Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Investor Presentation (May 2022)
34 slides from Scorpio Tankers's investor presentation, May 2022
Slide 1: Scorpio Tankers Inc. Company Presentation
Scorpio Tankers Inc. Company Presentation May 2022
Slide 2: Disclaimer and Forward-looking Statements
Disclaimer and Forward-looking Statements This presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Scorpio Tankers Inc.’s (“Scorpio’s”) curr
Slide 3: The Company
The Company 3
Slide 4: Scorpio Tankers at a Glance
Scorpio Tankers at a Glance Key Facts Fleet Overview One of the Largest Product Tanker Fleets in the World • Scorpio Tankers Inc. (“Scorpio”) is the world’s largest product tanker owner, providing marine transportation of refined with 113 Vessels on the Water petroleum products (gasoline, diesel, je
Slide 5: Investment Highlights
Investment Highlights One of the Largest Product Tanker • 113 wholly owned, finance leased or bareboat chartered-in tankers on the water Fleets in the World • Vessels trading within one of the world’s largest product tanker platforms with a strong track record High Quality, Modern & Fuel-Efficient •
Slide 6: One of the Largest & Most Modern Product Tanker Fleets in the World
One of the Largest & Most Modern Product Tanker Fleets in the World • One of the world’s largest and youngest product tanker fleets, including the leading owner in the MR and LR2 product tanker segments • While a significant portion of the global MR and LR fleets are older than 15 years of age, the
Slide 7: Significant Operating Leverage & Earnings Potential
Significant Operating Leverage & Earnings Potential Historical MR & LR2 (Non-Eco) Spot Earnings (1) Potential Annual Cash Flow Generation Excluding Debt Repayment ($/day) LR2 Middle East to Japan MR Avg Earnings ($USD millions) $100,000 $1,500 $80,000 $60,000 $1,000 $1,215 $1,009 $40,000 $803 $597 $
Slide 8: Product Tankers
Product Tankers 8
Slide 9: Product Tankers in the Oil Supply Chain & Cargo Types
Product Tankers in the Oil Supply Chain & Cargo Types • Crude tankers provide the marine transportation of the crude oil to the refineries whereas, product tankers provide the marine transportation of the refined products to areas of demand • Product tankers have coated tanks, typically epoxy, makin
Slide 10: Customers, Participants & Vessel Employment Arrangements
Customers, Participants & Vessel Employment Arrangements Spot Voyage Time Charter Bareboat Charter Commercial Pool Customers Charter Typical Contract Single Voyage One Year or More One Year or More Varies Length Commodity Traders Oil Companies Refiners Hire Rate (1) Varies Daily Daily Varies Voyage
Slide 11: Product Tanker Sizes, Cargoes & Trade Routes
Product Tanker Sizes, Cargoes & Trade Routes Vessel Types, Cargoes & Trading Regions Product Tanker Trade Routes Handymax MR LR2 Scorpio Fleet 14 60 39 (# of vessels) Trading Type Short Range Medium Range Long Range DWT 25,000-39,999 40,000-54,999 80,000-120,000 Avg Cargo Size ~200,000 bbls ~300,000
Slide 12: Vessel Designs & TCE Implications
