MONACO, May 09, 2024 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE:STNG) ("Scorpio Tankers" or the "Company") today reported its results for the three months ended March 31, 2024. The Company also announced that its board of directors (the "Board of Directors") has declared a quarterly cash dividend on its common shares of $0.40 per share. Results for the three months ended March 31, 2024 and 2023 For the three months ended March 31, 2024, the Company had net income of $214.2 million, or $4.29 basic and $4.11 diluted earnings per share. For the three months ended March 31, 2024, the Company had adjusted net income (see Non-IFRS Measures section below) of $206.6 million, or $4.14 basic and $3.97 diluted earnings per share, which excludes from net income a $3.7 million, or $0.07 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on certain lease financing obligations and related debt extinguishment costs, and a $11.3 million, or $0.23 per basic and $0.22 per diluted share, gain on the sale of a vessel. For the three months ended March 31, 2023, the Company had net income of $193.2 million, or $3.40 basic and $3.27 diluted earnings per share. For the three months ended March 31, 2023, the Company had adjusted net income (see Non-IFRS Measures section below) of $195.6 million, or $3.44 basic and $3.31 diluted earnings per share, which excludes from net income a $2.3 million, or $0.04 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on certain lease financing obligations and related extinguishment costs. Declaration of Dividend On May 8, 2024, the Company's Board of Directors declared a quarterly cash dividend of $0.40 per common share, with a payment date of June 28, 2024 to all shareholders of record as of June 14, 2024 (the record date). As of May 8, 2024, there were 54,575,565 common shares of the Company outstanding. Emanuele A. Lauro, Chairman and Chief Executive Officer, commented, "Reducing our debt and lowering our cash break even rate increases cash flow in any rate environment. This allows the Company to act opportunistically to further increase shareholder returns." Summary of First Quarter 2024 and Other Recent Significant Events Below is a summary of the average daily Time Charter Equivalent ("TCE") revenue (see Non-IFRS Measures section below) and duration of contracted voyages and time charters for the Company's vessels (both in the pools and outside of the pools) thus far in the second quarter of 2024 as of the date hereof (See footnotes to "Other operating data" table below for the definition of daily TCE revenue):   Pool and Spot Market   Time Charters Out of the Pool   Average Daily TCE Revenue Expected Revenue Days(1) % of Days   Average Daily TCE Revenue Expected Revenue Days(1) % of Days LR2 $ 51,700 2,600 53 %   $ 30,750 900 100 % MR $ 38,000 4,350 51 %   $ 21,750 450 100 % Handymax $ 25,000 1,225 48 %   N/A N/A N/A (1) Expected Revenue Days are the total number of calendar days in the quarter for each vessel, less the total number of expected off-hire days during the period associated with major repairs or drydockings. Consequently, Expected Revenue Days represent the total number of days the vessel is expected to be available to earn revenue. Idle days, which are days when a vessel is available to earn revenue, yet is not employed, are included in revenue days. The Company uses revenue days to show changes in net vessel revenues between periods. Below is a summary of the average daily TCE revenue earned by the Company's vessels during the first quarter of 2024:   Average Daily TCE Revenue Vessel class Pool / Spot Time Charters LR2 $ 57,250   $ 30,859 MR $ 35,025   $ 21,481 Handymax $ 32,427   N/A The Company is currently in discussions with the lenders under its 2023 $1.0 Billion Credit Facility to make an unscheduled repayment on the term portion of this credit facility in June 2024 of up to $223.6 million. This repayment is expected to be applied against the upcoming quarterly principal repayment obligations of the term loan. This repayment will not impact the availability under the revolving portion of this credit facility, which is currently $288.2 million. In April 2024, the Company entered into an agreement to sell its 2015 built MR product tanker, STI Manhattan, for $40.8 million. The sale of this vessel is expected to close in the second or third quarter of 2024. The Company expects that there will be no debt repayment as a result of this sale, as this vessel is currently in the process of being replaced by one of its unencumbered vessels, STI Notting Hill, as collateral on the 2023 $1.0 Billion Credit Facility. In April 2024, the