SOURCE: Scorpio Tankers Inc.

Scorpio Tankers Inc.

July 29, 2015 07:59 ET

Scorpio Tankers Inc. Announces Financial Results for the Second Quarter of 2015, Agreements for Four Newbuilding Contracts, and Declaration of a Quarterly Dividend

MONACO--(Marketwired - Jul 29, 2015) - Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers," or the "Company") today reported its results for the three and six months ended June 30, 2015.

Results for the three months ended June 30, 2015 and 2014

For the three months ended June 30, 2015, the Company's adjusted net income was $57.5 million, or $0.35 basic and $0.32 diluted earnings per share, which excludes an unrealized gain on derivative financial instruments of $0.1 million, or $0.00 per basic and diluted shares (see non-GAAP Measures section below). For the three months ended June 30, 2015, the Company had net income of $57.6 million, or $0.35 basic and $0.32 diluted earnings per share. 

For the three months ended June 30, 2015, the Company's basic and diluted weighted average number of shares were 162,457,319 and 199,202,256, 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 31,094,568 potential common shares (see below for further information).

For the three months ended June 30, 2014, the Company had an adjusted net loss of $11.2 million (see Non-GAAP Measures section below), or $0.06 basic and diluted loss per share, which excludes (i) a gain of $10.9 million, or $0.06 per share, resulting from the acquisition of 7,500,000 common shares of the Company in exchange for 3,422,665 shares of Dorian LPG Ltd. ("Dorian"), (ii) a write-off of deferred financing fees of $0.3 million, or $0.00 per share and (iii) an unrealized gain on derivative financial instruments of $64,769, or $0.00 per share. For the three months ended June 30, 2014, the Company had a net loss of $0.6 million, or $0.00 basic and diluted loss per share.

Results for the six months ended June 30, 2015 and 2014

For the six months ended June 30, 2015, the Company's adjusted net income was $96.8 million, or $0.62 basic and $0.55 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 $0.5 million, or $0.00 per basic and diluted shares (see non-GAAP Measures section below). For the six months ended June 30, 2015, the Company had net income of $98.3 million, or $0.63 basic and $0.56 diluted earnings per share. 

For the six months ended June 30, 2014, the Company had an adjusted net loss of $9.4 million (see Non-GAAP Measures section below), or a $0.05 basic and diluted loss 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, (ii) a gain of $10.9 million, or $0.06 per share, resulting from the acquisition of 7,500,000 common shares of the Company in exchange for 3,422,665 shares of Dorian, (iii) a write-off of $0.3 million of deferred financing fees, or $0.00 per share and (iv) an unrealized gain on derivative financial instruments of $0.1 million or $0.00 per share. For the six months ended June 30, 2014, the Company had net income of $52.8 million, or $0.28 basic and diluted earnings per share.

Newbuilding Agreements

The Company reached agreements to have two MR product tankers and two Handymax product tankers constructed at Hyundai Mipo Dockyard Co. Ltd. of South Korea ("HMD"). The contract price for the MR product tankers is approximately $34.5 million, and these vessels are scheduled for delivery in the first and second quarters of 2017. The contract price for the Handymax product tankers is approximately $32.5 million, and these vessels are scheduled for delivery in the second and third quarters of 2017. As part of the agreements, the Company holds certain options to construct up to six more MR product tankers and six more Handymax product tankers with fixed delivery dates and at fixed prices.

Declaration of Dividend

On July 29, 2015, the Scorpio Tankers' Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on September 4, 2015 to all shareholders as of August 14, 2015 (the record date). As of July 29, 2015 there were 182,592,121 shares outstanding.

Diluted Weighted Number of Shares

Diluted earnings per share for the three and six months ended June 30, 2015 includes the potentially dilutive shares relating to the Convertible Notes representing 31,094,568 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 associated with these notes of $5.3 million and $10.6 million during the three and six months ended June 30, 2015, respectively, is not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive. The Convertible Notes are currently ineligible for conversion.

Summary of Recent and Second Quarter Significant Events:

  • Below is a summary of the voyages fixed thus far in the third quarter of 2015:
    • For the LR2s: approximately $38,000 per day for 50% of the days
    • For the LR1s: approximately $27,000 per day for 40% of the days
    • For the MRs: approximately $25,000 per day for 43% of the days
    • For the Handymaxes: approximately $21,500 per day for 36% of the days
  • Reached an agreement with an unrelated third party to purchase a 2014 built MR product tanker for approximately $37.1 million. The vessel is expected to be delivered in August 2015.
  • Reached agreements with two unrelated third parties to sell the Company's investment in Dorian LPG Ltd. ("Dorian") consisting of 6 million common shares to BW Euroholdings Limited, a wholly owned subsidiary of BW Group Limited, for a purchase price of $15.34 per share and 3,392,083 common shares to Sino Energy Holdings LLC, for a purchase price of $16.16 per share.
  • Purchased 270,349 shares of the Company's common shares that are being held as treasury shares at an average price of $10.06 per share.
  • Purchased face value of $1.5 million of the Company's 2.375% Convertible Bonds Due 2019 at 1.0881 or $1.6 million.
  • Reached an agreement with an unrelated third party to purchase an LR2 product tanker that is currently under construction at Daehan Shipbuilding Co., Ltd ("DHSC") for approximately $58.5 million. This vessel is scheduled to be delivered in August 2015 whereupon the Company will bareboat charter-in the vessel for $10,000 per day for up to nine months. The Company will take ownership of the vessel at the conclusion of the bareboat charter. 
  • Reached an agreement with an unrelated third party to purchase an MR product tanker that is currently under construction at HMD for approximately $37.0 million. This vessel is scheduled to be delivered in September 2015.
  • Executed a Senior Secured Term Loan Facility for up to $142.2 million to partially finance four LR2s. The facility bears interest at LIBOR plus a margin of 2.15% per annum and the proceeds will be used to finance up to 60% of the purchase price of the vessels specified in the facility.
  • Took delivery of eleven vessels under the Company's Newbuilding Program, five LR2s and five MRs during the second quarter of 2015 and one MR in July 2015.
  • Approved a new securities buyback program to purchase up to an aggregate of $250 million of the Company's common stock and bonds.
  • Reached agreements with two unrelated third parties to purchase an aggregate of four LR2 product tankers under construction at Sungdong Shipbuilding and Marine Engineering Co., Ltd. ("SSME") and DHSC for approximately $60.0 million each. 
  • Closed on an underwritten offering of 17,177,123 common shares, raising aggregate net proceeds of $152.1 million.
  • Paid a quarterly cash dividend on the Company's common stock of $0.125 per share in June 2015.

