Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Investor Presentation (October 2022)
34 slides from Scorpio Tankers's investor presentation, October 2022
Slide 1: Scorpio Tankers Inc. Company Presentation
Scorpio Tankers Inc. Company Presentation October 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 • Scorpio Tankers Inc. (“Scorpio”) is the world’s largest product tanker owner, providing marine transportation of refined 113 Product Tanker Vessels on the Water petroleum products (gasoline, diesel, jet fuel and naphtha) to a diversified blue-ch
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: Summary of Recent Events
Summary of Recent Events Exercise of Purchase Options on 15 Leased Vessels Q3-22 Daily Time Charter Equivalent (“TCE”) Revenues as of September 6, 2022 • In August 2022, the Company exercised the purchase options on Pool & Spot Market Time Charters out of the Pool six 2014 built MR product tankers a
Slide 7: 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 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 through Sep 2022 (1) • Modern product tankers (“Eco vessels”) are more fuel ($/day) $40,000 $38,403 efficient than their older peers (“Non Eco vessels) $34,151 $34,691 • Fuel savings are realized b
Slide 13: Scrubber Fuel Savings
Scrubber Fuel Savings VLSFO-HSFO Spread (1) Scorpio Daily TCE Scrubber Fuel Savings ($/MT) Rotterdam Singapore ($/day) LR2 MR $500 $6,690 $400 $5,018 $4,978 $300 $3,733 $3,345 $200 $2,489 $1,673 $100 $1,244 $0 Jun-20 Aug-20 Jun-21 Aug-21 Oct-19 Dec-19 Apr-20 Oct-20 Dec-20 Dec-21 Jun-22 Aug-22 Apr-21
Slide 14: Environmental Regulations
Environmental Regulations IMO Regulations EU Regulations • The IMO has been devising strategies to reduce greenhouse gases (GHG) and • The EU has proposed a set of proposals including EU Emissions Trading carbon emissions from ships. System and Fuel EU Maritime Initiative. • According to the announc
Slide 15: Market Fundamentals
Market Fundamentals 15
Slide 16: Product Tanker Demand Drivers
Product Tanker Demand Drivers Increased Volumes Voyage Distance Product Tanker (Seaborne Trading Activity Demand Exports) (Ton Mile Demand) • Oil consumption • Dislocation • Arbitrage opportunities growth between refinery from price volatility and consumer • Refinery margins • Low inventory levels •
Slide 17: Short Term Market Update
Short Term Market Update Weekly MR & LR2 Spot Earnings Since November 2021 ($/day) LR2 Eco-Middle East to Japan MR Eco-Avg Earnings $80,000 $70,000 $60,000 $50,000 USG-Latin America MR Rates Reach Record Levels $40,000 Russia Invades Ukraine $30,000 MR & LR2 spot rates continue to oscillate at stron
Slide 18: Russian Invasion of Ukraine Has the Potential to Disrupt Product Flows
Russian Invasion of Ukraine Has the Potential to Disrupt Product Flows 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 1.6 1.5 1.5 1.5 1.5 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 1.2 0.5 0.5 0.5 0.5 0.