Company closed the previously announced sale of its 2013 built MR product tanker, STI Larvotto, for a selling price of $36.15 million. This vessel was not collateralized on a debt or lease arrangement and therefore there was no debt repayment as a result of the sale. In March 2024, the Company entered into an agreement to sell a 2013 built MR product tanker, STI Le Rocher, for $36.15 million. The sale of this vessel is expected to close in May 2024. This vessel is not collateralized on a debt or lease arrangement and therefore there will be no debt repayment as a result of the sale. In March 2024, the Company closed the previously announced sale of a 2015 built MR product tanker, STI Tribeca, for a selling price of $39.1 million. There was no debt repaid as a result of this sale, as this vessel was replaced by STI Galata as collateral on the 2023 $1.0 Billion Credit Facility. From January 1, 2024 through the date of this press release, the Company made $277.8 million in previously announced unscheduled debt and lease repayments. The Company also has $102.4 million in previously announced unscheduled lease repayments that are expected to close in the second quarter of 2024. These repayments are summarized in the table below. In January 2024, the Company drew down $99.0 million from the 2023 $1.0 Billion Credit Facility (split evenly between the term and revolving portions of the loan) and placed two Handymax product tankers and four MR product tankers as collateral under the facility. Securities Repurchase Program From January 1, 2024 through May 8, 2024, no shares were repurchased in the open market under the 2023 Securities Repurchase Program. There is $250.0 million available under the 2023 Securities Repurchase Program as of May 8, 2024. Diluted Weighted Number of Shares The computation of earnings per share is determined by taking into consideration the potentially dilutive shares arising from the Company's equity incentive plan. These potentially dilutive shares are excluded from the computation of earnings per share to the extent they are anti-dilutive. For the three months ended March 31, 2024, the Company's basic weighted average number of shares outstanding were 49,905,272. For the three months ended March 31, 2024, the Company's diluted weighted average number of shares outstanding were 52,069,380, which included the potentially dilutive impact of restricted shares issued under the Company's equity incentive plan. Conference Call On Thursday, May 9, 2024, the Company plans to issue its first quarter 2024 earnings press release in the morning (Eastern Daylight Time) and host a conference call at 9:00 AM Eastern Daylight Time and 3:00 PM Central European Summer Time. Title: Scorpio Tankers Inc. First Quarter 2024 Conference Call Date: Thursday May 9, 2024 Time: 9:00 AM Eastern Daylight Time and 3:00 PM Central European Summer Time The conference call will be available over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com and the webcast link: https://edge.media-server.com/mmc/p/kd9z9abw Participants for the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. The conference will also be available telephonically: US/CANADA Dial-In Number: 1 833-636-1321 International Dial-In Number: 1 412-902-4260 Please ask to join the Scorpio Tankers Inc call. Participants should dial into the call 10 minutes before the scheduled time. Current Liquidity As of May 8, 2024, the Company had $558.8 million in unrestricted cash and cash equivalents and $288.2 million of availability under the revolving portion of the 2023 $1.0 Billion Credit Facility.   The Company also expects the sale of STI Le Rocher to close before the end of May 2024. Debt The following table sets forth the unscheduled debt and lease repayments that the Company has recently completed or are committed yet pending, including those announced as of May 8, 2024. Facility Repayment date Principal balance repaid or to be repaid (in millions)   Vessels Prudential Credit Facility Jan-24 $ 33.7   STI Acton*, STI Camden* and STI Clapham 2020 SPDBFL Lease Financing Jan-24   38.3   STI Jardins* and STI San Telmo* 2021 AVIC Lease Financing Jan-24   77.4   STI Soho*, STI Osceola*, STI Memphis and STI Lombard BCFL Lease Financing (MRs) Jan-24   21.7   STI Topaz, STI Garnet and STI Onyx 2021 TSFL Lease Financing Mar-24   45.6   STI Black Hawk, STI Pontiac and STI Notting Hill 2021 CMBFL Lease Financing Mar-24   45.3   STI Comandante, STI Brixton, STI Pimlico and STI Finchley Total unscheduled repayments - Q1 2024 $ 262.0               2021 CMBFL Lease Financing Apr-24   15.8   STI Westminster Total unscheduled repayments - Q2 2024 $ 15.8               2022 AVIC Lease Financing May-24   39.6   STI Gramercy and STI Queens 2022 AVIC Lease Financing Jun-24   62.8   STI Oxford and STI Selatar Total unscheduled repayments - pending $ 102.4 (1)             * Vessel subsequently collateralized on the 2023 $1.0 Billion Credit Facility (1) Summation difference with indebtedness schedule due to rounding Set forth below is a summary of the principal balances of the Company's outstanding indebtedness as of the dates presented:   In thousands of U.S. Dollars Outstanding Principal as of December 31, 2023 Outstanding Principal as of March 31, 2024 Outstanding Principal as of May 8, 2024 Pro-forma Outstanding Principal as of May 8, 2024(3) 1 Prudential Credit Facility (1) $ 33,740 $ — $ — $ — 2 BNPP Sinosure Credit Facility   69,667   69,667   64,213   64,213 3 2023 $225.0 Million Credit Facility   199,575   191,100   182,625   182,625 4 2023 $49.1 Million Credit Facility   45,626   44,472   44,472   44,472 5 2023 $117.4 Million Credit Facility   108,890   104,638   104,638   104,638 6 2023 $1.0 Billion Credit Facility (2)   564,907   630,838   630,838   630,838 7 2023 $94.0 Million Credit Facility   92,908   90,491   89,167   89,167 8 Ocean Yield Lease Financing   25,376   24,624   24,378   24,378 9 BCFL Lease Financing (MRs) (1)   21,653   —   —   — 10 2020 SPDBFL Lease Financing (1)   38,300   —   —   — 11 2021 AVIC Lease Financing (1)   77,383   —   —   — 12 2021 CMBFL Lease Financing (1)   61,525   15,795   —   — 13 2021 TSFL Lease Financing (1)   45,617   —   —   — 14 2021 Ocean Yield Lease Financing   58,083   56,624   56,143   56,143 15 2022 AVIC Lease Financing (1)   104,635   102,344   102,344   — 16 Unsecured Senior Notes Due 2025   70,571   70,571   70,571   70,571   Gross debt outstanding   1,618,456   1,401,164   1,369,389   1,267,045   Cash and cash equivalents   355,551   369,504   558,834   456,490   Net debt $ 1,262,905 $ 1,031,660 $ 810,555 $ 810,555 (1) Refer to the preceding table for a description of unscheduled payment activity that has recently occurred or is expected to occur. (2) In January 2024, the Company drew down an aggregate of $99.0 million from this facility (split evenly between the term loan and the revolver) and six of the Company's vessels (STI Acton, STI Camden, STI Jardins, STI Osceola, STI Soho and STI San Telmo) were placed as collateral under the facility. There is currently $288.2 million available under the revolving portion of this facility and no further amounts are available to draw under the term portion. The amounts drawn, and the currently available $288.2 million under the revolving portion of the facility, are currently scheduled to be repaid and/or permanently reduced in aggregate amounts of $33.1 million per quarter through June 30, 2025 and gradually decreasing from $26.4 million to $21.3 million per quarter in years three through five of the loan, with a balloon payment due at the maturity date. These amounts do not reflect the impact of any potential unscheduled prepayment on the 2023 $1.0 Billion Credit Facility discussed above. (3) Amounts reflect the balances as of May 8, 2024, adjusted for previously announced and committed unscheduled debt and lease repayments which are expected to occur between May 9, 2024 and June 30, 2024. These amounts do not reflect the impact of any potential unscheduled prepayment on the 2023 $1.0 Billion Credit Facility discussed above. Set forth below are the estimated expected future principal repayments on the Company's outstanding indebtedness as of March 31, 2024, which includes principal amounts due under the Company's secured credit facilities, lease financing arrangements and Senior Notes Due 2025 (which also include actual scheduled payments made from April 1, 2024 through May 8, 2024):         In millions of U.S. dollars   Repayments/maturities of unsecured debt Vessel financings - announced vessel purchases and maturities in 2024 and 2025 Vessel financings - scheduled repayments, in addition to maturities in 2026 and thereafter Total(1) April 1, 2024 to May 8, 2024(2)   $ — $ 15.8 $ 16.0 $ 31.8 Remaining Q2 2024(2)     —   102.3   41.1   143.4 Q3 2024     —   —   51.6   51.6 Q4 2024     —   —   57.1   57.1 Q1 2025     —   —   51.6   51.6 Q2 2025     70.6   —   51.0   121.6 Q3 2025     —   —   41.0   41.0 Q4 2025(3)     —   55.4   37.6   93.0 2026 and thereafter     —   —   810.1   810.1     $ 70.6 $ 173.5 $ 1,157.1 $ 1,401.2 (1) Amounts represent the principal payments due on the Company's outstanding indebtedness as of March 31, 2024. (2) Includes the unscheduled payment activity that has recently