Scorpio Tankers Inc. Announces Financial Results for the Third Quarter of 2023, an Increase to its Quarterly Dividend, and Replenishment of its 2023 Securities Repurchase Program

Published

MONACO, Nov. 09, 2023 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers" or the "Company") today reported its results for the three and nine months ended September 30, 2023. The Company also announced that its board of directors (the "Board of Directors") has declared a quarterly cash dividend on its common shares of $0.35 per share.

Results for the three months ended September 30, 2023 and 2022

For the three months ended September 30, 2023, the Company had net income of $100.4 million, or $2.01 basic and $1.93 diluted earnings per share.

For the three months ended September 30, 2023, the Company had adjusted net income (see Non-IFRS Measures section below) of $99.2 million, or $1.99 basic and $1.91 diluted earnings per share, which excludes from net income (i) a $6.0 million, or $0.12 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on certain lease financing obligations and related debt extinguishment costs, and (ii) a $7.1 million, or $0.14 per basic and diluted share, gain on the sale of a vessel.

For the three months ended September 30, 2022, the Company had net income of $266.2 million, or $4.84 basic and $4.31 diluted earnings per share.

For the three months ended September 30, 2022, the Company had adjusted net income (see Non-IFRS Measures section below) of $264.8 million, or $4.81 basic and $4.29 diluted earnings per share, which excludes from net income (i) a $2.7 million, or $0.05 per basic and $0.04 per diluted share, gain on the sale of a vessel, (ii) $1.4 million, or $0.03 per basic and $0.02 per diluted share, write-off or acceleration of the amortization of deferred financing fees on certain debt or lease financing obligations and related debt extinguishment costs, and (iii) $0.1 million, or $0.00 per basic and diluted share, gain recorded on the repurchase of the Company’s Convertible Notes Due 2025.

Results for the nine months ended September 30, 2023 and 2022

For the nine months ended September 30, 2023, the Company had net income of $426.0 million, or $8.00 basic and $7.68 diluted earnings per share.

For the nine months ended September 30, 2023, the Company had adjusted net income (see Non-IFRS Measures section below) of $428.1 million, or $8.04 basic and $7.72 diluted earnings per share, which excludes from net income (i) a $9.3 million, or $0.17 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on certain lease financing obligations and related debt extinguishment costs, and (ii) a $7.1 million, or $0.13 per basic and diluted share, gain on the sale of a vessel.

For the nine months ended September 30, 2022, the Company had net income of $372.8 million, or $6.74 basic and $6.07 diluted earnings per share.

For the nine months ended September 30, 2022, the Company had adjusted net income (see Non-IFRS Measures section below) of $446.0 million, or $8.06 basic and $7.21 diluted earnings per share, which excludes from net income (i) a $66.5 million, or $1.20 per basic and $1.04 per diluted share, aggregate net loss on the sale of vessels, (ii) $7.1 million, or $0.13 per basic and $0.11 per diluted share, write-off or acceleration of the amortization of deferred financing fees on debt or lease financing obligations and related debt extinguishment costs, and (iii) $0.5 million, or $0.01 per basic and diluted share, gain recorded on the repurchases of the Company’s Convertible Notes due 2025.

Declaration of Dividend

On November 9, 2023, the Board of Directors declared a quarterly cash dividend of $0.35 per common share, with a payment date of December 15, 2023 to all shareholders of record as of November 30, 2023 (the record date). As of November 9, 2023, there were 53,107,765 common shares of the Company outstanding.

Summary of Third Quarter 2023 and Other Recent Significant Events

  • Below is a summary of the average daily Time Charter Equivalent ("TCE") revenue (see Non-IFRS Measures section below) and duration of contracted voyages and time charters for the Company's vessels (both in the pools and outside of the pools) thus far in the fourth quarter of 2023 as of the date hereof (See footnotes to "Other operating data" table below for the definition of daily TCE revenue):
 Pool and Spot Market Time Charters Out of the Pool
 Average Daily TCE RevenueExpected Revenue Days (1)% of Days Average Daily TCE RevenueExpected Revenue Days (1)% of Days
LR2$40,0002,55050% $30,750910100%
MR$31,0004,85048% $21,800450100%
Handymax$30,0001,25047% N/AN/AN/A 

(1) Expected Revenue Days are the total number of calendar days in the quarter for each vessel, less the total number of expected off-hire days during the period associated with major repairs or drydockings. Consequently, Expected Revenue Days represent the total number of days the vessel is expected to be available to earn revenue. Idle days, which are days when a vessel is available to earn revenue, yet is not employed, are included in revenue days. The Company uses revenue days to show changes in net vessel revenues between periods.

  • Below is a summary of the average daily TCE revenue earned by the Company's vessels during the third quarter of 2023:
 Average Daily TCE Revenue
Vessel classPool / SpotTime Charters
LR2$29,430$31,089
MR$29,181$22,192
Handymax$22,875N/A
  • On November 9, 2023, the Company’s Board of Directors replenished the 2023 Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company’s securities which, in addition to its common shares also consist of its Senior Unsecured Notes Due 2025 (NYSE: SBBA). This program resets the program that was previously replenished on May 31, 2023. There is $250 million available under the 2023 Securities Repurchase Program as of November 9, 2023.
  • The Company recently entered into an agreement to sell the 2012 built MR product tanker, STI Amber, for a selling price of $33.7 million. As a result, the Company gave notice to exercise the purchase option on this vessel on the BCFL Lease Financing (MRs), which is expected to result in a lease liability repayment of $8.2 million. The sale of this vessel and the corresponding lease repayment are expected to close before the end of the fourth quarter of 2023.
  • In October 2023, the Company gave notice to exercise the purchase options on 10 lease financed vessels consisting of (i) two Handymax vessels and four LR2 product tankers on the 2021 $146.3 Million Lease Financing (STI Rotherhithe, STI Hammersmith, STI Broadway, STI Connaught, STI Lauren and STI Winnie), and (ii) three MR product tankers and an LR2 product tanker on the 2021 AVIC Lease Financing (STI Soho, STI Osceola, STI Memphis and STI Lombard). These purchases are expected to take place in the fourth quarter of 2023 and first quarter of 2024 and the aggregate lease liability is expected to be $197.9 million at the date of purchase.
  • In October 2023, the Company closed on the previously announced exercise of purchase options on eight lease financed vessels consisting of (i) five LR2 product tankers on the CSSC Lease Financing (STI Gauntlet, STI Gladiator, STI Goal, STI Gratitude and STI Guide), and (ii) an MR product tanker and two LR2 product tankers (STI Maximus, STI Lily and STI Lotus) on the IFRS 16 - Leases - $670.0 Million lease financing. The Company repaid the aggregate outstanding lease liability of $195.9 million as a result of these purchases.
  • In July 2023, the Company executed its previously announced 2023 $1.0 Billion Credit Facility. In July and August 2023, the Company drew an aggregate of $576.4 million from this facility (split evenly between the term loan and the revolver) to finance 26 vessels. In September 2023, the Company repaid $288.2 million on the revolving portion of this credit facility, which may be re-borrowed in the future. In November 2023, the Company drew down $202.3 million from this facility (split evenly between the term loan and the revolver) and five LR2 product tankers (STI Lotus, STI Lily, STI Gladiator, STI Gratitude, and STI Goal) and three MR product tankers (STI Maximus, STI Leblon and STI Bosphorus) were placed as collateral under the facility.
  • In September 2023, the Company executed its previously announced 2023 $94.0 Million Credit Facility. Upon execution of the credit facility, the Company drew down $43.8 million and two vessels (STI Marshall and STI Grace) were placed as collateral under the facility. In October 2023, the Company drew down $50.2 million and two vessels (STI Guide and STI Gauntlet) were placed as collateral under the facility.
  • During the third quarter of 2023, the Company closed on the previously announced exercise of purchase options on eight MR product tankers (STI Mighty, STI Modest, STI Maestro, STI Maverick, STI Millennia, STI Miracle, STI Bosphorus and STI Leblon) and an LR2 product tanker (STI Supreme) which were financed on the IFRS 16 - Leases - $670.0 Million lease financing, 2020 CMBFL Lease Financing, and the Ocean Yield Lease Financing. These transactions resulted in an aggregate debt reduction of $207.9 million.
  • During the third quarter of 2023, the Company completed the previously announced debt repayments for six vessels which were financed on the 2019 DNB / GIEK Credit Facility (STI Condotti and STI Sloane), 2020 $225.0 Million Credit Facility (STI Kingsway and STI Spiga) and Hamburg Commercial Credit Facility (STI Veneto and STI Poplar). These transactions resulted in an aggregate debt reduction of $101.3 million.
  • During the third quarter of 2023, the Company gave notice to exercise the purchase options on nine vessels consisting of six MR product tankers (STI Galata, STI La Boca, STI Esles II, STI Donald C Trauscht, STI Jardins and STI San Telmo) and three LR2 product tankers (STI Stability, STI Solace and STI Solidarity). These vessels are currently financed on the 2020 SPDBFL Lease Financing, 2020 TSFL Lease Financing, and BCFL Lease Financing (LR2s) and the repurchases are expected to occur in the fourth quarter of 2023 and first quarter of 2024. This will result in a reduction of lease liabilities of $136.0 million in the fourth quarter of 2023 and $38.3 million in the first quarter of 2024.
  • In July 2023, the Company sold the 2013 built MR product tanker, STI Ville, for $32.5 million. As the vessel was unencumbered, the Company made no debt repayments associated with this sale.
  • Since July 1, 2023 and through the date of this press release, the Company has repurchased an aggregate of 1,889,643 of its common shares in the open market at an average price of $48.02 per share.

