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

Scorpio Tankers Inc. Announces Financial Results for the Fourth Quarter of 2012 
MONACO -- (Marketwire) -- 02/25/13 --  Scorpio Tankers Inc. (NYSE:
STNG) ("Scorpio Tankers," or the "Company") today reported its
results for the three months and year ended December 31, 2012. 
Results for the three months ended December 31, 2012 and 2011 
For the three months ended December 31, 2012, the Company had an
adjusted net loss of $3.6 million (see Non-GAAP Measure section
below), or $0.08 basic and diluted loss per share, excluding a $1.3
million, or $0.03 per share, unrealized loss on derivative financial
instruments.  
For the three months ended December 31, 2011, the Company had an
adjusted net loss of $5.1 million (see Non-GAAP Measure section
below), or $0.16 basic and diluted loss per share, excluding a $66.6
million, or $2.05 per share impairment charge.  
For the three months ended December 31, 2012, the Company recorded a
net loss of $4.9 million, or $0.11 basic and diluted loss per share.
This is compared to a net loss of $71.7 million or $2.21 basic and
diluted loss per share for the three months ended December 31, 2011.  
Results for the year ended December 31, 2012 and 2011 
For the year ended December 31, 2012, the Company had an adjusted net
loss of $11.9 million (see Non-GAAP Measure section below), or $0.29
basic and diluted loss per share, excluding (i) a $10.4 million, or
$0.25 per share, loss from sales of five vessels, (ii) a $3.0
million, or $0.07 per share, write-off of deferred financing fees
attributable to the extension of the 2011 Credit Facility, and (iii)
a $1.2 million, or $0.03 per share, unrealized loss on derivative
financial instruments.  
For the year ended December 31, 2011, the Company had an adjusted net
loss of $16.1 million (see Non-GAAP Measure section below), or $0.56
basic and diluted loss per share, excluding a $66.6 million, or $2.32
per share impairment charge.  
For the year ended December 31, 2012, the Company recorded a net loss
of $26.5 million or $0.64 basic and diluted loss per share. This is
compared to a net loss of $82.7 million or $2.88 basic and diluted
loss per share for the year ended December 31, 2011.  
Summary of Recent and Fourth Quarter Significant Events: 


 
--  Signed a commitment letter
 for a $267.0 million credit facility with
    Nordea Bank Finland plc, acting through its New York branch, ABN AMRO
    Bank N.V and Skandinaviska Enskilda Banken AB in February 2013.
--  Closed on a registered direct placement of 30,672,000 shares of common
    stock at an offering price of $7.50 per share receiving net proceeds
    of approximately $222.1 million in February 2013.
--  Exercised options with Hyundai Mipo Dockyard Co. Ltd. of South Korea
    ("HMD") for the construction of four Handymax, ice class 1A product
    tanker newbuildings (38,000 DWT) for approximately $31.3 million each
    in February 2013.
--  Signed contracts with SPP Shipbuilding Co., Ltd. of South Korea
    ("SPP") for the construction of four MR product tanker newbuildings
    for approximately $32.5 million each in February 2013.
--  Signed contracts with HMD for the construction of two MR product
    tanker newbuildings for approximately $32.5 million each in January
    2013.
--  Took delivery of the sixth vessel under the Company's Newbuilding
    program, STI Sapphire, in January 2013.
--  Closed on a registered direct placement of 21,639,774 shares of common
    stock at an offering price of $6.10 receiving net proceeds of $127.2
    million in December 2012.
--  Exercised options with HMD for the construction of two MR product
    tanker newbuildings and reached an agreement with SPP for the
    construction of four MR product tanker newbuildings in December 2012
    for approximately $33.0 million each.
--  Took delivery of six previously announced time chartered-in product
    tankers, two LR2's, an LR1 and three MR's in January 2013.

