SBNA - Scorpio Tankers Inc. Announces Financial Results for the Second Quarter of 2019 and Declaration of a Quarterly Dividend

July, 31 2019 06:44 AM Scorpio Tankers Inc. 6.75% Senior Notes due 2020

MONACO, July 31, 2019 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers", or the "Company") today reported its results for the three and six months ended June 30, 2019. 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 June 30, 2019 and 2018

For the three months ended June 30, 2019, the Company's net loss was $29.7 million, or $0.62 basic and diluted loss per share. There were no Non-IFRS adjustments to the net loss for the three months ended June 30, 2019.

For the three months ended June 30, 2018, the Company's adjusted net loss (see Non-IFRS Measures section below) was $44.9 million, or $1.45 basic and diluted loss per share, which excludes from the net loss (i) a $17.0 million loss recorded on the Company's exchange of its Convertible Notes due 2019 for newly issued Convertible Notes due 2022 (the "Convertible Notes Exchange"), and (ii) a $7.0 million write-off of deferred financing fees. The adjustments resulted in an aggregate reduction of the Company’s net loss by $24.0 million or $0.78 per basic and diluted share. For the three months ended June 30, 2018, the Company had a net loss of $68.9 million, or $2.23 basic and diluted loss per share.

Results for the six months ended June 30, 2019 and 2018

For the six months ended June 30, 2019, the Company's adjusted net loss (see Non-IFRS Measures section below) was $15.0 million, or $0.31 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 six months ended June 30, 2019, the Company had a net loss of $15.2 million, or $0.32 basic and diluted loss per share.

For the six months ended June 30, 2018, the Company's adjusted net loss was $76.4 million (see Non-IFRS Measures section below), or $2.47 basic and diluted loss per share, which excludes from the net loss (i) a $17.0 million loss recorded on the Convertible Notes Exchange, (ii) a $7.0 million write off of deferred financing fees, and (iii) $0.3 million of transaction costs related to the merger with Navig8 Product Tankers Inc. The adjustments resulted in an aggregate reduction of the Company's net loss by $24.3 million or $0.79 per basic and diluted share. For the six months ended June 30, 2018, the Company had a net loss of $100.7 million, or $3.26 basic and diluted loss per share.

Declaration of Dividend

On July 30, 2019, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about September 27, 2019 to all shareholders of record as of September 10, 2019 (the record date). As of July 30, 2019, there were 51,845,390 common shares of the Company outstanding.

Summary of Other Recent and Second 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 third 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: an average of approximately $14,200 per day for 50% of the days.
For the LR1s in the pool: an average of approximately $15,000 per day for 40% of the days.
For the MRs in the pool: an average of approximately $14,300 per day for 40% of the days.
For the ice-class 1A Handymaxes in the pool: an average of approximately $10,200 per day for 35% of the days.

• Below is a summary of the average daily TCE revenue earned on the Company's vessels during the second quarter of 2019:

For the LR2s in the pool: an average of $16,974 per revenue day.
For the LR1s in the pool: an average of $14,527 per revenue day.
For the MRs in the pool: an average of $13,436 per revenue day.
For the ice-class 1A Handymaxes in the pool: an average of $11,802 per revenue day.

• The Company has received commitments for seven different facilities to partially finance the purchase and installation of exhaust gas cleaning systems, or "scrubbers" on certain of the Company's vessels. These commitments are expected to increase the Company’s liquidity by approximately $87 million. Additionally, the Company is in discussions with a different group of financial institutions to finance the purchase of scrubbers which, if consummated, expect to increase the Company’s liquidity by an additional $35 million. All of these agreements are expected to be signed in the next few months and the drawdowns will occur as the scrubbers are installed throughout the remainder of 2019 and 2020.

• In June 2019, the Company paid a quarterly cash dividend with respect to the first quarter of 2019 on the Company's common stock of $0.10 per common share.

• In July 2019, the Company’s Convertible Notes due 2019 matured and the outstanding balance of $142.7 million was fully repaid in cash upon maturity.

$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 Unsecured Senior Notes due 2020 (NYSE: SBNA), which were issued in May 2014, and Convertible Notes due 2022, which were issued in May and July 2018.

As of the date hereof, the Company has the authority to purchase up to an additional $121.6 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, which were issued in June 2014 (and matured in July 2019), and Convertible Notes due 2022, which were issued in May and July 2018, were converted into common shares at the beginning of each period and the interest and non-cash amortization expense associated with these notes of $6.1 million and $12.1 million during the three and six months ended June 30, 2019, respectively, were not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.

For the three and six months ended June 30, 2019, the Company's basic weighted average number of shares were 48,148,885 and 48,109,924, respectively. For the three and six months ended June 30, 2019, the Company's diluted weighted average number of shares were 49,446,801 and 49,194,463 respectively, excluding the impact of the Convertible Notes due 2019 and Convertible Notes due 2022, and 56,104,777 and 55,822,804, respectively, under the if-converted method.

The weighted average number of shares, both diluted and under the if-converted method, were anti-dilutive for the three and six months ended June 30, 2019 as the Company incurred net losses during those periods.

The Company’s Convertible Notes due 2019 matured in July 2019 and the outstanding balance of $142.7 million was fully repaid in cash upon maturity. As of the date hereof, the Company's trading stock price is below the conversion price of the Convertible Notes due 2022.