Securities Repurchase Program

From July 1, 2023 through September 30, 2023, the Company repurchased 1,648,355 of its common shares in the open market at an average price of $47.74 per share under the 2023 Securities Repurchase Program.

From October 1, 2023 through November 8, 2023, the Company repurchased 241,288 of its common shares in the open market at an average price of $49.88 per share under the 2023 Securities Repurchase Program.

On November 9, 2023, the Company’s Board of Directors replenished the 2023 Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company’s securities which, in addition to its common shares also consist of its Senior Unsecured Notes Due 2025 (NYSE: SBBA). This program resets the program that was previously replenished on May 31, 2023.

There is $250 million available under the 2023 Securities Repurchase Program as of November 9, 2023.

Diluted Weighted Number of Shares

The computation of earnings per share is determined by taking into consideration the potentially dilutive shares arising from the Company’s equity incentive plan. These potentially dilutive shares are excluded from the computation of earnings per share to the extent they are anti-dilutive.   

For the three and nine months ended September 30, 2023, the Company’s basic weighted average number of shares outstanding were 49,906,783 and 53,235,165 respectively. For the three and nine months ended September 30, 2023, the Company’s diluted weighted average number of shares outstanding were 51,943,617 and 55,482,321, respectively, which included the potentially dilutive impact of restricted shares issued under the Company's equity incentive plan.

Conference Call

On Thursday November 9, 2023, the Company plans to issue its third quarter 2023 earnings press release in the morning (Eastern Daylight Time) and host a conference call at 9:00 AM Eastern Standard Time and 3:00 PM Central European Time.

Title: Scorpio Tankers Inc. Third Quarter 2023 Conference Call

Date: Thursday November 9, 2023

Time: 9:00 AM Eastern Standard Time and 3:00 PM Central European Time.

The conference call will be available over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com and the webcast link:

https://edge.media-server.com/mmc/p/suwrc98n 

Participants for the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

The conference will also be available telephonically:

US/CANADA Dial-In Number: 1 833-636-1321

International Dial-In Number: 1 412-902-4260

Please ask to join the Scorpio Tankers Inc call

Participants should dial into the call 10 minutes before the scheduled time.

Current Liquidity

As of November 8, 2023, the Company had $521.2 million in unrestricted cash and cash equivalents and $288.2 million of availability under the revolving portion of the 2023 $1.0 Billion Credit Facility.

Debt

The following table sets forth the unscheduled debt and lease repayments that the Company has recently completed or are pending. This table excludes the September 2023 payment of $288.2 million into the revolving portion of the 2023 $1.0 Billion Credit facility, which can be re-drawn in the future.

FacilityRepayment datePrincipal balance repaid (in millions) Vessels
Unscheduled repayments made - Q3 2023    
IFRS 16 - Leases - $670.0 MillionJul-23$143.6 STI Miracle*, STI Maestro*, STI Mighty*, STI Modest*, STI Maverick*, and STI Millennia*
Ocean Yield Lease FinancingAug-23 27.8 STI Supreme*
2019 DNB / GIEK Credit FacilityAug-23 34.8 STI Condotti* and STI Sloane*
2020 $225.0 Million Credit FacilityAug-23 35.2 STI Spiga* and STI Kingsway*
2020 CMBFL Lease FinancingSep-23 36.5 STI Leblon* and STI Bosphorus*
Hamburg Commercial Credit FacilitySep-23 31.3 STI Veneto and STI Poplar
Total unscheduled repayments - Q3 2023 $309.2  
     
Unscheduled repayments made - Q4 2023    
CSSC Lease FinancingOct-23 110.4 STI Gladiator*, STI Goal*, STI Gratitude*, STI Guide** and STI Gauntlet**
IFRS 16 - Leases - $670.0 MillionOct-23 85.5 STI Maximus*, STI Lily* and STI Lotus*
Total unscheduled repayments - October 1 through November 8, 2023 $195.9  
     
Purchase option notices issued, repayment pending    
BCFL Lease Financing (MRs)Nov-23 8.2 STI Amber***
2020 TSFL Lease FinancingNov-23 38.1 STI Galata and STI La Boca
2020 SPDBFL Lease FinancingNov-23 39.5 STI Donald C Trauscht* and STI Esles II*
BCFL Lease Financing (LR2s)Dec-23 58.4 STI Stability*, STI Solace* and STI Solidarity*
2021 $146.3 Million Lease FinancingDec-23 120.5 STI Rotherhithe, STI Hammersmith, STI Broadway, STI Connaught, STI Lauren and STI Winnie
2020 SPDBFL Lease FinancingJan-24 38.3 STI Jardins* and STI San Telmo*
2021 AVIC Lease FinancingJan-24 77.4 STI Soho*, STI Osceola*, STI Memphis and STI Lombard
Total repayments pending $380.4  
     