  
Emanuele Lauro, chief executive officer and chairman of the board,
commented, "The first quarter has been marked by seasonal refinery
turnarounds in the East and lower export volumes, yet we have
experienced firm markets so far, particularly in the Atlantic basin
as a result of increasing US Gulf exports. Going forward, we expect
improvement in volumes and rates as several major refineries resume
production.  
"We continue to see confirmation of our longer-term thesis, that
there will be significant increases in product tanker demand days as
refining capacity inexorably shifts to more competitive locations.
This shift is lengthening steaming distances, expanding the
opportunity set for commodity traders, and solidifying the role of
the product tanker as inexpensive and flexible storage as port
infrastructure -- both in the developed and developing world -- is
constrained." 
Mr. Lauro concluded, "Our new vessels are performing well, realizing
the fuel savings we previously announced, and we are confident that
our newbuilding program is well-timed. We see a very attractive
competitive landscape to match our profile for growth."  
Recent Significant Events 
Follow-on offering 
In February 2013, the Company closed on the sale of 30,672,000 shares
of common stock in a registered direct placement of common shares at
an offering price of $7.50 per share. The Company received net
proceeds of approximately $222.1 million, after deducting the
placement agents' discount and offering expenses and now has
94,499,846 shares outstanding.  
Newbuilding vessel orders 
In February 2013, the Company exercised options with Hyundai Mipo
Dockyard Co. Ltd. of South Korea ("HMD") for the construction of four
Handymax, ice class 1A product tankers (38,000 DWT) for approximately
$31.3 million each. These fuel efficient vessels will be delivered in
the third quarter of 2014. In conjunction with these contracts, the
Company received four new fixed price options for similar vessels
which would be delivered in the first half of 2015. 
In February 2013, the Company reached an agreement with SPP
Shipbuilding Co., Ltd. of South Korea ("SPP") for the construction of
four MR product tankers for approximately $32.5 million each, two of
which are the exercise of options from a previous contract. These
vessels will be delivered in the third and fourth quarters of 2014.
In conjunction with these contracts, the Company received extensions
on several previously agreed options and received four new fixed
price options for similar vessels which would be delivered in 2015. 
In January 2013, the Company reached an agreement with HMD for the
construction of two MR product tankers for approximately $32.5
million each. These vessels will be delivered in May and June 2014.  
The Company currently has a total of 20 product tanker newbuilding
orders with HMD and SPP (16 MR and four Handymax). Two of the
newbuildings are expected to be delivered to the Company by April
2013 and the remaining 18 by the end of 2014. The Company also has
fixed-price options to construct a total of 14 additional newbuilding
product tankers at these yards. 
2013 Credit Facility 
In February 2013, the Company signed a commitment letter for a $267.0
million credit facility ("2013 Credit Facility") with Nordea Bank
Finland plc, acting through its New York branch, ABN AMRO Bank N.V
and Skandinaviska Enskilda Banken AB.  
The 2013 Credit Facility, which will be split into a term loan and a
revolving loan, will be used to finance up to 60% of the purchase
price of vessels, including newbuildings upon delivery. The cre
dit
facility matures six years after the loan is signed. The covenants
and other conditions are similar to the Company's existing credit
facilities. 
Delivery of STI Sapphire 
The Company took delivery of the sixth vessel under its Newbuilding
program, STI Sapphire, in January 2013. Upon delivery, the vessel
began a time charter for up to 80 days at $20,750 per day. The vessel
was partially financed by the Company's 2011 Credit Facility. 
Time chartered-in vessels 
In January 2013, the Company agreed to time charter-in and took
delivery of a 2007 built MR ice-class 1B product tanker (49,999 DWT)
on a one year time charter-in agreement at $14,000 per day. The
agreement also contains an option for the Company to extend the
charter by one year at $15,000 per day.  
In January 2013, the Company took delivery of a previously announced
2013 built MR product tanker (51,561 DWT). This vessel is a sister
ship of our newbuilding vessels from HMD. The vessel will be
chartered-in for three years at $15,750 per day in year one, $16,250
per day in year two and $16,750 per day in year three. The agreement
includes 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. 
In January 2013, the Company took delivery of a previously announced
2007 built MR ice-class 1B product tanker (52,684 DWT) on a one year
time charter-in agreement at $13,500 per day. The agreement includes
an option for the Company to extend the charter for an additional
year at $14,500 per day. 
In January 2013, the Company took delivery of a previously announced
2003 built LR1 product tanker (72,344 DWT) on a two year time
charter-in agreement at $11,250 per day with a 50% profit sharing
provision whereby the Company splits any of the vessel's profits
above $11,250 per day with the vessel owner. The agreement includes
an option for the Company to extend the charter for an additional
year at $12,500 per day with a 50% profit sharing provision. 
In January 2013, the Company took delivery of a previously announced
2012 built LR2 product tanker (99,993 DWT) on a six month time
charter-in agreement at $14,750 per day. The Company has options to
extend the charter for three consecutive six month periods at $15,000
per day, $15,250 per day, and $15,500 per day respectively. 
In January 2013, the Company took delivery of a previously announced
2008 built LR2 product tanker (115,406 DWT) on a six month time
charter-in agreement at $16,000 per day. The Company has options to
extend the charter for three consecutive six month periods at $16,250
per day, $16,500 per day, and $16,750 per day respectively.  
Fourth Quarter Significant Events  
Follow-on offering 
In December 2012, the Company closed on the sale of 21,639,774 shares
of common stock in a registered direct placement of common shares at
an offering price of $6.10 per share. The Company received net
proceeds of approximately $127.2 million, after deducting the
placement agents' discount and offering expenses.  
Newbuilding vessel orders 
In December 2012, the Company exercised options with HMD for the
construction of two MR product tanker newbuildings, and it also
reached an agreement with SPP Shipbuilding Co., Ltd. of South Korea
("SPP") for the construction of four MR product tanker newbuildings.
The six newbuildings are scheduled to be delivered to the Company in
the second and third quarters of 2014. The contract price for each of
the newbuildings is approximately $33.0 million. 
Time chartered-in vessels 
In December 2012, the Company took delivery of a 2007 built LR1
product tanker (73,669 DWT) on a one year time charter-in agreement
at $12,500 per day. The agreement includes an option for the Company
to extend the charter for an additional six months at $14,250 per
day. 
In December 2012, the Company agreed to extend the charter on a 2007
built Handymax product tanker (40,394 DWT), which is already time
chartered-in by the Company for one additional year, commencing in
April 2013, at $12,600 per day. The agreement includes an option for
the Company to extend the charter for an additional year at $13,550
per day. 
Conference Call 
The Company will have a conference call on February 26, 2013 at 11:00
AM Eastern Standard Time. 
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1(877)-719-9789 (U.S.) or
1(719) 325-4933 (International). The conference participant passcode
is 7673945. The information provided on the teleconference is only
accurate at the time of the conference call, and the Company will
take no responsibility for providing updated information. 
Slides and Audio Webcast: 
There will also be a simultaneous live webcast over the internet,
through the Scorpio Tankers Inc. website www.scorpiotankers.com.
Participants to the live webcast should register on the website
approximately 10 minutes prior to the start of the webcast. 
Webcast URL: http://www.visualwebcaster.com/event.asp?id=92533 
Current Liquidity 
As of February 25, 2013, the Company had $271.7 million in cash and
$67.4 million available to draw down from its 2010 Revolving Credit
Facility.  
Debt  
As of February 25, 2013, the Company's outstanding debt balance is as
follows: 