Sale of investment in Dorian LPG Ltd.

In July 2015, the Company announced that it agreed to sell its investment in Dorian to two unrelated third parties in two separate transactions. The Company sold 6 million shares in Dorian to BW Euroholdings Limited, a wholly owned subsidiary of BW Group Limited, for a purchase price of $15.34 per share. The Company agreed to sell 3,392,083 shares to SINO Energy Holdings LLC, for a purchase price of $16.16 per share. The sale to SINO Energy Holdings LLC is expected to close at the end of July 2015. All shares were sold pursuant to an effective resale registration statement filed by Dorian on July 8, 2015.

Vessel purchases

In July 2015, the Company reached an agreement with an unrelated third party to purchase an MR product tanker that was built in 2014 at SPP Shipbuilding Co., Ltd. of South Korea ("SPP") for approximately $37.1 million. The vessel is expected to be delivered in August 2015.

In July 2015, the Company reached an agreement to purchase an LR2 product tanker that is currently under construction at DHSC for a purchase price of $58.5 million. The vessel is scheduled for delivery in August 2015. Upon delivery, the Company will bareboat charter-in the vessel for up to nine months at $10,000 per day. The Company will take ownership of the vessel at the conclusion of the bareboat charter. 

In June 2015, the Company purchased an MR product tanker that is under construction at HMD for $37.0 million. This vessel is scheduled for delivery in September 2015. 

In May 2015, the Company reached agreements with two unrelated third parties to purchase an aggregate of four LR2 product tankers under construction at SSME and DHSC for approximately $60.0 million each. Two of these vessels, STI Spiga and STI Savile Row, were delivered in June 2015. The remaining two are expected to be delivered in August and September 2015, respectively. 

$142.2 million credit facility

In July 2015, the Company executed a Term Loan Facility with ABN AMRO Bank N.V. and DVB Bank SE for up to $142.2 million to partially finance four LR2s. The facility bears interest at LIBOR plus a margin of 2.15% per annum and the proceeds will be used to finance up to 60% of the purchase price of the vessels specified in the facility. 

The facility has a 15 year repayment profile and a final maturity of five years from the drawdown date of the loan for each vessel. The terms and conditions, including covenants, are similar to those in the Company's existing credit facilities.

$250 million securities buyback program

In May 2015, the Company's Board of Directors authorized a new securities buyback program to purchase up to an aggregate of $250 million of the Company's common stock and bonds, which currently consist of its (i) Convertible Senior Notes Due 2019, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 2017 (NYSE: SBNB), which were issued in October 2014. This program replaces the Company's stock buyback program that was previously announced in July 2014 and was terminated in conjunction with this new repurchase program.

During 2015 (through the date of this press release), the Company has acquired the following:

  • an aggregate of 1,016,988 of its common shares that are being held as treasury shares at an average price of $8.48 per share (270,349 shares were purchased at an average price at $10.06 under the May 2015 $250 million securities buyback program; the remaining shares were purchased in the first quarter of 2015 under the previous buyback program) . There are 182,592,121 shares outstanding as of July 29, 2015.
  • $1.5 million face value of its Convertible Senior Notes Due 2019 at an average price of $1,088.10 per $1,000 principal amount (all of the Convertible Notes were purchased under the May 2015 $250 million securities buyback program). 

The Company has $245.6 million remaining under its securities buyback program as of the date of this press release. The Company expects to repurchase any 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 program to repurchase any securities.

Equity offering

In May 2015, the Company closed on the sale of 17,177,123 newly issued shares of common stock in an underwritten public offering at an offering price of $9.30 per share. We received aggregate net proceeds of approximately $152.1 million, after deducting underwriters' discounts and estimated offering expenses of $7.6 million.

Newbuilding Vessel deliveries

The Company has taken delivery of 11 vessels under its Newbuilding Program with HMD, DHSC, SSME, SPP and Hyundai Samho Heavy Industries Co., Ltd ("HSHI") since March 31, 2015. These deliveries are summarized as follows:

                 
        Month        
    Name   Delivered   Type   Shipyard
1   STI Oxford   April 2015   LR2   HSHI
2   STI Queens   April 2015   MR   SPP
3   STI Osceola   April 2015   MR   HMD
4   STI Lauren   April 2015   LR2   DHSC
5   STI Connaught   May 2015   LR2   HSHI
6   STI Notting Hill   May 2015   MR   HMD
7   STI Spiga   June 2015   LR2   DHSC
8   STI Seneca   June 2015   MR   HMD
9   STI Savile Row   June 2015   LR2   SSME
10   STI Westminster   June 2015   MR   HMD
11   STI Brooklyn   July 2015   MR   SPP
                 

Fleet update

At the end of June 2015, one of the Company's Handymax tankers, STI Pimlico, was involved in a collision with a passenger vessel in the Dardanelles Strait in Turkey. There were no reports of injuries on either vessel; however, STI Pimlico sustained damage. The incident and the costs to repair are currently under investigation however we expect these costs to be covered by insurance, less customary deductibles. The vessel is currently being repaired and is expected to be offhire for approximately 60 days in the third quarter of 2015. 

Time charter-in update

In May 2015, the Company time chartered-in an MR product tanker for six months at $15,250 per day. The Company also has two consecutive options to extend the charter for additional six month and one year periods at $15,250 per day and $16,350 per day, respectively. 

