Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Investor Presentation (October 2024)
49 slides from Scorpio Tankers's investor presentation, October 2024
Slide 1: Scorpio Tankers Inc. Company Presentation
Scorpio Tankers Inc. Company Presentation October 2024
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: Table of Contents
Table of Contents The Company Product Tankers Market Fundamentals Financials Appendix
Slide 4: The Company
The Company 4
Slide 5: Scorpio Tankers At a Glance
Scorpio Tankers At a Glance Key Facts NYSE Ticker Fleet Vessels(1) NUMBER • Scorpio Tankers Inc. (“Scorpio”) is the world’s largest product tanker STNG 102 owner, providing marine transportation of refined petroleum products (gasoline, diesel, jet fuel and naphtha) • Vessels employed in well-establi
Slide 6: Largest and Most Modern Product Tanker Fleet in the World
Largest and Most Modern Product Tanker Fleet in the World Scorpio’s Fleet vs. Peers Scorpio Average Age vs Worldwide Fleet Number of vessels Fleet average age Scorpio Tankers Active Fleet HM MR LR1 LR2 18 17.1 16 Scorpio 102 14 Peer 1 90 12.9 12 Peer 2 90 10.8 10.0 10 Peer 3 70 8.6 8.1 8 Peer 4 63 6
Slide 7: Investment Highlights
Investment Highlights Company • One of the largest product tanker fleets in the world • 102 Eco (fuel-efficient) vessels on the water (1) • Fully delivered fleet with an average age of 8.4 years (1) New Slide • No newbuildings on order = $0 newbuild capex • Significant Operating Leverage • A $10,000
Slide 8: Product Tankers
Product Tankers 8
Slide 9: What is a Product Tanker?
What is a Product Tanker? • Product tankers provide the marine transportation of refined petroleum products to areas of demand, whereas crude tankers provide the marine transportation of crude oil to refineries • Product tankers have coated tanks (typically epoxy) making them easy to clean and preve
Slide 10: Product Tanker Types, Cargoes
Product Tanker Types, Cargoes Clean Petroleum Products Handymax (“CPP”) “Clean” Gasoline Product Tankers (1) DWT: Voyage Length: Cargo Types : Diesel/Gasoil (Coated Tanks) Naphtha 25,000-39,999 15-20 days Diesel/Gasoil Jet Fuel Fuel Oil Kerosene Average Cargo Size: Primary Trading Regions: Gasoline
Slide 11: CPP Product Tanker Trade Routes
CPP Product Tanker Trade Routes Baltic Trade Routes HM MR LR2 9 23 North America Europe 2 Middle East 6 10 15 Asia 20 14 1 19 21 11 18 Africa 12 `` 22 17 130 kbd 7 South America Oceania 1 AG / Japan 10 South Korea / USWC 17 AG / EAF 22 1 South Korea / Australia 2 UKC / USAC 11 South Korea / Singapor
Slide 12: 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 13: Product Tanker Fundamentals
Product Tanker Fundamentals Demand Factors • Seaborne Exports • Growing global consumption of refined products has led to an increase in seaborne exports • Voyage Distances • Refinery capacity has moved closer to the well head and farther from the consumer, which has increased the distance refined p
Slide 14: Environmental Regulations - IMO
Environmental Regulations - IMO IMO 2023 GHG Strategy IMO EEXI & CII • The IMO’s Revised GHG Strategy was adopted in July 2023 under the 80th session of • As of January 1, 2023, it’s mandatory for all ships to determine their Efficiency the Marine Environment Protection Committee (MEPC80). Existing
Slide 15: Environmental Regulations – EU Fit for 55
Environmental Regulations – EU Fit for 55 EU Fit For 55 • The European Union's "Fit for 55" package of proposals aims to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels • The legislative package includes several measures which impact shipping European Trading Syst
Slide 16: Scorpio Tankers: Driving Sustainability and Governance Excellence
Scorpio Tankers: Driving Sustainability and Governance Excellence Scorpio Tankers is committed to advancing the pillars of sustainability. By aligning with global standards, fostering employee well-being, and upholding strong governance, we drive operational excellence and create long-term value for
Slide 17: Market Fundamentals
Market Fundamentals 17
