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Scorpio Tankers Inc. Announces Financial Results for the Third


Scorpio Tankers Inc. Announces Financial Results for the Third Quarter of 2012

MONACO -- (Marketwire) -- 10/29/12 -- Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers," or the "Company") today reported its results for the three and nine months ended September 30, 2012.

Results for the three months ended September 30, 2012 and 2011

For the three months ended September 30, 2012, the Company had an adjusted net loss of $3.7 million (see Non-GAAP Measures section below), or $0.09 basic and diluted loss per share, excluding (i) $5.9 million, or $0.14 per share, loss from sales of STI Diamond and STI Coral and (ii) $3.0 million, or $0.07 per share, write-off of deferred financing fees attributable to the extension of the 2011 Credit Facility.

For the three months ended September 30, 2012, the Company recorded a net loss of $12.5 million, or $0.30 basic and diluted loss per share. This is compared to a net loss of $6.9 million or $0.22 basic and diluted loss per share for the three months ended September 30, 2011.

Results for the nine months ended September 30, 2012 and 2011

For the nine months ended September 30, 2012, the Company had an adjusted net loss of $8.3 million (see Non-GAAP Measures section below), or $0.21 basic and diluted loss per share, excluding (i) $10.4 million, or $0.26 per share, loss from sales of vessels (STI Conqueror, STI Matador, STI Gladiator, STI Coral, and STI Diamond) and (ii) $3.0 million, or $0.07 per share, write-off of deferred financing fees attributable to the extension of the 2011 Credit Facility.

For the nine months ended September 30, 2012, the Company recorded a net loss of $21.7 million or $0.54 basic and diluted loss per share. This is compared to a net loss of $11.0 million or $0.40 basic and diluted loss per share for the nine months ended September 30, 2011.

Summary of Recent and Third Quarter Significant Events:


 
--  Delivery of the Company's first five vessels under its Newbuilding
    program, STI Amber, STI Topaz, STI Ruby, STI Garnet, and STI Onyx.
--  Closed on the sales of STI Diamond and STI Coral for $25.25 million
    each.
--  Contracted with Hyundai Mipo Dockyard Co., Ltd. of South Korea ("HMD")
    to construct the Company's ninth and tenth newbuilding vessels.
--  Signed a
n agreement with 2011 Credit Facility lenders to extend the
    availability period of the 2011 Credit Facility until January 31,
    2014, giving the Company the ability to partially finance the ninth
    and tenth newbuilding vessels.
--  Time chartered-in six vessels, a newbuilding MR, two MR's, an LR1 and
    two LR2s.
--  Repurchased 82,322 shares under the share buyback program at an
    average price per share of $5.34 during the third quarter.

Emanuele Lauro, chief executive officer and chairman of the board, commented, "The previous few months have been very exciting for us with the deliveries of our first five newbuildings. These vessels are performing as we expected on their voyages from the Far East to the Atlantic Basin. The following table illustrates the difference in main engine fuel oil consumption, assuming similar operating conditions, between the first newbuilding, STI Amber, and that of a comparable MR product tanker that the Company recently sold, STI Coral. The table provides evidence of the material savings (worldwide marine fuel oil prices exceed $600 per ton) and environmental benefits of our newbuildings:


 
                                                                            
----------------------------------------------------------------------------
                                                          Savings           
  Main Engine Consumption in Metric  STI Amber STI Coral in Metric  Variance
        Tons of Fuel per day                                Tons       %    
----------------------------------------------------------------------------
         13.5 Knots Ballast             18.0      25.0      7.0      28.0%  
----------------------------------------------------------------------------
          13.5 Knots Laden              20.5      29.5      9.0      30.5%  
----------------------------------------------------------------------------

Mr. Lauro continued, "presently we see the overall supply-demand balance in product tankers to be tightening, as evidenced by steadily increasing freight rates in certain regional markets like the Mediterranean and the Far East. Our newbuildings, as well as our chartered-in tankers put us in a desirable position, as we enter what has historically been the strongest period of the year for seaborne freight."

Third Quarter Significant Events Delivery of Five Newbuilding Vessels

During the third quarter of 2012, the Company took delivery of the first five vessels under its Newbuilding program, STI Amber, STI Topaz, STI Ruby, STI Garnet, and STI Onyx. The first four vessels were partially financed by the Company's Newbuilding Credit Facility with Credit Agricole Corporate and Investment Bank and Skandinaviska Enskilda Banken AB, and the fifth vessel was partially financed by the Company's 2011 Credit Facility.

