Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Merger or Acquisition (September 2019)
27 slides from Scorpio Tankers's merger presentation, September 2019
Slide 1: Company Presentation & Trafigura Vessel Acquisition
Company Presentation & Trafigura Vessel Acquisition September 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 Tankers Inc.’s (“Scorpio’s”) curr
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 provides investors with a mean
Slide 4: Scorpio at a Glance
Scorpio at a Glance Key Facts Leading Product Tanker Platform • Scorpio Tankers Inc. (“Scorpio”) is the world’s largest and most modern product tanker company Largest Product Tanker Fleet in the World • Pure play product tanker offering all asset classes with 124 Vessels on the Water (1) • 124 owned
Slide 5: Trafigura Acquisition
Trafigura Acquisition 5 5
Slide 6: Transaction Overview
Transaction Overview • Scorpio is acquiring a fleet of 19 tankers from Trafigura Group Pte. Ltd. (“Trafigura”) for an aggregate value of $803 million • Vessels fully financed with a financial institution under a bareboat contract arrangement, the Transaction present value of the financing lease arra
Slide 7: Trafigura Fleet Overview
Trafigura Fleet Overview On the Water Under Construction 11x MR 4x LR2 4x MR 2019-Built 47,500 DWT 2019-Built 110,000 DWT 2020-Built 47,500 DWT Hyundai Vinashin New Times Shipbuilding Hyundai Vinashin (1) Key Terms of $668 Million Lease Financing Purchase Option Detail: Advance Rate: ~83% • During t
Slide 8: Compelling Strategic Rationale
Compelling Strategic Rationale (# of Ships • Solidifies Scorpio’s position as the largest and most in / on the Water) 150 modern ECO product tanker fleet in the world 124 Reinforces 120 • Attractive mix of MR and LR2 product tankers 85 Industry-Leading 90 74 Position • Opportunistic time to expand f
Slide 9: Scorpio Opportunity
Scorpio Opportunity 9 9
Slide 10: Investment Highlights
Investment Highlights Largest and Most Modern Product • 128 owned vessels with 124 on the water with an average age of 3.7 years trading within the Tanker Fleet in the world’s largest product tanker platform with track record of outperforming the market(1) World Largest Scrubber • Scorpio's ECO flee
Slide 11: Largest and Most Modern Product Tanker Fleet in the World
Largest and Most Modern Product Tanker Fleet in the World • World’s largest and youngest product tanker fleet, including the leading owner in the MR and LR2 product tanker segments • Scorpio maintains average age of 3.7 years with significant amount of global MR and LR fleets are older than 15 years
Slide 12: Largest Scrubber Fitted Tanker Fleet
Largest Scrubber Fitted Tanker Fleet Scorpio Scrubber Fleet (1) Scrubber TCE Savings (2) Annual Cash Flow Benefit (3) (Vessels Installed with Scrubbers as of Q2-20) ($ per day) ($ millions) $3,345 $177 19 114 4 $2,788 15 $147 95 $2,489 42 $118 38 x = 12 12 60 45 Scorpio Trafigura Scorpio MR LR1 LR2
Slide 13: Distillate & Ton Mile Demand Continue to Grow
Distillate & Ton Mile Demand Continue to Grow • Light & middle distillate demand has increased every year except 2008/2009 • Ton miles, the quantity of cargo multiplied by the distance it travels, has increased at a CAGR of 3.8% since 2000 Incremental Light & Middle Distillate Demand (1) Seaborne Pr
Slide 14: Ton Mile Demand Continues to Grow
Ton Mile Demand Continues to Grow • Seaborne trade of product tanker cargoes as measured by ton miles (the quantity of cargo multiplied by the distance it travels) has increased at a CAGR of 3.8% since 2000, outpacing global GDP growth Seaborne Product Ton Miles Seaborne Refined Product Exports (1)
Slide 15: Record Low Product Tanker Orderbook as a % of Fleet
Record Low Product Tanker Orderbook as a % of Fleet • Current orderbook is at lowest levels since March 2000, measuring 7.1% of existing fleet on water • Significantly below longer-term five and ten year averages of 14.1% and 17.0%, respectively • Only 28 have been ordered to date this year compared
Slide 16: IMO 2020 Demand Catalyst for Products Market
IMO 2020 Demand Catalyst for Products Market • Marine fuel switch from non-compliant HSFO to low-sulfur products (like MGO) expected to add significant incremental demand for distillates that are transported on product tankers • Platts estimates a switch of 1.3 million b/d of new low sulfur fuel and
Slide 17: Demand Expected to Outpace Supply in 2020
Demand Expected to Outpace Supply in 2020 • The market could tighten significantly in 2020 as a result of slowing fleet growth, growing global refined product consumption and an expected increase in the demand for middle distillates from IMO 2020 Historically Low Orderbook & IMO 2020 Demand Catalyst
Slide 18: One Year Time Charter Rates Have Recovered
One Year Time Charter Rates Have Recovered… • One year MR and LR2 time charter rates have recovered from 2018, but are still below historical averages with ample room to grow given the strong supply/demand fundamentals One Year Time Charter Rates ($/day) MR 1 Yr TC Rate LR2 1 Yr TC Rate MR - 15 YR A
Slide 19: With Higher Spot TCE Rates in Every Month YoY
…With Higher Spot TCE Rates in Every Month YoY MR Average Earnings ($/day) LR2 Average Earnings ($/day) FY-18 FY-19 FY-18 FY-19 $18,000 $30,000 Jan-18 to Aug-18 Average: $8,419/day Jan-18 to Aug-18 Average: $12,887/day $16,000 Jan-19 to Aug-19 Average: $11,887/day Jan-19 to Aug-19 Average: $21,721/d
Slide 20: Significant Leverage to Market Recovery
Significant Leverage to Market Recovery Fleet Size Scorpio TCE Rates (1) Historical One Year TC Rates (2) Pre Transaction Acquisition Post Transaction Owned Trafigura Type Fleet TC/BB-In Fleet Total Vessels 1H-2019A 2015A Low Avg Max HM 14 7 0 21 $14,644 $19,686 $11,430 $16,029 $24,683 MR 45 15 60 $
Slide 21: Appendix
Tankers Inc. Appendix 21 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: Scrubber Fuel Savings
Scrubber Fuel Savings Consumption figures below assume that: • Scrubbers do not operate during any port activities • Each voyage has a load and discharge port in an ECA, i.e. scrubber does not operate in ECA waters Annual ECO Vessel Fuel Consumption (MT/year) (1) Sailing (Ballast & Laden) MR LR1 LR2
Slide 27: Fleet List
Fleet List Owned & Finance Lease Vessels Name Year DWT Type Name Year DWT Type Name Year DWT Type STI Comandante May-14 38,734 HM STI Manhattan Mar-15 49,990 MR STI Elysees Jul-14 109,999 LR2 STI Brixton Jun-14 38,734 HM STI Queens Apr-15 49,990 MR STI Madison Aug-14 109,999 LR2 STI Pimlico Jul-14 3
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