Vessel Designs & TCE Implications Eco vs Non Eco Vessels MR Avg Spot TCE Rates by Vessel Type from Jan to Apr 2022 (1) • Modern product tankers (“Eco vessels”) are more fuel ($/day) $25,000 $23,265 efficient than their older peers (“Non Eco vessels) $18,870 $20,596 $20,000 • Fuel savings are realize
Slide 13: Scrubber Fuel Savings
Scrubber Fuel Savings VLSFO-HSFO Spread (1) Scorpio Daily TCE Scrubber Savings ($/MT) ($/day) Rotterdam Singapore LR2 MR $400 $3,345 $300 $2,509 $2,489 $200 $1,867 $1,673 $1,244 $100 $0 Jun-20 Jun-21 Feb-20 Feb-21 Feb-22 Dec-19 Aug-20 Dec-20 Aug-21 Dec-21 Oct-19 Apr-20 Oct-20 Apr-21 Oct-21 Apr-22 $1
Slide 14: Environmental Regulations
Environmental Regulations IMO Regulations EU Regulations • The IMO has been devising strategies to reduce greenhouse gases (GHG) and • The EU has proposed a set of proposals including EU Emissions Trading carbon emissions from ships. System and Fuel EU Maritime Initiative. • According to the announc
Slide 15: Market Fundamentals
Market Fundamentals 15
Slide 16: Product Tanker Demand Drivers
Product Tanker Demand Drivers Increased Volumes Voyage Distance Product Tanker (Seaborne Trading Activity Demand Exports) (Ton Mile Demand) • Oil consumption • Dislocation • Arbitrage opportunities growth between refinery from price volatility and consumer • Refinery margins • Low inventory levels •
Slide 17: Short Term Market Update
Short Term Market Update Weekly MR & LR2 Spot Earnings Since November 2021 ($/day) LR2 Eco-Middle East to Japan MR Eco-Avg Earnings $80,000 $70,000 LR2 Rates Increase as Asian $60,000 Demand Returns $50,000 USG-Latin America MR Rates Reach Record Levels $40,000 Russia Invades Ukraine $30,000 MR rate
Slide 18: Diesel Market Continues to Tighten
Diesel Market Continues to Tighten Diesel Demand Has Been Robust & Above Pre-Pandemic Levels (1) Global Diesel Supply / Demand Balance (1) (mb/d) (mb/d) 30.0 29.2 29.1 29.4 28.9 28.6 28.0 28.3 27.5 27.3 26.8 27.1 26.6 25.0 25.0 20.0 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-21 Q2-22e
Slide 19: Russian Invasion of Ukraine Exacerbates Global Diesel Shortage
Russian Invasion of Ukraine Exacerbates Global Diesel Shortage Russian CPP Exports by Type (excl Fuel Oil) (1) Russian Diesel Trade Flows & Potential Changes (mb/d) Diesel/Gasoil Naphtha Gasoline Other 1.8 1.5 1.5 1.5 1.5 0.1 0.1 0.0 0.1 0.1 0.1 0.1 0.1 1.2 0.5 0.5 0.5 0.5 0.6 0.8 0.9 0.9 0.9 - FY-1
Slide 20: Global Refinery Rationalization Accelerates Ton Mile Demand
Global Refinery Rationalization Accelerates Ton Mile Demand • Global oil refining is being reconfigured and will have a Refinery Closures By Region (1) (mb/d) North America Europe Asia Pacific Latin America Africa Middle East significant change in future global trade patterns 1.0 0.9 0.9 • Older ref
Slide 21: Share of Global Refinery Capacity & Seaborne Exports / Imports
Share of Global Refinery Capacity & Seaborne Exports / Imports Global CDU Refining Capacity Additions & (Closures) (1) Share of Global CPP Seaborne Exports by Country (2) (mb/d) Africa Asia (excl China) China Europe FSU Middle East Latin America North America 14% 4.0 3.0 3.0 0.1 9% 0.4 0.5 2.0 0.9 1
Slide 22: Seaborne Exports & Ton Miles to Exceed Pre-Pandemic Levels