Upon delivery, each vessel began a short term time charter for durations up to 120 days.

Newbuilding contracts #9 and #10

In August 2012, the Company contracted with HMD to construct two newbuilding vessels for approximately $34.0 million each, which are the Company's ninth and tenth MR product tanker newbuildings with HMD. These vessels are scheduled to be delivered to the Company in January 2014. Partial financing for these vessels is available under the 2011 Credit Facility. The contract includes an option for two additional vessels.

Closing on Sales of STI Coral and STI Diamond

The Company completed the previously announced sales of STI Coral and STI Diamond for $25.25 million each in August and September 2012 and recorded a total loss of $5.9 million from disposal as part of these sales.

A portion of the proceeds from the sales was used to repay $16.1 million of debt outstanding on the 2011 Credit Facility relating to STI Coral. The Company's fifth newbuilding vessel, STI Onyx, was substituted as collateral under the 2011 Credit Facility on the outstanding borrowing relating to STI Diamond.

As part of these sales, the Company reduced the notional amount on the interest rate swaps relating to the 2011 Credit Facility to $15.0 million from $24.0 million.

Extension of availability on the Company's 2011 Credit Facility

In July 2012, the Company signed an agreement with its lenders, Nordea Bank Finland plc, DNB Bank ASA, and ABN AMRO Bank N.V., to extend the availability period of its 2011 Credit Facility until January 31, 2014. The availability period was previously scheduled to expire in May 2013. There is currently $115 million available for borrowing under this facility, which can be used to finance up to 50% of future vessel acquisitions. Due to the amendment, the Company wrote-off $3.0 million in deferred financing fees, which includes the loan origination fees from May 2011, in the third quarter of 2012.

Time Chartered-in Vessels and Other Agreements

In July 2012, the Company took delivery of a 2004 built, 46,102 DWT MR product tanker on a time charter-in agreement. The agreement is for a period of six months at an average rate of $11,525 per day. The Company has options to extend the charter following its expiration for two consecutive six month periods at $13,750 per day and $14,800 per day, respectively.

In August 2012, the Company took delivery of a 2007 built MR product tanker (50,633 DWT) on a six month time charter-in agreement at $12,000 per day. The agreement includes an option for the Company to extend the charter for an additional six months at $13,000 per day.

In September 2012, the Company agreed to charter-in a newbuilding MR product tanker (51,561 DWT) for three years. This vessel is a sister ship of the Company's Newbuilding vessels and is currently under construction at HMD. Delivery from the yard is expected in January 2013 and, upon delivery, it will be chartered-in at $15,750 per day in year one, $16,250 per day in year two and $16,750 per day in year three. The Company has options to extend the charter for two consecutive one year periods at $17,500 per day and $18,000 per day.

In September 2012, the Company took delivery of a 2009 built LR1 (73,800 DWT) on a one year time charter-in agreement at $12,800 per day. The Company has the option to extend the charter for two consecutive one year periods at $13,400 per day and $14,400 per day. Additionally, the Company has entered into a profit and loss sharing arrangement whereby 50% of the profits and losses above or below the charterhire rate will be shared with an unrelated third party.

The Company has also entered into a profit or loss sharing arrangement on the earnings of an LR1 vessel that is not owned or operated by the Company. The agreement stipulates that 50% of all profits and losses (the difference between the vessel's earnings and the daily charterhire expense of $12,750 per day) will be shared with the counterparty. The counterparty to this agreement is currently time chartering-in this vessel for a period of six months at $12,750 per day, with an option for the counterparty to extend the agreement for an additional six months, at the same daily rate.

The Company agreed to charter-in two LR2 tankers (2011 built and 2012 built, each approximately 100,000 DWT). The vessels will be chartered-in for six months at $14,750 per day and are expected to be delivered in the first half of 2013. The Company has options to extend the charters for up to three consecutive six month periods at $15,000 per day, $15,250 per day and $15,500 per day, respectively.

Conference Call - Postponed due to Hurricane Sandy

Due to Hurricane Sandy, the Company has postponed its conference call that was scheduled for October 29, 2012. The Company will announce the date and time of the rescheduled conference call later in the week.