Conference Call

The Company has scheduled a conference call on July 31, 2019 at 9:00 AM Eastern Daylight Time and 3:00 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: 7477236

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/mmc/p/mavm58wd

Current Liquidity

As of July 30, 2019, the Company had $307.3 million in unrestricted cash and cash equivalents. The Company’s Convertible Notes due 2019 matured in July 2019 and the outstanding balance of $142.7 million was fully repaid in cash upon maturity.

Drydock, Scrubber and Ballast Water Treatment Update

The following drydock, scrubber and ballast water treatment activity occurred during the second quarter of 2019:

Three LR2 tankers completed their scrubber installations during the second quarter of 2019 for aggregate costs of $8.6 million (which includes the cost of the scrubber and related installation costs) and incurred an aggregate of 108 offhire days.
Three MR tankers completed their class required special surveys and scrubber installations during the second quarter of 2019 for aggregate costs of $9.5 million (which includes the drydock along with the cost of the scrubber and related installation costs) and incurred an aggregate of 165 offhire days.
One ice-class 1A Handymax tanker completed its class required special survey and ballast water treatment system installation during the second quarter of 2019 for aggregate costs of $2.7 million (which includes the drydock along with the cost of the ballast water treatment system and related installation costs) and incurred an aggregate of 27 offhire days.
One LR2 tanker entered drydock for its scrubber installation during the second quarter of 2019, and the installation is expected to be completed during the third quarter of 2019. The aggregate cost of the installation is expected to be $2.5 million (which includes the cost of the scrubber and related installation costs), and this vessel was offhire for 2 days during the second quarter of 2019.
Three MR tankers entered drydock for their class required special surveys, ballast water treatment system installations, and scrubber installations during the second quarter of 2019, all of which are expected to be completed during the third quarter of 2019. The aggregate costs are expected to be approximately $13.0 million (which includes the drydock along with the cost of the scrubbers, ballast water treatment systems and all related installation costs), and these vessels were offhire for an aggregate of 37 days during the second quarter of 2019.
Two ice-class 1A Handymax tankers entered drydock for their class required special surveys and ballast water treatment system installations during the second quarter of 2019, which were completed during the third quarter of 2019. The aggregate cost is expected to be $4.0 million (which includes the drydock along with the cost of the ballast water treatment system and related installation costs), and these vessels were offhire for an aggregate of 46 days during the second quarter of 2019.

Set forth below are the estimated expected payments for the Company's drydocks, ballast water treatment system installations, and scrubber installations through 2020 (which also include actual payments made during the third quarter of 2019 through the date of this press release):

In millions of U.S. dollars
As of July 30, 2019 ⁽¹⁾
Q3 2019 - payments made through July 30, 2019
$
10.6

Q3 2019 - remaining payments
63.8

Q4 2019
90.3

Q1 2020
45.8

Q2 2020
30.4

Q3 2020
28.4

Q4 2020
11.4

⁽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.

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


Q3 2019


Ships Scheduled for:
Offhire

Drydock
Ballast Water Treatment Systems
Scrubbers
Days
LR2
5

4

13

371

LR1
—

—

6

168

MR
9

8

9

280

Handymax
5

5

—

102






Total Q3 2019
19

17

28

921







Q4 2019


Ships Scheduled for:
Offhire

Drydock
Ballast Water Treatment Systems
Scrubbers
Days
LR2
10

8

13

357

LR1
—

—

1

28

MR
9

7

9

245

Handymax
5

5

—

100






Total Q4 2019
24

20

23

730







Q1 2020


Ships Scheduled for:
Offhire

Drydock
Ballast Water Treatment Systems
Scrubbers
Days
LR2
1

—

2

55

LR1
—

—

—

—

MR
4

4

10

278

Handymax
2

2

—

40






Total Q1 2020
7

6

12

373







Q2 2020


Ships Scheduled for:
Offhire

Drydock
Ballast Water Treatment Systems
Scrubbers
Days
LR2
4

—

4

108

LR1
—

—

—

—

MR
3

3

6

167

Handymax
—

—

—

—






Total Q2 2020
7

3

10

275







Q3 2020


Ships Scheduled for:
Offhire

Drydock
Ballast Water Treatment Systems
Scrubbers
Days
LR2
2

—

2

54

LR1
5

—

5

135

MR
—

—

6

168

Handymax
—

—

—

—






Total Q3 2020
7

—

13

357







Q4 2020


Ships Scheduled for:
Offhire

Drydock
Ballast Water Treatment Systems
Scrubbers
Days
LR2
—

—

—

—

LR1
—

—

—

—

MR
—

—

2

56

Handymax
—

—

—

—






Total Q4 2020
—

—

2

56

⁽²⁾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.

