Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Q2 2023 Earnings Presentation
26 slides from Scorpio Tankers's earnings presentation, Aug 2, 2023
Slide 1: Second Quarter 2023 Earnings Presentation
Scorpio Tankers Inc. Second Quarter 2023 Earnings Presentation August 2, 2023
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: Q2 2023 Call Agenda
Q2 2023 Call Agenda 1.Q2 2023 Highlights 2.Financial Highlights 3.Product Tanker Market 4.Conclusion 5.Q&A 3
Slide 4: Q2 2023 Highlights
Q2 2023 Highlights 4
Slide 5: Q2 2023 Highlights
Q2 2023 Highlights Highlights Quarterly TCE Rates ($/day) Financial Results Q2-22 Q2-23 $41,831 • Adj EBITDA of $235.2 million (1) $36,065 $39,526 $34,904 • Adj net income of $133.3 million or $2.51 basic and $2.41 $28,586 $26,784 diluted earnings per share (1) Share Repurchases • Since January 1, 2
Slide 6: Financial Highlights
Financial Highlights 6
Slide 7: Financial Highlights
Financial Highlights Avg Daily TCE Rate by Vessel Type (Includes Vessels on Time Charter) Financial Highlights Over Last Six Quarters (Q1-22 through Q2-23)(1) ($/day) ($USD millions) Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 $2,175 $52,023 $52,065 $50.27/share $48,152 $46,231 $43,292 $1,602 $41,143 $41,83
Slide 8: Financing Update
Financing Update Repurchase of Lease & Credit Facility Financing # Vessel Name Type Built Financing Completed/Expected* Repurchase of Lease Financing 1 STI Opera MR 2014 Lease Financing Q3-22 2 STI Venere MR 2014 Lease Financing Q3-22 • Since August 2022, the company has given notice to repurchase 4
Slide 9: Continued Reduction in Expensive Lease Financing
Continued Reduction in Expensive Lease Financing Debt Repayment from December 31, 2021, through September 30, 2023 Outstanding Indebtedness by Type ($USD millions) ($USD millions) Lease Financing Bank Facilities Unsecured Notes Convertible Bonds $3,500 $3,500 $3,164 $3,164 $3,000 $3,000 $278 $70 $2,
Slide 10: Improving Balance Sheet, Strong Liquidity & Minimal Capex
Improving Balance Sheet, Strong Liquidity & Minimal Capex Outstanding Indebtedness Debt Repayment Schedule ($USD millions) ($USD millions) $3,500 $300.0 $269.7 Payments made through August 1, 2023 $3,164 Remaining Principal Payments $2,966 $3,000 $64.3 Repurchase of Lease Financing $2,652 $2,479 $20
Slide 11: Significant Operating Leverage & Earnings Potential
Significant Operating Leverage & Earnings Potential Company Fleet TCE Rate Potential Annual Cash Flow Generation Excluding Debt Repayment (1) ($/day) ($USD millions) $50,000 $45,679 $44,222 $2,012 $40,000 $37,500 $36,006 $36.9/share $1,603 $32,154 $29,693 $30,000 $26,210 $29.4/share $1,195 $22,644 $
Slide 12: Product Tanker Market
Product Tanker Market 12
Slide 13: Short Term Market Update
Short Term Market Update Weekly MR & LR2 Spot Earnings Since January 2022 ($/day) (1) Global Refinery Maintenance (Capacity Offline) (2) ($/day) (mb/d) Asia Pacific North America Europe FSU Middle East Africa $100,000 LR2 Eco-Middle East to Japan MR Eco-Avg Earnings 10.0 9.9 9.6 8.6 $80,000 8.0 8.2
Slide 14: Global Inventories Remain Well Below Average
Global Inventories Remain Well Below Average US Diesel Inventories (1) EU Distillate Inventories (2) (million barrels) (million barrels) 5Y Range 5Y AVG YTD 5Y Range 5Y AVG YTD 200 350 180 300 160 140 250 120 100 200 Jan Feb Mar Apr May May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Slide 15: Refined Product Demand & Seaborne Exports Continue to Increase
