SOURCE: Scorpio Tankers Inc.

Scorpio Tankers Inc.

June 24, 2010 08:00 ET

Scorpio Tankers Inc. Announces First Quarter Results

MONACO--(Marketwire - June 24, 2010) - Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers", or the "Company") today reported its results for the three months ended March 31, 2010.

The Company recorded net income of $1.2 million or $0.21 basic and $0.21 diluted earnings per share for the three months ended March 31, 2010 compared to net income of $2.8 million or $0.50 basic and $0.50 diluted earnings per share for the three months ended March 31, 2009. The weighted average outstanding number of outstanding shares (basic and diluted) for both periods was 5,589,147.

Recent Events

Initial Public Offering

On April 6, 2010, the Company closed on the sale of 12,500,000 shares of common stock at $13.00 per share in its initial public offering and received net proceeds of $149.6 million after deducting underwriters' discounts and offering expenses.

On May 4, 2010, the Company issued 450,000 shares of common stock at $13.00 and received $5.4 million, after deducting underwriters' discounts, when the underwriters in the Company's initial public offering partially exercised their over-allotment option.

Vessel Acquisitions

On June 9, 2010, Scorpio Tankers announced that it took delivery of three products tanker vessels that the Company previously agreed to acquire. Two of the tankers are LR1 ice class 1A sister ships, STI Harmony and STI Heritage, and were acquired for an aggregate price of $92.0 million, which includes an estimated $2.5 million related to the value of the existing time charter contracts. The third vessel delivered was STI Conqueror, which is a Handymax ice class 1B ship, and was acquired for $26.0 million.

The Company has agreed to acquire three additional Handymax tankers that are scheduled to be delivered by the end of July 2010 for an aggregate price of $76.0 million.

Credit Facilities

On April 9, 2010, the Company repaid in full the outstanding balance of $38.9 million of the 2005 credit facility from the proceeds of the initial public offering.

On June 2, 2010, the Company executed the $150 million credit facility, which will be used to partially finance vessel acquisitions. The Company currently has drawn down $19.0 million.

Explanation of Variances on the First Quarter Results

Net Income for the three months ended March 31, 2010 decreased $1.6 million to $1.2 million from the three months ended March 31, 2009. The following were the significant changes between the two periods:

-- Vessel revenue decreased $3.4 million because the revenue for the period
   ended March 31, 2009 included a vessel chartered-in, and the daily time
   charter equivalent rate from the pool decreased from $28,012 to $18,928.
-- Charter hire expense decreased $2.4 million because a vessel was
   chartered-in during the period ended March 31, 2009.
-- The net change in the realized and unrealized derivative financial
   instruments (i.e. interest rate swap) and other expenses was a reduction
   in income of $0.7 million

                   Scorpio Tankers Inc and Subsidiaries
                   Condensed Combined Income Statements


                                                     For the three months
                                                        Ended March 31,
                                                    ----------------------
                                                       2010        2009
                                                    ----------  ----------
Revenue:
   Vessel revenue                                    6,155,440   9,542,015
                                                    ----------  ----------

Operating expenses:
   Charter hire                                              -  (2,383,515)
   Vessel operating costs                           (2,385,846) (2,448,305)
   Depreciation                                     (1,652,055) (1,663,315)
   General and administrative expenses                (146,051)    (80,069)

                                                    ----------  ----------
Total Operating Expenses                            (4,183,952) (6,575,204)
                                                    ----------  ----------

                                                    ----------  ----------
Operating Income                                     1,971,488   2,966,811
                                                    ----------  ----------

Other Income and (Expense)
   Interest income                                          78       3,496
   Bank loan interest                                  (94,624)   (259,768)
   Realized loss on derivative financial
    instruments                                       (222,796)   (119,135)
   Unrealized (loss)/gain on derivative financial
    instruments                                       (146,696)    184,482
   Other expenses, net                                (342,930)     (7,535)

                                                    ----------  ----------
Total Income and Expense                              (806,968)   (198,460)
                                                    ----------  ----------

                                                    ----------  ----------
Net Income                                           1,164,520   2,768,351
                                                    ==========  ==========

Weighted average outstanding shares basic and
 diluted                                             5,589,147   5,589,147

Net earnings per share
   Basic                                            $     0.21  $     0.50
   Diluted                                          $     0.21  $     0.50






                     Scorpio Tankers Inc and Subsidiaries
                       Condensed Combined Balance Sheets


                                                    As of         As of
                                                  March 31,   December 31,
                                                    2010          2009
                                                ------------- -------------
ASSETS
  Current Assets
    Cash and cash equivalents                   $   3,343,390 $     444,497
    Accounts receivable                             1,606,349     1,438,998
    Prepaid expenses                                2,309,025       583,944
    Shareholder receivable                                  -     1,928,252
    Inventories                                       498,242       433,428
                                                ------------- -------------
  Total Current Assets                              7,757,006     4,829,119
                                                ------------- -------------

  Non-Current Assets
    Vessels and drydock                            97,942,213    99,594,267
                                                ------------- -------------
TOTAL ASSETS                                    $ 105,699,219 $ 104,423,386
                                                ============= =============

LIABILITIES AND SHAREHOLDER'S EQUITY
  Current Liabilities
    Bank loan                                   $   3,600,000 $   3,600,000
    Accounts payable                                1,071,522       656,002
    Accrued expenses                                1,402,630       953,532
    Derivative financial instruments                  797,685       814,206
                                                ------------- -------------
  Total Current Liabilities                         6,871,837     6,023,740
                                                ------------- -------------