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 Principal as of March 31, 2019
Repayments
Outstanding Principal as of June 30, 2019
Repayments
Outstanding Principal as of July 30, 2019
1
KEXIM Credit Facility

$
282,475

$
—

$
282,475

$
(4,300
)
$
278,175

2
ABN AMRO Credit Facility

98,369

(2,139
)
96,230

(537
)
95,693

3
ING Credit Facility

140,992

(3,184
)
137,808

(1,071
)
136,737

4
$35.7 Million Term Loan Facility

34,042

(808
)
33,234

(808
)
32,426

5
2017 Credit Facility

141,449

(3,316
)
138,133

—

138,133

6
Credit Agricole Credit Facility

97,153

(2,142
)
95,011

—

95,011

7
ABN AMRO/K-Sure Credit Facility

48,567

(963
)
47,604

—

47,604

8
Citi/K-Sure Credit Facility

101,546

(2,104
)
99,442

—

99,442

9
ABN AMRO/SEB Credit Facility

111,950

(2,875
)
109,075

—

109,075

10
Ocean Yield Lease Financing

157,664

(2,649
)
155,015

(917
)
154,098

11
CMBFL Lease Financing

60,744

(1,227
)
59,517

—

59,517

12
BCFL Lease Financing (LR2s)

98,933

(1,881
)
97,052

(636
)
96,416

13
CSSC Lease Financing

242,199

(4,327
)
237,872

(1,442
)
236,430

14
BCFL Lease Financing (MRs)

96,191

(2,768
)
93,423

(902
)
92,521

15
2018 CMB Lease Financing

134,014

(2,529
)
131,485

—

131,485

16
$116.0 Million Lease Financing

111,103

(1,672
)
109,431

(539
)
108,892

17
AVIC International Lease Financing

136,155

(2,948
)
133,207

—

133,207

18
China Huarong Shipping Lease Financing

133,875

(3,375
)
130,500

—

130,500

19
$157.5 Million Lease Financing

148,550

(3,536
)
145,014

—

145,014

20
COSCO Lease Financing

82,225

(1,925
)
80,300

—

80,300

21
IFRS 16 - Leases - 3 MRs

49,374

(1,711
)
47,663

(558
)
47,105

22
IFRS 16 - Leases - 7 Handymax

24,102

(3,692
)
20,410

(1,272
)
19,138

23
2020 Senior Unsecured Notes

53,750

—

53,750

—

53,750

24
Convertible Notes due 2019

142,708

—

142,708

(142,708
)
—

25
Convertible Notes due 2022

203,500

—

203,500

—

203,500




$
2,931,630

$
(51,771
)
$
2,879,859

$
(155,690
)
$
2,724,169

Set forth below are the estimated expected future principal repayments on the Company's outstanding indebtedness as of June 30, 2019, which includes principal amounts due under lease financing arrangements and lease liabilities under IFRS 16 (which also include actual payments made during the third quarter of 2019 through the date of this press release):



In millions of U.S. dollars
Q3 2019 - principal payments made through July 30, 2019 ⁽¹⁾

$
155.7

Q3 2019 - remaining principal payments

55.9

Q4 2019

52.2

Q1 2020

69.1

Q2 2020 ⁽²⁾

104.6

Q3 2020 ⁽³⁾

153.1

Q4 2020

48.6

2021 and thereafter

2,240.7



$
2,879.9

Repayments include $142.7 million that was repaid in July 2019 upon the maturity of the Company's Convertible Notes due 2019.
Repayments include $53.8 million due upon the maturity of the Company's Senior Unsecured Notes due 2020.
Repayments include $87.7 million due upon the maturity of the Company's ABN AMRO Credit Facility.

Explanation of Variances on the Second Quarter of 2019 Financial Results Compared to the Second Quarter of 2018

For the three months ended June 30, 2019, the Company recorded a net loss of $29.7 million compared to a net loss of $68.9 million for the three months ended June 30, 2018. 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 June 30, 2019 and 2018:




For the three months ended June 30,
In thousands of U.S. dollars

2019

2018

Vessel revenue

$
150,805


$
141,795


Voyage expenses

(1,328
)

(1,033
)