 
                                                          
2010 Revolving Credit Facility     $      17.2  million   
2011 Credit Facility               $      32.5  million   
STI Spirit Credit Facility         $      23.4  million   
Newbuilding Credit Facility        $      89.8  million   
                                   -----------            
Total                              $     162.9  million   
                                   ===========            

 
2010 Revolving Credit Facility 
In December 2012, the Company repaid $50.0 million into the 2010
Revolving Credit Facility.  
2011 Credit Facility 
In January 2013, the Company drew down $17.0 million from the 2011
Credit Facility to partially finance the delivery of the Company's
sixth newbuilding vessel, STI Sapphire.  
STI Spirit Credit Facility Repayment 
The credit facility with DVB Bank SE requires that the charter-free
market value of STI Spirit shall be no less than 140% of the then
outstanding loan balance. In order to stay in compliance with this
covenant, the Company made a prepayment of $1.3 million in December
2012, which will be applied to the next four quarterly payments.  
2013 Debt Repayments  
The first quarter of 2013 debt repayment for the Newbuilding Credit
Facility and 2011 Credit Facility will be $1.8 million. There are no
principal payments due for the 2010 Revolving Credit Facility since
the amount available is greater than the amount drawn. There are no
principal payments due for the STI Spirit Credit Facility as a result
of the $1.3 million prepayment made in December 2012. 
Newbuilding Program  
During the fourth quarter of 2012, the Company made $13.6 million of
installment payments on its newbuilding vessels. The Company
currently has 20 product tanker newbuilding orders with HMD and SPP
(16 MR and four Handymax). The estimated future payment dates and
amounts including the newbuilding contracts signed in 2013 are as
follows*:  


 
                              
Q1 2013   $   105.4  million**
Q2 2013        41.3  million  
Q3 2013        51.0  million  
Q4 2013        41.6  million  
Q1 2014        70.9  million  
Q2 2014        99.5  million  
Q3 2014       202.2  million  
Q4 2014        39.8  million  
          ---------           
Total     $   651.7  million  
                              
hese are estimates only and are subject to change as construction
progresses. 
 
**$42.3 million has been paid as of the date of this press release
which includes the final installment payment of $22.2 million
relating to the delivery of STI Sapphire in January 2013. 
 
Explanation of Variances on the Fourth Quarter of 2012 Financial
Results Compared to the Fourth Quarter of 2011
 
For the three months ended December 31, 2012, the Company incurred a
net loss of $4.9 million compared to a net loss of $71.7 million in
the three months ended December 31, 2011. The following were the
significant changes between the two periods:

 
--  Tim
e 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 December 31, 2012 and 2011: 
For the three months ended   
December 31,          
----------------------------- 
In thousands of U.S. dollars                       2012            2011      
-------------   ------------- 
Vessel revenue                                $      30,104   $      22,642 
Voyage expenses                                      (1,794)         (2,733) 
-------------   ------------- 
TCE revenue                                   $      28,310   $      19,909  
=============   =============  
--  TCE revenue increased by $8.4 million to $28.3 million as a result of 
an increase in the average number of operating vessels (owned and time 
chartered-in) to 23.81 from 17.48 for the three month periods ended 
December 31, 2012 and 2011, respectively. Additionally, the Company 
experienced an increase in time charter equivalent per day to $13,392 
per day from $11,912 per day for the three months ended December 31, 
2012 and 2011, respectively (see the breakdown of daily TCE averages 
below). 
--  Vessel operating costs remained consistent, increasing by $0.2 million 
to $8.2 million as the average number of owned vessels was 12.00 for 
both the three months ended December 31, 2012 and 2011. Operating 
costs per day were $7,348 for the three months ended December 31, 
2012, an increase of $109 per day from $7,239 during the three months 
ended December 31, 2011 (see the breakdown of daily operating expense 
averages below). Operating costs for our five newbuilding vessels were 
$5,711 per day for the three months ended December 31, 2012. The lower 
costs incurred on these vessels were offset by higher operating costs 
from vessels in our Aframax/LR2 and Handymax segments, which resulted 
from repairs made during the period on certain vessels within these 
segments. 
--  Charterhire expense increased $7.0 million to $14.2 million as a 
result of an increase in the average number of time chartered-in 
vessels to 11.81 from 5.48 for the three months ended December 31, 
2012 and 2011, respectively. See the Company's Fleet List below for 
the terms of these agreements. 
--  The Company recorded a $66.6 million non-cash impairment charge during 
the three months ended December 31, 2011. There was no such charge 
during the three months ended December 31, 2012. 
--  Depreciation expense decreased by $0.4 million to $4.6 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) the sales of STI Conqueror, STI Matador and STI 
Gladiator during the first and second quarters of 2012 along with the 
sales of STI Diamond and STI Coral during the third quarter of 2012. 
This fleet reduction was offset by the delivery of the first five 
vessels under the Company's Newbuilding program in the third quarter 
of 2012. 
--  Financial expenses, which consist of interest expense, amortization of 
deferred financing fees and commitment fees increased by $0.2 million 
to $1.9 million. This increase was primarily driven by an increase in 
interest expense which was the result of a higher average debt balance 
during the three months ended December 31, 2012 when compared to the 
three months ended December 31, 2011. This increase was partially 
offset by a decrease in commitment fees which was driven by the higher 
average debt balance (and hence lower available balance) for the three 
months ended December 31, 2012 and 2011, respectively. 
--  Unrealized loss on derivative financial instruments consists of (i) a 
$1.0 million loss attributable to the discontinuation of hedge 
accounting on three of the Company's interest rate swaps which 
resulted in the reclassification of the fair value of these swaps 
previously recorded in other comprehensive income (within equity) to 
the statement of profit or loss and (ii) the decrease in the fair 
value of derivatives related to profit and loss agreements on time 
chartered-in vessels with third parties of $0.2 million. 
--  Earnings from profit or loss sharing agreements include $0.2 million 
of earnings under these agreements during the three months ended 
December 31, 2012. There were no profit or loss agreements in place 
for the three months ended December 31, 2011. 
Scorpio Tankers Inc. and Subsidiaries                     
Condensed Consolidated Statement of Profit or Loss              
(unaudited)                                  
For the three months       For the year ended     
ended December 31,           December 31,        
------------------------  ------------------------ 
In thousands of U.S.                                                        
 dollars except per                                                         
 share and share data        2012         2011         2012         2011     
-----------  -----------  -----------  ----------- 
Revenue:                                                                    
  Vessel revenue         $    30,104  $    22,642  $   115,381  $    82,110  
Operating expenses:                                                         
  Vessel operating costs      (8,195)      (8,039)     (30,353)     (31,370)
  Voyage expenses             (1,794)      (2,733)     (21,744)      (6,881)
  Charterhire                (14,222)      (7,214)     (43,701)     (22,750)
  Impairment                       -      (66,611)           -      (66,611)
  Depreciation                (4,605)      (5,025)     (14,818)     (18,460)
  Loss from sale of                                                          
vessels (1)                     -            -      (10,404)           - 
  General and                                                                
administrative                                                            
expenses                   (3,132)      (3,025)     (11,536)     (11,637) 
-----------  -----------  -----------  ----------- 
  Total operating                                                            
expenses                  (31,948)     (92,647)    (132,556)    (157,709) 
-----------  -----------  -----------  ----------- 
Operating loss                (1,844)     (70,005)     (17,175)     (75,599) 
-----------  -----------  -----------  ----------- 
Other (expense) and                                                         
 income, net                                                                
  Financial expenses          (1,929)      (1,700)      (8,512)      (7,060)
  Earnings from profit                                                       
or loss sharing                                                           
agreements                    157            -          443            - 
  Unrealized loss on                                                         
derivative financial                                                      
instruments                (1,269)           -       (1,231)           - 
  Financial income                29            1           35           51 
  Other expenses, net            (24)          18          (97)        (119) 
-----------  -----------  -----------  ----------- 
  Total other expense,                                                       
net                        (3,036)      (1,681)      (9,362)      (7,128) 
-----------  -----------  -----------  ----------- 
Net loss                 $    (4,880) $   (71,686) $   (26,537) $   (82,727) 
===========  ===========  ===========  ===========  
Loss per share                                                               
Basic and diluted (2)  $     (0.11) $     (2.21) $     (0.64) $     (2.88)
  Basic and diluted                                                          
weighted average                                                          
shares outstanding                                                        
(2)                    46,090,794   32,413,382   41,413,339   28,704,876  