In May 2015, the Company declared an option to extend the charter on an LR1 product tanker that is currently time chartered-in for one year at $12,500 per day. The agreement also contains a provision whereby the Company splits all of the vessel's profits above the daily base rate with the vessel's owner.

In April 2015, the Company agreed to time charter-in an MR product tanker that was under construction in South Korea. The vessel was delivered in May 2015 and is being time chartered-in for three years at $17,034 per day.

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. The Company also has an option to extend the charter for an additional year at $26,925 per day.

Conference Call

The Company will have a conference call on Wednesday, July 29, 2015 at 10:00 AM Eastern Daylight Time and 4:00 PM Central European Summer Time.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-800-289-0438 (U.S.) or 1-913-312-0845 (International). The conference participant passcode is 6711816. 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: http://www.visualwebcaster.com/event.asp?id=102648

Current Liquidity
As of July 28, 2015, the Company had $247.3 million in cash. The cash balance does not include the $54.8 million proceeds from the sale of 3.4 million shares of Dorian; the sale is scheduled to close on July 29, 2015.

Debt
We made the following drawdowns from our credit facilities since March 31, 2015 and through the date of this press release:

                 
 
 
 
 
 
Credit facility
 
 
Drawdown amount
(in $ millions)
 
 
 
Drawdown date
 
 
 
Collateral
1   K-Sure Credit Facility   30.3   April 2015   STI Oxford
2   K-Sure Credit Facility   19.5   April 2015   STI Queens
3   2013 Credit Facility   19.3   April 2015   STI Osceola
4   K-Sure Credit Facility   30.3   April 2015   STI Lauren
5   K-Sure Credit Facility   30.3   April 2015   STI Connaught
6   K-Sure Credit Facility   21.0   May 2015   STI Notting Hill
7   2013 Credit Facility   35.1   June 2015   STI Spiga
8   2013 Credit Facility   18.5   June 2015   STI Seneca
9   K-Sure Credit Facility   21.0   June 2015   STI Westminster
10   K-Sure Credit Facility   19.5   July 2015   STI Brooklyn
11   ABN AMRO Term Loan Facility   35.7   July 2015   STI Savile Row
                 

As of July 29, 2015, the Company's outstanding debt balance, and amount available to draw, is as follows:

                 
In thousands of U.S. dollars   Amount outstanding at June 30, 2015   Amount Outstanding as of the date of this report   Availability as of the date of this report    
2010 Revolving Credit Facility   $ -   $ -     -   (1)
2011 Credit Facility     104,944     104,944     -    
Newbuilding Credit Facility     74,842     74,842     -    
2013 Credit Facility     498,136     498,136     -    
K-Sure Credit Facility     438,760     458,260     -   (2)
KEXIM Credit Facility     417,075     417,075     -    
Nomura Term Margin Facility     30,000     -     -   (3)
Credit Suisse Credit Facility     -     -     61,200   (4)
ING Credit Facility     -     -     52,000   (5)
ABN AMRO Term Loan Facility     -     35,700     106,500   (6)
Senior Unsecured Notes     105,500     105,500     -    
Convertible Senior Notes     360,000     358,500     -   (7)
Total   $ 2,029,257   $ 2,052,957   $ 219,700    
                       
(1)   In June 2015, the 2010 Revolving Credit Facility matured and we made an $8.0 million principal payment to settle all amounts outstanding. The mortgage on STI Highlander (the vessel collateralized under this facility) was released, and the vessel is now debt free.
(2)   The amount outstanding as of the date of this report includes a drawdown of $19.5 million to partially finance the delivery of STI Brooklyn, which was delivered in July 2015.
(3)   We repaid the outstanding amount to this facility in July 2015 as a result of the sale of 6 million shares that are owned in Dorian to BW Euroholdings Limited.
(4)   We received a commitment for a senior secured term loan facility with Credit Suisse AG in March 2015. Availability can be used to finance the lesser of $30.6 million and 60% of each vessel's fair market value at the respective drawdown dates.
(5)   We entered into a Term Loan Facility for two LR2 product tankers with ING Bank N.V. in June 2015. Availability can be used to finance the lesser of $26.0 million and 47.5% of the fair market value of the respective vessels.
(6)   We entered into a Term Loan Facility with ABN AMRO Bank N.V. and DVB Bank SE for up to $142.2 million to partially finance four LR2s. Availability can be used to finance up to 60% of the purchase price of the vessels specified in the facility. The amount outstanding as of the date of this report includes a drawdown of $35.7 million that was made in July 2015. STI Savile Row, which was delivered in June 2015, was provided as collateral for this drawdown.
(7)   As of June 30, 2015, $50.5 million of this amount has been attributed to the conversion feature of the Convertible Senior Notes and recorded within additional paid in capital on the consolidated balance sheet. In July 2015, the Company repurchased $1.5 million face value of its Convertible Senior Notes Due 2019 at an average price of $1,088.10 per $1,000 principal amount.
     

Newbuilding Program

During the second quarter of 2015, the Company made $345.6 million of installment payments on its newbuilding vessels. 

The Company currently has 12 newbuilding vessel orders with HMD, DHSC, and SSME (three MRs, seven LR2s and two Handymaxes) in addition to the expected delivery of a 2014 built MR product tanker in August 2015. The estimated third quarter of 2015 and future payments are as follows*:

     
    $ in millions of U.S. dollars
Q3 2015 - installment payments made   $ 62.0
Q3 2015 - remaining installment payments**     204.8
Q4 2015     24.8
Q1 2016     60.6
Q2 2016     78.5
Q3 2016     33.0
Q4 2016     39.7
Q1 2017     27.3
Q2 2017     43.4
Q3 2017     3.3
Q4 2017     19.5
       
Total   $ 596.9
       

*These are estimates only and are subject to change as construction progresses. 
** Includes the 2014 built MR product tanker at SPP that is expected to be delivered in August 2015.