occurred or is expected to occur as described in the preceding section describing unscheduled debt and lease repayments. (3) Includes the scheduled maturity payment of $55.4 million on the BNPP Sinosure Credit Facility. Drydock Update Set forth below is a table summarizing the drydock activity that occurred during the first quarter of 2024 and the estimated expected payments to be made, and off-hire days that are expected to be incurred, for the Company's drydocks through 2024 and 2025:       Number of(3)   Aggregate costs in millions of USD(1) Aggregate off-hire days(2) LR2s MRs Handymax Q1 2024 - actual $ 10.6 204 1 6 0 Q2 2024 - estimated   18.1 207 0 7 2 Q3 2024 - estimated   20.9 320 4 8 4 Q4 2024 - estimated   19.0 300 3 6 6 FY 2025   39.6 540 11 14 2 (1) These costs include estimated cash payments for drydocks. These amounts may include costs incurred for previous projects for which payments may not be due until subsequent quarters, or payments that are due in advance of the scheduled service and may be scheduled to occur in quarters prior to the actual drydocks. The timing of the payments set forth are estimates only and may vary as the timing of the related drydocks finalize. (2) Represents the total estimated off-hire days during the period for drydockings or major repairs, including vessels that commenced work in a previous period. (3) Represents the number of vessels scheduled to commence drydock. It does not include vessels that commenced work in prior periods but will be completed in the subsequent period. Additionally, the timing set forth in these tables may vary as drydock times are finalized. Explanation of Variances on the First Quarter of 2024 Financial Results Compared to the First Quarter of 2023 For the three months ended March 31, 2024, the Company recorded net income of $214.2 million compared to net income of $193.2 million for the three months ended March 31, 2023. The following were the significant changes between the two periods: TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot voyages, time charters, and pool charters), and it provides useful information to investors and management. The following table sets forth TCE revenue for the three months ended March 31, 2024, and 2023:       For the three months ended March 31, In thousands of U.S. dollars     2024       2023     Vessel revenue   $ 391,336     $ 384,431     Voyage expenses     (1,575 )     (7,269 )   TCE revenue   $ 389,761     $ 377,162   TCE revenue for the three months ended March 31, 2024 increased by $12.6 million to $389.8 million, from $377.2 million for the three months ended March 31, 2023. Overall, the average daily TCE revenue increased to $39,660 per vessel during the three months ended March 31, 2024, from $37,500 per vessel during the three months ended March 31, 2023. The average number of vessels was 110.9 during the three months ended March 31, 2024 as compared to 113.0 during the three months ended March 31, 2023. TCE revenue for the three months ended March 31, 2024 remained strong reflected by the increase in daily TCE rates when compared to the same period in the prior year. The overall supply and demand balance in the product tanker market continued to be favorable in the first quarter of 2024 as underlying consumption and export volumes remained robust against the backdrop of modest growth in the worldwide fleet. These favorable market conditions were exacerbated by the expansion of ton-mile demand that was triggered by the conditions in the southern Red Sea (discussed below), which has forced the re-routing of much of the global shipping fleet transiting to and from Europe to divert around the Cape of Good Hope. The mixture of these conditions resulted in record high average daily spot TCE rates on the Company's LR2 vessels (which are the primary vessel class making these longer-haul voyages) during the first quarter of 2024, with the remainder of the Company's fleet benefiting from a spill-over effect. TCE revenue for the three months ended March 31, 2023 reflected the continued strength in the product tanker market that began in the first quarter of 2022 as a result of several catalysts. Initially, the easing of COVID-19 restrictions around the globe, the conflict in Ukraine, and strengthening refining margins resulted in significant increases in ton-mile demand as trade routes shifted and volumes increased. In early 2023, volumes and trade routes continued to be impacted by the easing of COVID-19 restrictions, particularly in China, and the implementation of sanctions on the export of Russian crude oil and refined petroleum products. Vessel operating