Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Investor Presentation (May 2019)
34 slides from Scorpio Tankers's investor presentation, May 2019
Slide 1: Company Presentation
Company Presentation May 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 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. TCE revenue is vessel revenue less voyage expenses (including bunkers and port charges) and is not a measure prepared in accordance with IFRS (i.e. a "Non-IFRS" measure). T
Slide 4: Recent Events & Q1-2019 Highlights
Recent Events & Q1-2019 Highlights Net Income of $14.8 million Q1-2019 Adjusted EBITDA of $113.2 million, a $55.6 million y-o-y quarterly increase Financial Results Net cash flow from operating activities of $74.6 million Liquidity $518.4 million in cash as of May 1, 2019 The Company’s Board of Dire
Slide 5: Company Overview
Company Overview Key Facts Fleet Profile 60 Scorpio Tankers Inc. is the world’s largest and youngest product tanker company Owned BB Chartered-In • Pure play product tanker offering all asset classes 50 • 109 owned ECO product tankers on the 3 water with an average age of 3.7 years • 10 bareboat cha
Slide 6: Company Highlights
Company Highlights Best in Class Fleet • Youngest modern fuel efficient fleet of vessels • IMO 2020 ready with scrubbers to be installed on MR, LR1 and LR2 vessels Significant Operating Leverage • World’s largest product tanker fleet covering all asset classes Strong Balance Sheet • Liquidity positi
Slide 7: Largest and Most Modern Product Tanker Fleet Relative to Peers
Largest and Most Modern Product Tanker Fleet Relative to Peers Large, Modern Fleet Best Positions STNG Investors to Capture Market Recovery Largest & Most Modern Product Tanker Fleet Scorpio Average Age vs. Worldwide Fleet 16 HM & MR LR1 LR2 Average Age Scorpio Tankers Active Fleet 120 14 13.6 12 10
Slide 8: Scorpio Pools Have Consistently Outperformed Market
Scorpio Pools Have Consistently Outperformed Market • Scorpio’s trading platform Pool Performance ($/day) operates the largest product tanker fleet in the market $20,000 $15,000 • Commercial pools provide Scorpio Handymax $10,000 significant economies of Tanker Pool $5,000 scale (SHTP) $- Q1/16 Q2/1
Slide 9: Quarterly EBITDA Per Vessel
Quarterly EBITDA Per Vessel $1.80 $1.61 $1.60 $1.40 $1.27 $1.20 $1.08 $1.03 $1.03 (Millions $USD) $1.00 $0.95 $0.78 $0.80 $0.74 $0.64 $0.60 $0.55 $0.50 $0.47 $0.45 $0.40 $0.37 $0.37 $0.35 $0.32 $0.24 $0.20 $0.00 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-1
Slide 10: Potential Cash Flow Generation
Potential Cash Flow Generation • Assuming spot rates of $30,000/day for HM/MR and $50,000/day for LR1/LR2 Company Per Share $35.0 $1,800 $1,600 $30.0 ($504.6) ($9.8) $1,400 OPEX, $25.5 Interest, $1,312.7 $25.0 Cash G&A $4.5 $1,200 $233.8 $21.0 $1,078.9 ($233.8) ($4.5) USD $ Millions $20.0 $2.9 Per S
Slide 11: Debt Repayment Schedule
Debt Repayment Schedule Scheduled Principal Repayments Unsecured Notes Convertible Bond $250.0 $211.6 $200.0 $150.0 (Million $USD) $142.7 $104.6 $100.0 $69.1 $53.8 $65.4 $51.7 $52.2 $48.5 $50.0 $68.9 $69.1 $65.4 $51.7 $52.2 $50.8 $48.5 $0.0 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 From Q1-19 Compan
Slide 12: 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 13: Scrubber Installations through 2019
Scrubber Installations through 2019 MR LR1 LR2 70 60 60 50 30 40 (# of Vessels) 30 7 23 20 19 17 13 6 10 23 10 3 1 3 8 9 6 0 Q2-19 Q3-19 Q4-19 Total 2019 From Q1-19 Company Earnings Release 13 13
Slide 14: Forward Curve
Forward Curve Spread Between Rotterdam 3.5% HSFO vs 0.1% Low Sulfur Gasoil Pre-2020 2020-2022 330 Average of $248/mt Average of $276/mt 310 290 270 250 230 210 190 170 150 May-19 Aug-19 Nov-19 Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22 Source: Bloomberg, May
Slide 15: Scrubber Fuel Savings: 1/2
Scrubber Fuel Savings: 1/2 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 LR