Current Liquidity

As of October 29, 2012, the Company had $30.5 million in cash and $20.5 million available to draw down from its 2010 Revolving Credit Facility.

Debt As of October 29, 2012, the Company's outstanding debt balance is as follows:


 
                                                    
2010 Revolving Credit Facility      $  67.2  million
2011 Credit Facility                   15.8  million
STI Spirit Credit Facility             24.6  million
Newbuilding Credit Facility            91.3  million
                                    -------         
Total                               $ 198.9  million
                                    =======         

2010 Revolving Credit Facility

In August 2012, the Company drew down $16.2 million from the 2010 Revolving Credit Facility. The Company currently has $20.5 million available to draw down when needed.

2011 Credit Facility

In September 2012, the Company repaid $16.1 million into the 2011 Credit Facility in connection with the sale of STI Coral. The Company's fifth newbuilding vessel, STI Onyx was substituted as collateral under the 2011 Credit Facility as security for the outstanding borrowings previously related to STI Diamond which was sold in August 2012. The repayment described above did not affect the availability under the facility as amounts drawn cannot be re-borrowed. There is currently $115.0 million available for borrowing under this facility, which can be used to finance up to 50% of future vessel acquisitions.

Newbuilding Credit Facility

During the third quarter 2012, the Company drew down an aggregate of $82.3 million from the credit facility agreement with Credit Agricole Corporate and Investment Bank and Skandinaviska Enskilda Banken AB ("Newbuilding Credit Facility") to finance the final installments on the Newbuilding vessels ($20.6 million per vessel). There is $91.3 million outstanding under this facility (which reflects a principal payment of $0.7 million made in September 2012). There are no available borrowings under this facility.

2012 Debt Repayments

During the fourth quarter of 2012, the Company's scheduled debt repayments under the Newbuilding Credit Facility and 2011 Credit Facility are $1.8 million. During this period, there are no principal payments due for (i) the 2010 Revolving Credit Facility since the amount available is greater than the amount drawn and (ii) the STI Spirit Credit Facility as a result of the $0.8 million prepayment made in June 2012.

Drydocks and offhire

STI Spirit is scheduled to be drydocked in the fourth quarter of 2012 for an estimated cost of $0.8 million and 20 days of offhire.

STI Heritage is also scheduled to be drydocked in the fourth quarter of 2012 or first quarter of 2013 for an estimated cost of $0.8 million and 20 days of offhire.

Newbuilding Program

During the third quarter of 2012, the Company made $123.9 million of installment payments on its newbuilding vessels, which included the applicable delivery installments.

The Company currently has five vessels under contract with HMD, and the estimated future payment dates and amounts are as follows as of September 30, 2012*:


 
                                     
Q4 2012             $  10.7   million
Q1 2013                63.7   million
Q2 2013                22.0   million
Q3 2013                   -   million
Q4 2013                 6.6   million
Q1 2014                42.4   million
                    -------          
Total               $ 145.4   million
                                     
hese are estimates only and are subject to change as the
construction progresses.  
 
Explanation of Variances on the Third Quarter of 2012 Financial
Results Compared to the Third Quarter of 2011
 
For the three months ended September 30, 2012, the Company incurred a
net loss of $12.5 million compared to a net loss of $6.9 million in
the three months ended September 30, 2011. The following were the
significant changes between the two periods:

-- Time charter equivalent, or TCE revenues, a non-IFRS measure, is

vessel revenues less voyage expenses (including bunkers and port

charges). TCE revenue is also 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 bareboat charters), and it provides useful

information to investors and management. The following table depicts

TCE revenue for the three months ended September 30, 2012 and 2011:

For the three months ended

September 30,

----------------------------

2012 2011

------------- ------------- Vessel revenue $ 28,139,316 $ 21,460,983 Voyage expenses (5,776,046) (2,412,195)

------------- ------------- TCE revenue $ 22,363,270 $ 19,048,788

============= =============

-- TCE revenue increased by $3.3 million to $22.4 million as a result of

an increase in the average number of operating vessels (owned and time

chartered-in) to 20.39 from 18.46 for the three month periods ended

September 30, 2012 and 2011, respectively. Additionally, the Company

experienced a slight increase in time charter equivalent per day to

$11,926 per day from $11,660 per day for the three months ended

September 30, 2012 and 2011, respectively (see the breakdown of daily

TCE averages below).