TCE revenue

$
149,477


$
140,762

TCE revenue for the three months ended June 30, 2019 increased by $8.7 million to $149.5 million, from $140.8 million for the three months ended June 30, 2018. This increase was the result of modest, quarter over quarter improvements in TCE revenue per day across all of the Company's operating segments. Overall average TCE revenue per day increased to $14,348 per day during the three months ended June 30, 2019, from $12,301 per day during the three months ended June 30, 2018. The product tanker market experienced a period of prolonged weakness during the first nine months of 2018 culminating with a sharp recovery that began in the fourth quarter of 2018. While the second quarter of 2019 reflected an improvement over the same period during 2018, this recovery abated during the second quarter of 2019 as the product tanker market experienced headwinds, primarily as a result of a longer than usual refinery maintenance season which negatively impacted demand, particularly in our MR and Handymax operating segments. This increase in TCE revenue per day was partially offset by a reduction of the Company's fleet to an average of 119.0 operating vessels during the three months ended June 30, 2019 from an average of 127.0 operating vessels during the three months ended June 30, 2018, which was the result of the redelivery of 11 time chartered-in vessels throughout 2018 and in the first quarter of 2019.
Vessel operating costs for the three months ended June 30, 2019 remained consistent, decreasing slightly by $0.7 million to $68.8 million, from $69.5 million for the three months ended June 30, 2018. The Company’s average number of owned or bareboat chartered-in vessels remained consistent at 119.0 vessels for the three months ended June 30, 2019 and for the three months ended June 30, 2018.
Charterhire expense for the three months ended June 30, 2019 decreased by $17.2 million to $0.0 million, from $17.2 million for the three months ended June 30, 2018. This decrease was the result of (i) a decrease in the number of time chartered-in vessels when comparing the three months ended June 30, 2019 to the three months ended June 30, 2018, and (ii) the implementation of IFRS 16 - Leases beginning on January, 1, 2019. The Company's time and bareboat chartered-in fleet consisted of 10.0 bareboat chartered-in vessels for the three months ended June 30, 2019, and the Company's time and bareboat chartered-in fleet consisted of an average of 8.0 time chartered-in vessels and 10.0 bareboat chartered-in vessels for the three months ended June 30, 2018. As of June 30, 2019, we had 10 bareboat chartered-in vessels, which are being accounted for under IFRS 16 as right of use assets and related lease liabilities. Under IFRS 16, there is no charterhire expense for these vessels as the right of use assets are depreciated on a straight line basis (through depreciation expense) over the lease term and the lease liability is amortized over that same period (with a portion of each payment allocated to principal and a portion allocated to interest expense).
Depreciation expense - owned or finance leased vessels for the three months ended June 30, 2019 remained consistent, increasing slightly by $0.3 million to $44.4 million, from $44.1 million for the three months ended June 30, 2018. Depreciation expense in future periods is expected to increase as the Company installs ballast water treatment systems and scrubbers on its vessels in 2019 and 2020. The Company expects to depreciate the majority of the cost of this equipment over each vessels’ remaining useful life.
Depreciation expense - right of use assets for the three months ended June 30, 2019 was $5.9 million. Depreciation expense - right of use assets reflects the straight-line depreciation expense recorded during the three months ended June 30, 2019 as a result of the Company's transition to IFRS 16 - Leases on January 1, 2019. Right of use asset depreciation is approximately $0.2 million per vessel per month for all 10 vessels that the Company currently bareboat charters-in.
General and administrative expenses for the three months ended June 30, 2019 increased by $2.2 million to $15.5 million, from $13.3 million for the three months ended June 30, 2018. This increase was primarily driven by compensation expenses, including a slight increase in restricted stock amortization. General and administrative expenses in future periods are expected to reflect a similar run-rate to that which was incurred in the second quarter of 2019.
Financial expenses for the three months ended June 30, 2019 decreased by $1.6 million to $47.3 million, from $48.9 million for the three months ended June 30, 2018. The Company wrote off $7.0 million of deferred financing fees during the three months ended June 30, 2018 as a result of the various refinancing initiatives that the Company entered into during that period. There were no write-offs of deferred financing fees during the three months ended June 30, 2019. Excluding these write-offs, financial expenses increased during the second quarter of 2019 primarily a result of (i) increases in LIBOR rates as compared to the three months ended June 30, 2018, (ii) an increase in the Company's average debt to $2.9 billion during the three months ended June 30, 2019 from $2.8 billion during the three months ended June 30, 2018 as a result of the Company's refinancing initiatives that were executed in the second, third and fourth quarters of 2018 and (iii) increased borrowing costs associated with the Company's lease financing arrangements that were entered into during 2018. If LIBOR rates remain consistent, financial expenses in future periods are expected to reflect a similar run-rate to that which was incurred in the second quarter of 2019 as increased finance costs resulting from drawdowns on the Company’s scrubber financing program are expected to be offset by (i) the reduction in interest expense attributable to the July 2019 repayment of the Company’s Convertible Notes due 2019, and (ii) scheduled amortization on the Company’s existing credit facilities.

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



For the three months ended June 30,

For the six months ended June 30,
In thousands of U.S. dollars except per share and share data
2019

2018

2019

2018
Revenue








Vessel revenue
$
150,805


$
141,795


346,635


$
298,241










Operating expenses








Vessel operating costs
(68,776
)

(69,474
)

(138,152
)

(139,904
)

Voyage expenses
(1,328
)

(1,033
)

(1,622
)

(4,372
)

Charterhire
—


(17,157
)

(4,399
)

(35,169
)

Depreciation - owned or finance leased vessels
(44,369
)

(44,092
)

(88,183
)

(87,547
)

Depreciation - right of use assets
(5,895
)

—


(8,030
)

—


General and administrative expenses
(15,528
)

(13,346
)

(31,240
)

(26,972
)

Merger transaction related costs
—


(7
)

—


(271
)

Total operating expenses
(135,896
)

(145,109
)

(271,626
)

(294,235
)
Operating income / (loss)
14,909


(3,314
)

75,009


4,006

Other (expense) and income, net








Financial expenses
(47,327
)

(48,949
)

(96,083
)

(88,367
)

Loss on exchange of convertible notes
—


(16,968
)

—


(16,968
)

Financial income
2,725


345


5,843


730


Other expenses, net
(27
)

(15
)

(13
)

(96
)

Total other expense, net
(44,629
)

(65,587
)

(90,253
)

(104,701
)
Net loss
$
(29,720
)

$
(68,901
)

$
(15,244
)

$
(100,695
)









Loss per share

















Basic
$
(0.62
)

$
(2.23
)

$
(0.32
)

$
(3.26
)

Diluted
$
(0.62
)

$
(2.23
)

$
(0.32
)

$
(3.26
)

Basic weighted average shares outstanding
48,148,885


30,957,545


48,109,924


30,891,470


Diluted weighted average shares outstanding ⁽¹⁾
48,148,885


30,957,545


48,109,924


30,891,470

⁽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 and six months ended June 30, 2019 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 56,104,777 and 55,822,804 for the three and six months ended June 30, 2019, respectively.