* Vessel subsequently collateralized or is expected to be collateralized on the 2023 $1.0 Billion Credit Facility
** Vessel subsequently collateralized on the 2023 $94.0 Million Credit Facility
*** Vessel expected to be sold in Q4 2023

Set forth below is a summary of the principal balances of the Company’s outstanding indebtedness as of the dates presented:

 In thousands of U.S. DollarsOutstanding Principal as of June 30, 2023Outstanding Principal as of September 30, 2023Outstanding Principal as of November 8, 2023
1Hamburg Commercial Credit Facility (1)$32,086$$
2Prudential Credit Facility 36,513 35,126 34,202
32019 DNB / GIEK Credit Facility (1)  34,781  
4BNPP Sinosure Credit Facility 75,121 75,121 69,667
52020 $225.0 Million Credit Facility (1)  35,198  
62023 $225.0 Million Credit Facility 216,525 208,050 199,575
72023 $49.1 Million Credit Facility 47,934 46,780 46,780
82023 $117.4 Million Credit Facility 117,394 113,142 113,142
92023 $1.0 Billion Credit Facility (2)  269,344 471,644
102023 $94.0 Million Credit Facility (3)  43,750 94,000
11Ocean Yield Lease Financing (1)  54,895 26,141 25,883
12BCFL Lease Financing (LR2s) (1) 62,837 60,157 59,269
13CSSC Lease Financing (1)  113,994 110,353 
14BCFL Lease Financing (MRs) (1) 45,040 40,820 39,492
152020 CMBFL Lease Financing (1)  36,468  
162020 TSFL Lease Financing (1) 38,947 38,117 38,117
172020 SPDBFL Lease Financing (1)  80,264 78,640 78,640
182021 AVIC Lease Financing (1)  81,009 79,196 79,196
192021 CMBFL Lease Financing 64,785 63,155 62,750
202021 TSFL Lease Financing 47,807 46,712 46,712
212021 $146.3 Million Lease Financing (1)  127,110 123,815 120,520
222021 Ocean Yield Lease Financing 61,032 59,557 59,060
232022 AVIC Lease Financing 109,220 106,927 106,927
24IFRS 16 - Leases - 3 MR 16,904 14,713 13,993
25IFRS 16 - Leases - $670.0 Million (1) 231,015 85,508 
26Unsecured Senior Notes Due 2025 70,571 70,571 70,571
 Gross debt outstanding 1,837,450 1,795,695 1,830,140
 Cash and cash equivalents 313,923 364,908521,176
 Net debt$1,523,527$1,430,787$1,308,964

(1)  Refer to the preceding table for a description of unscheduled payment activity that has recently occurred or is expected to occur.

(2)  The 2023 $1.0 Billion Credit Facility was executed in July 2023. In July and August 2023, the Company drew an aggregate of $576.4 million from this facility (split evenly between the term loan and the revolver) and 26 of the Company's vessels (17 MRs and nine LR2s) were placed as collateral under the facility. In September 2023, the Company repaid $288.2 million on the revolving portion of this credit facility, which may be re-borrowed in the future. In November 2023, the Company drew down $202.3 million from this facility (split evenly between the term loan and the revolver) and eight of the Company's vessels (three MRs and five LR2s) were placed as collateral under the facility. This facility has a final maturity of June 30, 2028, bears interest at SOFR plus a margin of 1.95% per annum and is expected to be repaid in quarterly installments with a balloon payment due at the maturity date, where the term loan portion for each vessel shall be repaid in full prior to the reduction of the revolving loan for each vessel. The amounts drawn thus far, and the currently available $288.2 million under the revolving portion of the facility, are scheduled to be repaid and/or permanently reduced in aggregate amounts of $24.7 million per quarter through June 30, 2025 and gradually decreasing from $18.1 million to $16.2 million per quarter in years three through five of the loan, with a balloon payment due at the maturity date. The remaining terms and conditions of this credit facility, including financial covenants, are similar to those set forth in the Company’s existing credit facilities. The Company expects to draw $37.7 million under this facility before the end of the fourth quarter of 2023, and the remaining $183.6 million within the first quarter of 2024.

(3)  In September 2023, the Company executed its previously announced 2023 $94.0 Million Credit Facility. Upon execution of the credit facility, the Company drew $43.8 million and two vessels (one MR and one LR2) were placed as collateral under the facility. In October 2023, the Company drew $50.2 million and two vessels (two LR2s) were placed as collateral under the facility. Each tranche of the facility has a final maturity five years from the respective drawdown date and bears interest at SOFR plus a margin of 1.70% per annum. The facility is scheduled to be repaid in aggregate repayments of $2.4 million per quarter with a balloon payment due maturity.

Set forth below are the estimated expected future principal repayments on the Company's outstanding indebtedness as of September 30, 2023, which includes principal amounts due under the Company's secured credit facilities, lease financing arrangements, Senior Notes Due 2025, and lease liabilities under IFRS 16 (which also include actual scheduled payments made from October 1, 2023 through November 8, 2023):

      
In millions of U.S. dollars Repayments/maturities of unsecured debtVessel financings - announced vessel purchases and maturities in 2023 and 2024Vessel financings - scheduled repayments, in addition to maturities in 2025 and thereafterTotal (1)Repayments of new borrowings after September 30, 2023 (5)Pro forma, including new borrowing
October 1, 2023 to November 8, 2023 (2) $$195.9$22.2$218.1$$218.1
Remaining Q4 2023 (2)   264.7 39.1 303.8 5.9 309.7
Q1 2024 (2)   115.7 47.7 163.4 7.2 170.6
Q2 2024    53.2 53.2 7.2 60.4
Q3 2024 (3)   15.0 47.8 62.8 7.2 70.0
Q4 2024 (4)   5.2 50.2 55.4 7.2 62.6
2025 and thereafter  70.6  868.4 939.0 217.8 1,156.8
  $70.6$596.5$1,128.6$1,795.7$252.5$2,048.2

(1)  Amounts represent the principal payments due on the Company’s outstanding indebtedness as of September 30, 2023.

(2)  Includes the unscheduled payment activity that has recently occurred or is expected to occur as described in the preceding section describing unscheduled debt and lease repayments.

(3)  Includes the repayment of $15.0 million, inclusive of the scheduled purchase options, on three MR product tankers (STI Topaz, STI Ruby, and STI Garnet), which are currently financed under the BCFL Lease Financing (MRs).

(4)  Includes the repayment of $5.2 million, inclusive of the scheduled purchase option, on an MR product tanker (STI Onyx), which is currently financed under the BCFL Lease Financing (MRs).

(5)  Reflects the scheduled repayments on the amounts borrowed in October and November 2023 on the 2023 $94.0 Million Credit Facility and 2023 $1.0 Billion Credit Facility of $52.0 million and $202.3 million, respectively.