-- Vessel operating costs decreased by $2.1 million to $6.4 million as a

result of a reduction in the average number of owned vessels to 9.88

from 12.00 for the three months ended September 30, 2012 and 2011,

respectively. This was driven by the sales of STI Conqueror, STI

Matador and STI Gladiator during the first and second quarter of 2012

along with the sales of STI Diamond and STI Coral during the third

quarter of 2012. This fleet reduction was partially offset by the

delivery of the first five vessels under the Company's Newbuilding

program in the third quarter of 2012. Additionally, there was a

decrease in operating costs per day to $6,935 from $7,660 during the

three months ended September 30, 2012 and 2011, respectively.

-- Charterhire expense increased $5.2 million to $12.6 million as a

result of an increase in the average number of time chartered-in

vessels to 10.51 from 6.46 for the three months ended September 30,

2012 and 2011, respectively. See the Company's Fleet List below for

the terms of these agreements.

-- Depreciation expense decreased by $1.8 million to $3.4 million as a

result of a (i) a $66.6 million impairment charge recorded at December

31, 2011 which decreased the depreciable basis of the Company's

vessels and (ii) a decrease in the average number of owned vessels to

9.88 from 12.00 for the three months ended September 30, 2012 and

2011, respectively, which was driven by the sales of STI Conqueror,

STI Matador and STI Gladiator during the first and second quarter of

2012 along with the sales of STI Diamond and STI Coral during the

third quarter of 2012. This fleet reduction was partially offset by

the delivery of the first five vessels under the Company's Newbuilding

program in the third quarter of 2012.

-- Loss from sale of vessels increased $5.9 million as a result of the

sales of STI Diamond and STI Coral during the three months ended

September 30, 2012.

-- Financial expenses, which consist of interest expense, amortization of

deferred financing fees and commitment fees, increased by $2.2 million

to $4.1 million. This increase was driven by the write-off of deferred

financing fees of $3.0 million relating to the amendment to extend the

availability period of the 2011 Credit Facility to January 2014. This

increase was partially offset by reductions in interest expense and

commitment fees for the three months ended September 30, 2012 and

2011, respectively.

-- Realized and unrealized gains on derivative financial instruments

consist of earnings from profit and loss agreements with third parties

relating to time chartered-in vessels.

Scorpio Tankers Inc. and Subsidiaries

Condensed Consolidated Statement of Profit or Loss

(unaudited)

For the three months ended For the nine months ended

September 30, September 30,

-------------------------- --------------------------

2012 2011 2012 2011

------------ ------------ ------------ ------------ Revenue: Vessel revenue $ 28,139,316 $ 21,460,983 $ 84,017,287 $ 59,468,005

Operating expenses: Vessel operating

costs (6,374,319) (8,492,911) (22,158,410) (23,330,876) Voyage expenses (5,776,046) (2,412,195) (18,538,888) (4,147,621) Charterhire (12,587,580) (7,359,310) (29,479,223) (15,536,259) Depreciation (3,389,271) (5,169,926) (10,213,008) (13,434,476) Loss from sale of

vessels (1) (5,878,753) - (10,403,524) - General and

administrative

expenses (2,814,977) (2,905,614) (8,554,521) (8,612,061)

------------ ------------ ------------ ------------ Total operating

expenses (36,820,946) (26,339,956) (99,347,574) (65,061,293)

------------ ------------ ------------ ------------ Operating loss (8,681,630) (4,878,973) (15,330,287) (5,593,288)

------------ ------------ ------------ ------------ Other (expense) and income, net Financial expenses (4,108,237) (1,879,512) (6,582,928) (5,360,447) Realized gain on

derivative

financial

instruments 285,773 - 285,773 - Unrealized gain on

derivative

financial

instruments 38,224 - 38,224 - Financial income 3,569 - 5,674 49,842 Other expenses,

net (48,868) (126,123) (72,504) (137,128)

------------ ------------ ------------ ------------ Total other

expense, net (3,829,539) (2,005,635) (6,325,761) (5,447,733)

------------ ------------ ------------ ------------ Net loss $(12,511,169) $ (6,884,608) $(21,656,048) $(11,041,021)