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


As of
In thousands of U.S. dollars
June 30, 2019

December 31, 2018
Assets



Current assets



Cash and cash equivalents
$
467,219


$
593,652

Accounts receivable
56,469


69,718

Prepaid expenses and other current assets
15,845


15,671

Inventories
8,761


8,300

Total current assets
548,294


687,341

Non-current assets



Vessels and drydock
3,955,446


3,997,789

Right of use assets
67,266


—

Other assets
97,233


75,210

Goodwill
11,539


11,539

Restricted cash
12,294


12,285

Total non-current assets
4,143,778


4,096,823

Total assets
$
4,692,072


$
4,784,164

Current liabilities



Current portion of long-term debt
$
295,543


$
297,934

Finance lease liability
115,689


114,429

Lease liability - IFRS 16
20,708


—

Accounts payable
15,354


11,865

Accrued expenses
29,175


22,972

Total current liabilities
476,469


447,200

Non-current liabilities



Long-term debt
1,094,910


1,192,000

Finance lease liability
1,248,231


1,305,952

Lease liability - IFRS 16
47,364


—

Total non-current liabilities
2,390,505


2,497,952

Total liabilities
2,866,974


2,945,152

Shareholders' equity



Issued, authorized and fully paid-in share capital:



Share capital
580


5,776

Additional paid-in capital
2,657,375


2,648,599

Treasury shares
(467,056
)

(467,056
)
Accumulated deficit ⁽¹⁾
(365,801
)

(348,307
)
Total shareholders' equity
1,825,098


1,839,012

Total liabilities and shareholders' equity
$
4,692,072


$
4,784,164

⁽¹⁾ Accumulated deficit reflects the impact of the adoption of IFRS 16, Leases. IFRS 16 amended the existing accounting standards to require lessees to recognize, on a discounted basis, the rights and obligations created by the commitment to lease assets on the balance sheet, unless the term of the lease is 12 months or less. Accordingly, the standard resulted in the recognition of right-of-use assets and corresponding liabilities, on the basis of the discounted remaining future minimum lease payments, relating to the existing bareboat chartered-in vessel commitments for three bareboat chartered-in vessels, which are scheduled to expire in April 2025. Upon transition, a lessee shall apply IFRS 16 to its leases either retrospectively to each prior reporting period presented (the ‘full retrospective approach’) or retrospectively with the cumulative effect of initially applying IFRS 16 recognized at the date of initial application (the ‘modified retrospective approach’). We applied the modified retrospective approach upon transition. The impact of the application of this standard on the opening balance sheet as of January 1, 2019 was the recognition of a $48.5 million right of use asset, a $50.7 million operating lease liability and a $2.2 million reduction in retained earnings relating to these three vessels.

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


For the six months ended June 30,
In thousands of U.S. dollars
2019

2018
Operating activities



Net loss
$
(15,244
)

$
(100,695
)
Depreciation - owned or finance leased vessels
88,183


87,547

Depreciation - right of use assets
8,030


—

Amortization of restricted stock
13,859


13,180

Amortization of deferred financing fees
4,088


6,191

Write-off of deferred financing fees
275


7,035

Accretion of convertible notes
6,995


6,435

Accretion of fair value measurement on debt assumed in business combinations
1,827


1,909

Loss on exchange of convertible notes
—


16,968


108,013


38,570

Changes in assets and liabilities:



(Increase) / decrease in inventories
(461
)

1,473

Decrease in accounts receivable
13,248


15,039

(Increase) / decrease in prepaid expenses and other current assets
(175
)

4,620

Increase in other assets
(2,807
)

(3,576
)
Increase in accounts payable
1,187


2,767

Increase / (decrease) in accrued expenses
2,272


(6,165
)

13,264


14,158

Net cash inflow from operating activities
121,277


52,728

Investing activities



Acquisition of vessels and payments for vessels under construction
—


(26,057
)
Drydock, scrubber, ballast water treatment and other vessel related payments (owned, finance leased and bareboat-in vessels)
(59,688
)

(2,136
)
Net cash outflow from investing activities
(59,688
)

(28,193
)
Financing activities



Debt repayments
(166,729
)

(167,491
)
Issuance of debt
—


142,025

Debt issuance costs
(1,288
)

(13,473
)
Principal repayments on lease liability - IFRS 16
(7,129
)

—

Increase in restricted cash
(9
)

(897
)
Repayment of convertible notes
(2,292
)

—

Equity issuance costs
(295
)

(4
)
Dividends paid
(10,279
)

(6,579
)
Repurchase of common stock
(1
)

—

Net cash outflow from financing activities
(188,022
)

(46,419
)
Decrease in cash and cash equivalents
(126,433
)

(21,884
)
Cash and cash equivalents at January 1,
593,652


186,462

Cash and cash equivalents at June 30,
$
467,219


$
164,578

Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three and six months ended June 30, 2019 and 2018
(unaudited)



