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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