============ ============ ============ ============

Loss per share

Basic and diluted

(2) $ (0.30) $ (0.22) $ (0.54) $ (0.40) Basic and diluted

weighted average

shares

outstanding (2) 41,202,619 30,895,545 39,842,806 27,455,123

(1) The three months ended September 30, 2012 include the sales of STI

Diamond and STI Coral which closed on August 15, 2012 and September 11,

2012, respectively. The nine months ended September 30, 2012 include the

sales of STI Diamond, STI Coral along with the sales of STI Conqueror,

STI Matador, and STI Gladiator which closed on March 20, 2012, April 18,

2012, and May 2, 2012, respectively. (2) The effect of restricted shares, which are potential ordinary shares,

would be anti-dilutive since the Company is in a net loss position. As

such, there is no difference between basic and diluted earnings per

share for these periods.

Scorpio Tankers Inc. and Subsidiaries

Condensed Consolidated Balance Sheet

(unaudited)

As of

----------------------------

September 30, December 31,

2012 2011

------------- ------------- Assets Current assets Cash and cash equivalents $ 37,644,657 $ 36,833,090 Accounts receivable 25,960,839 20,385,546 Prepaid expenses 1,347,399 1,535,437 Inventories 2,773,571 2,696,296

------------- ------------- Total current assets 67,726,466 61,450,369

------------- ------------- Non-current assets Vessels and drydock 396,459,708 322,457,755 Vessels under construction 32,464,010 60,332,870 Other assets 645,052 3,988,778

------------- ------------- Total non-current assets 429,568,770 386,779,403

------------- ------------- Total assets $ 497,295,236 $ 448,229,772

============= =============

Current liabilities Bank loans 8,325,990 2,888,723 Accounts payable 7,180,015 11,732,427 Accrued expenses 2,851,171 3,376,033 Derivative financial instruments 692,425 236,987

------------- ------------- Total current liabilities 19,049,601 18,234,170

------------- ------------- Non-current liabilities Bank loans 187,004,371 142,678,788 Derivative financial instruments 913,921 463,587

------------- ------------- Total non-current liabilities 187,918,292 143,142,375

------------- ------------- Total liabilities 206,967,893 161,376,545

------------- -------------

Shareholders' equity Issued, authorized and fully paid in share capital: Share capital 433,591 390,691 Additional paid in capital 391,627,736 363,209,983 Treasury shares (7,938,455) (5,498,495) Hedging reserve (1,591,103) (700,574) Accumulated deficit (92,204,426) (70,548,378)

------------- ------------- Total shareholders' equity 290,327,343 286,853,227

------------- ------------- Total liabilities and shareholders' equity $ 497,295,236 $ 448,229,772

============= =============

Scorpio Tankers Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(unaudited)

For the nine months ended

September 30,

----------------------------

2012 2011

------------- -------------

Operating activities Net loss $ (21,656,048) $ (11,041,021) Loss from sale of vessels 10,403,524 - Depreciation 10,213,008 13,434,476 Amortization of restricted stock 2,597,901 2,492,624 Amortization of deferred financing fees 3,843,736 651,127 Write off of vessel purchase options - 126,337 Straight-line adjustment for charterhire expense 225,604 38,139 Unrealized gain on derivative financial instruments (38,224) -

------------- -------------

5,589,501 5,701,682

------------- ------------- Changes in assets and liabilities: Drydock payments (149,560) (1,862,210) Increase in inventories (77,275) (1,630,832) Increase in accounts receivable (5,575,293) (12,760,193) Decrease/(increase) in prepaid expenses 129,038 (645,181) Increase in accounts payable 4,412,985 1,488,004 Increase in accrued expenses 598,075 803,350 Decrease/(increase) in other assets 2,442,338 (982,921)

------------- -------------

1,780,308 (15,589,983)

------------- ------------- Net cash inflow/(outflow) from operating activities 7,369,809 (9,888,301)

------------- ------------- Investing activities Acquisition of vessels and payments for vessels under construction (176,555,897) (90,188,013) Proceeds from disposal of vessels 101,334,510 -

------------- ------------- Net cash outflow from investing activities (75,221,387) (90,188,013)

------------- ------------- Financing activities Bank loan repayment (75,988,596) (74,576,166) Bank loan drawdown 124,172,500 68,307,500 Debt issuance costs (2,943,550) (3,208,946) Net proceeds from issuance of common stock 25,862,752 68,460,639 Purchase of Treasury shares (2,439,961) (1,599,047)