(1)  The year ended December 31, 2012 includes the loss from sales of STI    
Diamond, STI Coral, STI Conqueror, STI Matador, and STI Gladiator which 
closed on August 15, 2012, September 11, 2012, March 20, 2012, April    
18, 2012, and May 2, 2012, respectively.                               
(2)  Diluted weighted shares outstanding, which consists of the impact of    
restricted shares, for the three months and years ended December 31,    
2012 and 2011 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              
-----------------------------  
December 31,    December 31, 
In thousands of U.S. dollars                       2012            2011      
-------------   ------------- 
Assets                                                                      
Current assets                                                              
Cash and cash equivalents                     $      87,165   $      36,833 
Accounts receivable                                  36,438          20,386 
Prepaid expenses and other current assets               956           1,535 
Inventories                                           2,170           2,696  
-------------   ------------- 
Total current assets                                126,729          61,450  
-------------   ------------- 
Non-current assets                                                          
Vessels and drydock                                 395,412         322,458 
Vessels under construction                           50,251          60,333 
Other assets                                            889           3,989  
-------------   ------------- 
Total non-current assets                            446,552         386,780  
-------------   ------------- 
Total assets                                  $     573,281   $     448,230  
=============   =============  
Current liabilities                                                         
Bank loans                                            7,475           2,889 
Accounts payable                                     11,387          11,732 
Accrued expenses                                      3,057           3,376 
Derivative financial instruments                        844             237  
-------------   ------------- 
Total current liabilities                            22,763          18,234  
-------------   ------------- 
Non-current liabilities                                                     
Bank loans                                          134,984         142,679 
Derivative financial instruments                        743             464  
-------------   ------------- 
Total non-current liabilities                       135,727         143,143  
-------------   ------------- 
Total liabilities                                   158,490         161,377  
-------------   -------------  
Shareholders' equity                                                        
Issued, authorized and fully paid-in share                                  
 capital:                                                                   
Share capital                                           650             391 
Additional paid-in capital                          519,493         363,210 
Treasury shares                                      (7,938)         (5,498)
Hedging reserve                                        (329)           (701)
A
ccumulated deficit                                 (97,085)        (70,549) 
-------------   ------------- 
Total shareholders' equity                          414,791         286,853  
-------------   ------------- 
Total liabilities and shareholders' equity    $     573,281   $     448,230  
=============   =============  
Scorpio Tankers Inc. and Subsidiaries                     
Condensed Consolidated Statement of Cash Flows                
(unaudited)                                  
For the year ended December 31,  
------------------------------- 
In thousands of U.S. dollars                     2012             2011       
--------------   --------------  
Operating activities                          
Net loss                                    $      (26,537)  $      (82,727)
Loss from sale of vessels                           10,404                - 
Depreciation                                        14,818           18,460 
Impairment                                               -           66,611 
Amortization of restricted stock                     3,490            3,362 
Amortization of deferred financing fees              4,093              986 
Write off of vessel purchase options                     -              126 
Straight-line adjustment for charterhire                                    
 expense                                                41               84 
Unrealized loss on derivative financial                                     
 instruments                                         1,231                -  
--------------   --------------  
7,540            6,902  
--------------   -------------- 
Changes in assets and liabilities:                                          
Drydock payments                                    (1,702)          (2,516)
Decrease/(increase) in inventories                     527           (1,410)
Increase in accounts receivable                    (16,052)         (13,031)
Decrease/(increase) in prepaid expenses                547           (1,075)
Decrease/(increase) in other assets                  2,442           (1,374)
Increase/(decrease) in accounts payable              3,966             (954)
Increase in accrued expenses                           804            1,006  
--------------   --------------  
(9,468)         (19,354) 
--------------   -------------- 
Net cash outflow from operating activities          (1,928)         (12,452) 
--------------   -------------- 
Investing activities                                                        
Acquisition of vessels and payments for                                     
 vessels under construction                       (191,490)        (122,573)
Proceeds from disposal of vessels                  101,335                -  
--------------   -------------- 
Net cash outflow from investing activities         (90,155)        (122,573) 
--------------   -------------- 
Financing activities                                                        
Bank loan repayment                               (129,076)        (109,638)
Bank loan drawdown                                 124,171          115,308 
Debt issuance costs                                 (3,293)          (4,134)
Net proceeds from issuance of common stock         153,053          104,986 
Purchase of Treasury shares                         (2,440)          (2,851) 
--------------   -------------- 
Net cash inflow from financing activities          142,415          103,671  
--------------   -------------- 
Increase/(decrease) in cash and cash                                        
 equivalents                                        50,332          (31,354)
Cash and cash equivalents at January 1,             36,833           68,187  
--------------   -------------- 
Cash and cash equivalents at December 31,   $       87,165   $       36,833  
==============   ==============  
Scorpio Tankers Inc. and Subsidiaries                   
 Other operating data for the three months and year ended December 31, 2012  
and 2011                                  
(unaudited)                                 
For the three                       
months ended     For the year ended 
December 31,        December 31,    
------------------  ------------------ 
2012      2011      2012      2011   
--------  --------  --------  --------
Adjusted EBITDA(1)(in thousands of                                          
 U.S. dollars)                        $  3,786  $  2,518  $ 11,883  $ 12,715 