Slide 18: Product Tanker Earnings Remain at Historically High Levels
Product Tanker Earnings Remain at Historically High Levels Product Tanker Earnings (LHS) vs. Product Tanker 10k+ DWT Deliveries (RHS) $USD per day Number of deliveries Product Tanker Deliveries Average Weighted Clean Product Tanker Earnings $70,000 35 $60,000 2020: 2022: 30 COVID-19 floating Russia
Slide 19: Refined Product Demand & Seaborne Exports Exceed Pre-Pandemic Levels
Refined Product Demand & Seaborne Exports Exceed Pre-Pandemic Levels Global Refined Product Demand (1) • Product tanker earnings have remained at elevated levels Million barrels per day Diesel Gasoline Jet Naphtha Fuel Oil since March 2022 90.0 79.2 80.5 80.1 • Seaborne exports of refined products c
Slide 20: Rates Improving as Maintenance Eases & Crude Vessels Move Back to Dirty
Rates Improving as Maintenance Eases & Crude Vessels Move Back to Dirty Refinery Maintenance (Capacity Offline) (1) Snapshot of Crude Tanker Cleanup Behavior After Discharging CPP (2) Million barrels per day Asia Pacific North America Europe Latin America FSU Middle East Africa Vessel Count VLCC Sue
Slide 21: Crude Tankers Return to Dirty Trade as Feedstock Demand Increases
Crude Tankers Return to Dirty Trade as Feedstock Demand Increases & Spreads Narrow Crude Tankers Carrying Clean Products is Expected to Slow (1) Earnings Spread Between Crude & Product Tankers (2) Million barrels Suezmax VLCC $USD per day VLCC-LR2 Spread Suezmax-LR2 Spread 20.0 $60,000 18.8 17.9 16.
Slide 22: Global Inventories Well Below Historical Averages (1/2)
Global Inventories Well Below Historical Averages (1/2) US Diesel Inventories US Gasoline Inventories Million barrels Million barrels 5Y Range Previous 5Y AVG YTD 5Y Range Previous 5Y AVG YTD 190 270 180 260 170 250 160 150 240 140 230 130 220 120 210 110 100 200 Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 23: Global Inventories Well Below Historical Averages (2/2)
Global Inventories Well Below Historical Averages (2/2) EU Distillate Inventories OECD & Non-OECD Gasoline Inventories (Excl US) Million barrels Million barrels 5Y Range Previous 5Y AVG YTD 5Y Range Previous 5Y AVG YTD 310 360 340 290 320 270 300 280 250 260 230 240 220 210 Jan Feb Mar Apr May Jun J
Slide 24: Refined Products Demand and Seaborne Product Exports Continue to Increase
Refined Products Demand and Seaborne Product Exports Continue to Increase Seaborne Refined Product Exports (1) Refined Product Demand vs 2023 Baseline (2) Million barrels per day Million barrels per day Diesel Gasoline Jet Naphtha Fuel Oil 22.00 3.0 21.00 2.0 20.00 1.0 19.00 0.0 18.00 -1.0 17.00 -2.
Slide 25: Disruptions Exacerbate Strong Supply & Demand Fundamentals
Disruptions Exacerbate Strong Supply & Demand Fundamentals Clean Product Trade Flows Re-routed via Cape of Good Hope (1) Product Tankers Continue to Transit Around the Cape of Good Hope (2) Million barrels per day Via COGH Via Suez 4.5 4.0 3.8 3.5 3.5 3.5 3.3 3.2 3.2 3.2 3.2 3.1 3.1 3.0 3.0 3.0 3.0
Slide 26: Refining Capacity Changes Increase Seaborne Exports, Trading & Ton Miles
Refining Capacity Changes Increase Seaborne Exports, Trading & Ton Miles Net CDU Additions From 2013 to 2025 By Region (1) Middle East CPP Ton Miles Have Increased ~93% Since 2017 (2) Million barrels per day Billion ton miles 6.0 Increased ~93% 5.5 300.0 5.0 256.0 250.0 4.0 3.5 3.0 200.0 2.0 150.0 1
Slide 27: Crude Oil Demand Could Outpace Distillation Capacity
Crude Oil Demand Could Outpace Distillation Capacity Crude Oil Demand vs Refining Distillation Capacity Spare Distillation Capacity & Impact of Refinery Closures Million barrels per day Oil demand Distillation capacity Million barrels per day Spare Distillation Capacity* Effect of Actual Closures Ef
Slide 28: Refined Product Demand Has Been Resilient
Refined Product Demand Has Been Resilient Global Refined Product Demand Global Product Demand - Global Financial Crisis & COVID-19 Million barrels per day Diesel Gasoline Jet Naphtha Fuel Oil YoY change, million barrels per day Change Excl Fue Oil 78.8 79.3 80.0 77.3 6.0 7.8 7.5 4.6 7.0 70.0 68.8 4.