Explanation of Variances on the Second Quarter of 2015 Financial Results Compared to the Second Quarter of 2014

For the three months ended June 30, 2015, the Company recorded net income of $57.6 million compared to a net loss of $0.6 million for the three months ended June 30, 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 June 30, 2015 and 2014:
       
    For the three months ended June 30,  
In thousands of U.S. dollars   2015     2014  
  Vessel revenue   $ 188,464     $ 57,445  
  Voyage expenses     (1,112 )     (551 )
  TCE revenue   $ 187,352     $ 56,894  
                 
  • TCE revenue increased $130.5 million to $187.4 million. This increase was driven by an increase in the average number of operating vessels (owned and time chartered-in) to 88.2 from 49.3 for the three months ended June 30, 2015 and 2014, respectively, along with an increase in time charter equivalent revenue per day to $23,469 per day from $12,733 per day for the three months ended June 30, 2015 and 2014, respectively (see the breakdown of daily TCE averages below). Spot rates across all of our operating segments improved during the second 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. 

  • Vessel operating costs increased $27.4 million to $41.1 million from $13.7 million for the three months ended June 30, 2015 and 2014, respectively. This increase was primarily driven by an increase in the Company's owned fleet to an average of 69.6 vessels from 21.5 vessels for the three months ended June 30, 2015 and 2014, respectively. The increase was offset by an overall decrease in vessel operating costs per day to $6,487 per day from $6,960 per day for the three months ended June 30, 2015 and 2014, respectively (see the breakdown of daily TCE averages below)

  • Charterhire expense decreased $10.3 million to $25.9 million from $36.2 million for the three months ended June 30, 2015 and 2014, respectively. This difference was driven by a decrease in the Company's time chartered-in fleet to an average of 18.6 vessels from 27.8 vessels for the three months ended June 30, 2015 and 2014, respectively.

  • Depreciation expense increased $18.1 million to $25.5 million from $7.4 million for the three months ended June 30, 2015 and 2014, respectively. This change was the result of an increase in the average number of owned vessels to 69.6 from 21.5 for the three months ended June 30, 2015 and 2014, respectively.

  • General and administrative expenses increased $3.8 million to $15.4 million from $11.6 million for the three months ended June 30, 2015 and 2014, respectively. This increase is due to the significant growth in the Company's fleet. 

  • Gain on sale of Dorian shares during the three months ended June 30, 2014 resulted from the acquisition of 7,500,000 common shares of the Company in exchange for 3,422,665 shares of Dorian in June 2014.

  • Financial expenses increased $21.4 million to $21.8 million from $0.4 million primarily as a result of an increase in the Company's debt balance in addition to a decrease in the amount of interest capitalized for the three months ended June 30, 2015 and 2014, respectively. Total debt outstanding, net of deferred financing fees, was $1.9 billion at June 30, 2015 compared to $807.5 million at June 30, 2014.

   
Scorpio Tankers Inc. and Subsidiaries  
Condensed Consolidated Statement 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   2015     2014     2015     2014  
Revenue                                
  Vessel revenue   $ 188,464     $ 57,445     $ 349,170     $ 134,179  
                                 
Operating expenses                                
  Vessel operating costs     (41,147 )     (13,680 )     (78,622 )     (26,750 )
  Voyage expenses     (1,112 )     (551 )     (3,206 )     (4,525 )
  Charterhire     (25,915 )     (36,220 )     (54,646 )     (76,393 )
  Depreciation     (25,550 )     (7,369 )     (46,958 )     (13,322 )
  General and administrative expenses     (15,451 )     (11,649 )     (29,153 )     (22,615 )
  Gain on sale of VLCCs     -       -       -       51,419  
  Gain on sale of Dorian shares     -       10,924       -       10,924  
  Gain on sale of vessels     11       -       2,019       -  
  Total operating expenses     (109,164 )     (58,545 )     (210,566 )     (81,262 )
Operating income / (loss)     79,300       (1,100 )     138,604       52,917  
Other (expense) and income, net                                
  Financial expenses     (21,840 )     (472 )     (39,898 )     (871 )
  Realized gain on derivative financial instruments     15       -       55       17  
  Unrealized gain / (loss) on derivative financial instruments     64       65       (542 )     112  
  Financial income     53       42       78       69  
  Share of income from associate     -       898       -       573  
  Other expenses, net     (4 )     (6 )     (14 )     (53 )
  Total other expense, net     (21,712 )     526       (40,321 )     (153 )
Net income / (loss)   $ 57,588     $ (574 )   $ 98,283     $ 52,764  
                                 
                                 
Earnings / (loss) per share                                
                                 
  Basic   $ 0.35     $ (0.00 )   $ 0.63     $ 0.28  
  Diluted   $ 0.32     $ (0.00 )   $ 0.56     $ 0.28  
  Basic weighted average shares outstanding     162,457,319       185,856,086       157,177,056       187,563,892  
  Diluted weighted average shares outstanding     199,202,256       185,856,086       193,533,559       190,793,888  
                                   

*Diluted earnings per share for the three months ended June 30, 2015 primarily includes the potentially dilutive shares relating to our Convertible Senior Notes due 2019 (the "Convertible Notes") representing 31,094,568 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 associated with these notes of $5.3 million and $10.6 million for the three and six months ended June 30, 2015, respectively, is not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive. The Convertible Notes are currently ineligible for conversion.

