259 )   332     (605 )   1,527  
  Total other expense, net (45,507 )   (37,903 )   (200,613 )   (113,291 )
Net loss $ (17,668 )   $ (41,509 )   $ (190,071 )   $ (158,240 )
                 
Loss per share              
                 
  Basic $ (0.38 )   $ (1.46 )   $ (5.46 )   $ (7.35 )
  Diluted $ (0.38 )   $ (1.46 )   $ (5.46 )   $ (7.35 )
  Basic weighted average shares outstanding 46,382,795     28,366,872     34,824,311     21,533,340  
  Diluted weighted average shares outstanding (1) 46,382,795     28,366,872     34,824,311     21,533,340  

(1) The dilutive effect of (i) unvested shares of restricted stock and (ii) the potentially dilutive securities relating to the Company's Convertible Notes due 2019 and Convertible Notes due 2022 were excluded from the computation of diluted earnings per share for the three months and year ended December 31, 2018 because their effect would have been anti-dilutive. Weighted average shares under the if-converted method (which includes the potential dilutive effect of the unvested shares of restricted stock, the Convertible Notes due 2019, and the Convertible Notes due 2022) were 53,232,552 and 40,788,217 for the three months and year ended December 31, 2018, respectively.


Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)

     
  As of
In thousands of U.S. dollars
 December 31, 2018    December 31, 2017
Assets            
Current assets            
Cash and cash equivalents $ 593,652     $ 186,462  
Accounts receivable 67,207     65,458  
Prepaid expenses and other current assets 18,182     17,720  
Inventories 8,300     9,713  
Total current assets 687,341     279,353  
Non-current assets      
Vessels and drydock 3,997,789     4,090,094  
Vessels under construction     55,376  
Other assets 75,210     50,684  
Goodwill 11,539     11,482  
Restricted cash 12,285     11,387  
Total non-current assets 4,096,823     4,219,023  
Total assets $ 4,784,164     $ 4,498,376  
Current liabilities      
Current portion of long-term debt $ 297,934     $ 113,036  
Finance lease liability 114,429     50,146  
Accounts payable 11,865     13,044  
Accrued expenses 22,973     32,838  
Total current liabilities 447,201     209,064  
Non-current liabilities      
Long-term debt 1,192,000     1,937,018  
Finance lease liability 1,305,952     666,993  
Total non-current liabilities 2,497,952     2,604,011  
Total liabilities 2,945,153     2,813,075  
Shareholders' equity      
Issued, authorized and fully paid-in share capital:      
Share capital 5,776     3,766  
Additional paid-in capital 2,648,599     2,283,591  
Treasury shares (467,056 )   (443,816 )
Accumulated deficit (1) (348,308 )   (158,240 )
Total shareholders' equity 1,839,011     1,685,301  
Total liabilities and shareholders' equity $ 4,784,164     $ 4,498,376  

(1)  Accumulated deficit reflects the impact of the adoption of IFRS 15, Revenue from Contracts with Customers, which is effective for annual periods beginning on January 1, 2018.  The standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption (the "modified retrospective method"). We have applied the modified retrospective method upon the date of transition.  Accordingly, the cumulative effect of the application of this standard resulted in a $3,888 reduction in the opening balance of Accumulated deficit on January 1, 2018.


Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited)

  For the year ended December 31,
In thousands of U.S. dollars 2018     2017
Operating activities              
Net loss $ (190,071 )   $ (158,240 )
Loss on sales of vessels     23,345  
Depreciation 176,723     141,418  
Amortization of restricted stock 25,547     22,385  
Amortization of deferred financing fees 10,541     13,381  
Write-off of deferred financing fees 13,212     2,467  
Bargain purchase gain     (5,417 )
Share-based transaction costs     5,973  
Accretion of convertible notes 13,225     12,211  
Accretion of fair value measurement on debt assumed from NPTI 3,779     1,478  
Loss on exchange of convertible notes 17,838      
  70,794     59,001  
Changes in assets and liabilities:      
Decrease / (increase) in inventories 1,535     (1,319 )
Increase in accounts receivable (1,788 )   (1,478 )
(Increase) / decrease in prepaid expenses and other current assets (163 )   12,219  
Increase in other assets (1,226 )   (22,651 )
(Decrease) / increase in accounts payable (1,382 )   3,694  
Decrease in accrued expenses (9,980 )   (7,665 )
  (13,004 )   (17,200 )
Net cash inflow from operating activities 57,790     41,801  
Investing activities      
Acquisition of vessels and payments for vessels under construction (26,057 )   (258,311 )
Proceeds from disposal of vessels     127,372  
Net cash paid for the merger with NPTI     (23,062 )
Drydock, scrubber and BWTS payments (owned and bareboat-in vessels) (26,680 )   (5,922 )
Net cash outflow from investing activities (52,737 )   (159,923 )
Financing activities      
Debt repayments (865,594 )   (546,296 )
Issuance of debt 1,007,298     525,642  
Debt issuance costs (23,056 )   (11,758 )
Refund of debt issuance costs due to early debt repayment 2,826      
Increase in restricted cash (897 )   (2,279 )
Gross proceeds from issuance of common stock 337,000     303,500  
Equity issuance costs (17,073 )   (15,056 )
Dividends paid (15,127 )   (9,561 )
Redemption of NPTI Redeemable Preferred Shares     (39,495 )
Repurchase of common stock (23,240 )    
Net cash inflow from financing activities 402,137     204,697  
Increase in cash and cash equivalents 407,190     86,575  
Cash and cash equivalents at January 1, 186,462     99,887  
Cash and cash equivalents at December 31, $ 593,652     $ 186,462  


Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three months and year ended December 31, 2018 and 2017
(unaudited)

null
    For the three months ended
December 31,
  For the year ended
December 31,
    2018   2017   2018   2017
Adjusted EBITDA(1)  (in thousands of U.S. dollars)   $ 78,316     $ 46,464     $ 212,479     $ 174,307  
Average Daily Results                                
Time charter equivalent per day(2)   $ 15,008     $ 12,805     $ 12,782     $ 13,146  
Vessel operating costs per day(3)   $ 6,505     $ 6,971     $ 6,463     $ 6,559  
                 
LR2                
TCE per revenue day (2)   $ 16,228     $ 15,005     $ 13,968     $ 14,849  
Vessel operating costs per day(3)   $ 6,574     $ 7,187     $ 6,631     $ 6,705  
Average number of owned or finance leased vessels   38.0     38.0     38.0     27.5  
Average number of time chartered-in vessels   1.0     1.0     1.5     1.2  
                 
LR1                
TCE per revenue day (2)   $ 13,548     $ 11,275     $ 10,775     $ 11,409  
Vessel operating costs per day(3)   $ 6,595     $ 7,488     $ 6,608     $ 7,073  
Average number of owned or finance leased vessels   12.0     12.0     12.0     4.9  
Average number of time chartered-in vessels               0.4  
                 
MR                
TCE per revenue day (2)   $ 14,412     $ 12,377     $ 12,589     $ 12,975  
Vessel operating costs per day(3)   $ 6,504     $ 6,662     $ 6,366     $ 6,337  
Average number of owned or finance leased vessels   45.0     42.7     44.9     41.7  
Average number of time chartered-in vessels   1.9     5.9     4.3     6.7  
Average number of bareboat chartered-in vessels