Drydock, Scrubber and Ballast Water Treatment Update

Set forth below is a table summarizing the drydock, scrubber, and ballast water treatment system ("BWTS") activity that occurred during the third quarter of 2023 and the estimated expected payments to be made, and off-hire days that are expected to be incurred, for the Company's drydocks, ballast water treatment system installations, and scrubber installations through 2023 and 2024:

   Number of (3)
 Aggregate costs in millions of USD (1)Aggregate offhire days (2)LR2sMRsHandymax
Q3 2023 - actual(a)3.628010
Q4 2023 - estimated(b)7.6125320
Q1 2024 - estimated(c)16.1180160
Q2 2024 - estimated(d)18.23350113
Q3 2024 - estimated(e)23.15004134
Q4 2024 - estimated20.7400497

(1)  These costs include estimated cash payments for drydocks, ballast water treatment system installations and scrubber installations. These amounts may include costs incurred for previous projects for which payments may not be due until subsequent quarters, or installment payments that are due in advance of the scheduled service and may be scheduled to occur in quarters prior to the actual installation. In addition to these installment payments, these amounts also include estimates of the installation costs of such systems.  The timing of the payments set forth are estimates only and may vary as the timing of the related drydocks and installations finalize. 

(2)  Represents the total estimated off-hire days during the period, including vessels that commenced work in a previous period.

(3)  Represents the number of vessels scheduled to commence drydock, ballast water treatment system, and/or scrubber installations during the period. It does not include vessels that commenced work in prior periods but will be completed in the subsequent period. The number of vessels in these tables may reflect a certain amount of overlap where certain vessels are expected to be drydocked and have ballast water treatment systems and/or scrubbers installed simultaneously.  Additionally, the timing set forth in these tables may vary as drydock, ballast water treatment system installation and scrubber installation times are finalized.

(a)  Includes one BWTS installation.

(b)  Includes one BWTS installation.

(c)  Includes two scrubber installations.

(d)  Includes four scrubber installations.

(e)  Includes five scrubber installations.

Explanation of Variances on the Third Quarter of 2023 Financial Results Compared to the Third Quarter of 2022

For the three months ended September 30, 2023, the Company recorded net income of $100.4 million compared to net income of $266.2 million for the three months ended September 30, 2022. The following were the significant changes between the two periods:

  • TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot voyages, time charters, and pool charters), and it provides useful information to investors and management. The following table sets forth TCE revenue for the three months ended September 30, 2023, and 2022:
   For the three months ended September 30,
In thousands of U.S. dollars  2023   2022 
 Vessel revenue $291,179  $489,996 
 Voyage expenses  (1,985)  (33,721)
 TCE revenue $289,194  $456,275 
  • TCE revenue for the three months ended September 30, 2023, decreased by $167.1 million to $289.2 million, from $456.3 million for the three months ended September 30, 2022. Overall average TCE revenue per day decreased to $28,313 per day during the three months ended September 30, 2023, from $44,222 per day during the three months ended September 30, 2022. The average number of vessels was 112.1 during the three months ended September 30, 2023 as compared to 113.5 during the three months ended September 30, 2022.       
    • TCE revenue for the three months ended September 30, 2023 remained strong despite a decline in daily TCE rates when compared to the same period in the prior year. The third quarter of 2022 reflected several key events and market conditions (discussed below), leading to a counter-seasonal spike in daily TCE rates. The third quarter of 2023 reflected a more normalized seasonal pattern whereby the beginning of the quarter was impacted by extended refinery maintenance, lower refining margins and a reduction in arbitrage opportunities, which all led to reduced refinery throughput and decreased volumes from major export regions. These conditions improved later in the quarter and daily TCE rates strengthened. As such, on a seasonally adjusted basis, demand for the Company's vessels remained strong during the third quarter of 2023 supported by growing underlying consumption for refined petroleum products against the backdrop of low inventory levels and a modest newbuilding orderbook (with a dearth of deliveries expected in the next two years).
    • TCE revenue for the three months ended September 30, 2022 reflected the continued momentum in the product tanker market that began in the first quarter of 2022. Initially, the easing of COVID-19 restrictions around the globe resulted in increased personal mobility which served as a catalyst for underlying demand for refined petroleum products. This buoyant demand, combined with low global refined petroleum product inventories and strong refining margins, incentivized refiners to increase and maintain high utilization levels which drove substantial increases in refined petroleum product export volumes throughout the world. Lastly, the volatility brought on by the conflict in Ukraine significantly disrupted supply chains for crude oil and refined petroleum products, changing volumes and trade routes, and thus increasing ton-mile demand for the seaborne transportation of refined petroleum products.

The Company also had an increased number of vessels operating outside of the Scorpio pools during the three months ended September 30, 2022, which led to an increase in voyage revenue and voyage expenses for that period.

  • Vessel operating costs for the three months ended September 30, 2023 increased by $3.3 million to $79.1 million, from $75.8 million for the three months ended September 30, 2022. Vessel operating costs per vessel per day increased to $7,669 per day for the three months ended September 30, 2023 from $7,256 per day for the three months ended September 30, 2022. General inflationary pressures were the main drivers behind the increase, with certain crewing, spares and stores, and freight and forwarding expenses being the most impacted.
  • Depreciation expense – owned or sale leaseback vessels for the three months ended September 30, 2023 increased by $5.6 million to $47.0 million, from $41.4 million for the three months ended September 30, 2022. This increase was attributable to the exercise of purchase options on six lease financed vessels during the third quarter of 2023 that were previously accounted for as IFRS 16 - Leases. The carrying value of these vessels was reclassified to Vessels from Right of Use Assets on the Company's balance sheet on the date of purchase. Depreciation expense going forward from the date of repurchase will be recorded as a part of owned vessels and will not change significantly.
  • Depreciation expense - right of use assets for the three months ended September 30, 2023 decreased by $5.4 million to $4.1 million from $9.6 million for the three months ended September 30, 2022. Depreciation expense - right of use assets reflects the straight-line depreciation expense recorded under IFRS 16 - Leases. This decrease was attributable to the exercise of purchase options on six lease financed vessels during the third quarter of 2023 that were previously accounted for as IFRS 16 - Leases. The carrying value of these vessels was reclassified to Vessels from Right of Use Assets on the Company's balance sheet on the date of purchase. Depreciation expense going forward from the date of repurchase will be recorded as part of owned vessels.
  • General and administrative expenses for the three months ended September 30, 2023, decreased by $1.8 million to $24.6 million, from $26.5 million for the three months ended September 30, 2022. This decrease was primarily due to an aggregate decrease in compensation related costs. General and administrative expenses for the fourth quarter of 2023 are expected to reflect a one-time non-cash charge of approximately $8.5 million for the acceleration of restricted stock amortization which was triggered by the departure of the Company’s former CFO in October 2023. Excluding any future grants, this acceleration will reduce restricted stock amortization in subsequent periods gradually over the remaining vesting period (through 2027).
  • Financial expenses for the three months ended September 30, 2023 increased by $7.4 million to $49.7 million, from $42.3 million for the three months ended September 30, 2022. This increase was primarily attributable to increases in benchmark rates, primarily SOFR. This increase was partially offset by the overall reduction in the Company's average indebtedness to $2.0 billion from $2.6 billion during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. In addition to regularly scheduled repayments, the Company exercised purchase options or made unscheduled repayments of debt of $1.2 billion since October 1, 2022 and settled $205.1 million of debt through the conversion of the Convertible Notes Due 2025 into common shares in December 2022. These debt settlements were partially offset by $1.0 billion of drawdowns under new credit facilities during that same period.Additionally, the Company recorded $6.0 million of debt extinguishment related costs during the three months ended September 30, 2023, as compared to $1.4 million during the three months ended September 30, 2022. There was no accretion on the Convertible Notes Due 2025 during the three months ended September 30, 2023 given their conversion in December 2022, as compared to accretion of $3.1 million during the three months ended September 30, 2022.