Seaborne Exports & Ton Miles to Exceed Pre-Pandemic Levels Refined Product Demand Expected to Increase ~4 mb/d from Q1-21 (1) Seaborne Refined Product Exports Increase above Pre COVID Levels in May (2) (mb/d) (mb/d) 25.3 78.5 78.6 23.6 23.1 22.8 23.1 23.4 76.9 74.0 74.6 76.6 21.9 22.6 69.8 7.3 6.6 6
Slide 23: Limited Fleet Growth with Low Orderbook & Ageing Fleet
Limited Fleet Growth with Low Orderbook & Ageing Fleet Orderbook as a % of Fleet at Record Lows Product Tanker Net Fleet Growth 70% Scenario 1 Scenario 2 60% 6.3% 50% 4.8% 4.2% 40% 2.5% 30% 1.9% 2.0% 1.4% 1.3% 20% 0.3% 0.3% 0.0% 10% 4.9% -1.0% -0.9% 0% -2.0% 2016 2017 2018 2019 2020 2021 2022e 2023e
Slide 24: Scrapping Expected to Continue After 20 Year High in 2021
Scrapping Expected to Continue After 20 Year High in 2021 Scrapping Reach a 20 Year High in 2021 Scrap Values Have Reached Record Levels(2) (# of vessels) MR LR1 LR2 (Millions $USD) MR Aframax/LR2 50 47 42 $15.0 8 40 4 35 36 4 $11.3 9 5 30 7 $10.0 24 24 7 22 20 3 20 3 16 14 6 16 $6.0 3 2 5 35 15 13
Slide 25: Financials
Financials 25
Slide 26: Significant Operating Leverage & Earnings Potential
Significant Operating Leverage & Earnings Potential Company Fleet TCE Rate Q2-22 TCE Rates ($/day) as of April 27, 2022 ($/day) % of Days Booked $29,693 $30,000 $30,000 $27,929 $24,000 $22,644 $15,100 $15,415 $11,954 $12,615 42% 33% $11,608 $11,166 44% $10,139 LR2 MR HM Q1-20 Q2-20 Q3-20 Q4-20 Q1-21
Slide 27: Improving Balance Sheet & Healthy Liquidity Position
Improving Balance Sheet & Healthy Liquidity Position Company to Reduce Debt by $513mm in First Half of 2022 Potential for ~$450mm in Pro Forma Liquidity if Fleet TCE $25,000/day in Q2-22 (1) ($USD millions) ($USD millions) $500 $3,500 $452.1 $452.1 $3,164 $400 $368.6 $83.5 $3,000 $298.2 $2,651 $330.
Slide 28: Significant Increase in Asset Values
Significant Increase in Asset Values 5 Year Old Vessel Values Historical 5 Yr Old Vessel Values Millions $USD Millions $USD MR 5 Yr LR2 5 Yr MR 5 Yr Old LR2 5 Yr Old $50.0 $47.5 $100.0 $43.0 $40.0 $80.0 $35.0 $32.5 $29.0 $60.0 $30.0 $27.5 $40.0 $20.0 $20.0 $10.0 $0.0 $0.0 Jan-21 Dec-21 Apr-22 Newbui
Slide 29: Appendix
Appendix 29
Slide 30: Product Tanker Specifications
Product Tanker Specifications IMO Classes I, II, & III IMO Class I Chemical IMO Class I refers to the transportation of the most hazardous, Tankers very acidic, chemicals. The tanks can be stainless steel, epoxy or marine-line coated. IMO Class II Chemical & Product Tankers IMO Class II carries Veg
Slide 31: Design Features on Scorpio Product Tankers
Design Features on Scorpio Product Tankers 31
Slide 32: Scrubber Fuel Savings
Scrubber Fuel Savings Annual ECO Vessel Fuel Consumption (MT/year) (1) Sailing (Ballast & Laden) MR LR2 Non ECA 4,641 6,019 Waiting/Idle Non ECA 153 347 Less Additional Consumption for Scrubber -252 -261 Total Non ECA Consumption (MT) 4,542 6,105 MGO-HSFO Spread ($/MT) $200 $200 Annual Scrubber Savi
Slide 33: Global Refinery Closures Accelerate
Global Refinery Closures Accelerate Announced Refinery Closures • Global oil refining is being reconfigured and will have a significant change on future global trade patterns Operator Location Capacity (kbd) Timing MPC Martinez, CA(USA) 161 2020 • Older refineries have faced a wave of closures due t
Slide 34: www.scorpiotankers.com
www.scorpiotankers.com