For the three months ended June 30,

For the six months ended June 30,


2019

2018

2019

2018
Adjusted EBITDA⁽¹⁾ (in thousands of U.S. dollars except Fleet Data)

$
71,821


$
47,300


$
185,068


$
104,908










Average Daily Results








Time charter equivalent per day⁽²⁾

$
14,348


$
12,301


$
16,470


$
12,816

Vessel operating costs per day⁽³⁾

$
6,351


6,391


$
6,414


$
6,507










LR2








TCE per revenue day⁽²⁾

$
16,974


$
12,861


$
19,948


$
13,572

Vessel operating costs per day⁽³⁾

$
6,687


6,436


$
6,748


$
6,650

Average number of owned or finance leased vessels

38.0


38.0


38.0


38.0

Average number of time chartered-in vessels

—


2.0


—


1.7










LR1








TCE per revenue day⁽²⁾

$
14,527


$
11,090


$
16,221


$
10,608

Vessel operating costs per day⁽³⁾

$
6,159


$
6,613


$
6,377


$
6,805

Average number of owned or finance leased vessels

12.0


12.0


12.0


12.0

Average number of time chartered-in vessels

—


—


—


—










MR








TCE per revenue day⁽²⁾

$
13,436


$
12,567


$
14,594


$
13,049

Vessel operating costs per day⁽³⁾

$
6,148


$
6,392


$
6,235


$
6,384

Average number of owned or finance leased vessels

45.0


45.0


45.0


44.8

Average number of time chartered-in vessels

—


5.6


0.2


5.9

Average number of bareboat chartered-in vessels

3.0


3.0


3.0


3.0










Handymax








TCE per revenue day⁽²⁾

$
11,520


$
11,267


$
14,644


$
12,096

Vessel operating costs per day⁽³⁾

$
6,318


$
6,183


$
6,240


$
6,357

Average number of owned or finance leased vessels

14.0


14.0


14.0


14.0

Average number of time chartered-in vessels

—


0.3


—


1.1

Average number of bareboat chartered-in vessels

7.0


7.0


7.0


7.0










Fleet data








Average number of owned or finance leased vessels

109.0


109.0


109.0


108.8

Average number of time chartered-in vessels

—


8.0


0.2


8.7

Average number of bareboat chartered-in vessels

10.0


10.0


10.0


10.0










Drydock








Drydock, scrubber, ballast water treatment and other vessel related payments for owned, finance leased and bareboat chartered-in vessels (in thousands of U.S. dollars)

$
41,448


$
1,698


$
59,688


$
2,136

(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 July 30, 2019


Vessel Name

Year Built

DWT

Ice class

Employment

Vessel type

Owned or finance leased vessels










1
STI Brixton

2014

38,734


1A

SHTP (1)

Handymax
2
STI Comandante

2014

38,734


1A

SHTP (1)

Handymax
3
STI Pimlico

2014

38,734


1A

SHTP (1)

Handymax
4
STI Hackney

2014

38,734


1A

SHTP (1)

Handymax
5
STI Acton

2014

38,734


1A

SHTP (1)

Handymax
6
STI Fulham

2014

38,734


1A

SHTP (1)

Handymax
7
STI Camden

2014

38,734


1A

SHTP (1)

Handymax
8
STI Battersea

2014

38,734


1A

SHTP (1)

Handymax
9
STI Wembley

2014

38,734


1A

SHTP (1)

Handymax
10
STI Finchley

2014

38,734


1A

SHTP (1)

Handymax
11
STI Clapham

2014

38,734


1A

SHTP (1)

Handymax
12
STI Poplar

2014

38,734


1A

SHTP (1)

Handymax
13
STI Hammersmith

2015

38,734


1A

SHTP (1)

Handymax
14
STI Rotherhithe

2015

38,734


1A

SHTP (1)

Handymax
15
STI Amber

2012

49,990


—

SMRP (2)

MR
16
STI Topaz

2012

49,990


—

SMRP (2)

MR
17
STI Ruby

2012

49,990


—

SMRP (2)

MR
18
STI Garnet

2012

49,990


—

SMRP (2)

MR
19
STI Onyx

2012

49,990


—

SMRP (2)

MR
20
STI Fontvieille

2013

49,990


—

SMRP (2)

MR
21
STI Ville

2013

49,990


—

SMRP (2)

MR
22
STI Duchessa

2014

49,990


—

SMRP (2)

MR
23
STI Opera

2014

49,990


—

SMRP (2)

MR
24
STI Texas City

2014

49,990


—

SMRP (2)

MR
25
STI Meraux

2014

49,990


—

SMRP (2)

MR
26
STI San Antonio

2014

49,990


—

SMRP (2)

MR
27
STI Venere

2014

49,990


—

SMRP (2)

MR
28
STI Virtus

2014

49,990


—

SMRP (2)

MR
29
STI Aqua

2014

49,990


—

SMRP (2)

MR
30
STI Dama

2014

49,990


—

SMRP (2)

MR
31
STI Benicia

2014

49,990


—

SMRP (2)

MR
32
STI Regina

2014

49,990


—

SMRP (2)

MR
33
STI St. Charles

2014

49,990


—

SMRP (2)

MR
34
STI Mayfair

2014

49,990


—

SMRP (2)

MR
35
STI Yorkville

2014

49,990


—

SMRP (2)

MR
36
STI Milwaukee

2014

49,990


—

SMRP (2)

MR
37
STI Battery

2014

49,990


—

SMRP (2)

MR
38
STI Soho

2014

49,990


—

SMRP (2)

MR
39
STI Memphis

2014

49,990


—

SMRP (2)

MR
40
STI Tribeca

2015

49,990


—

SMRP (2)

MR
41
STI Gramercy

2015

49,990


—

SMRP (2)

MR
42
STI Bronx

2015

49,990


—

SMRP (2)