Slide 16: Scrubber Fuel Savings: 2/2
Scrubber Fuel Savings: 2/2 MGO-HSFO Spread $200 MGO-HSFO Spread $250 $1,800,000 $1,600,000 $1,526,175 $1,400,000 $1,271,813 $1,220,940 $1,200,000 $1,135,500 $1,017,450 $1,000,000 $908,400 $800,000 $600,000 $400,000 $200,000 $0 MR LR1 LR2 16 16
Slide 17: Long Term Product Tanker Fundamentals
Long Term Product Tanker Fundamentals 17 17
Slide 18: Industry Highlights
Industry Highlights Demand • Growing global oil consumption and strong underlying demand for refined products • Reduction in global refined product inventories and opening of arbitrage trades • Incremental refining capacity expansions have moved closer to the well head and further from consumption r
Slide 19: Refinery Maintenance (Capacity Offline)
Refinery Maintenance (Capacity Offline) Average [2013-2018] 2019 10.0 9.0 8.0 7.0 6.0 Million Barrels 5.0 4.0 3.0 2.0 1.0 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Bloomberg, May 2019 19 19
Slide 20: Global Diesel Inventories Remain Below Five Year Avg
Global Diesel Inventories Remain Below Five Year Avg • Diesel inventories have decreased approximately 20.1 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 in
Slide 21: 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 3.9% 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 22: Seaborne Refined Product Exports
Seaborne Refined Product Exports Incremental (YoY) Increases in Seaborne Refined Product Exports 2.0 1.5 1.5 1.4 1.3 1.3 1.0 1.0 1.0 0.9 0.8 0.7 0.7 0.7 0.7 0.7 mb/d 0.5 0.4 0.3 0.2 0.1 0.0 0.0 -0.2 -0.5 -0.5 -1.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
Slide 23: 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 estimated to be 5.6 mb/d (of which 3.7 mb/d was HSFO, 1.9 mb/d was MGO/LSFO) in 2017 (1) • Assuming total fuel consumption remains the same in 2020 at 5.6 m
Slide 24: Supply Demand to Rebalance in 2019
Supply Demand to Rebalance in 2019 Product Tanker Net Fleet Growth Seaborne Refined Product Exports 9.0% 8.0% 7.6% 7.3% 7.0% 6.3% 6.0% 5.7% 5.0% 4.6% 4.3% 3.9% 4.0% 3.7% 3.9% 3.0% 2.6% 3.0% 1.8% 1.8% 2.0% 1.4% 1.0% 0.9% 0.0% -1.0% -1.0% -2.0% 2013 2014 2015 2016 2017 2018 2019e 2020e Source: Clarkso
Slide 25: Product Tanker Orderbook as a % Fleet
Product Tanker Orderbook as a % Fleet Product Tanker 10K+ Orderbook % Fleet 5 Yr Avg 10 Yr Avg 25.0% 23.0% 21.0% 19.0% (Orderbook % of fleet) 17.0% 15.0% 13.0% 11.0% 9.0% 7.6% 7.0% 5.0% Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Lowest Or
Slide 26: Product Tanker Scrapping Has Never Really Happened
Product Tanker Scrapping Has Never Really Happened MR LR1 LR2 50 45 42 40 4 38 35 35 5 9 7 30 7 # of Vessels 25 24 24 22 3 3 14 6 20 19 2 5 3 16 3 15 2 13 29 13 12 26 8 4 1 10 9 9 8 8 6 7 17 16 4 6 6 1 14 15 3 1 7 12 5 10 4 8 3 2 2 2 7 6 2 2 1 1 4 5 5 1 2 3 3 2 2 2 0 1 1 1 1997 1998 1999 2000 2001 2
Slide 27: When Compared to Deliveries
When Compared to Deliveries • From 1996 to 2018 there have been 1,511 MRs delivered while only 189 MRs have been scrapped • Unlike other shipping segments, demand for product tankers and its fleet did not experience significant growth until the early 2000’s 160 MR Deliveries MR Demolitions 140 120 1
Slide 28: Fleet Age Profile Transitions into Normalized Cycle
Fleet Age Profile Transitions into Normalized Cycle • Due to the significant fleet expansion during the initial growth phase, a large number of vessels will soon turn 15 years and older • For example, including newbuilding deliveries, the % of the MR fleet that’s 15-19 years old will increase from 1
Slide 29: Appendix
Appendix Cccrrio 29
Slide 30: 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 31: 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 32: 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 33: New Design Features on Scorpio Product Tankers
New Design Features on Scorpio Product Tankers 33 33
Slide 34: 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