Scorpio Tankers Inc. Announces Financial Results for the First Quarter of 2015 and Declaration of a Quarterly Dividend
(firmenpresse) - MONACO -- (Marketwired) -- 04/27/15 -- Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers," or the "Company") today reported its results for the three months ended March 31, 2015.
For the three months ended March 31, 2015, the Company''s adjusted net income was $39.3 million (see Non-GAAP Measures section below), or $0.26 basic and $0.24 diluted earnings per share, which excludes (i) a gain of $2.0 million, or $0.01 per basic and diluted shares, related to the closing of the sales of Venice, STI Harmony and STI Heritage and (ii) an unrealized loss on derivative financial instruments of $0.6 million, or $0.00 per basic and diluted shares (see non-GAAP Measures section below). For the three months ended March 31, 2015, the Company had net income of $40.7 million, or $0.27 basic and $0.25 diluted earnings per share.
For the three months ended March 31, 2015, the Company''s basic and diluted weighted average number of shares were 151,838,124 and 186,916,874, respectively. The diluted weighted average number of shares includes the potentially dilutive shares relating to our Convertible Senior Notes due 2019 (the "Convertible Notes") representing 30,679,767 potential common shares (see below for further information).
For the three months ended March 31, 2014, the Company''s adjusted net income was $1.9 million (see Non-GAAP Measure section below), or $0.01 basic and diluted earnings per share, which excludes (i) a gain of $51.4 million, or $0.27 per share, resulting from the sales of seven Very Large Crude Carriers (''VLCCs'') under construction, and (ii) an unrealized gain on derivative financial instruments of $47,000 or $0.00 per share. For the three months ended March 31, 2014, the Company had net income of $53.3 million, or $0.28 basic and diluted earnings per share.
On April 27, 2015, the Scorpio Tankers'' board of directors declared a quarterly cash dividend of $0.125 per share, payable on June 10, 2015 to all shareholders as of May 21, 2015 (the record date). As of April 27, 2015 there were 163,827,903 shares outstanding.
Diluted earnings per share for the three months ended March 31, 2015 includes the potentially dilutive shares relating to the Convertible Notes representing 30,679,767 potential common shares. The Convertible Notes were issued in June 2014. The dilutive impact of the Convertible Notes is determined using the if-converted method. Under this method, we assume that the Convertible Notes are converted into common shares during the period and the interest and non-cash amortization expense of $5.3 million associated with these notes is not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive. The Convertible Notes are currently ineligible for conversion.
Below is a summary of the voyages fixed thus far in the second quarter of 2015:
For the LR2s: approximately $29,000 per day for 48% of the days
For the LR1s: approximately $24,000 per day for 48% of the days
For the MRs: approximately $23,000 per day for 35% of the days
For the Handymaxes: approximately $20,000 per day for 37% of the days
Recently took delivery of two vessels under the Company''s Newbuilding Program, one LR2, STI Oxford and one MR, STI Queens.
Took delivery of 11 vessels under the Company''s Newbuilding Program (four LR2, five MR, and two ice-class 1A Handymax) during the first quarter of 2015.
Received commitments from two leading European financial institutions for two separate loan facilities of up to $113.2 million in aggregate to partially finance the purchase of four LR2 product tankers that was announced in December 2014.
Paid a quarterly cash dividend on the Company''s common stock of $0.12 per share in March 2015.
The Company took delivery of two vessels under its Newbuilding Program in April 2015.
STI Oxford, an LR2 product tanker, was delivered from Hyundai Samho Heavy Industries Co. Ltd. ("HSHI"). Upon delivery, this vessel began a voyage for 50 days at approximately $41,000 per day.
STI Queens, an MR product tanker, was delivered from SPP Shipbuilding Co., Ltd. of South Korea ("SPP"). Upon delivery, this vessel began a time charter for up to 120 days at approximately $18,000 per day.
The Company has taken delivery of 13 vessels under its Newbuilding Program with HSHI, Hyundai Mipo Dockyard Co. Ltd. ("HMD"), SPP, Daewoo Shipbuilding and Marine Engineering Co. Ltd. ("DSME") and Daehan Shipbuilding Co. Ltd., ("DHSC") during 2015. These deliveries are summarized as follows:
In February 2015, the Company took delivery of a previously announced time chartered-in LR2 tanker that was under construction in South Korea. The vessel is chartered-in for one year at $21,050 per day, and the Company also has an option to extend the charter for one year at $22,600 per day. Upon delivery from the shipyard, this vessel began a voyage for 54 days at approximately $31,000 per day.
In February 2015, the Company extended the time charter on an LR2 tanker that is currently time chartered-in. The term of the agreement is for six months at $16,250 per day beginning in March 2015.