------------- ------------- Net cash inflow from financing activities 68,663,145 57,383,980

------------- ------------- Increase/(decrease) in cash and cash equivalents 811,567 (42,692,334) Cash and cash equivalents at January 1, 36,833,090 68,186,902

------------- ------------- Cash and cash equivalents at September 30, $ 37,644,657 $ 25,494,568

============= =============

Scorpio Tankers Inc. and Subsidiaries Other operating data for the three and nine months ended September 30, 2012

and 2011

(unaudited)

For the three months For the nine months

ended ended

September 30, September 30,

2012 2011 2012 2011

----------- ----------- ----------- ----------- Adjusted EBITDA(1) $ 1,715,172 $ 1,034,551 $ 8,097,415 $10,196,684

Average Daily Results Time charter equivalent per day(2) $ 11,926 $ 11,660 $ 12,719 $ 13,304 Vessel operating costs per day(3) 6,935 7,660 7,690 7,707

Aframax/LR2 TCE per revenue day - pool $ 15,809 $ 16,986 $ 10,940 $ 14,789 TCE per revenue day - time charters - - - 15,457 Vessel operating costs per day(3) 7,645 6,788 8,622 7,066

Panamax/LR1 TCE per revenue day - pool $ 13,723 $ 11,776 $ 14,661 $ 13,666 TCE per revenue day - spot 11,238 - 11,238 - TCE per revenue day - time charters - 23,894 - 23,921 Vessel operating costs per day(3) 7,271 7,986 7,783 7,928

MR TCE per revenue day - pool (Existing MR) $ 10,433 $ - $ 9,445 $ - TCE per revenue day - spot (Newbuildings) 16,719 - 16,719 -

9,103 15,928 10,750 12,053 TCE per revenue day - spot (Existing MR)

Vessel operating costs per day(3) 6,593 7,054 7,338 7,116

Handymax TCE per revenue day - pool $ 11,123 $ 8,914 $ 12,864 $ 11,587 TCE per revenue day - spot - - 11,894 - Vessel operating costs per day(3) 5,524 7,774 7,414 7,746

Fleet data Average number of owned vessels 9.88 12.00 10.43 11.05 Average number of time chartered-in vessels 10.51 6.46 8.43 3.96

Drydock Expenditures for drydock $ - $ 1,189,860 $ - $ 1,919,525

(1) See Non-GAAP Measures 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 divided

by the number of days the vessel is owned during the period.

Fleet List as of October 29, 2012

Vessel Year Ice Vessel

Name Built DWT Class Employment type

---------- ----- --------- ----- ---------- --------

Owned

vessels 1 STI

Highlander 2007 37,145 1A SHTP (1) Handymax 2 STI Amber 2012 52,000 - Spot MR 3 STI Topaz 2012 52,000 - Spot MR 4 STI Ruby 2012 52,000 - Spot MR 5 STI Garnet 2012 52,000 - Spot MR 6 STI Onyx 2012 52,000 - Spot MR 7 Noemi 2004 72,515 - SPTP (2) LR1 8 Senatore 2004 72,514 - SPTP (2) LR1 9 STI

Harmony 2007 73,919 1A SPTP (2) LR1 10 STI

Heritage 2008 73,919 1A SPTP (2) LR1

Post- 11 Venice 2001 81,408 1C SPTP (2) Panamax 12 STI Spirit 2008 113,100 - SLR2P (3) LR2

---------

Total

owned DWT 784,520

=========

Time Charter

Info

----------------

Time Chartered-

In vessels

Daily

Vessel Year Ice Vessel Base Expiry

Name Built DWT Class Employment type Rate (5)

---------- ----- --------- ----- ---------- -------- ------- --------

26-Jul- 13 Kraslava 2007 37,258 1B SHTP (1) Handymax $12,070 13 (6) 14 Krisjanis 14-Jun-

Valdemars 2007 37,266 1B SHTP (1) Handymax $12,000 13 (7) 15 Histria 06-Apr-

Azure 2007 40,394 - SHTP (1) Handymax $12,000 13 (8) 16 Histria 17-Jul-

Coral 2006 40,426 - SHTP (1) Handymax $13,000 13 (9) 17 Histria 15-Jul-

Perla 2005 40,471 - SHTP (1) Handymax $13,000 13 (9)