Scorpio Tankers Inc. and Subsidiaries Condensed Consolidated Statements of Income(unaudited)
  For the three months ended September 30, For the nine months ended September 30,
In thousands of U.S. dollars except per share and share data 2023   2022   2023   2022 
Revenue       
 Vessel revenue$291,179  $489,996  $1,004,909  $1,069,116 
         
Operating expenses       
 Vessel operating costs (79,113)  (75,801)  (231,645)  (237,556)
 Voyage expenses (1,985)  (33,721)  (10,998)  (59,229)
 Depreciation - owned or sale leaseback vessels (47,016)  (41,422)  (129,704)  (126,581)
 Depreciation - right of use assets (4,136)  (9,567)  (22,139)  (29,055)
 General and administrative expenses (24,647)  (26,490)  (74,127)  (61,747)
 Gain (loss) on sales of vessels 7,127   2,732   7,127   (66,486)
 Total operating expenses (149,770)  (184,269)  (461,486)  (580,654)
Operating income  141,409   305,727   543,423   488,462 
Other (expenses) and income, net       
 Financial expenses (49,698)  (42,302)  (136,950)  (121,012)
 Financial income 6,071   2,183   14,615   3,207 
 Other income, net 2,586   557   4,920   2,191 
 Total other expense, net (41,041)  (39,562)  (117,415)  (115,614)
Net income$100,368  $266,165  $426,008  $372,848 
         
Earnings per share       
         
 Basic$2.01  $4.84  $8.00  $6.74 
 Diluted$1.93  $4.31  $7.68  $6.07 
 Basic weighted average shares outstanding 49,906,783   55,003,149   53,235,165   55,334,147 
 Diluted weighted average shares outstanding (1) 51,943,617   62,820,207   55,482,321   64,172,301 

(1)  The computation of diluted earnings per share for the three months ended September 30, 2023 includes the effect of potentially dilutive unvested shares of restricted stock. The computation of diluted earnings per share for the three and nine months ended September 30, 2022 includes the effect of potentially dilutive unvested shares of restricted stock and the effect of the Convertible Notes Due 2022 and Convertible Notes Due 2025 under the if-converted method.

Scorpio Tankers Inc. and SubsidiariesCondensed Consolidated Balance Sheets(unaudited)
 As of
In thousands of U.S. dollarsSeptember 30, 2023 December 31, 2022
Assets   
Current assets   
Cash and cash equivalents$364,908  $376,870 
Accounts receivable 192,547   276,700 
Prepaid expenses and other current assets 19,373   18,159 
Inventories 8,482   15,620 
Total current assets 585,310   687,349 
Non-current assets   
Vessels and drydock 3,478,195   3,089,254 
Right of use assets for vessels 142,508   689,826 
Other assets 94,442   83,754 
Goodwill 8,197   8,197 
Restricted cash 783   783 
Total non-current assets 3,724,125   3,871,814 
Total assets$4,309,435  $4,559,163 
Current liabilities   
Current portion of long-term debt$147,526  $31,504 
Lease liability - sale and leaseback vessels 369,019   269,145 
Lease liability - IFRS 16 95,171   52,346 
Accounts payable 21,492   28,748 
Accrued expenses and other liabilities 73,163   91,508 
Total current liabilities 706,371   473,251 
Non-current liabilities   
Long-term debt 694,026   264,106 
Lease liability - sale and leaseback vessels 454,450   871,469 
Lease liability - IFRS 16 5,676   443,529 
Other long-term liabilities 3,974    
Total non-current liabilities 1,158,126   1,579,104 
Total liabilities 1,864,497   2,052,355 
Shareholders' equity   
Issued, authorized and fully paid-in share capital:   
Share capital 745   727 
Additional paid-in capital 3,078,552   3,049,732 
Treasury shares (1,119,190)  (641,545)
Retained earnings 484,831   97,894 
Total shareholders' equity 2,444,938   2,506,808 
Total liabilities and shareholders' equity$4,309,435  $4,559,163 

Scorpio Tankers Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows (unaudited)
 For the nine months ended September 30,
In thousands of U.S. dollars 2023   2022 
Operating activities   
Net income$426,008  $372,848 
Depreciation - owned or sale leaseback vessels 129,704   126,581 
Depreciation - right of use assets 22,139   29,055 
Amortization of restricted stock 28,838   16,148 
Amortization of deferred financing fees 4,491   5,039 
Non-cash debt extinguishment costs 6,126   5,506 
Accretion of convertible notes    10,858 
Net (gain) / loss on sales of vessels (7,127)  66,486 
Accretion of fair value measurement on debt assumed in business combinations 956   1,756 
Gain on Convertible Notes transactions    (481)
Share of income from dual fuel tanker joint venture (4,940)  (695)
  606,195   633,101 
Changes in assets and liabilities:   
Decrease / (increase) in inventories 6,640   (7,183)
Decrease / (increase) in accounts receivable 84,153   (208,941)
Increase in prepaid expenses and other current assets (1,214)  (13,232)
Decrease in other assets 2,549   16,705 
Decrease in accounts payable (5,658)  (12,975)
(Decrease) / increase in accrued expenses (12,998)  45,513 
  73,472   (180,113)
Net cash inflow from operating activities 679,667   452,988 
Investing activities   
Net proceeds from sales of vessels 32,186   607,894 
Distributions from dual fuel tanker joint venture 1,489   493 
Drydock, scrubber, ballast water treatment system and other vessel related payments (owned, leased financed and bareboat-in vessels) (17,101)  (26,418)
Net cash inflow from investing activities 16,574   581,969 
Financing activities   
Debt repayments (774,892)  (670,108)
Issuance of debt 1,011,632   122,638 
Debt issuance costs (28,742)  (1,701)
Principal repayments on lease liability - IFRS 16 (399,485)  (66,030)
Repurchase / repayment of convertible notes    (83,968)
Decrease in restricted cash    4,008 
Dividends paid (39,072)  (17,683)
Repurchase of common stock (477,644)  (84,893)
Net cash outflow from financing activities (708,203)  (797,737)
(Decrease) / increase in cash and cash equivalents (11,962)  237,220 
Cash and cash equivalents at January 1, 376,870   230,415 
Cash and cash equivalents at September 30,$364,908  $467,635 

Scorpio Tankers Inc. and SubsidiariesOther operating data for the nine months ended September 30, 2023 and 2022 (unaudited)

  For the three months ended September 30, For the nine months ended September 30,
  2023 2022 2023 2022
Adjusted EBITDA(1) (in thousands of U.S. dollars except Fleet Data) $200,284 $360,013 $721,897 $728,923
         