In February 2015, the Company extended the time charter on an LR1 tanker that is currently time chartered-in. The term of the agreement is for one year at $16,250 per day beginning in March 2015.
In March 2015, the Company extended the time charter on an MR tanker that is currently time chartered-in. The term of the agreement is for one year at $15,200 per day beginning in May 2015.
In April 2015, the Company time chartered-in an MR product tanker that is currently under construction in South Korea with delivery expected in May 2015. Upon delivery from the shipyard, the vessel will be chartered-in for three years at $17,034 per day.
In April 2015, the Company time chartered-in an MR product tanker for six months at $15,250 per day. We also have two consecutive options to extend the charter for an additional six month and one year periods at $15,250 per day and $16,350 per day, respectively. Delivery is expected in May 2015.
In April 2015, the Company extended the time charter on an LR2 product tanker that is currently time chartered-in. The term of the agreement is for one year at $24,875 per day beginning in September 2015. We also have an option to extend the charter for an additional year at $26,925 per day.
In March 2015, we received a commitment from a leading European financial institution for a loan facility of up to $52.0 million. The proceeds of this facility will be used to finance a portion of the purchase price of two LR2 product tankers currently under construction at DHSC with expected deliveries in the first and second quarters of 2016. This loan facility has a final maturity of seven years from the date of signing and bears interest at LIBOR plus a margin of 1.95% per annum. This facility is subject to customary conditions precedent and the execution of definitive documentation.
In March 2015, we received a commitment from a leading European financial institution for a loan facility of up to $61.2 million. The proceeds of this facility will be used to finance a portion of the purchase price of two LR2 product tankers currently under construction at Sungdong Shipbuilding & Marine Engineering Co. Ltd. ("SSME") with expected deliveries in the third and fourth quarters of 2016. This loan facility has a final maturity of five years from the date of delivery of each vessel and bears interest at LIBOR plus a margin ranging between 1.95% and 2.40% per annum (depending on the advance ratio). This facility is subject to customary conditions precedent and the execution of definitive documentation.
In March 2015, we entered into a term margin loan facility with Nomura Securities International, Inc. ("Nomura") for up to $30.0 million. All of the shares that we own in Dorian LPG Ltd. have been pledged as collateral under this facility, and we are subject to certain covenants, including a loan to value ratio based on the amount outstanding and the market value of the shares that are collateral. Interest on the facility is LIBOR plus 4.50% per annum and the facility matures in March 2016, which can be extended to March 2017 at Nomura''s option. The outstanding balance was $30.0 million as of March 31, 2015, and the facility was fully drawn.
During the first quarter of 2015, the Company acquired an aggregate of 746,639 of its common shares that are being held as treasury shares at an average price of $7.91 per share. There are 163,827,903 shares outstanding as of April 27, 2015.
The Company has $69.3 million remaining under its stock buyback program as of the date of this press release. The Company expects to repurchase these shares 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 program to repurchase any shares.
As of April 24, 2015, the Company had $138.5 million in cash.
We made the following drawdowns from our credit facilities during 2015:
As of April 27, 2015, the Company''s outstanding debt balance, and amount available to draw, is as follows:
Newbuilding Program
During the first quarter of 2015, the Company made $197.5 million of installment payments on its newbuilding vessels.
The Company currently has 11 newbuilding vessel orders with HMD, SPP, HSHI, DSME, DHSC, and SSME (five MRs and six LR2s). The estimated second quarter of 2015 and future payments are as follows*:
*These are estimates only and are subject to change as construction progresses.
For the three months ended March 31, 2015, the Company recorded net income of $40.7 million compared to net income of $53.3 million for the three months ended March 31, 2014. The following were the significant changes between the two periods:
Time charter equivalent, or TCE revenue, a non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company''s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management. The following table depicts TCE revenue for the three months ended March 31, 2015 and 2014:
TCE revenue increased $85.9 million to $158.6 million. This increase was driven by an increase in the average number of operating vessels (owned and time chartered-in) to 84.0 from 50.7 for the three months ended March 31, 2015 and 2014, respectively, along with an increase in time charter equivalent revenue per day to $21,138 per day from $15,906 per day for the three months ended March 31, 2015 and 2014, respectively (see the breakdown of daily TCE averages below). Spot rates across all operating segments improved during the first quarter as fundamentals in the product tanker market remained strong. These fundamentals were driven by increased refining capacity in the Middle East and India along with improved refining margins worldwide which have had a resultant, positive impact on the demand for our vessels. Furthermore, we have benefited from the collapse in crude oil prices through the consequent decline in bunker costs, positively impacting our TCE revenue.