Slide 29: Seaborne Exports & Ton Miles Show Persistent Growth
Seaborne Exports & Ton Miles Show Persistent Growth Seaborne Product Exports Have Increased in 21 of the Last 25 Years Ton Mile Demand Has Grown at a 3.6% CAGR Since 2000 YoY change Billion ton miles 4,000 10.0% 3,500 5.0% 3,000 2,500 0.0% 2,000 -5.0% 1,500 1,000 -10.0% 500 -15.0% 0 Clarksons Shippi
Slide 30: Orderbook & Historical Product Tanker Fleet Growth
Orderbook & Historical Product Tanker Fleet Growth Product Tanker Earnings vs Orderbook as % of Fleet Product Tanker Fleet Growth YoY change Orderbook as % of Fleet YoY change Average Product Tanker Earnings (LHS) Product Tanker 10K+ Orderbook % Fleet (RHS) $70,000 70% 13.7% $60,000 60% 12.0% 11.5%
Slide 31: Newbuild Prices & Delivery Lead Times Continue to Increase
Newbuild Prices & Delivery Lead Times Continue to Increase Newbuilding Prices Average Time Between Vessel Order & Delivery $USD millions LR2 MR Years MR LR2 90.0 3.5 80.0 3.1 3.1 70.0 60.0 2.7 2.7 2.6 2.6 50.0 2.5 40.0 2.3 2.2 30.0 2.0 20.0 1.9 1.8 10.0 0.0 1.5 Mar-04 Mar-09 May-13 Mar-14 Mar-19 Mar
Slide 32: Time Charter Rates Remain Strong
Time Charter Rates Remain Strong LR2 Time Charter Rates MR Time Charter Rates $USD per day $USD per day LR2 3 Yr Charter Rate LR2 1 Yr Charter Rate MR 3 Yr Charter Rate MR 1 Yr Charter Rate $50,000 $35,000 $45,000 $30,000 $40,000 $25,000 $35,000 $30,000 $20,000 $25,000 $15,000 $20,000 $15,000 $10,00
Slide 33: TMX Pipeline Increases Demand for Aframax & LR2 Vessels
TMX Pipeline Increases Demand for Aframax & LR2 Vessels Trans Mountain Pipeline (TMX) Crude Exports (1)(2) APAC Refinery Runs (1) Thousand barrels per day North America Asia Undetermined EA Forecast Thousand barrels per day 500 32,500 433 434 32,000 411 400 359 31,500 336 323 323 17 300 31,000 138 1
Slide 34: Majority of Aframax & LR2 Market is Focused on Crude & Dirty Products
Majority of Aframax & LR2 Market is Focused on Crude & Dirty Products Aframax & LR2 Cargo Breakdown (1) % of LR2 Vessels Trading Clean Products (2) Clean Petroleum Products Crude Oil Dirty Petroleum Products 70% 12% 12% 12% 12% 12% 12% 12% 11% 11% 65% 60% 55% 69% 69% 55% 72% 70% 70% 73% 72% 72% 73%
Slide 35: Aframax & LR2 Orderbook
Aframax & LR2 Orderbook Aframax & LR2 Newbuild Orders Aframax & LR2 Orderbook as a % of Fleet Number of vessels LR2 Aframax 50% 400 45% 347 350 336 40% 300 35% 263 30% 250 239 221 60 254 25% 200 188 175 112 19% 20% 150 96 15% 100 140 203 10% 126 127 50 92 82 5% 35 0 0% 1996-2000 2001-2005 2006-2010
Slide 36: Product Tanker Orderbook & Fleet Average Age
Product Tanker Orderbook & Fleet Average Age Orderbook as % of Fleet vs Avg Fleet Age Global Fleet Age Breakdown by 2027 (Including Newbuildings) Orderbook as % of Fleet 30.0% 70% Scrap Candidates 25.0% 24.5% 60% 2007 24.1% 2008 50% 19.7% 20.0% 17.7% 2006 2005 40% 2009 2004 15.0% 14.0% 30% 2010 10.0
Slide 37: Significant 2000’s Fleet Growth Expected to be Phased Out
Significant 2000’s Fleet Growth Expected to be Phased Out Historical Deliveries and Projected Orderbook Vessels At or Above 20 Years Old Number of vessels HM MR LR1 LR2 Cumulative number of vessels HM MR LR1 LR2 250 1400 1200 200 1000 150 800 100 600 400 50 200 0 2025e 2024e 2026e 2027e 2028e 2029e