16-Jan- 18 Endeavour 2004 46,102 - SMRP(4) MR $11,525 13 (10)

17-May- 19 STX Ace 6 2007 46,161 - SMRP(4) MR $14,150 14 (11) 20 Pacific 17-Mar-

Duchess 2009 46,697 - SMRP(4) MR $13,800 13 (12)

17-May- 21 Targale 2007 49,999 - SMRP(4) MR $14,500 14 (13)

Freja 26-Apr- 22 Lupus 2012 50,385 - SMRP(4) MR $14,760 14 (14) 23 Valle 15-Feb-

Bianca 2007 50,633 - SMRP(4) MR $12,000 13 (15)

01-Jan- 24 Gan-Trust 2013 51,561 - SMRP(4) MR $16,250 16 (16)

FPMC P 09-Sep- 25 Eagle 2009 73,800 - SPTP (2) LR1 $12,800 13 (17)

FPMC P 01-Jul- 26 Hero 2011 99,995 - SLR2P (3) LR2 $14,750 13 (18) 27 FPMC P 01-Jul-

Ideal 2012 99,993 - SLR2P (3) LR2 $14,750 13 (18)

---------

Total time

chartered-in DWT 811,141

=========

Newbuildings currently under

construction (19)

Vessel Vessel

Name DWT type

---------- --------- -------- 28 Hull 2361 52,000 MR 29 Hull 2362 52,000 MR 30 Hull 2369 52,000 MR 31 Hull 2389 52,000 MR 32 Hull 2390 52,000 MR

---------

Total

newbuilding DWT 260,000

=========

---------

Total DWT 1,855,661

=========

(1) This vessel operates 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 Scorpio Panamax Tanker Pool (SPTP). SPTP is

operated by SCM. SPTP is a related party to the Company. (3) This vessel operates in the Scorpio LR2 Pool (SLR2P). SLR2P is operated

by SCM. SLR2P is a related party to the Company. (4) This vessel operates in the Scorpio MR Pool (SMRP). SMRP is operated by

SCM. SMRP is a related party to the Company. (5) Redelivery from the charterer is plus or minus 30 days from the expiry

date. (6) This agreement contains an option for the Company to extend the charter

for an additional year at $13,070 per day. (7) This agreement contains an option for the Company to extend the charter

for an additional year at $13,000 per day. The agreement also contains

a 50% profit and loss sharing provision whereby the Company splits all

of the vessel's profits and losses above or below the daily base rate

with the vessel owner. (8) The agreement contains an option for the Company to extend the term of

the charter agreement for an additional year at $13,650 per day. (9) Represents the average rate for the two year duration of the agreement.

The rate for the first year is $12,750 per day and the rate for the

second year is $13,250 per day. The agreement contains an option for

the Company to extend the charter for an additional year at $14,500 per

day. (10) The agreement contains two consecutive options for the Company to

extend the charter for up to two six month periods at $13,750 and

$14,800 per day, respectively. (11) The agreement contains an option for the Company to extend the charter

for an additional year at $15,150 per day. (12) The agreement contains an option for the Company to extend the charter

for an additional year at $14,800 per day. (13) The agreement contains three consecutive options for the Company to

extend the charter for up to three consecutive one year periods at

$14,850 per day, $15,200 per day and $16,200 per day, respectively. (14) The agreement contains an option for the Company to extend the charter

for an additional year at $16,000 per day. (15) The agreement contains an option for the Company to extend the charter

for an additional six months at $13,000 per day. (16) This vessel is currently under construction and is expected to be

delivered in January 2013 from the shipyard. The daily base rate

represents the average rate for the three year duration of the

agreement. The rate for the first year is $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. The agreement contains two consecutive options for the

Company to extend the charter for up to two consecutive one year

periods at $17,500 per day and $18,000 per day, respectively. (17) The agreement contains two consecutive options for the Company to

extend the charter up to two, one year periods at $13,400 per day and

$14,400 per day, respectively. The Company also entered into an

agreement with a third party to share 50% profit and loss sharing

provisions whereby the Company will split all of the vessel's profits

and losses above or below the daily base rate. (18) The agreement contains three consecutive options for the Company to

extend the charter for up to three six month periods at $15,000 per

day, $15,250 per day and $15,500 respectively. (19) These newbuilding vessels are being constructed at Hyundai Mipo

Dockyard Co., Ltd of South Korea. Three vessels are expected to be

delivered between January 2013 and April 2013 and the remaining two are

expected to be delivered in January 2014.