costs for the three months ended March 31, 2024, increased by $4.5 million to $78.1 million, from $73.7 million for the three months ended March 31, 2023. Overall, the average daily vessel operating costs increased to $7,743 per vessel for the three months ended March 31, 2024 from $7,244 per vessel for the three months ended March 31, 2023. The increase was among the LR2 and MR vessel classes with the largest increases within stores and spares expenses due to the timing of purchases. Per day vessel operating costs for the three months ended March 31, 2024 decreased from $8,181 per day in the three months ended December 31, 2023, due to the $2.0 million crew bonus expense recorded at year end as well as decreases in repairs and maintenance. Voyage expenses for the three months ended March 31, 2024 decreased by $5.7 million from the three months ended March 31, 2023, to $1.6 million as the number of vessels operating outside of the Scorpio pools during the three months ended March 31, 2024 decreased from the prior year period. Depreciation expense – owned or sale leaseback vessels for the three months ended March 31, 2024, increased by $7.4 million to $47.9 million, from $40.5 million for the three months ended March 31, 2023. This increase was attributable to the exercise of purchase options on all 21 lease financed vessels throughout 2023 that were previously accounted for as IFRS 16 - Leases consisting of nine in the second quarter; six in the third quarter; and six in the fourth quarter of 2023 as reflected in the $9.5 million decrease in Depreciation expense - right of use assets for the three months ended March 31, 2024. The carrying values of these repurchased vessels were reclassified to Vessels and drydock from Right of use assets for vessels on the Company's balance sheet and depreciation expense is recorded as a part of owned vessels as of the dates of each purchase. The combined decrease in depreciation expense of $2.1 million was due to five vessels that were either classified as held for sale or sold since March 31, 2023. General and administrative expenses for the three months ended March 31, 2024, increased by $7.8 million to $30.1 million, from $22.3 million for the three months ended March 31, 2023. This increase was primarily due to an increase in non-cash restricted stock amortization resulting from grants made in the second quarter of 2023. A recent restricted stock grant is expected to result in an increase in general and administrative expenses by approximately $8.0 million to $9.0 million per quarter in the upcoming quarters. The stock price on the date of the grant, which has increased over 25% since March 2023, is used as the fair value for the accounting of the awards under IFRS. The awards granted to employees vest ratably in years three, four and five following the initial grant. Financial expenses for the three months ended March 31, 2024 decreased by $6.5 million to $37.0 million, from $43.5 million for the three months ended March 31, 2023. This decrease was primarily attributable to the overall reduction in interest expense on debt and sale leaseback arrangements due to the Company's focus on deleveraging. The Company's average indebtedness decreased to $1.5 billion during the three months ended March 31, 2024, as compared to $2.0 billion during the three months ended March 31, 2023. Additionally: The Company recorded $3.7 million of debt extinguishment related costs during the three months ended March 31, 2024, as compared to $2.3 million during the three months ended March 31, 2023; and The amortization of deferred financing fees increased to $3.0 million during the three months ended March 31, 2024, as compared to $1.2 million during the three months ended March 31, 2023, due to the entrance into new credit facilities during 2023. Scorpio Tankers Inc. and SubsidiariesCondensed Consolidated Statements of Income(unaudited)       For the three months ended March 31, In thousands of U.S. dollars except per share and share data   2024       2023   Revenue         Vessel revenue $ 391,336     $ 384,431             Operating expenses         Vessel operating costs   (78,125 )     (73,674 )   Voyage expenses   (1,575 )     (7,269 )   Depreciation - owned or sale leaseback vessels   (47,910 )     (40,491 )   Depreciation - right of use assets   —       (9,490 )   General and administrative expenses   (30,089 )     (22,271 )   Gain on sales of vessels   11,330       —     Total operating expenses   (146,369 )     (153,195 ) Operating income   244,967       231,236   Other (expenses) and income, net         Financial expenses   (36,994 )     (43,532