Scorpio Tankers Inc. Announces Financial Results for the Third Quarter of 2018 and Declaration of a Quarterly Dividend

Monaco - Oct. 31, 2018

Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers", or the "Company") today reported its results for the three and nine months ended September 30, 2018.

Results for the three months ended September 30, 2018 and 2017
For the three months ended September 30, 2018, the Company's adjusted net loss (see Non-IFRS Measures section below) was $64.9 million, or $0.21 basic and diluted loss per share, which excludes from the net loss (i) a $0.9 million loss recorded on the Company's exchange of $15.0 million of its convertible notes (as described below), and (ii) a $5.9 million write-off of deferred financing fees. The adjustments resulted in an aggregate reduction of the Company’s net loss by $6.8 million, or $0.02 per basic and diluted share. For the three months ended September 30, 2018, the Company had a net loss of $71.7 million, or $0.23 basic and diluted loss per share.

For the three months ended September 30, 2017, the Company's adjusted net loss (see Non-IFRS Measures section below) was $34.0 million, or $0.15 basic and diluted loss per share, which excludes from the net loss (i) $2.3 million of transaction costs related to the merger with Navig8 Product Tankers Inc. ("NPTI"), and (ii) a $0.6 million write-off of deferred financing fees. The adjustments resulted in an aggregate reduction of the Company’s net loss by $2.9 million, or $0.01 basic and diluted loss per share. For the three months ended September 30, 2017, the Company had a net loss of $36.9 million, or $0.16 basic and diluted loss per share.

Results for the nine months ended September 30, 2018 and 2017
For the nine months ended September 30, 2018, the Company's adjusted net loss was $141.3 million (see Non-IFRS Measures section below), or $0.46 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 $203.5 million of its convertible notes (as described below), (ii) a $12.9 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 $31.1 million or $0.10 per basic and diluted share. For the nine months ended September 30, 2018, the Company had a net loss of $172.4 million, or $0.56 basic and diluted loss per share.

For the nine months ended September 30, 2017, the Company's adjusted net loss was $62.5 million (see Non-IFRS Measures section below), or $0.33 basic and diluted loss per share, which excludes from the net loss (i) a $23.3 million loss on sales of vessels, (ii) $34.8 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 $1.5 million write-off of deferred financing fees. The adjustments resulted in an aggregate reduction of the Company's net loss by $54.2 million, or $0.28 per basic and diluted share. For the nine months ended September 30, 2017, the Company had a net loss of $116.7 million, or $0.61 basic and diluted loss per share.

Declaration of Dividend
On October 30, 2018, the Company's Board of Directors declared a quarterly cash dividend of $0.01 per share, payable on or about December 13, 2018 to all shareholders of record as of December 5, 2018 (the record date). As of October 30, 2018, there were 515,893,564 shares outstanding.

Summary of Other Recent and Third 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 fourth quarter of 2018 as of the date hereof:

— For the LR2s in the pool: approximately $13,000 per day for 45% of the days.

— For the LR1s in the pool: approximately $12,750 per day for 46% of the days.

— For the MRs in the pool: approximately $12,000 per day for 46% of the days.

— For the ice-class 1A and 1B Handymaxes in the pool: approximately $11,000 per day for 42% of the days.

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

— For the LR2s in the pool: $12,160 per revenue day.

— For the LR1s in the pool: $8,335 per revenue day.

— For the MRs in the pool: $9,494 per revenue day.

— For the ice-class 1A and 1B Handymaxes in the pool: $8,852 per revenue day.

From June 2018 through October 2018, the Company closed on agreements to refinance a total of 41 of its vessels through a series of bank loans and lease financing arrangements raising $321.7 million in aggregate of new liquidity, after the repayment of the existing secured debt related to these vessels. These agreements are described below.

In September and October 2018, the Company entered into an agreement to retrofit 23 of its LR2s with Exhaust Gas Cleaning Systems (“Scrubbers”), and agreed letters of intent (which are subject to the execution of definitive documentation) with suppliers, engineering firms, and ship repair facilities to cover the purchase and installation of Scrubbers on substantially all of its remaining owned and financed leased LR2, LR1, and MR tanker vessels (approximately 67 vessels) between the second quarter of 2019 and the second quarter of 2020. The Scrubbers and their installation are expected to cost between $1.5 and $2.2 million per vessel, and the Company anticipates that between 60-70% of these costs will be financed.

In October 2018, the Company raised estimated net proceeds of $319.7 million in an underwritten public offering of 182.2 million shares of common stock (including 20.0 million shares of common stock issued when the underwriters partially exercised their overallotment option to purchase additional shares) at a public offering price of $1.85 per share. Scorpio Bulkers Inc., or SALT, and Scorpio Services Holding Limited, or SSH, each a related party, purchased 54.1 million common shares and 5.4 million common shares, respectively, at the public offering price.

In September 2018, the Company entered into an agreement with its commercial manager, Scorpio Commercial Management S.A.M., or SCM, whereby SCM will reimburse certain of the commissions that SCM charges the Company's vessels to effectively reduce such to 0.85% of gross revenue per charter fixture, effective from September 1, 2018 and ending on June 1, 2019.

In September 2018, the Company entered into agreements with certain of its lenders who are party to credit facilities with the Company, to permanently remove the minimum interest coverage ratio financial covenant from the terms of each facility. As a result, the Company is no longer required to maintain a ratio of EBITDA to net interest expense on any of its secured credit facilities or lease financing arrangements.

In September 2018, the Company paid a quarterly cash dividend with respect to the second quarter of 2018 on the Company's common stock of $0.01 per share.

In July 2018, the Company exchanged $15.0 million in aggregate principal amount of its Convertible Senior Notes due 2019 (the "Convertible Notes due 2019") for $15.0 million in aggregate principal amount of its Convertible Senior Notes due 2022 (the "Convertible Notes due 2022").

Full report

Scorpio Tankers Inc. press release