MR
43
STI Pontiac

2015

49,990


—

SMRP (2)

MR
44
STI Manhattan

2015

49,990


—

SMRP (2)

MR
45
STI Queens

2015

49,990


—

SMRP (2)

MR
46
STI Osceola

2015

49,990


—

SMRP (2)

MR
47
STI Notting Hill

2015

49,687


1B

SMRP (2)

MR
48
STI Seneca

2015

49,990


—

SMRP (2)

MR
49
STI Westminster

2015

49,687


1B

SMRP (2)

MR
50
STI Brooklyn

2015

49,990


—

SMRP (2)

MR
51
STI Black Hawk

2015

49,990


—

SMRP (2)

MR
52
STI Galata

2017

49,990


—

SMRP (2)

MR
53
STI Bosphorus

2017

49,990


—

SMRP (2)

MR
54
STI Leblon

2017

49,990


—

SMRP (2)

MR
55
STI La Boca

2017

49,990


—

SMRP (2)

MR
56
STI San Telmo

2017

49,990


1B

SMRP (2)

MR
57
STI Donald C Trauscht

2017

49,990


1B

SMRP (2)

MR
58
STI Esles II

2018

49,990


1B

SMRP (2)

MR
59
STI Jardins

2018

49,990


1B

SMRP (2)

MR
60
STI Excel

2015

74,000


—

SLR1P (3)

LR1
61
STI Excelsior

2016

74,000


—

SLR1P (3)

LR1
62
STI Expedite

2016

74,000


—

SLR1P (3)

LR1
63
STI Exceed

2016

74,000


—

SLR1P (3)

LR1
64
STI Executive

2016

74,000


—

SLR1P (3)

LR1
65
STI Excellence

2016

74,000


—

SLR1P (3)

LR1
66
STI Experience

2016

74,000


—

SLR1P (3)

LR1
67
STI Express

2016

74,000


—

SLR1P (3)

LR1
68
STI Precision

2016

74,000


—

SLR1P (3)

LR1
69
STI Prestige

2016

74,000


—

SLR1P (3)

LR1
70
STI Pride

2016

74,000


—

SLR1P (3)

LR1
71
STI Providence

2016

74,000


—

SLR1P (3)

LR1
72
STI Elysees

2014

109,999


—

SLR2P (4)

LR2
73
STI Madison

2014

109,999


—

SLR2P (4)

LR2
74
STI Park

2014

109,999


—

SLR2P (4)

LR2
75
STI Orchard

2014

109,999


—

SLR2P (4)

LR2
76
STI Sloane

2014

109,999


—

SLR2P (4)

LR2
77
STI Broadway

2014

109,999


—

SLR2P (4)

LR2
78
STI Condotti

2014

109,999


—

SLR2P (4)

LR2
79
STI Rose

2015

109,999


—

SLR2P (4)

LR2
80
STI Veneto

2015

109,999


—

SLR2P (4)

LR2
81
STI Alexis

2015

109,999


—

SLR2P (4)

LR2
82
STI Winnie

2015

109,999


—

SLR2P (4)

LR2
83
STI Oxford

2015

109,999


—

SLR2P (4)

LR2
84
STI Lauren

2015

109,999


—

SLR2P (4)

LR2
85
STI Connaught

2015

109,999


—

SLR2P (4)

LR2
86
STI Spiga

2015

109,999


—

SLR2P (4)

LR2
87
STI Savile Row

2015

109,999


—

SLR2P (4)

LR2
88
STI Kingsway

2015

109,999


—

SLR2P (4)

LR2
89
STI Carnaby

2015

109,999


—

SLR2P (4)

LR2
90
STI Solidarity

2015

109,999


—

SLR2P (4)

LR2
91
STI Lombard

2015

109,999


—

SLR2P (4)

LR2
92
STI Grace

2016

109,999


—

SLR2P (4)

LR2
93
STI Jermyn

2016

109,999


—

SLR2P (4)

LR2
94
STI Sanctity

2016

109,999


—

SLR2P (4)

LR2
95
STI Solace

2016

109,999


—

SLR2P (4)

LR2
96
STI Stability

2016

109,999


—

SLR2P (4)

LR2
97
STI Steadfast

2016

109,999


—

SLR2P (4)

LR2
98
STI Supreme

2016

109,999


—

SLR2P (4)

LR2
99
STI Symphony

2016

109,999


—

SLR2P (4)

LR2
100
STI Gallantry

2016

113,000


—

SLR2P (4)

LR2
101
STI Goal

2016

113,000


—

SLR2P (4)

LR2
102
STI Nautilus

2016

113,000


—

SLR2P (4)

LR2
103
STI Guard

2016

113,000


—

SLR2P (4)

LR2
104
STI Guide

2016

113,000


—

SLR2P (4)

LR2
105
STI Selatar

2017

109,999


—

SLR2P (4)

LR2
106
STI Rambla

2017

109,999


—

SLR2P (4)

LR2
107
STI Gauntlet

2017

113,000


—

SLR2P (4)

LR2
108
STI Gladiator

2017

113,000


—

SLR2P (4)

LR2
109
STI Gratitude

2017

113,000


—

SLR2P (4)

LR2













Total owned or finance leased DWT



7,883,190


Vessel Name

Year Built

DWT

Ice class

Employment

Vessel type

Charter type

Daily Base Rate

Expiry (5)


