Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Investor Presentation (November 2018)
27 slides from Scorpio Tankers's investor presentation, November 2018
Slide 1: STNG Company Presentation
STNG Company Presentation November 2018 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 5 water with an average age of 3.3 years • 13 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 3.3 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 120 14 Scorpio Tankers HM & MR LR1 LR2 Total Average Age Active Fleet 12.2 12
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 162 vessels under commercial management Top Product Tanker Operators Top HM/MR Operators Top LR Operators 180 120 70 162 160 103 99 100 59 60 140 55
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 162 product tankers Tanker Pool $10,000 under commercial (SHTP) $0 management offering Q3/15 Q4/15
Slide 9: Significant Leverage to Market Recovery
Significant Leverage to Market Recovery • STNG’s YTD reported TCE rates are near 15yr low 1yr TC-rates, consistent with management’s belief that the market is currently at trough levels with significant upside potential • $1,000 increase in rates equates to an additional ~$45 million of cash flow ba
Slide 10: 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 11: Product Tanker Fundamentals
Product Tanker Fundamentals 11 11
Slide 12: Industry Highlights
Industry Highlights Recent Market Improvements • Refinery maintenance season coming to an end • Increased US Gulf exports heading to Brazil, Chile and West Coast Mexico • Naphtha East to West arbitrage has opened with the one month forward spread at $22/MT(1) • Improving crude market has resulted in
Slide 13: Refinery Maintenance Schedule (Capacity Offline)
Refinery Maintenance Schedule (Capacity Offline) Average [2013-2017] 2018e 2018 8.0 7.0 6.0 Million Barrels per day 5.0 4.0 3.0 2.0 1.0 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Refinery maintenance season coming to an end Source: Bloomberg, November 2018 2018e – November to December refin
Slide 14: Increasing Asset Values
Increasing Asset Values $55 $49.50 $50 $45.50 $45 $42.00 USD Millions $39.00 $40 $37.00 $34.00 $34.00 $35 $31.00 $30 $25 Nov-16 May-17 Nov-17 May-18 Nov-18 HM MR LR1 LR2 Historically low spot rates, stable time charter rates and increasing asset values reflect expectations of an improving market Sou
Slide 15: Global Diesel Inventories Below Five Year Average
Global Diesel Inventories Below Five Year Average • Diesel inventories have decreased approximately 22.3 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 16: Refining Capacity Moving Closer to the Well Head
Refining Capacity Moving Closer to the Well Head • From 2011 to 2017, the world’s three largest crude producers (United States, Saudi Arabia and Russia) have accounted for: • 75.8% of the incremental global refining capacity • 78.0% of the incremental global crude oil production • Only 20.5% of the
Slide 17: 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 18: 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 5.2 mb/d (of which 3.3 mb/d was HSFO) in 2017 and total marine fuel consumption is estimated to be 5.5 mb/d in 2020(1) • A 1.8 mb/d increase in MGO & LSFO f
Slide 19: Supply Demand to Rebalance in 2019
Supply Demand to Rebalance in 2019 Product Tanker Net Fleet Growth Seaborne Refined Product Exports 8.0% 7.3% 7.3% 7.0% 6.3% 6.0% 5.7% 5.0% 4.3% 4.2% 3.9% 4.0% 4.1% 3.0% 3.0% 2.6% 2.6% 2.8% 2.0% 1.9% 1.5% 1.0% 1.0% 0.0% 0.1% 2013 2014 2015 2016 2017 2018e 2019e 2020e Source: Clarksons Research Servi
Slide 20: 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 Newb
Slide 21: Appendix
Appendix Cccrrio 21
Slide 22: 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 23: 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 24: 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 25: New Design Features on Scorpio Product Tankers
New Design Features on Scorpio Product Tankers 25 25
Slide 26: Cargo Carriage 2017
Cargo Carriage 2017 MR Cargo Carriage 2017 LR2 Cargo Carriage 2017 Condensate, Edible Oil, Other, 2.1% 1.7% 1.4% Kerosene/Jet, 5.8% Other, 0.5% Kerosene/Jet, Gasoline, 8.9% 11.3% Naphtha, 9.2% Gasoline, 41.2% Diesel/Gas Oil, 52.1% Naphtha, 28.8% Diesel/Gas Oil, 25.3% 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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