   
Scorpio Tankers Inc. and Subsidiaries  
Condensed Consolidated Balance Sheet  
(unaudited)  
   
    As of  
In thousands of U.S. dollars   June 30, 2015     December 31, 2014  
Assets                
Current assets                
Cash and cash equivalents   $ 226,863     $ 116,143  
Accounts receivable     77,491       78,201  
Prepaid expenses and other current assets     9,807       2,420  
Inventories     6,869       6,075  
Vessels held for sale     -       70,865  
Total current assets     321,030       273,704  
Non-current assets                
Vessels and drydock     2,876,519       1,971,878  
Vessels under construction     26,788       404,877  
Other assets     19,087       23,728  
Available for sale investment     156,660       130,456  
Total non-current assets     3,079,054       2,530,939  
Total assets   $ 3,400,084     $ 2,804,643  
                 
Current liabilities                
Current portion of long term debt     143,181       87,163  
Debt related to vessels held for sale     -       32,932  
Accounts payable     22,811       14,929  
Accrued expenses     53,087       55,139  
Derivative financial instruments     542       205  
Total current liabilities     219,621       190,368  
Non-current liabilities                
Long term debt     1,773,958       1,451,427  
Total non-current liabilities     1,773,958       1,451,427  
Total liabilities     1,993,579       1,641,795  
                 
Shareholders' equity                
Issued, authorized and fully paid in share capital:                
Share capital     2,205       2,033  
Additional paid in capital     1,711,120       1,550,956  
Treasury shares     (357,189 )     (351,283 )
Accumulated other comprehensive income / (loss)     15,403       (10,878 )
Retained earnings / (accumulated deficit)     34,966       (27,980 )
Total shareholders' equity     1,406,505       1,162,848  
Total liabilities and shareholders' equity   $ 3,400,084     $ 2,804,643  
                 
                 
   
Scorpio Tankers Inc. and Subsidiaries  
Condensed Consolidated Statement of Cash Flows  
(unaudited)  
   
    For the six months ended June 30,  
In thousands of U.S. dollars   2015     2014  
Operating activities                
Net income   $ 98,283     $ 52,764  
Gain on sale of VLCCs     -       (51,419 )
Gain on sale of Dorian shares     -       (10,924 )
Gain on sale of vessels     (2,019 )     -  
Depreciation     46,958       13,322  
Amortization of restricted stock     15,140       14,436  
Amortization of deferred financing fees     7,088       468  
Straight-line adjustment for charterhire expense     -       3  
Share of income from associate     -       (573 )
Unrealized loss / (gain) on derivative financial instruments     542       (112 )
Amortization of acquired time charter contracts     346       114  
Accretion of convertible senior notes     5,471       29  
      171,809       18,108  
Changes in assets and liabilities:                
Drydock payments     -       (953 )
Increase in inventories     (1,075 )     (246 )
Increase in accounts receivable     (3,626 )     (3,563 )
Increase in prepaid expenses and other current assets     (7,668 )     (1,230 )
Increase in other assets     (5,607 )     -  
Increase in accounts payable     7,481       5,036  
(Decrease)/increase in accrued expenses     (2,641 )     1,736  
Interest rate swap termination payment     (128 )     (274 )
      (13,264 )     506  
Net cash inflow from operating activities     158,545       18,614  
Investing activities                
Acquisition of vessels and payments for vessels under construction     (575,467 )     (455,010 )
Proceeds from disposal of vessels     72,884       213,670  
Net cash outflow from investing activities     (502,583 )     (241,340 )
Financing activities                
Debt repayments     (75,034 )     (56,056 )
Issuance of debt     429,600       417,782  
Debt issuance costs     (3,969 )     (36,252 )
Proceeds from issuance of convertible senior notes     -       360,000  
Convertible senior notes issuance costs     -       (10,803 )
Proceeds from issuance of common stock     159,747       -  
Equity issuance costs     (7,394 )     (42 )
Dividends paid     (42,285 )     (33,860 )
Repurchase of common stock     (5,907 )     (139,581 )
Net cash inflow from financing activities     454,758       501,188  
Increase in cash and cash equivalents     110,720       278,462  
Cash and cash equivalents at January 1,     116,143       78,845  
Cash and cash equivalents at June 30,   $ 226,863     $ 357,307  
                 
                 
 
Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three and six months ended June 30, 2015 and 2014
(unaudited)
 
    For the three months ended June 30,   For the six months ended June 30,
    2015   2014   2015   2014
Adjusted EBITDA(1)(in thousands of U.S. dollars)   $ 112,314   $ 4,316   $ 198,724   $ 20,212
                         
Average Daily Results                        
Time charter equivalent per day(2)   $ 23,469   $ 12,733   $ 22,331   $ 14,339
Vessel operating costs per day(3)     6,487     6,960     6,534     7,052
                         
Aframax/LR2                        
TCE per revenue day (2)     30,116     15,745     27,876     14,986
Vessel operating costs per day(3)     6,751     12,881     6,797     8,233
                         
Panamax/LR1                        
TCE per revenue day (2)     23,243     12,516     22,317     16,556
Vessel operating costs per day(3)     *     9,306     8,362     8,729
                         
MR                        
TCE per revenue day (2)     22,599     11,977     21,402     13,066
Vessel operating costs per day(3)     6,352     6,491     6,375     6,462
                         
Handymax                        
TCE per revenue day (2)     19,774     12,013     19,909     14,421
Vessel operating costs per day(3)     6,422     6,847     6,586     8,464
                         
Fleet data                        
Average number of owned vessels     69.6     21.5     66.3     20.9
Average number of time chartered-in vessels     18.6     27.8     19.8     29.1
                         
Drydock                        
Expenditures for drydock (in thousands of U.S. dollars)     -   $ 1,290     -   $ 1,290
                         

*In early April 2015, the Company sold STI Harmony and STI Heritage, which were the last two owned LR1 tankers in this segment. As there were only four total operating days in this segment, operating costs per day are not a meaningful metric during the three months ended June 30, 2015. 

     
(1)   See Non-GAAP Measure 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 less the number of days the vessel is off-hire for drydock and repairs.
(3)   Vessel operating costs per day represent vessel operating costs excluding non-recurring expenses (for example insurance deductible expenses for repairs) divided by the number of days the vessel is owned during the period.
     