Average Daily Results        
Fleet        
TCE per revenue day (2) $28,313 $44,222 $32,631 $31,485
Vessel operating costs per day (3) $7,669 $7,256 $7,529 $7,199
Average number of vessels  112.1  113.5  112.7  120.9
         
LR2        
TCE per revenue day (2) $29,856 $48,152 $37,509 $32,812
Vessel operating costs per day (3) $8,129 $7,349 $7,901 $7,288
Average number of vessels  39.0  39.4  39.0  41.1
         
LR1        
TCE per revenue day (2) N/A N/A N/A $13,724
Vessel operating costs per day (3) N/A N/A N/A $7,429
Average number of vessels N/A N/A N/A  4.4
         
MR        
TCE per revenue day (2) $28,587 $41,143 $30,218 $30,694
Vessel operating costs per day (3) $7,393 $7,258 $7,356 $7,197
Average number of vessels  59.1  60.1  59.7  61.3
         
Handymax        
TCE per revenue day (2) $22,875 $46,231 $29,292 $34,934
Vessel operating costs per day (3) $7,568 $6,835 $7,246 $6,873
Average number of vessels  14.0  14.0  14.0  14.0
         
Capital Expenditures        
Drydock, scrubber, ballast water treatment system and other vessel related payments (in thousands of U.S. dollars) $3,556 $3,639 $17,101 $26,418

(1)See Non-IFRS 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 vessels are part of the fleet less the number of days vessels are off-hire for drydock and repairs.
(3)Vessel operating costs per day represent vessel operating costs divided by the number of operating days during the period. Operating days are the total number of available days in a period with respect to vessels that are owned, operating under a lease financing arrangement, or bareboat chartered-in, before deducting available days due to off-hire days and days in drydock. Operating days is a measurement that is only applicable to vessels that are owned, operating under a lease financing arrangement, or bareboat chartered-in, not time chartered-in vessels.

Fleet list as of November 8, 2023

 Vessel Name Year Built DWT Ice class Employment Vessel type Scrubber 
 Owned, sale leaseback and bareboat chartered-in vessels         
1STI Brixton 2014 38,734 1A SHTP (1) Handymax N/A 
2STI Comandante 2014 38,734 1A SHTP (1) Handymax N/A 
3STI Pimlico 2014 38,734 1A SHTP (1) Handymax N/A 
4STI Hackney 2014 38,734 1A SHTP (1) Handymax N/A 
5STI Acton 2014 38,734 1A SHTP (1) Handymax N/A 
6STI Fulham 2014 38,734 1A SHTP (1) Handymax N/A 
7STI Camden 2014 38,734 1A SHTP (1) Handymax N/A 
8STI Battersea 2014 38,734 1A SHTP (1) Handymax N/A 
9STI Wembley 2014 38,734 1A SHTP (1) Handymax N/A 
10STI Finchley 2014 38,734 1A SHTP (1) Handymax N/A 
11STI Clapham 2014 38,734 1A SHTP (1) Handymax N/A 
12STI Poplar 2014 38,734 1A SHTP (1) Handymax N/A 
13STI Hammersmith 2015 38,734 1A SHTP (1) Handymax N/A 
14STI Rotherhithe 2015 38,734 1A SHTP (1) Handymax N/A 
15STI Amber 2012 49,990  SMRP (2) (4) MR Yes 
16STI Topaz 2012 49,990  SMRP (2) MR Yes 
17STI Ruby 2012 49,990  SMRP (2) MR Not Yet Installed 
18STI Garnet 2012 49,990  SMRP (2) MR Yes 
19STI Onyx 2012 49,990  SMRP (2) MR Yes 
20STI Duchessa 2014 49,990  Time Charter (5) MR Not Yet Installed 
21STI Opera 2014 49,990  SMRP (2) MR Not Yet Installed 
22STI Texas City 2014 49,990  SMRP (2) MR Yes 
23STI Meraux 2014 49,990  SMRP (2) MR Yes 
24STI San Antonio 2014 49,990  SMRP (2) MR Yes 
25STI Venere 2014 49,990  SMRP (2) MR Yes 
26STI Virtus 2014 49,990  SMRP (2) MR Yes 
27STI Aqua 2014 49,990  SMRP (2) MR Yes 
28STI Dama 2014 49,990  SMRP (2) MR Yes 
29STI Regina 2014 49,990  SMRP (2) MR Yes 
30STI St. Charles 2014 49,990  SMRP (2) MR Yes 
31STI Mayfair 2014 49,990  SMRP (2) MR Yes 
32STI Yorkville 2014 49,990  SMRP (2) MR Yes 
33STI Milwaukee 2014 49,990  SMRP (2) MR Yes 
34STI Battery 2014 49,990  SMRP (2) MR Yes 
35STI Soho 2014 49,990  SMRP (2) MR Yes 
36STI Memphis 2014 49,990  Time Charter (6) MR Yes 
37STI Tribeca 2015 49,990  SMRP (2) MR Yes 
38STI Gramercy 2015 49,990  SMRP (2) MR Yes 
39STI Bronx 2015 49,990  SMRP (2) MR Yes 
40STI Pontiac 2015 49,990  SMRP (2) MR Yes 
41STI Manhattan 2015 49,990  SMRP (2) MR Yes 
42STI Queens 2015 49,990  SMRP (2) MR Yes 
43STI Osceola 2015 49,990  SMRP (2) MR Yes 
44STI Notting Hill 2015 49,687 1B SMRP (2) MR Yes 
45STI Seneca 2015 49,990  SMRP (2) MR Yes 
46STI Westminster 2015 49,687 1B SMRP (2) MR Yes 
47STI Brooklyn 2015 49,990  SMRP (2) MR Yes 
48STI Black Hawk 2015 49,990  SMRP (2) MR Yes 
49STI Galata 2017 49,990  SMRP (2) MR Yes 
50STI Bosphorus 2017 49,990  SMRP (2) MR Not Yet Installed 
51STI Leblon 2017 49,990  SMRP (2) MR Yes 
52STI La Boca 2017 49,990  SMRP (2) MR Yes 
53STI San Telmo 2017 49,990 1B SMRP (2) MR Not Yet Installed 
54STI Donald C Trauscht 2017 49,990 1B SMRP (2) MR Not Yet Installed 
55STI Esles II 2018 49,990 1B SMRP (2) MR Not Yet Installed 
56STI Jardins 2018 49,990 1B SMRP (2) MR Not Yet Installed 
57STI Magic 2019 50,000  SMRP (2) MR Yes 
58STI Mystery 2019 50,000  SMRP (2) MR Yes 
59STI Marvel 2019 50,000  SMRP (2) MR Yes 
60STI Magnetic 2019 50,000  Time Charter (7) MR Yes 
61STI Millennia 2019 50,000  SMRP (2) MR Yes 
62STI Magister 2019 50,000  SMRP (2) MR Yes 
63STI Mythic 2019 50,000  SMRP (2) MR Yes 
64STI Marshall 2019 50,000  Time Charter (8) MR Yes 
65STI Modest 2019 50,000  SMRP (2) MR Yes 
66STI Maverick 2019 50,000  SMRP (2) MR Yes 
67STI Miracle 2020 50,000  Time Charter (9) MR Yes 
68STI Maestro 2020 50,000  SMRP (2) MR Yes 
69STI Mighty 2020 50,000  SMRP (2) MR Yes 
70STI Maximus 2020 50,000  SMRP (2) MR Yes 
71STI Elysees 2014 109,999  SLR2P (3) LR2 Yes 
72STI Madison 2014 109,999  SLR2P (3) LR2 Yes 
73STI Park 2014 109,999  SLR2P (3) LR2 Yes 
74STI Orchard 2014 109,999  SLR2P (3) LR2 Yes 
75STI Sloane 2014 109,999  SLR2P (3) LR2 Yes 
76STI Broadway 2014 109,999  SLR2P (3) LR2 Yes 
77STI Condotti 2014 109,999  SLR2P (3) LR2 Yes 
78STI Rose 2015 109,999  SLR2P (3) LR2 Yes 
79STI Veneto 2015 109,999  SLR2P (3) LR2 Yes 
80STI Alexis 2015 109,999  SLR2P (3) LR2 Yes 
81STI Winnie 2015 109,999  SLR2P (3) LR2 Yes 
82STI Oxford 2015 109,999  SLR2P (3) LR2 Yes 
83STI Lauren 2015 109,999  SLR2P (3) LR2 Yes 
84STI Connaught 2015 109,999  Time Charter (10) LR2 Yes 
85STI Spiga 2015 109,999  SLR2P (3) LR2 Yes 
86STI Kingsway 2015 109,999  SLR2P (3) LR2 Yes 
87STI Solidarity 2015 109,999  SLR2P (3) LR2 Yes 
88STI Lombard 2015 109,999  Time Charter (11) LR2 Yes 
89STI Grace 2016 109,999  Time Charter (12) LR2 Yes 
90STI Jermyn 2016 109,999  Time Charter (13) LR2 Yes 
91STI Sanctity 2016 109,999  SLR2P (3) LR2 Yes 
92STI Solace 2016 109,999  SLR2P (3) LR2 Yes 
93STI Stability 2016 109,999  SLR2P (3) LR2 Yes 
94STI Steadfast 2016 109,999  SLR2P (3) LR2 Yes 
95STI Supreme 2016 109,999  SLR2P (3) LR2 Yes 
96STI Symphony 2016 109,999  SLR2P (3) LR2 Yes 
97STI Gallantry 2016 113,000  SLR2P (3) LR2 Yes 
98STI Goal 2016 113,000  SLR2P (3) LR2 Yes 
99STI Guard 2016 113,000  Time Charter (14) LR2 Yes 
100STI Guide 2016 113,000  Time Charter (15) LR2 Yes 
101STI Selatar 2017 109,999  SLR2P (3) LR2 Yes 
102STI Rambla 2017 109,999  SLR2P (3) LR2 Yes 
103STI Gauntlet 2017 113,000  Time Charter (16) LR2 Yes 
104STI Gladiator 2017 113,000  Time Charter (15) LR2 Yes 
105STI Gratitude 2017 113,000  Time Charter (17) LR2 Yes 
106STI Lobelia 2019 110,000  SLR2P (3) LR2 Yes 
107STI Lotus 2019 110,000  SLR2P (3) LR2 Yes 
108STI Lily 2019 110,000  SLR2P (3) LR2 Yes 
109STI Lavender 2019 110,000  Time Charter (18) LR2 Yes 
110STI Beryl 2013 49,990  SMRP (2) MR Not Yet Installed 
111STI Le Rocher 2013 49,990  SMRP (2) MR Not Yet Installed 
112STI Larvotto 2013 49,990  SMRP (2) MR Not Yet Installed 
               