Average Daily Results                                                       
Time charter equivalent per day(2)    $ 13,392  $ 11,912  $ 12,960  $ 12,898
Vessel operating costs per day           7,348     7,239     7,605     7,581 
Aframax/LR2                                                                 
TCE per revenue day - pool            $  6,619  $ 14,924  $ 10,201  $ 14,849
TCE per revenue day - time charters          -         -         -    15,457
Vessel operating costs per day(3)        7,884     6,644     8,436     6,960 
Panamax/LR1                                                                 
TCE per revenue day - pool            $ 13,130  $ 10,533  $ 14,242  $ 12,876
TCE per revenue day - spot              18,496         -    15,147         -
TCE per revenue day - time charters          -    24,098         -    23,962
Vessel operating costs per day(3)        7,509     7,782     7,714     7,891 
MR                                                                          
TCE per revenue day - pool            $ 12,135         -  $ 11,811         -
TCE per revenue day - spot              16,352    12,148    12,541    12,092
Vessel operating costs per day(3)        5,994     6,175     6,770     6,748 
Handymax                                                                    
TCE per revenue day - pool            $ 13,810  $ 10,762  $ 13,166  $ 11,343
TCE per revenue day - spot                   -         -    11,201         -
Vessel operating costs per day(3)        7,908     7,242     7,594     7,619 
Fleet data                                                                  
Average number of owned vessels          12.00     12.00     10.81     11.29
Average number of time chartered-in                                         
 vessels                                 11.81      5.48      9.18      4.95 
Drydock                                                                     
Expenditures for drydock (in                                                
 thousands of U.S. dollars)           $  2,869  $    705  $  2,869  $  2,624 
(1)  See Non-GAAP Measure section below                                     
(2)  Freight rates are commonly measured in the shipping industry in terms   
of time charter equivalent per day (or TCE per day), which is           
calculated by subtracting voyage expenses, including bunkers and port   
charges, from vessel revenue and dividing the net amount (time charter  
equivalent revenues) by the number of revenue days in the period.       
Revenue days are the number of days the vessel is owned less the number 
of days the vessel is off-hire for drydock and repairs.                
(3)  Vessel operating costs per day represent vessel operating costs         
excluding non-recurring expenses (for example insurance deductible      
expenses for repairs) divided by the number of days the vessel is owned 
during the period.                                                      
Fleet List as of February 25, 2013                      
Ice                                          
Year                             Vessel                      
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   -     SMRP(4)     MR                       
3  STI Topaz    2012    52,000   -     SMRP(4)     MR                       
4  STI Ruby     2012    52,000   -     SMRP(4)     MR                       
5  STI Garnet   2012    52,000   -     SMRP(4)     MR                       
6  STI Onyx     2012    52,000   -     SMRP(4)     MR                       
7  STI                                                                       
Sapphire    2013    52,000   -      Spot       MR                       
8  Noemi        2004    72,515   -    SPTP (2)     LR1                      
9  Senatore     2004    72,514   -    SPTP (2)     LR1                      
10 STI Harmony  2007    73,919   1A   SPTP (2)     LR1                      
11 STI                                                                       
Heritage    2008    73,919   1A   SPTP (2)     LR1                      
12 Venice       2001    81,408   1C   SPTP (2)    Post-                      
Panamax                    
13 STI Spirit   2008   113,100   -    SLR2P (3)    LR2                       
---------                                               
Total owned                                                               
DWT                836,520                                               
=========                                               
Time Charter       
Info           
--------------      
Time Chartered-In                                      Daily              
vessels                     Ice                        Base              
Year                             Vessel          Expiry      
Vessel Name Built    DWT    Class Employment   type     Rate    (5)       
----------- ----- --------- ----- ---------- -------- ------- ------     
14 Kraslava     2007   37,258    1B   SHTP (1)  Handymax $12,070   18-  (6)  
Jul-13     
15 Krisjanis                                                       14-       
Valdemars   2007    37,266   1B   SHTP (1)  Handymax $12,000 Jun-13 (7) 
16 Histria                                                         04-       
Azure       2007    40,394   -    SHTP (1)  Handymax $12,000 Apr-14 (8) 
17 Histria                                                         17-       
Coral       2006    40,426   -    SHTP (1)  Handymax $13,000 Jul-13 (9) 
18 Histria                                                         15-       
Perla       2005    40,471   -    SHTP (1)  Handymax $13,000 Jul-13 (9) 
19 STX Ace 6    2007    46,161   -     SMRP(4)     MR    $14,150   17-  (10) 
May-14     
20 Pacific                                                         17-       
Duchess     2009    46,697   -     SMRP(4)     MR    $13,800 Mar-13 (11)
21 Targale      2007    49,999   -     SMRP(4)     MR    $14,500   17-  (12) 
May-14     
22 Ugale        2007    49,999   1B    SMRP(4)     MR    $14,000   15-  (13) 
Jan-14     
23 Freja Lupus  2012    50,385   -     SMRP(4)     MR    $14,760   26-  (14) 
Apr-14     
24 Valle                                                           22-       
Bianca      2007    50,633   -     SMRP(4)     MR    $12,000 Mar-13 (15)
25 Gan-Trust    2013    51,561   -      Spot       MR    $16,250   06-  (16) 
Jan-16     
26 Usma         2007    52,684   1B    SMRP(4)     MR    $13,500   03-  (17) 
Jan-14     
27 SN Federica  2003    72,344   -      Spot       LR1   $11,250   28-  (18) 
Feb-15     
28 Hellespont                                                      16-       
Promise     2007    73,669   -    SPTP (2)     LR1   $12,500 Dec-13 (19)
29 FPMC P                                                          09-       
Eagle       2009    73,800   -    SPTP (2)     LR1   $12,800 Sep-13 (20)
30 FPMC P Hero  2011    99,995   -    SLR2P (3)    LR2   $14,750   13-  (21) 
Oct-13     
31 FPMC P                                                          09-       
Ideal       2012    99,993   -    SLR2P (3)    LR2   $14,750 Jul-13 (21)
32 Fair Seas    2008   115,406   -    SLR2P (3)    LR2   $16,000   27-  (22) 
Jul-13      
---------                                               
Total time                                                                
chartered-in DWT 1,129,141                                               
=========                                               
Newbuildings currently                                                    
under construction          Ice                                          
Vessel                      
Vessel Name          DWT    Class              type                       
-----------       --------- -----            --------                    
33 Hull 2451            38,000   1A             Handymax                (23)
