Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Q2 2021 Earnings Presentation
37 slides from Scorpio Tankers's earnings presentation, Aug 5, 2021
Slide 1: Second Quarter 2021 Earnings Presentation
Scorpio Tankers Inc. Second Quarter 2021 Earnings Presentation August 5, 2021
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: Investment Highlights
Investment Highlights • 131 wholly owned, finance leased or bareboat chartered-in tankers on the water with an average age of 5.5 years The Largest & Most Modern Product Tanker Fleet in the • 98 product tanker vessels equipped with exhaust gas scrubbers World • Vessels trading within one of the worl
Slide 4: Scorpio Tankers at a Glance
Scorpio Tankers at a Glance Key Facts Fleet Overview Largest Product Tanker Fleet in the World • Scorpio Tankers Inc. (“Scorpio”) is the world’s largest product with 131 Vessels on the Water tanker owner, providing marine transportation of refined 14x 63x petroleum products (gasoline, diesel, jet fu
Slide 5: Largest & Most Modern Product Tanker Fleet in the World
Largest & 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 • While a significant portion of the global MR and LR fleets are older than 15 years of age, the Scorpio fleet has an ave
Slide 6: Q2-21 Actual & Q3-21 Guidance of Company TCE Rates
Q2-20 Actual & Q3-21 Guidance of Company TCE Rates Scorpio Fleet TCE by Segment ($/day) % of Q3-21 Days Booked as of August 4, 2021 LR2 LR1 MR HM Q3-21 47% 43% 48% 45% $12,468 $11,951 $11,528 $10,500 $9,865 $9,500 $9,000 $7,500 LR2 LR1 MR HM Q2-21 Q3-21 Guidance Source: Company’s earnings release 6
Slide 7: Bunker Prices & Forward Curve
Bunker Prices & Forward Curve • The VLSFO-HSFO spread reached $300/MT in January 2020 as the International Maritime Organization (IMO) regulatory fuel changes were implemented, requiring non scrubber fitted vessels to consume marine fuel with 0.5% sulfur content • In Q2-20 the oil demand shock cause
Slide 8: Scrubber Fuel Savings
Scrubber Fuel Savings • As of August 4, 2021 the Company has 98 vessels currently installed with exhaust gas cleaning systems (“scrubbers”) Scorpio Scrubber Fleet Scorpio TCE Savings Annual Cash Flow Benefit (Vessels installed with scrubbers) ($/day) (Millions $USD) 80 $2,509 $102.6 70 $2,091 60 $77
Slide 9: Financials
Financials 9
Slide 10: Quarterly Financial Performance
Quarterly Financial Performance (In '000s of USD) Q2-21 Q1-21 Revenue $ 139,442 $ 134,165 Vessel operating costs (80,598) (83,302) Voyage expenses (1,396) (1,385) Charterhire - - Depreciation (59,422) (60,625) Impairment of vessels and goodwill - - G&A (13,324) (13,560) Marger related transaction co
Slide 11: Limited Capex & Upcoming Maturities Have Been Refinanced
Limited Capex & Upcoming Maturities Have Been Refinanced • Since 2018, the Company completed $432.0 million in capex payments for drydock, ballast water treatment systems and scrubbers • Remaining capex for FY-21 is $20.6 million • The Company has $20 million of committed scrubber financing that has
Slide 12: Liquidity
Liquidity Liquidity • As of August 4, 2021, the Company had $268.6 million in Millions $USD $400.0 unrestricted cash and cash equivalents. • The Company is also in discussions with financial institutions to $347.6 $347.6 further increase liquidity by up to $59.0 million in connection with $59.0 the
Slide 13: Potential Cash Flow Generation
Potential Cash Flow Generation Potential Annual Cash Flow Generation Excluding Debt Repayment Potential Annual Cash Flow Generation Including Debt Repayment Millions $USD Millions $USD $2,500 $2,500 $2,000 $2,000 $1,500 $1,500 $1,095 $856 $1,391 $617 $1,152 $1,000 $1,000 $378 $913 $139 $674 $435 $29
Slide 14: Market Fundamentals
Market Fundamentals 14
Slide 15: Short Term Market Update
Short Term Market Update • Global oil demand has recovered significantly since April 2020, Global Oil Demand (mb/d) (1) but continues to balance its recovery with the impact of the 105.0 101.5 pandemic 100.8 • Floating and land based refined product inventories remain near 100.0 their five year avg
Slide 16: Floating and Land Based Inventories Continue to Decline
Floating and Land Based Inventories Continue to Decline • Refined product (Gasoline, diesel and jet fuel) inventories are below their five year average in the United States, ARA and Singapore • Floating refined product inventories decreased from 108.2 million barrels in May 2020 to 22.3 million barr
Slide 17: US Refined Product Exports Near 2019 Levels
US Refined Product Exports Near 2019 Levels • US refinery utilization averaged 92.3% in June and 91.6% in July, the highest monthly utilization rates since the start of COVID-19 • US refined product exports have continued to increase since March and are now slightly below 2019 levels US Refinery Uti