 Total Fleet DWT   7,802,192         
               

(1)This vessel operates in, or is expected to operate in, the Scorpio Handymax Tanker Pool, or SHTP. SHTP is a Scorpio Pool and is operated by Scorpio Commercial Management S.A.M. (SCM). SHTP and SCM are related parties to the Company.
(2)This vessel operates in, or is expected to operate in, the Scorpio MR Pool, or SMRP. SMRP is a Scorpio Pool and is operated by SCM. SMRP and SCM are related parties to the Company.
(3)This vessel operates in, or is expected to operate in, the Scorpio LR2 Pool, or SLR2P. SLR2P is a Scorpio Pool and is operated by SCM. SLR2P and SCM are related parties to the Company.
(4)The Company has entered into an agreement to sell this vessel which is expected to close before the end of the fourth quarter of 2023.
(5)This vessel commenced a time charter in October 2022 for three years at an average rate of $25,000 per day.
(6)This vessel commenced a time charter in June 2022 for three years at an average rate of $21,000 per day. The daily rate is the average rate over the three-year period, which is payable during the first six months at $30,000 per day, the next six months are payable at $20,000 per day, and years two and three are payable at $19,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $22,500 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $24,000 per day.
(7)This vessel commenced a time charter in July 2022 for three years at an average rate of $23,000 per day. The daily rate is the average rate over the three-year period, which is payable in years one, two, and three at $30,000 per day, $20,000 per day, and $19,000 per day, respectively. The charterers have the option to extend the term of this agreement for an additional year at $24,500 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $26,000 per day.
(8)This vessel commenced a time charter in July 2022 for three years at a rate of $23,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $24,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $25,000 per day. If this second option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $26,000 per day.
(9)This vessel commenced a time charter in August 2022 for three years at a rate of $21,000 per day. The daily rate is the average rate over the three-year period, which is payable during the first six months at $30,000 per day, the next six months are payable at $20,000 per day, and years two and three are payable at $19,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $22,500 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $24,000 per day.
(10)In April 2023, STI Connaught replaced STI Goal on a time charter which initially commenced in August 2022 for three years at a rate of $30,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $32,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $34,000 per day.
(11)This vessel commenced a time charter in September 2022 for three years at an average rate of $32,750 per day. The charterer has the option to extend the term of this agreement for an additional year at $34,750 per day. If this option is declared, the charterer has the option to further extend the term of this agreement for an additional year at $36,750 per day.
(12)This vessel commenced a time charter in December 2022 for three years at an average rate of $37,500 per day. The daily rate is the average rate over the three-year period, which is payable during the first six months at $47,000 per day, the next 6 months are payable at $28,000 per day, and years two and three are payable at $37,500 per day.
(13)This vessel commenced a time charter in April 2023 for three years at a rate of $40,000 per day. The charterer has the option to extend the term of this agreement for an additional year at $42,500 per day.
(14)This vessel commenced a time charter in July 2022 for five years at a rate of $28,000 per day. The charterers have the option to convert the term of this agreement to three years at $30,000 per day, which must be declared within 30 months after the delivery date.
(15)This vessel commenced a time charter in July 2022 for three years at an average rate of $28,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $31,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $33,000 per day.
(16)This vessel commenced a time charter in November 2022 for three years at an average rate of $32,750 per day.
(17)This vessel commenced a time charter in May 2022 for three years at an average rate of $28,000 per day. The charterers have the option to extend the term of this agreement for an additional year at $31,000 per day. If this option is declared, the charterers have the option to further extend the term of this agreement for an additional year at $33,000 per day.
(18)This vessel commenced a time charter in December 2022 for three years at an average rate of $35,000 per day.