Slide 19: US Inventories Decline as US Becomes Incremental Barrel
US Inventories Decline as US Becomes Incremental Barrel US Crude Oil (Incl SPR) & Product (Diesel, Jet & Gasoline) Inventories US Diesel Inventories for September by Year (million barrels) (million barrels) 2019 2020 2021 2022 176 1,700 162 1,600 144 141 138 134 131 1,500 115 1,400 1,300 1,200 1 3 5
Slide 20: Global Diesel & Gasoline Markets Imbalances Expected to Persist
Global Diesel & Gasoline Markets Imbalances Expected to Persist Middle Distillate Demand Expected to Remain Robust(1) Global Diesel Supply / Demand Balance (1) (mb/d) (mb/d) Diesel Jet 36.5 36.1 36.0 36.3 36.6 35.0 33.3 31.5 8.1 6.4 7.4 7.6 7.7 7.8 5.4 4.9 28.4 26.6 27.8 28.6 28.7 28.4 28.6 28.9 201
Slide 21: Refined Product Demand & Seaborne Exports Exceed Pre-Pandemic Levels
Refined Product Demand & Seaborne Exports Exceed Pre-Pandemic Levels Refined Product Demand Expected to Increase through 2023 (1) • Global refined product demand continues Diesel Gasoline Jet Naphtha Fuel Oil to increase as COVID restrictions ease 78.6 79.2 76.9 75.0 76.7 78.1 77.2 77.4 74.0 74.9 69
Slide 22: Refinery Changes Continue to Drive Ton Mile Demand
Refinery Changes Continue to Drive Ton Mile Demand Refinery Closures By Region (1) Upcoming Refinery CDU Capacity Additions > 200 kb/d (2) (mb/d) (mb/d) North America Europe Asia Pacific Latin America Africa Middle East Saudi Arabia Kuwait China Nigeria Oman Bahrain United States UAE India 1.5 1.0 0
Slide 23: Seaborne Exports & Ton Miles > Fleet Growth
Seaborne Exports & Ton Miles > Fleet Growth Refined Product Exports & Ton Mile Demand Growth (4) Product Tanker Net Fleet Growth (yoy growth) Scenario 1 Scenario 2 Refined Product Exports Ton Mile Demand 10.0% 8.5% 8.2% 8.0% 6.3% 5.1% 4.8% 5.0% 3.3% 4.2% 2.4% 2.5% 0.0% 1.9% 2.0% 1.4% 1.3% 0.3% 0.3%
Slide 24: Financials
Financials 24
Slide 25: Significant Operating Leverage & Earnings Potential
Significant Operating Leverage & Earnings Potential Company Fleet TCE Rate Potential Annual Cash Flow Generation Excluding Debt Repayment ($/day) ($USD millions) $43,221 $1,500 $36,006 $29,693 $1,197 $1,000 $990 $22,644 $784 $578 $372 $15,100 $15,415 $12,615 $500 $11,608 $11,166 $11,954 $10,139 $453
Slide 26: Improving Balance Sheet & Healthy Liquidity Position
Improving Balance Sheet & Healthy Liquidity Position Company to Reduce Outstanding Debt by $686mm in First Nine Months of 2022 Potential for ~$680mm in Pro Forma Liquidity if Fleet TCE $35,000/day in Q3-22 (1) ($USD millions) ($USD millions) $3,500 $677.1 $677.1 $3,164 $700 $3,000 $600 $185.0 $511 $
Slide 27: Time Charter Rates & Asset Values Continue to Increase
Time Charter Rates & Asset Values Continue to Increase Three Year Time Charter Rates Newbuild Values ($/day) Sep-20 Sep-21 Sep-22 ($USD millions) Sep-20 Sep-21 Sep-22 $64.0 $28,750 $61.0 $25,000 $50.5 $20,750 $21,500 $43.0 $40.3 $35.5 $15,688 $15,250 MR LR2 MR LR2 Five-Year-Old Vessel Values Resale
Slide 28: Scorpio Time Chartered-Out Vessels
Scorpio Time Chartered-Out Vessels Total Fixed Revenue # Vessel Name Type Year of Built Duration Daily Rate ($ Million) 1 STI Memphis MR 2014 Three Years $21,000 $23.0 2 STI Miracle MR 2020 Three Years $21,000 $23.0 3 STI Magnetic MR 2019 Three Years $23,000 $25.2 4 STI Marshall MR 2019 Three Years
Slide 29: Appendix
Appendix 29
Slide 30: Product Tanker Specifications
Product Tanker Specifications IMO Classes I, II, & III IMO Class I Chemical IMO Class I refers to the transportation of the most hazardous, Tankers very acidic, chemicals. The tanks can be stainless steel, epoxy or marine-line coated. IMO Class II Chemical & Product Tankers IMO Class II carries Veg
Slide 31: Design Features on Scorpio Product Tankers
Design Features on Scorpio Product Tankers 31
Slide 32: Scrubber Fuel Savings
Scrubber Fuel Savings Annual ECO Vessel Fuel Consumption (MT/year) (1) Sailing (Ballast & Laden) MR LR2 Non ECA 4,641 6,019 Waiting/Idle Non ECA 153 347 Less Additional Consumption for Scrubber -252 -261 Total Non ECA Consumption (MT) 4,542 6,105 MGO-HSFO Spread ($/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
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