Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Investor Presentation (October 2017)
29 slides from Scorpio Tankers's investor presentation, October 2017
Slide 1: Company Presentation October 2017
Company Presentation October 2017 1 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This document may contain forward-looking statements that reflects management’s expectations for the future. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospecti
Slide 3: Company Overview
Company Overview Key Facts Fleet Profile Scorpio Tankers Inc. is the world’s largest and Owned TC/BB Chartered-In Newbuildings youngest product tanker company 60 • Pure product tanker play offering all asset classes • 106 owned ECO product tankers on the 3 50 water with an average age of 2.2 years 9
Slide 4: Company Profile
Company Profile Top Shareholders Market Cap ($m) # Holder Ownership 1 7.2% $1,200 Wellington Management Company 2 Dimensional Fund Advisors 5.7% $1,000 3 Hosking Partners 2.7% $800 4 Fidelity Management & Research Company 2.7% $600 5 BlackRock Fund Advisors 2.4% 6 Magallanes Value Investors 2.2% $40
Slide 5: Largest & Youngest Product Tanker Fleet
Largest & Youngest Product Tanker Fleet Largest & Youngest Product Tanker Fleet Scorpio Average Age vs. Worldwide Fleet Avg. Age of Vessels (Owned Fleet Only) 140 14 Scorpio Tankers HM & MR LR1 LR2 12.7 Active Fleet 120 12 106 100 10 9.4 9.0 38 7.9 80 8 73 6 12 7 60 56 55 55 6 53 11 11 8 14 3 40 11
Slide 6: Scorpio Pools Provide World's Largest Operating Platform
Scorpio Pools Provide World’s Largest Operating Platform • Scorpio’s trading platform operates the largest product tanker fleet in the market with over 168 vessels under commercial management Top Product Tanker Operators Top HM & MR Operators Top LR1 & LR2 Operators 180 120 60 168 114 109 54 160 100
Slide 7: Scorpio Pools Have Consistently Outperformed Market
Scorpio Pools Have Consistently Outperformed Market Pool Performance ($/day) $30,000 $20,000 Scorpio Handymax Tanker $10,000 Pool (SHTP) $0 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Scorpio Handymax Pool Handymax Benchmark (TD16 - TD18 - TC6 - BALTIC/CONT) $30,000 $20,000 Scorpio MR Tank
Slide 8: Asset Values & Time Charter Rates
Asset Values & Time Charter Rates Newbuilding Prices One Year TC Rate ($/day) $60 $35,000 $55 $30,000 $50 Million $USD $25,000 $45 $20,000 $40 $15,000 $35 $10,000 $30 $25 $5,000 $20 $0 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar
Slide 9: Ballast Water Treatment Systems
Ballast Water Treatment Systems BWTS Filtering Unit • In July 2017, the IMO extended ballast water treatment until the first statutory dry docking survey after 2019. • Ship operators will need to install type-approved ballast water treatment systems by the time the International Oil Pollution Preven
Slide 10: Sulfur Emission Regulations
Sulfur Emission Regulations • On October 27, 2016 the International Maritime Organization's (IMO) Marine Environmental Protection Committee announced the results from a vote to ratify and formalize regulations mandating a reduction in sulfur emissions from 3.5% currently to 0.5% as of the beginning
Slide 11: Long Term Developments
Cconrio Tankers Inc. Long Term Developments
Slide 12: Fundamentals Overview
Fundamentals Overview Increasing Ton Mile Demand and Seaborne Exports ✓ Since 2000 seaborne product ton miles have increased at a CAGR of 4.4% Product tanker fleet is expected to grow 7.3% over next three Fleet Growth Begins to Slow ✓ years without scrapping, compared to 22% with scrapping over the
Slide 13: 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 4.4% since 2000 Seaborne Product Ton Miles 3,500 3,000 Billion Ton Miles 2,500 2,000 1,500 1,000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20
Slide 14: Seaborne Refined Product Exports
Seaborne Refined Product Exports 2000 2016 % Change CAGR mb/d mb/d Global Oil Demand 100.0 Global Oil 90.0 76.9 96.6 25% 1.4% Demand 80.0 70.0 Seaborne Crude Exports 40.0 Seaborne Crude 33.7 39.3 17% 1.0% 35.0 Exports 30.0 Seaborne Exports of Refined Products 25.0 Seaborne 20.0 Refined Product 12.2
Slide 15: Fleet Growth Begins to Slow
Fleet Growth Begins to Slow • After significant fleet growth between 2014-2017, newbuilding deliveries are starting to subside Product Tanker Fleet Growth (1) 10.0% 8.0% 6.3% 6.1% 6.0% 5.7% 5.3% 3.8% 3.9% 3.8% 4.0% 2.6% 2.3% 2.0% 2.0% 0.6% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017* 2018* 2019* 20
Slide 16: Limited Newbuilding Orders
Limited Newbuilding Orders • Between 2000-2015 the average number of newbuilding orders per year: • 134 vessels, 8.3 million DWT • The total number of ships ordered in: • 2016, 25 vessels, 1.5 million DWT • 2017 YTD, 64 vessels, 4.9 million DWT Newbuilding Ordering MR LR1 LR2 Total # of Vessels 500
Slide 17: US Remains Worlds Largest Product Exporter
US Remains Worlds Largest Product Exporter U.S. Crude Oil Production U.S. Imports and Exports of Finished Oil Products (mb/d) (mb/d) 12.0 Imports Exports 6.0 10.0 5.0 8.0 4.0 6.0 3.0 4.0 2.0 2.0 1.0 0.0 0.0 U.S. Diesel Exports 2017 YTD Diesel Exports By Country (mb/d) 1.6 Mexico 17% 1.4 Other 32% 1.
