Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Stifel Conference Presentation February 2017
29 slides from Scorpio Tankers's conference presentation, February 2017
Slide 1: STIFEL Conference Presentation
STIFEL Conference Presentation February 2017 1
Slide 2: Company Overview
Company Overview • Scorpio Tankers Inc. (“STNG” or “Company") is the world’s largest ECO-spec product tanker company • By Q1-18, the Company will own a fleet of 87 eco-design product tankers • 78 product tankers on the water with an average age of 2.3 years 22 LR2s (110,000 DWT, ~750,000 bbls) 42
Slide 3: Operating Leverage Continues to Grow
Operating Leverage Continues to Grow Class Existing To be Delivered Total Owned TC/BB-In Total 2017 2018 Handymax 14 - - 14 7 21 (35,000 DWT) MR 42 7 1 50 8 58 (52,000 DWT) LR1 - - - - 1 1 (75,000 DWT) LR2 22 1 - 23 1 25 (110,000 DWT) Total 78 8 1 87 17 105 3
Slide 4: Product Tankers in the Oil Supply Chain
Product Tankers in the Oil Supply Chain • Crude Tankers provide the marine transportation of the crude oil to the refineries. • Product Tankers provide the marine transportation of the refined products to areas of demand. • Structural demand drivers in the product tanker industry: • US has emerged a
Slide 5: Product and Crude Tankers
Product and Crude Tankers Tankers “Dirty” “Clean” Crude Products Vessel VLCC Suezmax Aframax Panamax Handysize LR2 LR1 Hmx/MR Handysize Size (200,000 + (120,000 - (80,000 - (60,000 - (< 60,000 (80,000- (60,000- (25,000- (<25,000 DWT) 200,00 DWT) 120,00 DWT) 80,00 DWT) DWT) 120,000 80,000 DWT) 60,000
Slide 6: Product Tanker Specifications
Product Tanker Specifications IMO Classes I, II, & III IMO Class I Chemical Tankers IMO Class I refers to the transportation of the most hazardous, 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 7: New Design Features on Scorpio Product Tankers
New Design Features on Scorpio Product Tankers Lower Co2 Emissions at Vapor Recovery Deepwell Pumps, Cleaning Capability for Rapid Sea & In Port System Discharge & Cargo Flexibility Bulbous Bow Mewis Duct Hydrodynamic Hull Form Enhanced Cargo Tank Coatings G-Type Larger Propeller (Electronic Long St
Slide 8: Ballast Water Treatment Systems
Ballast Water Treatment Systems • The IMO’s Ballast Water Convention is due to enter force on BWTS Filtering Unit September 8, 2017. • After September 2017, ship operators will need to install type-approved ballast water treatment systems by the time the International Oil Pollution Prevention (IOPP)
Slide 9: New Sulfur Emission Regulations
New Sulfur Emission Regulations • On October 27, 2016 the International Maritime Organization's (IMO) announced the results from a vote to MARPOL Annex VI SOx Emission Timeline ratify and formalize regulations mandating a reduction in sulfur emissions from 3.5% currently to 0.5% as of the beginning
Slide 10: STNG Market Cap & Liquidity
STNG Market Cap & Liquidity $1,400 $20 $1,200 $15 $1,000 Liquidity ($m pd) (Millions $USD) $800 $10 $600 $1,158 $1,236 $851 $400 $655 $5 $554 $458 $424 $200 $387 $278 $240 $- $- Euronav US Frontline Nordic Scorpio TORM DHT Holdings Gener 8 Teekay Navios Mar. Ardmore American Tankers Maritime Tankers
Slide 11: Product Tanker Fleet Age Profile
Product Tanker Fleet Age Profile HM MR 13% 13% 26% 27% 23% 26% 36% 37% LR1 LR2 6% 13% 13% 30% 30% 17% 51% 41% Source: Clarksons Research Services, February 2017 11
Slide 12: Product Tanker Owners & Operators
Product Tanker Owners & Operators Scorpio’s trading platform operates the largest product tanker fleet in the market with over 140 vessels under commercial management Top Pool Operators Top Five Handymax & MR Owners (1) Pool Operator Handymax MR LR2 Total # Owner Vessels Scorpio 39 85 25 149 1 Scorp
Slide 13: Scorpio Pools Have Consistently Outperformed The Market
Scorpio Pools Have Consistently Outperformed The Market Pool Performance ($/day) $30,000 Scorpio Handymax Pool Handymax Benchmark (TD16 - TD18 - TC6 - BALTIC/CONT) Scorpio $20,000 Handymax Tanker Pool $10,000 (SHTP) $0 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Scorpio M
Slide 14: Product Tanker Fundamentals
Product Tanker Fundamentals 14 14
Slide 15: Product Tanker DWT Before Scrapping
Product Tanker DWT Before Scrapping 180.0 158.4 159.7 160.2 160.0 154.9 147.2 140.0 38.6 38.6 38.6 37.6 35.0 120.0 28.7 28.8 28.9 DWT (Millions) 27.5 100.0 25.5 80.0 60.0 89.8 91.1 92.3 92.7 86.7 40.0 20.0 0.0 Current 2017 2018 2019 2020 HM/MR LR1 LR2 . Assumes no slippage, cancellation or scrapping
