Scorpio Tankers reported its results for the three months ended March 31, 2024. The Company also announced that its board of directors has declared a quarterly cash dividend on its common shares of $0.40 per share.
Results for the three months ended March 31, 2024 and 2023
For the three months ended March 31, 2024, the Company had net income of $214.2 million, or $4.29 basic and $4.11 diluted earnings per share.
For the three months ended March 31, 2024, the Company had adjusted net income (see Non-IFRS Measures section below) of $206.6 million, or $4.14 basic and $3.97 diluted earnings per share, which excludes from net income a $3.7 million, or $0.07 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on certain lease financing obligations and related debt extinguishment costs, and a $11.3 million, or $0.23 per basic and $0.22 per diluted share, gain on the sale of a vessel.
For the three months ended March 31, 2023, the Company had net income of $193.2 million, or $3.40 basic and $3.27 diluted earnings per share.
For the three months ended March 31, 2023, the Company had adjusted net income (see Non-IFRS Measures section below) of $195.6 million, or $3.44 basic and $3.31 diluted earnings per share, which excludes from net income a $2.3 million, or $0.04 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on certain lease financing obligations and related extinguishment costs.
Declaration of Dividend
On May 8, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.40 per common share, with a payment date of June 28, 2024 to all shareholders of record as of June 14, 2024 (the record date). As of May 8, 2024, there were 54,575,565 common shares of the Company outstanding.
Emanuele A. Lauro, Chairman and Chief Executive Officer, commented, “Reducing our debt and lowering our cash break even rate increases cash flow in any rate environment. This allows the Company to act opportunistically to further increase shareholder returns.”
Summary of First Quarter 2024 and Other Recent Significant Events
- Below is a summary of the average daily Time Charter Equivalent (“TCE”) revenue (see Non-IFRS Measures section below) and duration of contracted voyages and time charters for the Company’s vessels (both in the pools and outside of the pools) thus far in the second quarter of 2024 as of the date hereof (See footnotes to “Other operating data” table below for the definition of daily TCE revenue):
| Pool and Spot Market | Time Charters Out of the Pool | ||||||||||
| Average Daily TCE Revenue | Expected Revenue Days(1) | % of Days | Average Daily TCE Revenue | Expected Revenue Days(1) | % of Days | ||||||
| LR2 | $ | 51,700 | 2,600 | 53 | % | $ | 30,750 | 900 | 100 | % | |
| MR | $ | 38,000 | 4,350 | 51 | % | $ | 21,750 | 450 | 100 | % | |
| Handymax | $ | 25,000 | 1,225 | 48 | % | N/A | N/A | N/A | |||
(1) Expected Revenue Days are the total number of calendar days in the quarter for each vessel, less the total number of expected off-hire days during the period associated with major repairs or drydockings. Consequently, Expected Revenue Days represent the total number of days the vessel is expected to be available to earn revenue. Idle days, which are days when a vessel is available to earn revenue, yet is not employed, are included in revenue days. The Company uses revenue days to show changes in net vessel revenues between periods.
- Below is a summary of the average daily TCE revenue earned by the Company’s vessels during the first quarter of 2024:
| Average Daily TCE Revenue | |||||
| Vessel class | Pool / Spot | Time Charters | |||
| LR2 | $ | 57,250 | $ | 30,859 | |
| MR | $ | 35,025 | $ | 21,481 | |
| Handymax | $ | 32,427 | N/A | ||
- The Company is currently in discussions with the lenders under its 2023 $1.0 Billion Credit Facility to make an unscheduled repayment on the term portion of this credit facility in June 2024 of up to $223.6 million. This repayment is expected to be applied against the upcoming quarterly principal repayment obligations of the term loan. This repayment will not impact the availability under the revolving portion of this credit facility, which is currently $288.2 million.
- In April 2024, the Company entered into an agreement to sell its 2015 built MR product tanker, STI Manhattan, for $40.8 million. The sale of this vessel is expected to close in the second or third quarter of 2024. The Company expects that there will be no debt repayment as a result of this sale, as this vessel is currently in the process of being replaced by one of its unencumbered vessels, STI Notting Hill, as collateral on the 2023 $1.0 Billion Credit Facility.
- In April 2024, the Company closed the previously announced sale of its 2013 built MR product tanker, STI Larvotto, for a selling price of $36.15 million. This vessel was not collateralized on a debt or lease arrangement and therefore there was no debt repayment as a result of the sale.
- In March 2024, the Company entered into an agreement to sell a 2013 built MR product tanker, STI Le Rocher, for $36.15 million. The sale of this vessel is expected to close in May 2024. This vessel is not collateralized on a debt or lease arrangement and therefore there will be no debt repayment as a result of the sale.
- In March 2024, the Company closed the previously announced sale of a 2015 built MR product tanker, STI Tribeca, for a selling price of $39.1 million. There was no debt repaid as a result of this sale, as this vessel was replaced by STI Galata as collateral on the 2023 $1.0 Billion Credit Facility.
- From January 1, 2024 through the date of this press release, the Company made $277.8 million in previously announced unscheduled debt and lease repayments. The Company also has $102.4 million in previously announced unscheduled lease repayments that are expected to close in the second quarter of 2024. These repayments are summarized in the table below.
- In January 2024, the Company drew down $99.0 million from the 2023 $1.0 Billion Credit Facility (split evenly between the term and revolving portions of the loan) and placed two Handymax product tankers and four MR product tankers as collateral under the facility.
Securities Repurchase Program
From January 1, 2024 through May 8, 2024, no shares were repurchased in the open market under the 2023 Securities Repurchase Program.
There is $250.0 million available under the 2023 Securities Repurchase Program as of May 8, 2024.
Diluted Weighted Number of Shares
The computation of earnings per share is determined by taking into consideration the potentially dilutive shares arising from the Company’s equity incentive plan. These potentially dilutive shares are excluded from the computation of earnings per share to the extent they are anti-dilutive.
For the three months ended March 31, 2024, the Company’s basic weighted average number of shares outstanding were 49,905,272. For the three months ended March 31, 2024, the Company’s diluted weighted average number of shares outstanding were 52,069,380, which included the potentially dilutive impact of restricted shares issued under the Company’s equity incentive plan.