 
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 medium-sized
tanker vessels. The Company intends to acquire modern, high-quality
tankers through timely and selective acquisitions. The Company is
currently concentrating on product or coated tankers because of the
fundamentals of this segment, which the Company believes includes:

-- increasing demand for refined products; -- increasing ton miles (distance between new refiners and areas of

demand); and -- reduced order book.


 
 
Dividend Policy 
 The Company does not have immediate plans to pay
dividends but will continue to assess the dividend policy. In the
future, the board of directors may determine in its sole discretion
that it is in the best interest of the Company to pay dividends. 
 
Share Buyback Program
 
On July 9, 2010, the board of directors authorized a share buyback
program of up to $20 million. The Company plans 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 October 29, 2012, the Company has purchased $7.9 million of
shares in the open market at an average price of $6.78.
 
About Scorpio Tankers Inc. 
 Scorpio Tankers Inc. is a provider of
marine transportation of petroleum products worldwide. Scorpio
Tankers Inc. currently owns one LR2 tanker, four LR1 tankers, one
Handymax tanker, five MR tankers, and one post-Panamax tanker with an
average age of 4.6 years, time charters-in 15 vessels (two LR2, one
LR1, seven MR and five Handymax tankers), and has contracted for five
newbuilding MR's (three are expected to be delivered to the Company
in the first half of 2013 and two in January 2014). Additional
information about the Company is available at the Company's website
www.scorpiotankers.com, which is not a part of this press release.
 
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. The information set forth herein speaks only as of the date
hereof, and the Company disclaims any intention or obligation to
update any forward looking statements as a result of developments
occurring after the date hereof. Please see our filings with the
Securities and Exchange Commission for a more complete discussion of
these and other risks and uncertainties. 
 
Non-GAAP Measures
 This press release describes adjusted net loss and
Adjusted EBITDA, which are not measures prepared in accordance with
IFRS (that is, a "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 loss

For the three months For the three months

ended ended

September 30, 2012 September 30, 2011

----------------------- -----------------------

------------ --------- ------------ ---------

Amount Per share Amount Per share

------------ --------- ------------ --------- Net loss $(12,511,169) $ (0.30) $ (6,884,608) $ (0.22) Add: Loss from sale of

vessels 5,878,753 0.14 - - Write off of deferred

financing fees 2,977,905 0.07 - -

------------ --------- ------------ --------- Total adjustments 8,856,658 0.21 - -

------------ --------- ------------ --------- Adjusted net loss $ (3,654,511) $ (0.09) $ (6,884,608) $ (0.22)

============ ========= ============ =========

For the nine months For the nine months

ended ended

September 30, 2012 September 30, 2011

----------------------- -----------------------

Amount Per share Amount Per share

------------ --------- ------------ --------- Net loss $(21,656,048) $ (0.54) $(11,041,021) $ (0.40) Add: Loss from sale of

vessels 10,403,524 0.26 - - Write off of deferred

financing fees 2,977,905 0.07 - -

------------ --------- ------------ --------- Total adjustments 13,381,429 0.34 - -

------------ --------- ------------ --------- Adjusted net loss $ (8,274,619) $ (0.21) $(11,041,021) $ (0.40)

============ ========= ============ =========

Adjusted EBITDA

For the three months

ended For the nine months ended

September 30, September 30,

------------------------- --------------------------

2012 2011 2012 2011

------------ ----------- ------------ ------------ Net loss $(12,511,169) $(6,884,608) $(21,656,048) $(11,041,021) Financial expenses 4,108,237 1,879,512 6,582,928 5,360,447 Unrealized gain on derivative financial instruments (38,224) - (38,224) - Financial income (3,569) - (5,674) (49,842) Depreciation 3,389,271 5,169,926 10,213,008 13,434,476 Amortization of restricted stock 891,873 869,721 2,597,901 2,492,624

------------ ----------- ------------ ------------ Loss from sale of vessels 5,878,753 - 10,403,524 -

------------ ----------- ------------ ------------ Adjusted EBITDA $ 1,715,172 $ 1,034,551 $ 8,097,415 $ 10,196,684

============ =========== ============ ============


 
 
 
Scorpio Tankers Inc. 
212-542-1616 

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