Scorpio Tankers Inc. · NYSE:STNG
Scorpio Tankers — Investor Presentation (October 2023)
34 slides from Scorpio Tankers's investor presentation, October 2023
Slide 1: Scorpio Tankers Inc. Company Presentation
Scorpio Tankers Inc. Company Presentation October 2023
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: Table of Contents
Table of Contents The Company Product Tankers Market Fundamentals Financials Appendix 3
Slide 4: The Company
The Company 4
Slide 5: Scorpio Tankers at a Glance
Scorpio Tankers at a Glance Key Facts Fleet Overview • Scorpio Tankers Inc. (“Scorpio”) is the world’s largest product 112 Product Tanker Vessels on the Water tanker owner, providing marine transportation of refined petroleum products (gasoline, diesel, jet fuel and naphtha) • NYSE-listed under the
Slide 6: Largest and Most Modern Product Tanker Fleet in the World
Largest and Most Modern Product Tanker Fleet in the World • One of the world’s largest and youngest product tanker fleets, including the leading owner in the MR and LR2 product tanker segments • While a significant portion of the global HM, MR and LR2 fleets are older than 15 years of age, Scorpio’s
Slide 7: Investment Highlights
Investment Highlights Company Industry & Outlook Strategy • One of the largest product • Significant increase in product • Reduce leverage, maintain tanker fleets in the world tanker rates since Q1-22 liquidity and return to capital • 112 Eco (fuel-efficient) • Robust product demand and shareholders
Slide 8: Product Tankers
Product Tankers 8
Slide 9: What is a Product Tanker?
What is a Product Tanker? • Product tankers provide the marine transportation of refined petroleum products to areas of demand, whereas crude tankers provide the marine transportation of crude oil to refineries • Product tankers have coated tanks (typically epoxy) making them easy to clean and preve
Slide 10: Product Tanker Types, Cargoes & Trade Flows
Product Tanker Types, Cargoes & Trade Flows Vessel Types, Cargoes & Trading Regions Product Tanker Trade Routes Handymax MR LR2 Scorpio Fleet 14 59 39 (# of vessels) Trading Type Short Range Medium Range Long Range DWT 25,000-39,999 40,000-54,999 80,000-120,000 Avg Cargo Size ~200,000 bbls ~300,000
Slide 11: Customers, Participants & Vessel Employment Arrangements
Customers, Participants & Vessel Employment Arrangements Spot Voyage Time Charter Bareboat Charter Commercial Pool Customers Charter Typical Contract Single Voyage One Year or More One Year or More Varies Length Commodity Traders Oil Companies Refiners Hire Rate (1) Varies Daily Daily Varies Voyage
Slide 12: Product Tanker Fundamentals
Product Tanker Fundamentals Demand Factors Historical Product Tanker Earnings vs Orderbook as a % of Fleet • Seaborne Exports ($/day) Clean Tanker Earnings (LHS) Orderbook as % of Fleet (RHS) (% of Fleet) • Growing global consumption of refined products has led to an increase in seaborne exports $80
Slide 13: Environmental Regulations
Environmental Regulations 2023 IMO Strategy on Reduction of GHG Emissions from Ships IMO Indicative Checkpoints • Carbon intensity of the ship to decline through further improvement of • Reduce the total annual GHG emissions from international shipping by at the energy efficiency for new ships least
Slide 14: Market Fundamentals
Market Fundamentals 14
Slide 15: Refined Product Demand & Seaborne Exports Exceed Pre-Pandemic Levels
Refined Product Demand & Seaborne Exports Exceed Pre-Pandemic Levels Refined Product Demand Expected to Increase through 2024 (1) • Product tanker earnings have remained at (mb/d) elevated levels since March 2022 Diesel Gasoline Jet Naphtha Fuel Oil 90.0 81.3 81.1 78.8 79.9 79.9 77.9 79.9 76.9 76.9
Slide 16: Short Term Market Update
Short Term Market Update Product Tanker Earnings Remain Elevated through Refinery Maintenance (1) Jet Fuel Demand Continues to Increase & Expected to Reach Pre Covid-Levels in 2024 (2) ($/day) (mb/d) LR2 Eco-Middle East to Japan MR Eco-Avg Earnings 2019 2023 2024e $100,000 9.0 $80,000 $60,000 8.0 $4
Slide 17: Global Inventories Near Historical Lows
Global Inventories Near Historical Lows US Diesel Inventories (1) EU Distillate Stocks (2) (million barrels) (million barrels) 5Y Range 5Y AVG YTD 5Y Range 5Y AVG YTD 200 360 190 340 180 320 170 160 300 150 280 140 260 130 240 120 220 110 100 200 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-
Slide 18: Russian Exports Find New Markets
Russian Exports Find New Markets 15% of the Product Tanker Fleet has Traded Russian CPP(1) Russian Origin MR and LR2 Ton Miles (CPP) (# of vessels) (million ton miles) MR LR2 500 35,000 453 49 30,000 400 61 25,000 300 20,000 15,000 200 261 10,000 5,000 100 0 82 0 HM MR LR1 LR2 Total Russian CPP Impo
Slide 19: Overview of Global Refining Capacity
Overview of Global Refining Capacity Global Net Refining Capacity Additions / (Closures) (1) Cumulative Net Refining Capacity Additions / (Closures) by Region 2013 to 2023 (2) (mb/d) (mb/d) 2.5 5.0 2.2 2.0 3.7 1.5 1.5 1.4 1.1 1.1 2.2 0.9 0.9 1.0 0.8 1.1 0.5 0.4 0.5 0.3 0.3 0.2 0.0 (0.1) (0.7) -0.5 (
Slide 20: Refining Capacity & Regional Imbalances Drive Flows
Refining Capacity & Regional Imbalances Drive Flows Improved Triangulation - Largest Exporters Can Also Be Large Importers (2023 ytd) (1) Global Diesel Balances (2) (mb/d) Exports Imports (mb/d) 2.5 2.2 Russia 2.0 Europe 1.0 (1.1) North America 1.5 1.0 China 1.2 1.2 Middle 0.4 1.1 East 1.0 1.2 1.0 0
Slide 21: Refinery Capacity Additions / Closures Increase Flows & Ton Miles
Refinery Capacity Additions / Closures Increase Flows & Ton Miles Middle East Net Capacity Additions (1) Australian Refinery Closures Increase Refined Product Imports (2) (mb/d) (kb/d) Refined Product Imports (kb/d) Domestic Refining Capacity (kb/d) 1.0 0.8 0.8 1,042 1,002 978 958 0.6 0.6 858 235 0.