 
Fleet List as of July 29, 2015
 
    Vessel Name   Year Built   DWT   Ice class   Employment   Vessel type
    Owned vessels                    
1   STI Highlander   2007   37,145   1A   SHTP (1)   Handymax
2   STI Brixton   2014   38,000   1A   SHTP (1)   Handymax
3   STI Comandante   2014   38,000   1A   SHTP (1)   Handymax
4   STI Pimlico   2014   38,000   1A   SHTP (1)   Handymax
5   STI Hackney   2014   38,000   1A   SHTP (1)   Handymax
6   STI Acton   2014   38,000   1A   SHTP (1)   Handymax
7   STI Fulham   2014   38,000   1A   SHTP (1)   Handymax
8   STI Camden   2014   38,000   1A   SHTP (1)   Handymax
9   STI Battersea   2014   38,000   1A   SHTP (1)   Handymax
10   STI Wembley   2014   38,000   1A   SHTP (1)   Handymax
11   STI Finchley   2014   38,000   1A   SHTP (1)   Handymax
12   STI Clapham   2014   38,000   1A   SHTP (1)   Handymax
13   STI Poplar   2014   38,000   1A   SHTP (1)   Handymax
14   STI Hammersmith   2015   38,000   1A   SHTP (1)   Handymax
15   STI Rotherhithe   2015   38,000   1A   SHTP (1)   Handymax
16   STI Amber   2012   52,000   -   SMRP(4)   MR
17   STI Topaz   2012   52,000   -   SMRP(4)   MR
18   STI Ruby   2012   52,000   -   SMRP(4)   MR
19   STI Garnet   2012   52,000   -   SMRP(4)   MR
20   STI Onyx   2012   52,000   -   SMRP(4)   MR
21   STI Sapphire   2013   52,000   -   SMRP(4)   MR
22   STI Emerald   2013   52,000   -   SMRP(4)   MR
23   STI Beryl   2013   52,000   -   SMRP(4)   MR
24   STI Le Rocher   2013   52,000   -   SMRP(4)   MR
25   STI Larvotto   2013   52,000   -   SMRP(4)   MR
26   STI Fontvieille   2013   52,000   -   SMRP(4)   MR
27   STI Ville   2013   52,000   -   SMRP(4)   MR
28   STI Duchessa   2014   52,000   -   SMRP(4)   MR
29   STI Opera   2014   52,000   -   SMRP(4)   MR
30   STI Texas City   2014   52,000   -   Time Charter (5)   MR
31   STI Meraux   2014   52,000   -   SMRP(4)   MR
32   STI Chelsea   2014   52,000   -   SMRP(4)   MR
33   STI Lexington   2014   52,000   -   SMRP(4)   MR
34   STI San Antonio   2014   52,000   -   SMRP(4)   MR
35   STI Venere   2014   52,000   -   SMRP(4)   MR
36   STI Virtus   2014   52,000   -   SMRP(4)   MR
37   STI Powai   2014   52,000   -   SMRP(4)   MR
38   STI Aqua   2014   52,000   -   SMRP(4)   MR
39   STI Dama   2014   52,000   -   SMRP(4)   MR
40   STI Olivia   2014   52,000   -   SMRP(4)   MR
41   STI Mythos   2014   52,000   -   SMRP(4)   MR
42   STI Benicia   2014   52,000   -   Time Charter (6)   MR
43   STI Regina   2014   52,000   -   SMRP(4)   MR
44   STI St. Charles   2014   52,000   -   SMRP(4)   MR
45   STI Mayfair   2014   52,000   -   SMRP(4)   MR
46   STI Yorkville   2014   52,000   -   SMRP(4)   MR
47   STI Milwaukee   2014   52,000   -   SMRP(4)   MR
48   STI Battery   2014   52,000   -   SMRP(4)   MR
49   STI Soho   2014   52,000   -   SMRP(4)   MR
50   STI Tribeca   2015   52,000   -   SMRP(4)   MR
51   STI Gramercy   2015   52,000   -   SMRP(4)   MR
52   STI Bronx   2015   52,000   -   SMRP(4)   MR
53   STI Pontiac   2015   52,000   -   SMRP(4)   MR
54   STI Manhattan   2015   52,000   -   Spot   MR
55   STI Queens   2015   52,000   -   Spot   MR
56   STI Osceola   2015   52,000   -   Spot   MR
57   STI Notting Hill   2015   52,000   1B   Spot   MR
58   STI Seneca   2015   52,000   -   Spot   MR
59   STI Westminster   2015   52,000   1B   Spot   MR
60   STI Brooklyn   2015   52,000   -   Spot   MR
61   STI Elysees   2014   109,999   -   SLR2P (3)   LR2
62   STI Madison   2014   109,999   -   SLR2P (3)   LR2
63   STI Park   2014   109,999   -   SLR2P (3)   LR2
64   STI Orchard   2014   109,999   -   SLR2P (3)   LR2
65   STI Sloane   2014   109,999   -   SLR2P (3)   LR2
66   STI Broadway   2014   109,999   -   SLR2P (3)   LR2
67   STI Condotti   2014   109,999   -   SLR2P (3)   LR2
68   STI Rose   2015   109,999   -   SLR2P (3)   LR2
69   STI Veneto   2015   109,999   -   SLR2P (3)   LR2
70   STI Alexis   2015   109,999   -   SLR2P (3)   LR2
71   STI Winnie   2015   109,999   -   SLR2P (3)   LR2
72   STI Oxford   2015   109,999   -   SLR2P (3)   LR2
73   STI Lauren   2015   109,999   -   SLR2P (3)   LR2
74   STI Connaught   2015   109,999   -   SLR2P (3)   LR2
75   STI Spiga   2015   109,999   -   SLR2P (3)   LR2
76   STI Savile Row   2015   109,999   -   SLR2P (3)   LR2
                         
    Total owned DWT       4,669,129            
                         
                         
                                   