Dividend Policy

The declaration and payment of dividends is subject at all times to the discretion of the Company's Board of Directors. The timing and the amount of dividends, if any, depends on the Company's earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.

The Company's dividends paid during 2022 and 2023 were as follows:

 Date paidDividend per commonshare 
 March 2022$0.10 
 June 2022$0.10 
 September 2022$0.10 
 December 2022$0.10 
 March 2023$0.20 
 June 2023$0.25 
 September 2023$0.25 

On November 9, 2023, the Board of Directors declared a quarterly cash dividend of $0.35 per common share, with a payment date of December 15, 2023 to all shareholders of record as of November 30, 2023 (the record date). As of November 9, 2023, there were 53,107,765 common shares of the Company outstanding.

Conflict in Ukraine

The ongoing military conflict in Ukraine has had a significant direct and indirect impact on the trade of refined petroleum products. This conflict has resulted in the United States, the United Kingdom, and the European Union countries, among other countries and jurisdictions, implementing sanctions and executive orders against citizens, entities, and activities connected to Russia. Some of these sanctions and executive orders target the Russian oil sector, including a prohibition on the import of oil from Russia to the United States or the United Kingdom, and the European Union's recent ban on Russian crude oil and petroleum products which took effect in December 2022 and February 2023, respectively. The Company cannot foresee what other sanctions or executive orders may arise that affect the trade of petroleum products. Furthermore, the conflict and ensuing international response has disrupted the supply of Russian oil to the global market, and as a result, the price of oil and petroleum products has experienced significant volatility. The Company cannot predict what effect the higher price of oil and petroleum products will have on demand, and it is possible that the current conflict in Ukraine could adversely affect the Company's financial condition, results of operations, and future performance.

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns, lease finances or bareboat charters-in 112 product tankers (39 LR2 tankers, 59 MR tankers and 14 Handymax tankers) with an average age of 7.8 years. The Company has entered into an agreement to sell one of its MR tankers within the fourth quarter of 2023. Additional information about the Company is available at the Company's website www.scorpiotankers.com. Information on the Company’s website does not constitute a part of and is not incorporated by reference into this press release.

Non-IFRS Measures

Reconciliation of IFRS Financial Information to Non-IFRS Financial Information

This press release describes time charter equivalent revenue, or TCE revenue, adjusted net income or loss, and adjusted EBITDA, which are not measures prepared in accordance with IFRS ("Non-IFRS" measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors and other users of our financial statements, such as our lenders, with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.

The Company believes that the presentation of TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful to investors or other users of our financial statements, such as our lenders, because they facilitate the comparability and the evaluation of companies in the Company’s industry. In addition, the Company believes that TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful in evaluating its operating performance compared to that of other companies in the Company’s industry. The Company’s definitions of TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA may not be the same as reported by other companies in the shipping industry or other industries.

TCE revenue, on a historical basis, is reconciled above in the section entitled "Explanation of Variances on the Third Quarter of 2023 Financial Results Compared to the Third Quarter of 2022". The Company has not provided a reconciliation of forward-looking TCE revenue because the most directly comparable IFRS measure on a forward-looking basis is not available to the Company without unreasonable effort.

Reconciliation of Net Income to Adjusted Net Income

   For the three months ended September 30, 2023 
     Per share Per share 
In thousands of U.S. dollars except per share data Amount  basic  diluted  
 Net income $100,368  $2.01  $1.93  
 Adjustment:       
 Write-offs of deferred financing fees and debt extinguishment costs  5,999   0.12   0.12  
 Gain on sales of vessels  (7,127)  (0.14)  (0.14) 
 Adjusted net income $99,240  $1.99  $1.91  

   For the three months ended September 30, 2022 
     Per share Per share 
In thousands of U.S. dollars except per share data Amount  basic  diluted 
 Net income $266,165  $4.84  $4.31  
 Adjustments:       
 Net gain on sales of vessels  (2,732) $(0.05) $(0.04) 
 Write-offs of deferred financing fees and debt extinguishment costs  1,443  $0.03  $0.02  
 Gain on repurchase of Convertible Notes  (69) $  $  
 Adjusted net income $264,807  $4.81 (1)$4.29  

(1) Summation difference due to rounding

   For the nine months ended September 30, 2023 
     Per share Per share 
In thousands of U.S. dollars except per share data Amount basic diluted 
 Net income $426,008  $8.00  $7.68  
 Adjustment:       
 Write-offs of deferred financing fees and debt extinguishment costs  9,253   0.17   0.17  
 Gain on sales of vessels  (7,127)  (0.13)  (0.13) 
 Adjusted net income $428,134  $8.04  $7.72  

   For the nine months ended September 30, 2022 
     Per share Per share 
In thousands of U.S. dollars except per share data Amount basic diluted 
 Net income $372,848  $6.74  $6.07  
 Adjustments:       
 Net loss on sales of vessels  66,486  $1.20  $1.04  
 Write-offs of deferred financing fees and debt extinguishment costs  7,144  $0.13  $0.11  
 Gain on repurchase of Convertible Notes $(481) $(0.01) $(0.01) 
 Adjusted net income $445,997  $8.06  $7.21  

Reconciliation of Net Income to Adjusted EBITDA

   For the three months ended September 30, For the nine months ended September 30,
In thousands of U.S. dollars  2023   2022   2023   2022 
 Net Income $100,368  $266,165  $426,008  $372,848 
 Financial expenses  49,698   42,302   136,950   121,012 
 Financial income  (6,071)  (2,183)  (14,615)  (3,207)
 Depreciation - owned or lease financed vessels  47,016   41,422   129,704   126,581 
 Depreciation - right of use assets  4,136   9,567   22,139   29,055 
 Amortization of restricted stock  12,264   5,472   28,838   16,148 
 Net (gain) / loss on sales of vessels  (7,127)  (2,732)  (7,127)  66,486 
 Adjusted EBITDA $200,284  $360,013  $721,897  $728,923 

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," "expect," "anticipate," "estimate," "intend," "plan," "target," "project," "likely," "may," "will," "would," "could" 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, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although management believes 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 the Company’s control, there can be no assurance that the Company will achieve or accomplish these expectations, beliefs or projections. The Company undertakes no obligation, and specifically declines any obligation, except as required by law, to publicly update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.

In addition to these important factors, other important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward‐looking statements include unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies in response to epidemic and other public health concerns including any effect on demand for petroleum products and the transportation thereof, expansion and growth of the Company’s operations, risks relating to the integration of assets or operations of entities that it has or may in the future acquire and the possibility that the anticipated synergies and other benefits of such acquisitions may not be realized within expected timeframes or at all, the failure of counterparties to fully perform their contracts with the Company, 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 the Company’s operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company’s 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, including the impact of the conflict in Ukraine and the developments in the Middle East, including the armed conflict in Israel and Gaza, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off‐hires, and other factors. Please see the Company's filings with the SEC for a more complete discussion of certain of these and other risks and uncertainties.

Contact Information

Scorpio Tankers Inc.James Doyle - Head of Corporate Development & Investor RelationsTel: +1 646-432-1678Email: investor.relations@scorpiotankers.com 

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Source: Scorpio Tankers Inc.

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