Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Investor Presentation (January 2019)
27 slides from Scorpio Tankers's investor presentation, January 2019
Slide 1: STNG Company Presentation
STNG Company Presentation January 2019 1 1
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 Tanker Inc.’s (“Scorpio’s”) curre
Slide 3: Disclaimer and Forward-looking Statements (Cont'd)
Disclaimer and Forward-looking Statements (Cont’d) This presentation describes time charter equivalent revenue, or TCE revenue, which is not a measure prepared in accordance with IFRS (i.e. a "Non-IFRS" measure). TCE revenue is presented here because we believe that it provide investors with a means
Slide 4: Company Overview
Company Overview Key Facts Fleet Profile Owned TC/BB Chartered-In Scorpio Tankers Inc. is the world’s largest and 60 youngest product tanker company • Pure play product tanker offering all asset classes • 109 owned ECO product tankers on the 50 4 water with an average age of 3.4 years • 11 time/bare
Slide 5: Company Highlights
Company Highlights Youngest & largest product tanker fleet in the world ✓ • 109 owned ECO product tankers on the water with an average age of 3.4 years Vessels employed in Scorpio pools ✓ • The world’s largest product tanker operating platform with track record of consistently outperforming the mark
Slide 6: Largest and Most Modern Product Tanker Fleet Relative to Peers
Largest and Most Modern Product Tanker Fleet Relative to Peers Large, Modern Fleet Best Positions STNG Investors to Capture Market Recovery Largest & Most Modern Product Tanker Fleet Scorpio Average Age vs. Worldwide Fleet HM & MR LR1 LR2 Average Age 16 Scorpio Tankers 120 Active Fleet 14 13.5 100 1
Slide 7: Scorpio Pools Provide World's Largest Operating Platform
Scorpio Pools Provide World’s Largest Operating Platform • Scorpio’s trading platform operates the largest product tanker fleet in the market with over 158 vessels under commercial management Top Product Tanker Operators Top HM/MR Operators Top LR Operators 60 120 57 56 180 158 103 160 101 50 100 92
Slide 8: Scorpio Pools Have Consistently Outperformed Market
Scorpio Pools Have Consistently Outperformed Market • Scorpio’s trading platform Pool Performance ($/day) operates the largest product tanker fleet in the $30,000 market $20,000 Scorpio Handymax • Over 158 product tankers Tanker Pool $10,000 under commercial (SHTP) $0 management offering Q3/15 Q4/15
Slide 9: Improving TCE Rates Translate to TCE Acceleration
Improving TCE Rates Translate to TCE Acceleration • The improvement in TCE rates from: • Q3-18 Actual Rates compared to the Q4-18 guidance as of October 30, 2018 translates to $22 million in incremental cash flow in Q4 2018 • Q3-18 Actual Rates compared to the Q4-18 guidance as of December 9, 2018 t
Slide 10: Significant Leverage to Market Recovery
Significant Leverage to Market Recovery • $1,000 increase in rates equates to an additional ~$44 million of cash flow based on 120 product tankers • $5,000 increase in rates equates to ~$219 million of cash flow • $10,000 increase in rates equates to ~$438 million of cash flow Fleet Size Scorpio TCE
Slide 11: IMO 2020 Regulations & Company Strategy
IMO 2020 Regulations & Company Strategy What is IMO 2020? • The International Maritime Organization (IMO) will require shipowners to reduce sulfur emissions from 3.5% currently to 0.5% in 2020. • To comply, shipowners will have to decide between: • Installing a scrubber to enable the vessel to burn
Slide 12: How Will Scorpio Comply With IMO 2020?