  Non-Current Liabilities
    Bank loan                                      35,300,000    36,200,000
    Derivative financial instruments                1,034,320       871,104
                                                ------------- -------------
  Total Non-Current Liabilities                    36,334,320    37,071,104
                                                ------------- -------------

                                                ------------- -------------
  Total Liabilities                                43,206,157    43,094,844
                                                ------------- -------------

  Shareholder's Equity
    Share capital                                      55,891        55,891
    Additional paid-in capital                     46,272,339    46,272,339
    Merger reserve                                 13,292,496    13,292,496
    Retained earnings                               2,872,336     1,707,816

                                                ------------- -------------
  Total Shareholder's Equity                       62,493,062    61,328,542
                                                ------------- -------------

                                                ------------- -------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY      $ 105,699,219 $ 104,423,386
                                                ============= =============





                   Scorpio Tankers Inc and Subsidiaries
                  Condensed Combined Cash Flow Statements


                                                    For the Three Months
                                                      Ended March 31,
                                                  ------------------------
                                                      2010         2009
Operating Activities
   Net Income                                     $ 1,164,520  $ 2,768,351
   Depreciation                                     1,652,055    1,663,315
   Unrealized (gain)/loss on derivatives              146,696     (184,482)
                                                  -----------  -----------
                                                    2,963,271    4,247,184
                                                  -----------  -----------
   Changes in assets and liabilities:
   Drydock payments                                   (99,958)           -
   Increase in inventory                              (64,814)      38,429
   Decrease/(increase) in accounts receivable        (167,353)     134,139
   Decrease/(increase) in prepaid expenses           (787,582)       5,460
   Increase/(decrease) in accounts payable            933,147       96,360
   Increase/(decrease) in accrued expenses            449,098      (15,226)
   Net (payments)/receipts to/from shareholder      1,928,253   (3,349,335)
                                                  -----------  -----------
                                                    2,190,791   (3,090,173)
                                                  -----------  -----------

                                                  -----------  -----------
Net Cash Inflow from Continuing Operating
 Activities                                         5,154,062    1,157,011
                                                  -----------  -----------

Financing Activities
   Dividends paid                                           -   (2,269,502)
   Loan facility fees                                (937,500)           -
   Bank loan repayment                               (900,000)    (900,000)
   Payment for stock offering                        (417,669)           -

                                                  -----------  -----------
Net Cash Outflow from Financing Activities         (2,255,169)  (3,169,502)
                                                  -----------  -----------

Increase/(Decrease) in Cash and Cash Equivalents    2,898,893   (2,012,491)

   Cash and cash equivalents at January 1             444,497    3,607,635

                                                  -----------  -----------
   Cash and Cash Equivalents at March 31          $ 3,343,390  $ 1,595,144
                                                  ===========  ===========

   Supplemental information:
   Interest paid                                  $   164,327  $   231,215
                                                  ===========  ===========



Fleet List as of June 24, 2010

                                                        Time Charter Info
                                                       --------------------
                                                       Daily
                     Year        Ice                   Base
       Vessel Name   Built  DWT  Class   Employment    Rate     Expiry (A)
      -------------- ---- ------- --- ---------------- -------- -----------

1     Noemi          2004 72,515  -   Time Charter (B) $ 24,500 21-Jan-2012
2     Senatore       2004 72,514  -   Time Charter     $ 26,000 4-Oct-2010
3     Venice         2001 81,408  1C  SPTP (C)         N/A      N/A
4     STI Conqueror  2005 40,158  1B  SHTP (D)         N/A      N/A
5     STI Harmony    2007 73,919  1A  Time Charter (E) $ 25,500 17-Oct-2010
6     STI Heritage   2008 73,919  1A  Time Charter (E) $ 25,500 8-Jan-2011
                          -------
                          414,433
                          -------

Vessels Agreed to be Acquired
1     STI Gladiator  2003 40,083  -   SHTP (D)         N/A      N/A
2     STI Matador    2003 40,096  -   SHTP (D)         N/A      N/A
3     STI Highlander 2007 37,145  1A  SHTP (D)         N/A      N/A
                          -------
                          117,324
                          -------

                          -------
                          531,757
                          =======

(A) Redelivery from the charterer is plus or minus 30 days from the expiry
    date.
(B) Noemi is time chartered by King Dustin, which is a related party.
(C) The vessel operates in Scorpio Panamax Tanker Pool (SPTP). SPTP is
    operated by Scorpio Commercial Management (SCM). SPTP and SCM are
    related parties to the Company.
(D) The vessel operates in Scorpio Handymax Tanker Pool (SHTP). SHTP is
    operated by Scorpio Commercial Management (SCM).  SHTP and SCM are
    related parties to the Company.
(E) STI Harmony and STI Heritage were acquired with existing time charter
    contracts that commenced in October 2007 and January 2008,
    respectively.  The vessels are chartered to subsidiaries of Liberty,
    which are related parties.


About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns four LR1 product tankers, one Handymax tanker, and one post-Panamax tanker with an average age of 5.2 years and has signed agreements to purchase three Handymax tankers. Additional information about the Company is available at the Company's website www.scorpiotankers.com.

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.

Contact Information

  • Contact:
    Scorpio Tankers Inc.
    212-542-1616