34 Hull 2452            38,000   1A             Handymax                (23)
35 Hull 2453            38,000   1A             Handymax                (23)
36 Hull 2454            38,000   1A             Handymax                (23)
37 Hull 2362            52,000                     MR                   (23)
38 Hull 2369            52,000                     MR                   (23)
39 Hull 2389            52,000                     MR                   (23)
40 Hull 2390            52,000                     MR                   (23)
41 Hull 2391            52,000                     MR                   (23)
42 Hull 2392            52,000                     MR                   (23)
43 Hull 2449            52,000                     MR                   (23)
44 Hull 2450            52,000                     MR                   (23)
45 Hull S1138           52,000                     MR                   (24)
46 Hull S1139           52,000                     MR                   (24)
47 Hull S1140           52,000                     MR                   (24)
48 Hull S1141           52,000                     MR                   (24)
49 Hull S1142           52,000                     MR                   (24)
50 Hull S1143           5
2,000                     MR                   (24)
51 Hull S1144           52,000                     MR                   (24)
52 Hull S1145           52,000                     MR                   (24) 
---------                                               
Total newbuilding                                                         
DWT                984,000                                               
=========                                               
---------                                               
Total DWT         2,949,661                                               
=========                                               
(1)  This vessel operates in or is expected to operate in the Scorpio        
Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial     
Management (SCM). SHTP and SCM are related parties to the Company.     
(2)  This vessel operates in or is expected to operate in the Scorpio        
Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related  
party to the Company.                                                  
(3)  This vessel operates in or is expected to operate in the Scorpio LR2    
Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the 
Company.                                                               
(4)  This vessel operates in or is expected to operate in the Scorpio MR     
Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the    
Company.                                                               
(5)  Redelivery from the charterer is plus or minus 30 days from the expiry  
date.                                                                  
(6)  We have an option to extend the charter for an additional year at       
$13,070 per day.                                                       
(7)  We have an option 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 we split all of the vessel's profits and      
losses above or below the daily base rate with the vessel's owner.     
(8)  In April 2013, the daily base rate will increase to $12,600 per day for 
one year thereafter. We have an option to extend the term of the        
charter for an additional year at $13,550 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. We have an option to extend the charter 
for an additional year at $14,500 per day.                             
(10) We have an option to extend the charter for an additional year at       
$15,150 per day.                                                       
(11) We have an option for the Company to extend the charter for an          
additional year at $14,800 per day.                                    
(12) We have options 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.                                                          
(13) We have an option to extend the charter for an additional year at       
$15,000 per day.                                                       
(14) We have an option to extend the charter for an additional year at       
$16,000 per day.                                                       
(15) We have an option to extend the charter for an additional six months at 
$13,000 per day.                                                       
(16) 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. We have options to extend the        
charter for up to two consecutive one year periods at $17,500 per day   
and $18,000 per day, respectively.                                     
(17) We have an option to extend the charter for an additional year at       
$14,500 per day.                                                       
(18) We have an option to extend the charter for an additional year at       
$12,500 per day.  We have also entered into an agreement with the owner 
whereby we split all of the vessel's profits above the daily base rate.
(19) We have an option to extend the charter for an additional six months at 
$14,250 per day.                                                       
(20) We have options to extend the charter for up to two consecutive one     
year periods at $13,400 per day and $14,400 per day, respectively.  We  
have also entered into an agreement with a third party whereby we split 
all of the vessel's profits and losses above or below the daily base    
rate.                                                                  
(21) We have options to extend the charters for three consecutive six month  
periods at $15,000 per day, $15,250 per day, and $15,500 per day        
respectively. FPMC P Hero is expected to be delivered in April 2013 and 
FPMC P Ideal was delivered in January 2013.                            
(22) We have options to extend the charter for three consecutive six month   
periods at $16,250 per day, $16,500 per day, and $16,750 per day        
respectively.                                                          
(23) These Newbuilding vessels are being constructed at HMD (Hyundai Mipo    
Dockyard Co. Ltd. of South Korea).  Two vessels are expected to be      
delivered between March 2013 and April 2013, and the remaining 10 are   
expected to be delivered by October 2014.                              
(24) These Newbuilding vessels are being constructed at SPP (SPP             
Shipbuilding Co., Ltd. of South Korea).  These eight vessels are        
expected to be delivered by the end of 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 (di
stance 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 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. Scorpio Tankers expects 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 February 25, 2013, 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 13
tankers (one LR2 tanker, four LR1 tankers, one Handymax tanker, six
MR tankers, and one post-Panamax tanker) with an average age of 4.6
years, time charters-in 19 product tankers (three LR2, three LR1,
eight MR and five Handymax tankers), and has contracted for 20
newbuilding product tankers (16 MR and four Handymax vessels), two of
which are expected to be delivered to the Company by April 2013 and
the remaining 18 by the end of 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. 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 (i.e. "Non-GAAP" measure). The Non-GAAP measures are presented
in this press release as we believe that they provide investors with
a means of evaluating and understanding how the Company's management
evaluates the Company's operating performance. These Non-GAAP
measures should not be considered in isolation from, as substitutes
for, or superior to financial measures prepared in accordance with
IFRS.
 