    Vessel Name   Year Built   DWT   Ice class   Employment   Vessel type   Daily Base Rate   Expiry (7)  
    Time chartered-in vessels                              
77   Kraslava   2007   37,258   1B   SHTP (1)   Handymax   $14,150   18-May-16 (8)
78   Krisjanis Valdemars   2007   37,266   1B   SHTP (1)   Handymax   $14,150   01-May-16 (9)
79   Iver Prosperity   2007   37,412   -   SHTP (1)   Handymax   $13,500   03-Apr-16 (10)
80   Histria Coral   2006   40,426   -   SHTP (1)   Handymax   $13,550   31-Aug-15  
81   Histria Perla   2005   40,471   -   SHTP (1)   Handymax   $13,550   31-Oct-15  
82   Miss Mariarosaria   2011   47,499   -   SMRP(4)   MR   $15,250   26-Nov-15 (11)
83   Vukovar   2015   49,990   -   Spot   MR   $17,034   01-May-18  
84   Targale   2007   49,999   -   SMRP(4)   MR   $15,200   17-May-16 (12)
85   Gan-Trust   2013   51,561   -   SMRP(4)   MR   $16,250   06-Jan-16 (13)
86   SN Federica   2003   72,344   -   SPTP (2)   LR1   $12,500   15-May-16 (14)
87   King Douglas   2008   73,666   -   SPTP (2)   LR1   $15,000   08-Nov-15  
88   Hellespont Progress   2006   73,728   -   SPTP (2)   LR1   $16,250   18-Mar-16 (15)
89   FPMC P Eagle   2009   73,800   -   SPTP (2)   LR1   $14,525   01-Oct-15  
90   Swarna Jayanti   2010   104,895   -   SLR2P (3)   LR2   $16,250   15-Sep-15  
91   Densa Crocodile   2015   105,408   -   SLR2P (3)   LR2   $21,050   07-Feb-16 (16)
92   Densa Alligator   2013   105,708   -   SLR2P (3)   LR2   $17,550   17-Sep-16 (17)
93   Khawr Aladid   2006   106,003   -   SLR2P (3)   LR2   $15,400   05-Aug-15  
                                   
    Total time chartered-in DWT       1,107,434                      
                                   
                                   
                     
    Newbuildings currently under construction                
    Vessel Name   Yard       DWT   Vessel type
94   Hull 2473 - TBN STI Black Hawk   HMD   (18)   52,000   MR
95   Hull S3120 - TBN STI Selatar   SSME   (19)   109,999   LR2
96   Hull S3121 - TBN STI Rambla   SSME   (19)   109,999   LR2
97   Hull S3094 - TBN STI Kingsway   SSME   (19)   109,999   LR2
98   Hull S3079 - TBN STI Carnaby   SSME   (19)   109,999   LR2
99   Hull 5003 - TBN STI Grace   DHSC   (20)   109,999   LR2
100   Hull 5004 - TBN STI Jermyn   DHSC   (20)   109,999   LR2
101   Hull 5024 - TBN STI Lombard   DHSC   (21)   109,999   LR2
102   HMD Handymax #1   HMD   (18)   38,000   Handymax
103   HMD Handymax #2   HMD   (18)   38,000   Handymax
104   HMD MR #1   HMD   (18)   52,000   MR
105   HMD MR #2   HMD   (18)   52,000   MR
                     
    Total newbuilding product tankers DWT           1,001,993    
                     
    Total Fleet DWT           6,778,556    
                     
     
(1)   This vessel operates in or is expected to operate in the Scorpio Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial Management (SCM). SHTP and SCM are related parties to the Company.
(2)   This vessel operates in or is expected to operate in the Scorpio Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related party to the Company.
(3)   This vessel operates in or is expected to operate in the Scorpio LR2 Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the Company.
(4)   This vessel operates in or is expected to operate in the Scorpio MR Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the Company.
(5)   This vessel is on a time charter agreement for two years expiring in March 2016, which also contains a 50% profit sharing provision whereby we split all of the vessel's profits above the daily base rate with the charterer. 
(6)   This vessel is on a one-year time charter agreement that expires in September 2015. This agreement contains a 50% profit sharing provision whereby we split all of the vessel's profits above the daily base rate with the charterer. 
(7)   Redelivery from the charterer is plus or minus 30 days from the expiry date.
(8)   In April 2015, we declared an option to extend the charter for an additional year at $14,150 per day effective May 2015.
(9)   In April 2015, we declared an option to extend the charter for an additional year at $14,150 per day effective May 2015.
(10)   In September 2014, we declared an option to extend the charter for an additional year at $13,500 per day effective April 3, 2015.
(11)   We 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. 
(12)   In March 2015, we declared an option to extend the charter for an additional year at $15,200 per day effective May 2015.  We have an option to extend the charter for an additional year at $16,200 per day.
(13)   The rate for the first year of this agreement was $15,750 per day, the rate for the second year is $16,250 per day, and the rate for the third year is $16,750 per day. We have options to extend the charter for up to two consecutive one year periods at $17,500 per day and $18,000 per day, respectively. 
(14)   In May 2015, we declared an option to extend the charter for an additional year at $12,500 per day.  We have also entered into an agreement with the vessel's owner whereby we split all of the vessel's profits above the daily base rate.
(15)   We have an option to extend the charter for an additional year at $17,250 per day.
(16)   We have entered into an agreement with a third party whereby we split all of the vessel's profits and losses above or below the daily base rate.   We also have an option to extend the charter for an additional year at $22,600 per day. 
(17)   In April 2015, we extended the charter for an additional year at $24,875 per day effective September 2015.  We have an option to extend the charter for an additional year at $26,925 per day.
(18)   These newbuilding vessels are being constructed at HMD (Hyundai Mipo Dockyard Co. Ltd. of South Korea).  One vessel is expected to be delivered in the third quarter of 2015 and the remaining four vessels throughout 2017.
(19)   These newbuilding vessels are being constructed at SSME (Sungdong Shipbuilding & Marine Engineering Co., Ltd). Two vessels are expected to be delivered in the third quarter of 2015, one in the third quarter of 2016 and one in the fourth quarter of 2016.
(20)   These newbuilding vessels are being constructed at DHSC (Daehan Shipbuilding Co. Ltd). These two vessels are expected to be delivered in the first and second quarter of 2016.
(21)   This newbuilding vessel is being constructed at DHSC. This vessel is scheduled to be delivered in August 2015, whereupon the Company will bareboat charter-in the vessel for up to nine months and purchase the vessel at the conclusion of the bareboat charter.
     