Slide 16: Product Tanker Newbuilding Contracts at 20 Year Low
Product Tanker Newbuilding Contracts at 20 Year Low 2017 Newbuilding Contracts YTD Handymax MR LR1 LR2 Total 0 2 0 2 4 600 490 500 400 (# of Vessels) 299 300 217 192 200 160 126 108 98 100 80 47 17 4 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD HM & MR LR1 LR2 Total Source: Clar
Slide 17: Reductions in Shipyard Capacity
Reductions in Shipyard Capacity 1000 930 879 844 798 800 758 737 648 649 (# of Active Yards) 600 580 547 515 478 472 400 411 400 376 354 358 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 *Active Yards: Yards with at least one vessel above 1,000 GT on
Slide 18: Structural Drivers in Demand for Refined Products
Structural Drivers in Demand for Refined Products • Between 2000-2016, ton miles have increased an average of 4.4% per year. • Reduction in oil prices has lead to an increase in the production of refined products, and consequently the quantity to be transported. • US has emerged as a refined product
Slide 19: US Has Become the World's Largest Products Exporter
US Has Become the World’s Largest Products Exporter U.S. Crude Oil Production U.S. Imports and Exports of Finished Oil Products 10.0 3.5 Imports Exports 8.0 3.0 (mb/d) 2.5 (mb/d) 6.0 2.0 1.5 4.0 1.0 2.0 0.5 U.S. Finished Oil Product Exports U.S. Refined Product Exports By Type: Jan-Nov 2016 3.5 3.0
Slide 20: Underlying Demand Growth Drives Imports
Underlying Demand Growth Drives Imports United Kingdom: Diesel Australia: Diesel 350 350 318 300 291 292 295 300 264 243 250 250 219 226 kb/d kb/d 200 200 150 150 100 100 2013 2014 2015 2016 2013 2014 2015 2016 Mexico: Gasoline Singapore: Gasoline 500 400 371 450 435 342 350 327 394 400 306 340 300
Slide 21: Refinery Capacity Expansions Drive Demand
Refinery Capacity Expansions Drive Demand • The refining industry continues to undergo massive expansion and restructuring as worldscale refining hubs in Asia, the Middle East, and United States are crowding out legacy capacity in Europe and OECD Asia Oceania. • According to International Energy Age
Slide 22: Middle East Investing in New Refinery Capacity
Middle East Investing in New Refinery Capacity • New refinery projects coming on stream in the Middle East exceed regional demand growth, resulting in increased product exports particularly middle distillates. • Europe is the most likely destination for much of the new volumes, particularly diesel.
Slide 23: Product Tankers Needed to Meet Refining Capacity Growth
Product Tankers Needed to Meet Refining Capacity Growth Product Tankers Needed to Meet New Capacity Growth AG-FE Example Incremental Refining Capacity Growth(bbl/d) 500,000 HM/MR Carrying Capacity (bbl) 250,000 LR1/LR2 Carrying Capacity (bbl) 600,000 Far East Laden Speed (knots) 12.5 Ballast Speed (
Slide 24: Product Tanker Trade Map
Product Tanker Trade Map Gasoil/Diesel N. America Gasoline Gasoil/Diesel Med Far East Jet Fuel Gasoline Arabian Gulf Gasoil/Diesel Naphtha Gasoline Caribbean Gasoil/Diesel Gasoil/Diesel Gasoil/Diesel South East Asia Gasoline S. America Gasoil/Diesel Gasoil/Diesel Gasoline Inter-Regional trade routes
Slide 25: Company Highlights
Company Highlights 1 World’s largest fleet of ECO-design product tankers Modern, fuel- ECO-design vessels have substantially lower fuel costs than prior generation vessels efficient fleet Young fleet (average age of 2.3 years), built at high quality yards. 2 STNG currently operates a fleet o
Slide 26: Appendix
Appendix 26 26
Slide 27: Fleet List
Fleet List Owned Vessels 2017 Delivery Schedule Name Year DWT Type Name Year DWT Type Name Year DWT Type STI Comandante May-14 38,000 HM STI Yorkville Oct-14 52,000 MR STI Rambla Mar-17 114,000 LR2 STI Brixton Jun-14 38,000 HM STI Memphis Nov-14 52,000 MR STI Galata Mar-17 52,000 MR STI Pimlico Jul-
Slide 28: Largest Shareholders
Largest Shareholders # Holder % 1 Wellington Management Company 11.5% 2 Dimensional Fund Advisors 8.2% 3 Fidelity Management & Research Company 4.1% 4 Putnam Investment Management 4.0% 5 The Vanguard Group 3.5% 6 Daruma Capital Management 3.5% 7 BlackRock Fund Advisors 3.5% 8 Millennium Management 2
Slide 29: Thank you!
Thank you! www.scorpiotankers.com 29
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