Slide 18: Jet Fuel Demand Is Improving but Still Below 2019 Levels
Jet Fuel Demand Is Improving but Still Below 2019 Levels • Global commercial flights have continued to recover from their 2020 lows, but are still at 89% of their 2019 levels • Remaining recovery in jet fuel demand will be driven by a reduction in travel restrictions and an increase in long-haul int
Slide 19: Vaccinations to Drive Demand Recovery in Refined Products
Vaccinations to Drive Demand Recovery in Refined Products • Robust economic growth, rising vaccination rates, increasing mobility levels and the easing of social distancing to underpin stronger global oil demand in 2H-21 • Low product inventories, refinery closures and growing demand are expected to
Slide 20: Product Tanker Demand Drivers
Product Tanker Demand Drivers Increased Volumes Voyage Distance Product Tanker (Seaborne Trading Activity Demand Exports) (Ton Mile Demand) • Oil consumption • Dislocation • Arbitrage opportunities growth between refinery from price volatility and consumer • Refinery margins • Low inventory levels •
Slide 21: Long Term Fundamentals
Long Term Fundamentals Oil and Refined Product Demand Expected to Continue to Recover through 2021 • IEA expects oil demand to increase 5.4 mb/d to 96.4 mb/d 2021 and an additional 3.0 mb/d in 2022 (1) • Seaborne refined product exports and ton mile demand are estimated to increase 6.7% and 7.1%, re
Slide 22: Global Refinery Closures Accelerate
Global Refinery Closures Accelerate Announced Refinery Closures • Global oil refining is being reconfigured and will have Operator Location Capacity (kbd) Timing a significant change on future global trade patterns MPC Martinez, CA(USA) 161 2020 • Older refineries have faced a wave of closures due t
Slide 23: Impact of Closing Australia's Kwinana & Altona Refinery
Impact of Closing Australia’s Kwinana & Altona Refinery Australia Refining Capacity • BP announced that they are closing their 146 kb/d Kwinana refinery in Australia at the end of 2020 Refinery Owner Capacity (kb/d) Status Altona Exxon Mobil 90 Closing • In February 2021 Exxon Mobil announced that t
Slide 24: Regional Diesel & Gasoline Balances
Regional Diesel & Gasoline Balances FSU Europe 1.0 (1.2) North America 0.1 1.2 0.8 Asia 0.1 1.0 Middle East (0.3) Africa 0.9 (1.1) (0.1) (0.9) Latin America (1.1) (1.2) Diesel surplus / (deficit) in mb/d Gasoline surplus / (deficit) in mb/d Source: Energy Aspects, estimates are for FY-21 24
Slide 25: Orderbook as % of Fleet Remains Near Historical Low
Orderbook as % of Fleet Remains Near Historical Low • Limited newbuilding orders coupled with a low orderbook has kept orderbook as % of fleet near historical lows Newbuilding Orders Orderbook as % of Fleet MR LR1 LR2 25.0% 450 433 Product Tanker 10K+ Orderbook % Fleet 5 Yr Avg 400 78 10 Yr Avg 350
Slide 26: Seaborne Ton Mile Demand to Outpace Supply in 2021
Seaborne Ton Mile Demand to Outpace Supply in 2021 Ton Mile Demand vs Product Tanker Fleet Growth Product Tanker Net Fleet Growth Seaborne Refined Products Exports 10.0% 7.4% 6.3% 6.7% 5.7% 5.0% 4.8% 4.8% 4.5% 4.2% 4.0% 2.6% 2.5% 1.5% 1.9% 1.1% 2.5% 1.0% 0.7% 0.0% -1.0% -5.0% -5.0% -10.0% -12.0% -15
Slide 27: Significant % of the Fleet Turning 15 Years & Older
Significant % of the Fleet Turning 15 Years & Older • Certain key customers will only employ product tankers 15 years & younger • This limits trading opportunities for older tonnage and creates a two-tiered market where; • Owners consider continuing to carry refined products, switching from products
Slide 28: Increased Scrapping & Ageing MR Fleet to Tighten Supply
Increased Scrapping & Ageing MR Fleet to Tighten Supply MR Vessels Scrapped • There have been 25 MR vessels scrapped 35 year to date and projected to be the largest 29 30 number of MR vessels scrapped in a year 25 24 25 • Increased scrapping driven by higher scrap 20 17 prices, lower rate environmen
Slide 29: Increasing Environmental Regulations to Benefit Modern Vessels
Increasing Environmental Regulations to Benefit Modern Vessels • The EU has put pressure on the IMO to accelerate it’s 2030 GHG emission targets and may implement its own ETS by 2023 • It’s unclear how the timeline of these plans will accelerate, but the focus on reducing GHG emissions in the shippi
Slide 30: Appendix
Appendix 30
Slide 31: 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 32: What is in a Barrel of Crude Oil?
What is in a Barrel of Crude Oil? Source: Valero & EIA, December 2019 32
Slide 33: Product & Crude Tankers
Product & 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 34: 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 35: Design Features on Scorpio Product Tankers
Design Features on Scorpio Product Tankers 35
Slide 36: 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 37: www.scorpiotankers.com
www.scorpiotankers.com