Slide 18: Middle Eastern Refinery Expansions Continue
Middle Eastern Refinery Expansions Continue Middle East expected to add 1.5 mb/d from 2018-2021 12.0 11.2 10.6 10.3 10.0 9.6 9.7 9.3 9.3 9.5 8.4 4.4 8.2 3.4 3.8 8.0 3.3 3.4 3.3 3.3 3.4 3.2 3.5 (mb/d) 6.0 2.3 2.3 2.3 2.0 2.0 2.0 2.2 2.2 2.0 4.0 1.1 1.1 1.1 2.0 1.1 1.1 1.1 1.1 1.1 0.7 0.7 2.0 3.3 3.3
Slide 19: Saudi Aramco Increasing Product Exports
Saudi Aramco Increasing Product Exports Saudi Aramco Domestic Refining Capacity • Saudi Aramco refined product exports Operational Refinery Capacity (kb/d) have increased 144% since 2013 1967 Jiddah 77 1979 Yanbu 243 • 800 kb/d of refining capacity added in 1981 Riyadh 126 2014 from export oriented
Slide 20: Regional Imbalances Drive Product Tanker Demand Growth
Regional Imbalances Drive Product Tanker Demand Growth (k.bpd) FSU 1,100 1,200 Europe 1,000 1,000 800 800 1,200 700 Americas 900 200 200 400 50 200 -1,720-1,730 -520 -490 700 Asia Middle East 1,300 1,200 700 700 -340 -670 -1,180 -1,030 -1,720 -260 -510 Africa Latin America 200 0 60 -40 -290 -300 -24
Slide 21: Refinery Capacity Expansions (2017-2022)
Refinery Capacity Expansions (2017-2022) FSU + 263 kb/d Europe North America + 200 kb/d + 233 kb/d Asia Middle East + 1,482 kb/d + 1,905 kb/d China + 2,200 kb/d Africa + 650 kb/d South America + 73 kb/d Source: International Energy Agency (IEA) 21 21
Slide 22: Incremental Supply Needed to Meet New Capacity
Incremental Supply Needed to Meet New Capacity Product Tankers Needed to Meet New Capacity Growth AG-FE Illustrative Example Incremental Refining Capacity 500,000 Growth(bbl/d) HM/MR Carrying Capacity (bbl) 250,000 LR1/LR2 Carrying Capacity (bbl) 600,000 Far East Laden Speed (knots) 12.5 Ballast Spe
Slide 23: Company Highlights
Company Highlights 1 World’s largest product tanker fleet, of which, all are ECO-design product tankers Modern, fuel- ECO-design vessels have substantially lower fuel costs than prior generation vessels efficient fleet World’s youngest fleet (average age of 2.2 years), built at high quality ya
Slide 24: Appendix
Appendix CccRrio 24
Slide 25: 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 26: 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 27: 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 28: New Design Features on Scorpio Product Tankers
New Design Features on Scorpio Product Tankers 28 28
Slide 29: Fleet List
Fleet List Owned 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 Veneto Jan-15 109,999 LR2 STI Brixton Jun-14 38,734 HM STI Tribeca Jan-15 49,990 MR STI Alexis Jan-15 109,999 LR2 STI Pimlico Jul-14 38,734 HM STI Gramercy
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