Slide 38: Seaborne Exports & Ton Mile Demand to Outpace Fleet Growth
Seaborne Exports & Ton Mile Demand to Outpace Fleet Growth Product Tanker Fleet Growth (1) Seaborne Ton Mile Demand & Exports (2) Number of vessels Scenario 1 Scenario 2 Scenario 3 YoY change Seaborne Exports Growth - bmd Ton Mile Demand Growth 10.0% 8.1% 7.8% 7.0% 5.2% 4.8% 5.1% 5.0% 3.9% 4.8% 4.0%
Slide 39: Financials
Financials 39
Slide 40: Financial Highlights
Financial Highlights Adj EBITA of $278.0 million Q2-24 Financial Results Adj net income of $188.4 million or $3.77 basic and $3.60 diluted earnings per share (1) From January 1, 2024, through July 29, 2024, the Company made $603.8 million in unscheduled debt and lease Significant Debt Repayment repa
Slide 41: Financial Highlights
Financial Highlights Financial Highlights Over Last Six Quarters (Q1-23 through Q2-24) $USD millions 2,500 $2,091 2,000 $1,530 1,500 $965 $955 1,000 $543 500 $101 0 TCE Revenue Adj EBITDA Adj Net income Debt Reduction Share Repurchases Dividends 41
Slide 42: Continued Reduction In Leverage & Expensive Lease Financing
Continued Reduction In Leverage & Expensive Lease Financing Outstanding Indebtedness by Type Net Debt $USD millions $USD millions Lease Financing Bank Facilities Unsecured Notes Convertible Bonds Gross Debt Outstanding Cash & Cash Equivalents $3,500 $2,933 $3,164 $3,000 $70 $2,500 $574 $1,581 $1,263
Slide 43: Debt Repayment Schedule
Debt Repayment Schedule Debt Repayment Schedule (1) Debt Repayment from December 31, 2021, through September 30, 2024 $USD millions Payments made through July 29, 2024 Scheduled repayments $USD millions Unsecured Notes Prepayment of Credit Facility $100.0 $3,500 $3,164 $85.2 $3,000 $82.8 $2,500 $1,9
Slide 44: Significant Operating Leverage & Earnings Potential
Significant Operating Leverage & Earnings Potential Company Fleet TCE Rates Potential Annual Cash Flow Generation After Debt Repayment (1) $USD per day $USD millions $45,679 $44,222 $1,716 $39,660 $38,813 $37,500 $36,006 $34,800 $1,355 $32,949 $32,154 $33.8/Share $28,313 $994 $26.7/Share $19.6/Share
Slide 45: Appendix
Appendix 45
Slide 46: Time-Chartered Out Vessels
Time-Chartered Out Vessels Vessel Vessel class Term Average Rate ($/day) Commencement date STI Memphis MR Three Years $21,000 June-22 STI Miracle MR Three Years $21,000 August-22 STI Magnetic MR Three Years $23,000 July-22 STI Marshall MR Three Years $23,000 July-22 STI Duchessa MR Three Years $25,0
Slide 47: Product Tanker Specifications
Product Tanker Specifications IMO Classes I, II, & III IMO Class I refers to the transportation of the most hazardous, very IMO Class I Chemical Tankers acidic, chemicals. The tanks can be stainless steel, epoxy or marine-line coated. Chemical & IMO Class II carries Veg & Palm Oils, Caustic Soda. Th
Slide 48: Design Features on Scorpio Product Tankers
Design Features on Scorpio Product Tankers 48
Slide 49: www.scorpiotankers.com
www.scorpiotankers.com
Scorpio Tankers — Investor Presentation (October 2024) on 6ix