Vessel operating costs increased $24.4 million to $37.5 million from $13.1 million for the three months ended March 31, 2015 and 2014, respectively. This increase was primarily driven by an increase in the Company''s owned fleet to an average of 63.0 vessels from 20.2 vessels for the three months ended March 31, 2015 and 2014, respectively. The increase was offset by an overall decrease in vessel operating costs per day to $6,583 per day from $7,185 per day for the three months ended March 31, 2015 and 2014, respectively (see the breakdown of daily TCE averages below). Vessel operating costs per day improved across all operating segments as the Company''s fleet transitioned to a modern, more cost-efficient fleet with the delivery of 52 vessels under our newbuilding program since January 2014 and the disposal of four of our older vessels during that same time period.
Charterhire expense decreased $11.5 million to $28.7 million from $40.2 million for the three months ended March 31, 2015 and 2014, respectively. This difference was driven by a decrease in the Company''s time chartered-in fleet to an average of 21.0 vessels from 30.5 vessels for the three months ended March 31, 2015 and 2014, respectively.
Depreciation expense increased $15.4 million to $21.4 million from $6.0 million for the three months ended March 31, 2015 and 2014, respectively. This change was the result of an increase in the average number of owned vessels to 63.0 from 20.2 for the three months ended March 31, 2015 and 2014, respectively.
General and administrative expenses increased $2.7 million to $13.7 million from $11.0 million for the three months ended March 31, 2015 and 2014, respectively. This increase was driven by a $0.7 million increase in the amortization of restricted stock (non-cash) and an overall increase in other general and administrative expenses due to the significant growth in the Company''s fleet.
Gain on sale of vessels of $2.0 million for the three months ended March 31, 2015 relates to the sales of Venice, STI Harmony and STI Heritage, which closed in March, April and April, respectively. This gain relates to lower than expected closing costs incurred relating to the closing of the sales of each vessel.
Gain on sale of VLCCs of $51.4 million for the three months ended March 31, 2014 relates to the gain recorded as a result of our sale of seven VLCCs under construction.
Financial expenses increased $17.7 million to $18.1 million from $0.4 million primarily as a result of an increase in the Company''s debt balance for the three months ended March 31, 2015 and 2014, respectively. Total debt outstanding, net of deferred financing fees, was $1.7 billion at March 31, 2015 compared to $344.6 million at March 31, 2014.
Unrealized loss on derivative financial instruments of $0.6 million for the three months ended March 31, 2015 relates to the mark-to-market value on a profit or loss sharing agreement with a third party relating to one of our time chartered-in vessels.
*Diluted earnings per share for the three months ended March 31, 2015 primarily includes the potentially dilutive shares relating to our Convertible Senior Notes due 2019 (the "Convertible Notes") representing 30,679,767 potential common shares. The dilutive impact of the Convertible Notes is determined using the if-converted method. Under this method, we assume that the Convertible Notes are converted into common shares during the period and the interest and non-cash amortization expense of $5.3 million associated with these notes is not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive. The Convertible Notes are currently ineligible for conversion.
Business Strategy
The Company''s primary objectives are to profitably grow the business and emerge as a major operator of product tanker vessels. The Company intends to acquire modern, high-quality tankers through timely and selective acquisitions. The Company is currently concentrating on these sectors because of their attractive fundamentals which the Company believes includes:
increasing demand for refined products.
increasing ton miles (distance between production and areas of demand), and
reduced order book.
Dividend Policy
The declaration and payment of dividends is subject at all times to the discretion of the Company''s board of directors. The timing and amount of dividends, if any, depends on the Company''s earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.
The Company''s dividend history is as follows:
Share Buyback Program
During 2015, the Company acquired an aggregate of 746,639 of its common shares that are being held as treasury shares at an average price of $7.91. There are 163,827,903 shares outstanding as of April 27, 2015.
The Company has $69.3 million remaining under its stock buyback program as of the date of this press release. The Company expects to repurchase these shares 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 program to repurchase any shares.
Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 67 tankers (12 LR2 tankers, 15 Handymax tankers, and 40 MR tankers) with an average age of 0.9 years, time charters-in 21 product tankers (five LR2, five LR1, four MR and seven Handymax tankers), and has contracted for 11 newbuilding product tankers (five MR and six LR2), seven of which are expected to be delivered in the second quarter of 2015 and the remaining four vessels throughout 2016. The Company also owns approximately 16% of Dorian LPG Ltd. Additional information about the Company is available at the Company''s website , which is not a part of this press release.
This press release describes adjusted net income and adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. "Non-GAAP" measure). The Non-GAAP measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company''s management evaluates the Company''s operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management''s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
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Datum: 27.04.2015 - 06:12 Uhr
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