Adjusted net loss

  
For the three months    For the three months  
ended December 31,      ended December 31,   
2012                    2011          
---------------------   ---------------------  
---------   ---------   ---------   --------- 
In thousands of U.S. dollars                                                
 except per share and share                                                 
 data                           Amount    Per share     Amount    Per share  
---------   ---------   ---------   --------- 
  Net loss                    $  (4,880)  $   (0.11)  $ (71,686)  $   (2.21)
  Add:                                                                       
Impairment                        -           -      66,611        2.05  
Unrealized loss on                                                       
derivative financial                                                    
instruments                  1,269        0.03           -           -  
---------   ---------   ---------   --------- 
  Total adjustments               1,269        0.03      66,611        2.05  
---------   ---------   ---------   --------- 
  Adjusted net loss           $  (3,611)  $   (0.08)  $  (5,075)  $   (0.16) 
=========   =========   =========   =========  
For the year ended      For the year ended   
December 31, 2012       December 31, 2011    
---------------------   --------------------- 
In thousands of U.S. dollars                                                
 except per share and share                                                 
 data                           Amount    Per share     Amount    Per share  
---------   ---------   ---------   --------- 
  Net loss                    $ (26,537)  $   (0.64)  $ (82,727)  $   (2.88)
  Add:                                                                       
Impairment                        -           -      66,611        2.32  
Loss from sale of                                                        
vessels                     10,404        0.25           -           -  
Write off of deferred                                                    
financing fees               2,978        0.07           -           -  
Unrealized loss on                                                       
derivative financial                                                    
instruments                  1,231        0.03           -           -  
---------   ---------   ---------   --------- 
  Total adjustments              14,613        0.35      66,611        2.32  
---------   ---------   ---------   --------- 
  Adjusted net loss           $ (11,924)  $   (0.29)  $ (16,116)  $   (0.56) 
=========   =========   =========   =========  


 
Adjusted EBITDA

  
For the three months   For the year ended   
ended December 31,       December 31,      
--------------------  -------------------- 
In thousands of U.S. dollars        2012       2011       2012       2011    
---------  ---------  ---------  --------- 
  Net loss                       $  (4,880) $ (71,686) $ (26,537) $ (82,727)
  Financial expenses                 1,929      1,700      8,512      7,060 
  Unrealized loss on derivative                                              
financial instruments             1,269          -      1,231          - 
  Financial income                     (29)        (1)       (35)       (51)
  Depreciation                       4,605      5,025     14,818     18,460 
  Amortization of restricted                                                 
stock                               892        869      3,490      3,362 
  Impairment                             -     66,611          -     66,611 
  Loss from sale of vessels              -          -     10,404          -  
---------  ---------  ---------  --------- 
  Adjusted EBITDA                $   3,786  $   2,518  $  11,883  $  12,715  
=========  =========  =========  =========  


 
 
 
 
 
 
Scorpio Tankers Inc. 
212-542-1616 


 
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