Business Strategy, Dividend Policy, and Stock Buyback Program

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:

On July 29, 2015, the Scorpio Tankers' Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on September 4, 2015 to all shareholders as of August 14, 2015 (the record date). As of July 29, 2015 there were 182,592,121 shares outstanding.

     
Date paid   Dividends per share
  June 2013   $ 0.025
  September 2013   $ 0.035
  December 2013   $ 0.070
  March 2014   $ 0.080
  June 2014   $ 0.090
  September 2014   $ 0.100
  December 2014   $ 0.120
  March 2015   $ 0.120
  June 2015   $ 0.125
       

Securities Buyback Program

In May 2015, the Company's Board of Directors authorized a new securities buyback program to purchase up to an aggregate of $250 million of the Company's common stock and bonds, which currently consist of its (i) Convertible Senior Notes Due 2019, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in May 2014, and (iii) Unsecured Senior Notes Due 2017 (NYSE: SBNB), which were issued in October 2014. This program replaces the Company's stock buyback program that was previously announced in July 2014 and was terminated in conjunction with this new repurchase program.

During 2015 (through the date of this press release), the Company has acquired the following:

  • an aggregate of 1,016,988 of its common shares that are being held as treasury shares at an average price of $8.46 per share. There are 182,592,121 shares outstanding as of July 29, 2015.
  • $1.5 million face value of its Convertible Senior Notes Due 2019 at an average price of $1,088.10 per $1,000 principal amount. 

The Company has $245.6 million remaining under its securities buyback program as of the date of this press release. The Company expects to repurchase any 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 program to repurchase any securities.

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 76 tankers (16 LR2 tankers, 15 Handymax tankers, and 45 MR tankers) with an average age of 1.0 years, and time charters-in 17 product tankers (four LR2, four LR1, four MR and five Handymax tankers). The Company has reached an agreement to acquire an MR product tanker in August 2015 and has contracted for 12 newbuilding product tankers (two Handymax, three MR and seven LR2), four of which are expected to be delivered in the third quarter of 2015, four throughout 2016 and four throughout 2017. 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-GAAP Measures
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.

   
Adjusted net income  
   
    For the three months ended June 30, 2015  
In thousands of U.S. dollars except per share and share data   Amount     Per share
basic
    Per share
diluted
 
  Net income   $ 57,588     $ 0.35     $ 0.32  
  Adjustments:                        
    Unrealized gain on derivative financial instruments     (64 )     (0.00 )     (0.00 )
    Gain on sale of vessels     (11 )     (0.00 )     (0.00 )
  Total adjustments     (75 )     (0.00 )     (0.00 )
  Adjusted net income   $ 57,513     $ 0.35     $ 0.32  
                         
                         
    For the three months ended June 30, 2014  
   
Amount
    Per share
basic
    Per share
diluted
 
  Net loss   $ (574 )   $ (0.00 )   $ (0.00 )
  Adjustments:                        
    Deferred financing fees write-off - STI Spirit     317       0.00       0.00  
    Unrealized gain on derivative financial instruments     (65 )     (0.00 )     (0.00 )
    Gain on sale of Dorian shares     (10,924 )     (0.06 )     (0.06 )
  Total adjustments     (10,672 )     (0.06 )     (0.06 )
  Adjusted net loss   $ (11,246 )   $ (0.06 )   $ (0.06 )
                         
                         
    For the six months ended June 30, 2015  
   
Amount
    Per share
basic
    Per share
diluted
 
  Net income   $ 98,283     $ 0.63     $ 0.56  
  Adjustments:                        
    Unrealized loss on derivative financial instruments     542       0.00       0.00  
    Gain on sale of vessels     (2,019 )     (0.01 )     (0.01 )
  Total adjustments     (1,477 )     (0.01 )     (0.01 )
  Adjusted net income   $ 96,806     $ 0.62     $ 0.55  
                         
                         
    For the six months ended June 30, 2014  
   
Amount
    Per share
basic
    Per share
diluted
 
  Net income   $ 52,764     $ 0.28     $ 0.28  
  Adjustments:                        
    Deferred financing fees write-off - STI Spirit     317       0.00       0.00  
    Unrealized gain on derivative financial instruments     (112 )     (0.00 )     (0.00 )
    Gain on sale of VLCCs     (51,419 )     (0.27 )     (0.27 )
    Gain on sale of Dorian shares     (10,924 )     (0.06 )     (0.06 )
  Total adjustments     (62,138 )     (0.33 )     (0.33 )
  Adjusted net loss   $ (9,374 )   $ (0.05 )   $ (0.05 )
                         
                         
   
Adjusted EBITDA  
   
    For the three months ended June 30,     For the six months ended June 30,  
In thousands of U.S. dollars   2015     2014     2015     2014  
  Net (loss) / income   $ 57,588     $ (574 )   $ 98,283     $ 52,764  
  Financial expenses     21,840       472       39,898       871  
  Unrealized (gain) / loss on derivative financial instruments     (64 )     (65 )     542       (112 )
  Financial income     (53 )     (42 )     (78 )     (69 )
  Depreciation     25,550       7,369       46,958       13,322  
  Depreciation component of our net profit from associate     -       599       -       1,343  
  Amortization of restricted stock     7,464       7,481       15,140       14,436  
  Gain on sale of VLCCs     -       -       -       (51,419 )
  Gain on sale of Dorian shares     -       (10,924 )     -       (10,924 )
  Gain on sale of vessels     (11 )     -       (2,019 )     -  
  Adjusted EBITDA   $ 112,314     $ 4,316     $ 198,724     $ 20,212  
                                 

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.