How Will Scorpio Comply With IMO 2020? • The Company entered into agreements to retrofit 75 of its MRs, LR1s and LR2s with Exhaust Gas Cleaning Systems (“Scrubbers”) • Has agreed letters of intent on substantially all of its remaining owned and financed lease LR2, LR1 and MR vessels • For the handym
Slide 13: Product Tanker Fundamentals
Product Tanker Fundamentals 13 13
Slide 14: Industry Highlights
Industry Highlights Recent Market Improvements • Below average refinery maintenance to start the New Year • Increased US Gulf exports heading to Brazil, Chile and West Coast Mexico • Naphtha East to West arbitrage has remained opened with the one month forward spread at $17.97/MT(1) • Improving crud
Slide 15: Refinery Maintenance Schedule (Capacity Offline)
Refinery Maintenance Schedule (Capacity Offline) Average [2013-2018] 2019 2019e 8.0 7.0 6.0 5.0 (MB/D) 4.0 3.0 2.0 1.0 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Bloomberg, January 2019 15 15
Slide 16: Global Diesel Inventories Below Five Year Average
Global Diesel Inventories Below Five Year Average • Diesel inventories have decreased approximately 22.9 million barrels since Jan 2017 (1) • Consumption has been "subsidized" by inventory draws; as inventories have fallen below 5-year average levels, expect further consumption to translate to incre
Slide 17: Increasing Asset Values
Increasing Asset Values $55 $50.5 $49.5 $50 $47.5 $43.0 $45 $42.0 $40.0 $40 $37.5 $36.0 $35.0 $35 $33.0 $32.0 $35.0 $30 $25 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 HM MR LR1 LR2 Increasing time charter rates and asset values reflect expectations of an improving market Source: Clarksons Research Services,
Slide 18: Ton Mile Demand Continues to Grow
Ton Mile Demand Continues to Grow • Ton miles, the quantity of cargo multiplied by the distance it travels, has increased at a CAGR of 4.1% since 2000 Seaborne Product Ton Miles 3,500 3,000 2,500 (Billion Ton Miles) 2,000 1,500 1,000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 19: IMO 2020 Implications for the Product Tanker Market
IMO 2020 Implications for the Product Tanker Market Consumption of MGO and LSFO is be expected to increase • Global marine fuel consumption was estimated to be 5.6 mb/d (of which 3.7 mb/d was HSFO, 1.9 mb/d was MGO/LSFO) in 2017 (1) • Assuming total fuel consumption remains the same in 2020 at 5.6 m
Slide 20: Supply Demand to Rebalance in 2019
Supply Demand to Rebalance in 2019 Product Tanker Net Fleet Growth Seaborne Refined Product Exports 8.0% 7.5% 7.3% 7.0% 6.3% 6.0% 5.7% 5.0% 4.3% 3.9% 4.0% 4.0% 3.9% 3.3% 3.0% 2.6% 2.7% 1.9% 1.8% 2.0% 1.5% 1.1% 1.0% 0.0% -0.3% -1.0% 2013 2014 2015 2016 2017 2018 2019e 2020e Source: Clarksons Research
Slide 21: Aging Fleet vs. Newbuild Deliveries: 2018 - 2020
Aging Fleet vs. Newbuild Deliveries: 2018 - 2020 • By 2020, the number of vessels 15-19 years old and 20 years and older will outpace newbuilding deliveries between 2018-2020 • Rising fuel costs from IMO 2020 and capital expenditures for BWT systems likely to accelerate scrapping of older tonnage Ne
Slide 22: Appendix
Appendix Cccrrio 22
Slide 23: 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 24: Product and Crude Tankers
Product and Crude Tankers Tankers “Dirty” “Clean” Crude Products Vessel VLCC Suezmax Aframax Panamax Handysize LR2 LR1 Hmx/MR Handysize (200,000 + (120,000 - (80,000 - (60,000 - (< 60,000 (80,000- (60,000- (25,000- (<25,000 Size DWT) 200,000 DWT) 120,000 DWT) 80,000 DWT) DWT) 120,000 DWT) 80,000 DWT
Slide 25: 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 26: New Design Features on Scorpio Product Tankers
New Design Features on Scorpio Product Tankers 26 26
Slide 27: Fleet List
Fleet List Owned & Finance Leased Vessels Name Year DWT Type Name Year DWT Type Name Year DWT Type STI Comandante May-14 38,734 HM STI Soho Dec-14 49,990 MR STI Broadway Nov-14 109,999 LR2 STI Brixton Jun-14 38,734 HM STI Tribeca Jan-15 49,990 MR STI Condotti Nov-14 109,999 LR2 STI Pimlico Jul-14 38
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