Slide 22: Seaborne Exports & Ton Mile Demand Have Been Resilient
Seaborne Exports & Ton Mile Demand Have Been Resilient Seaborne Product Exports Have Increased in 20 of the Last 24 Years Ton Mile Demand Has Increased in 20 of the Last 24 Years (yoy, mb/d) (yoy change) 2.0 15% 10% 1.0 5% 0.0 0% -1.0 -5% -2.0 -10% -3.0 -15% Seaborne Product Exports vs Brent Crude O
Slide 23: Modest Orderbook & Aging Fleet with Significant Scrapping Potential
Modest Orderbook & Aging Fleet with Significant Scrapping Potential Product Tanker 10k+ dwt Orderbook as % of Fleet Age Distribution of Fleet through 2026 (1) (% of Fleet) (DWT million) 70.0% HM MR LR1 LR2 60.0% 16.0 50.0% 14.4 14.0 14.0 40.0% 30.0% 10.0% 12.0 20.0% 10.9 11.1 Scrapping Candidates 10
Slide 24: Seaborne Exports & Ton Miles > Fleet Growth
Seaborne Exports & Ton Miles > Fleet Growth 2024 Fleet Growth Expected to Be Lowest Since 2000 (1) Refined Product Exports & Ton Mile Demand Growth (yoy growth) (yoy growth) Refined Product Exports Ton Mile Demand 13.8% 12.1% 12.1% 11.7% 11.4% 10.1% 10.5% 8.4% 6.8% 5.0% 4.9% 3.7% 3.5% 3.6% 6.0% 6.3%
Slide 25: Financials
Financials 25
Slide 26: Financial Highlights
Financial Highlights Avg Daily TCE Rate by Vessel Type (Includes Vessels on Time Charter) Financial Highlights Over Last Six Quarters (Q1-22 through Q2-23) (1) ($/day) ($USD millions) Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 $2,175 $50.27/share $52,023 $52,065 $48,152 $46,231 $43,292 $1,602 $41,143 $41,8
Slide 27: Continued Reduction in Expensive Lease Financing
Continued Reduction in Expensive Lease Financing Repayment from June 30, 2023, through September 29, 2023 Outstanding Indebtedness by Type ($USD millions) ($USD millions) Lease Financing Bank Facilities Unsecured Notes Convertible Bonds $2,500 $3,500 $3,164 $153 $2,115 $3,000 $278 $431 $2,000 $235 $
Slide 28: Improving Balance Sheet, Strong Liquidity & Minimal Capex
Improving Balance Sheet, Strong Liquidity & Minimal Capex Outstanding Indebtedness Debt Repayment Schedule (1) ($USD millions) ($USD millions) $3,500 $500.0 $3,164 $2,966 $401.4 $3,000 $400.0 $2,652 $2,479 Remaining Principal Payments $2,500 $300.0 Repurchase of Lease Financing $2,079 $1,958 $340.1
Slide 29: Asset Values Continue to Increase
Asset Values Continue to Increase LR2 Newbuild & 5-Year-Old Asset Values MR Newbuild & 5-Year-Old Asset Values ($USD millions) ($USD millions) LR2-Newbuild LR2-5 YearOld MR-Newbuild MR-5 Year Old $90.0 $60.0 $50.0 $70.0 $40.0 $50.0 $30.0 $30.0 $20.0 $10.0 $10.0 Histogram of Monthly LR2 Newbuild Pric
Slide 30: Significant Operating Leverage & Earnings Potential
Significant Operating Leverage & Earnings Potential Company Fleet TCE Rate Potential Annual Cash Flow Generation Excluding Debt Repayment (1) ($/day) ($USD millions) $50,000 $45,679 $44,222 $2,012 $40,000 $37,500 $36,006 $1,603 $32,154 $29,693 $36.9/share $30,000 $26,210 $1,195 $22,644 $29.4/share $
Slide 31: Appendix
Appendix 31
Slide 32: Product Tanker Specifications
Product Tanker Specifications IMO Classes I, II, & III IMO Class I refers to the transportation of the most hazardous, very IMO Class I Chemical Tankers acidic, chemicals. The tanks can be stainless steel, epoxy or marine- line coated. Chemical & IMO Class II carries Veg & Palm Oils, Caustic Soda. T
Slide 33: Design Features on Scorpio Product Tankers
Design Features on Scorpio Product Tankers 33
Slide 34: www.scorpiotankers.com
www.scorpiotankers.com
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