Bareboat chartered-in vessels

















110
Silent

2007

37,847


1A

SHTP (1)

Handymax

Bareboat

$
6,300


31-Mar-20
(6
)
111
Single

2007

37,847


1A

SHTP (1)

Handymax

Bareboat

$
6,300


31-Mar-20
(6
)
112
Star I

2007

37,847


1A

SHTP (1)

Handymax

Bareboat

$
6,300


31-Mar-20
(6
)
113
Sky

2007

37,847


1A

SHTP (1)

Handymax

Bareboat

$
6,300


31-Mar-21
(7
)
114
Steel

2008

37,847


1A

SHTP (1)

Handymax

Bareboat

$
6,300


31-Mar-21
(7
)
115
Stone I

2008

37,847


1A

SHTP (1)

Handymax

Bareboat

$
6,300


31-Mar-21
(7
)
116
Style

2008

37,847


1A

SHTP (1)

Handymax

Bareboat

$
6,300


31-Mar-21
(7
)
117
STI Beryl

2013

49,990


—

SMRP (2)

MR

Bareboat

$
8,800


18-Apr-25
(8
)
118
STI Le Rocher

2013

49,990


—

SMRP (2)

MR

Bareboat

$
8,800


21-Apr-25
(8
)
119
STI Larvotto

2013

49,990


—

SMRP (2)

MR

Bareboat

$
8,800


28-Apr-25
(8
)




















Total bareboat chartered-in DWT



414,899


































Total Fleet DWT



8,298,089

(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., or SCM. SHTP and SCM are related parties to the Company.
(2
)
This vessel operates 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 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
)
Redelivery from the charterer is plus or minus 30 days from the expiry date.
(6
)
In March 2019, the Company entered into a new bareboat charter-in agreement on this vessel for a period of one year at $6,300 per day.
(7
)
In March 2019, the Company entered into a new bareboat charter-in agreement on this vessel for a period of two years at $6,300 per day.
(8
)
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, 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 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 2018 and 2019 were as follows:

Date paid
Dividends per common share
March 2018
$0.100
June 2018
$0.100
September 2018
$0.100
December 2018
$0.100
March 2019
$0.100
June 2019
$0.100

On July 30, 2019, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per share, payable on or about September 27, 2019 to all shareholders of record as of September 10, 2019 (the record date). As of July 30, 2019, there were 51,845,390 of the common shares of the Company outstanding.

Securities Repurchase Program

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns or finance leases 109 product tankers (38 LR2 tankers, 12 LR1 tankers, 45 MR tankers and 14 Handymax tankers) with an average age of 4.0 years and bareboat charters-in 10 product tankers (three MR tankers and seven Handymax tankers). 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 or loss 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 or loss 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 or loss 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 is reconciled above in the section entitled 'Explanation of Variances on the Second Quarter of 2019 Financial Results Compared to the Second Quarter of 2018'.

Reconciliation of Net Loss to Adjusted Net Loss

There were no Non-IFRS adjustments to the Net Loss for the three months ended June 30, 2019.




For the three months ended June 30, 2018





Per share

Per share
In thousands of U.S. dollars except per share data

Amount

basic

diluted

Net loss

$
(68,901
)

$
(2.23
)

$
(2.23
)

Adjustments:







Merger transaction related costs

7


0.00


0.00


Deferred financing fees write-off

7,035


0.23


0.23


Loss on exchange of convertible notes

16,968


0.55


0.55


Adjusted net loss

$
(44,891
)

$
(1.45
)

$
(1.45
)




For the six months ended June 30, 2019





Per share

Per share
In thousands of U.S. dollars except per share data

Amount

basic

diluted

Net loss

$
(15,244
)

$
(0.32
)

$
(0.32
)

Adjustment:







Deferred financing fees write-off

275


0.01


0.01


Adjusted net loss

$
(14,969
)

$
(0.31
)

$
(0.31
)




For the six months ended June 30, 2018





Per share

Per share
In thousands of U.S. dollars except per share data

Amount

basic

diluted

Net loss

$
(100,695
)

$
(3.26
)

$
(3.26
)

Adjustments:







Merger transaction related costs

271


0.01


0.01


Deferred financing fees write-off

7,035


0.23


0.23


Loss on exchange of convertible notes

16,968


0.55


0.55


Adjusted net loss

$
(76,421
)

$
(2.47
)

$
(2.47
)

Reconciliation of Net Loss to Adjusted EBITDA




For the three months ended June 30,

For the six months ended June 30,
In thousands of U.S. dollars

2019

2018

2019

2018

Net loss

$
(29,720
)

$
(68,901
)

$
(15,244
)

$
(100,695
)

Financial expenses

47,327


48,949


96,083


88,367


Financial income

(2,725
)

(345
)

(5,843
)

(730
)

Depreciation - owned or finance leased vessels

44,369


44,092


88,183


87,547


Depreciation - right of use assets

5,895


—


8,030


—


Merger transaction related costs

—


7


—


271


Amortization of restricted stock

6,675


6,530


13,859


13,180


Loss on exchange of convertible notes

—


16,968


—


16,968


Adjusted EBITDA

$
71,821


$
47,300


$
185,068


$
104,908

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, 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

Company Name:	Scorpio Tankers Inc. 6.75% Senior Notes due 2020
Stock Symbol:	SBNA
Market:	NYSE

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