Refined Product Demand & Seaborne Exports Continue to Increase Refined Product Demand Expected to Increase through 2023 (1) • Global refined product demand continues (mb/d) Diesel Gasoline Jet Naphtha Fuel Oil 79.4 79.6 to increase 76.9 74.0 75.5 75.5 77.0 76.7 76.8 78.3 6.8 69.8 7.7 7.0 7.4 7.7 7.5
Slide 16: Refinery Changes Drive Global Trade Flows & Ton Miles
Refinery Changes Drive Global Trade Flows & Ton Miles Global Refining Capacity Additions / (Closures) Excluding China (1) Al Zhour Refinery Boosting Kuwait’s Product Exports (2) (mb/d) (mb/d) Africa Asia (Excl China) Europe FSU Middle East Latin America North America 2.0 0.8 1.1 0.7 0.8 1.0 0.4 0.6
Slide 17: Russian Products Find New Markets as Gray Fleet Increases
Russian Products Find New Markets as Gray Fleet Increases Russian CPP Exports Have Increased Post Feb 5 Sanctions Product Tanker Vessels Loading Russian CPP after Feb 5, 2023 (mb/d) (# of Vessels) 2.0 353 29 47 1.5 185 92 1.0 HM MR LR1 LR2 Total # of Vessels Russian CPP Imports by Region Russian CPP
Slide 18: Strong Product Tanker Rates & Modest Orderbook
Strong Product Tanker Rates & Modest Orderbook Historical Product Tanker Earnings vs Orderbook as % of Fleet Orderbook as % of Fleet Orderbook as a % of Fleet (LHS) Clean Tanker Earnings (RHS) ($/day) 70.0% $80,000 $70,000 60.0% $60,000 50.0% $50,000 40.0% $40,000 30.0% $30,000 20.0% $20,000 9.3% 10
Slide 19: Newbuild Orders & Asset Values
Newbuild Orders & Asset Values Newbuilding Product Tanker Orders LR2 Newbuild & Five-Year-Old Asset Values (# of Vessels) MR LR1 LR2 ($USD millions) LR2 Newbuild LR2 Five Yr Old 500 431 $77.5 $70.5 $72.5 400 $66.0 $57.0 $58.5 300 255 $44.0 185 180 179 188 200 151 116 $30.0 107 113 111 106 95 108 100
Slide 20: Ageing Fleet to Offset Recent Newbuilding Orders
Ageing Fleet to Offset Recent Newbuilding Orders Avg Age of Product Tanker by Vessel Type as of August 1, 2023 (1) Fleet Age Profile by 2026 (Including Newbuilds) (2) (years) (# of Vessels) HM MR LR1 LR2 16.1 250 233 236 13.8 200 11.9 200 177 172 10.1 149 146 154 146 162 150 134 112 116 113 109 104
Slide 21: Seaborne Exports & Ton Miles > Fleet Growth
Seaborne Exports & Ton Miles > Fleet Growth Historical Product Tanker Fleet Growth One- & Three-Year Eco Vessel Time Charter Rates ($/day) 16.0% MR 1 yr TC Rate LR2 1 yr TC Rate 13.9% 60,000 14.0% MR 3 yr TC Rate LR2 3 yr TC Rate 12.1% 11.7% 11.4% 50,000 12.0% 10.5% 10.1% 10.0% 40,000 8.0% 6.3% 30,0
Slide 22: Conclusion
Conclusion 22
Slide 23: Investment Highlights
Investment Highlights Company Industry & Outlook Strategy • One of the largest product • Significant increase in product • Reduce leverage, maintain tanker fleets in the world tanker rates since Q1-22 liquidity and return to capital • 112 Eco (fuel-efficient) • Robust product demand and shareholders
Slide 24: Financing Update
Financing Update Repurchase of Lease & Credit Facility Financing (2022) Repurchase of Lease & Credit Facility Financing (2023) # Vessel Name Type Built Financing Completed/Expected* # Vessel Name Type Built Financing Completed/Expected* 1 STI Opera MR 2014 Lease Financing Q3-22 24 STI Brooklyn MR 20
Slide 25: Q&A
Q&A 25
Slide 26: www.scorpiotankers.com
www.scorpiotankers.com