Scorpio Tankers Inc. Announces Financial Results for the Second Quarter of 2013 and Declares a Dividend

Scorpio Tankers Inc. yesterday reported its results for the three and six months ended June 30, 2013.
Results for the three months ended June 30, 2013 and 2012
For the three months ended June 30, 2013, the Company had an adjusted net income of $3.6 million (see Non-GAAP Measure section below), or $0.03 basic and diluted earnings per share, excluding a $0.3 million, or $0.00 per share of unrealized gain on derivative financial instruments. Including the unrealized gain on derivative financial instruments, the Company had net income of $4.0 million, or $0.03 basic and diluted earnings per share.
For the three months ended June 30, 2012, the Company had a net loss of $4.0 million, or $0.10 basic and diluted loss per share.
Results for the six months ended June 30, 2013 and 2012
For the six months ended June 30, 2013, the Company had an adjusted net income of $10.2 million (see Non-GAAP Measure section below), or $0.09 basic and diluted earnings per share, excluding a $0.4 million, or $0.00 per share unrealized gain on derivative financial instruments. Including the unrealized gain on derivative financial instruments, the Company had net income of $10.6 million or $0.09 basic and diluted earnings per share.
For the six months ended June 30, 2012, the Company had an adjusted net loss of $4.6 million, or $0.12 basic and diluted loss per share, excluding a $4.5 million, or $0.11 basic and diluted loss per share relating to the loss from sales of STI Conqueror, STI Matador, and STI Gladiator. Including the loss from the sales of vessels, the Company had a net loss of $9.1 million or $0.23 basic and diluted loss per share.
Declaration of Dividend
On July 29, 2013, the Scorpio Tankers' board of directors declared a quarterly cash dividend of $0.035 per share, payable on September 25, 2013 to all shareholders as of September 10, 2013 (the record date). There are currently 164,656,424 shares outstanding.
Emanuele Lauro, chief executive officer and chairman of the board, commented, "Our year-over-year performance continues to improve both as a result of stronger market fundamentals and a stronger Company. The seasonal weakness which we typically experience in the second and third quarter has been particularly short-lived in the Atlantic basin this year. Burgeoning exports of refined products from the United States has contributed to a significant counter-seasonal swing in MR vessel freight rates since the end of June, reaching levels in excess of $20,000 per day.
"We are confident in the outlook for freight markets in the Eastern hemisphere and as well for the LPG trade as major global infrastructure develops. Finally, our conviction in sustained profitability for the Company has led our Board of Directors to authorize an increase in our quarterly dividend by 40%."
Summary of Recent and Second Quarter Significant Events:
•    Executed the previously announced $525.0 million 2013 Credit Facility in July 2013 (see additional information below).  
•    Reached agreements with Hyundai Samho Heavy Industries ("HSHI") and Daewoo Shipbuilding and Marine Engineering Co., Ltd. ("DSME") in July 2013 for the construction of a minimum of five and up to 10 Very Large Gas Carriers ("VLGCs") for approximately $75.0 million each, with deliveries scheduled in 2015.  
•    Declared and paid a quarterly cash dividend on the Company's common stock of $0.025 per share in June 2013.
•    Took delivery of the eighth, ninth and tenth MR tankers under the Company's Newbuilding Program, STI Beryl, STI Le Rocher and STI Larvotto in April, June and July 2013, respectively. After delivery, each vessel began a time charter for up to 120 days at approximately $19,000 per day.
•    Closed on a registered direct placement of common shares in May 2013, raising aggregate net proceeds of $289.1 million.
•    Reached agreements in May 2013 with two shipyards to construct four 114,000 dwt LR2 product tankers for approximately $50.5 million each, two at HSHI and two at DSME. These vessels are scheduled to be delivered in the first and second quarters of 2015.  
•    Reached an agreement in May 2013 with SPP Shipbuilding Co., Ltd. of South Korea ("SPP") to construct four 52,000 dwt MR product tankers for approximately $32.5 million each. These vessels are scheduled to be delivered in the first and second quarters of 2015.
•    Reached agreements in May 2013 with Hyundai Mipo Dockyard Co. Ltd. of South Korea ("HMD") for the construction of six Handymax ice class-1A tankers for approximately $31.6 million each with expected deliveries in the third quarter of 2014.  
•    Reached an agreement in April 2013 with an unaffiliated third party for the purchase of four MR tankers currently under construction at HMD for approximately $36.5 million each. The first two vessels under this agreement, STI Le Rocher and STI Larvotto were delivered in June and July 2013, respectively and the third and fourth vessels are expected to be delivered in August and September 2013.  
VLGC Newbuilding Agreements
In July 2013, the Company reached agreements with HSHI and DSME for the construction of a minimum of five and up to 10 VLGCs for approximately $75.0 million each. The vessels are 84,000 cubic meter tankers designed for the carriage of liquefied petroleum gas ("LPG"). Of the first five vessels, two are scheduled to be delivered in the second quarter of 2015, one in the third quarter of 2015, and two in the fourth quarter of 2015. These agreements replace the previously announced agreement to construct four LR2 vessels at Samsung Heavy Industries.
2013 Credit Facility
In July 2013, we executed final documentation for the previously announced $525.0 million 2013 Credit Facility. The 2013 Credit Facility consists of a $260.0 million delayed draw term loan facility and a $265.0 million revolving credit facility. Drawdowns under the 2013 Credit Facility will be secured by certain vessels for which we have entered into newbuilding contracts ("Collateral").
A single drawdown of the term loan may occur in connection with the delivery of each newbuilding vessel that provides security for this credit facility in an amount equal to the lesser of 60% of (i) the contract price for such vessel or (ii) its fair market value. The drawdowns under the revolving loan may occur in connection with the delivery of certain newbuilding vessels and is also capped at the lesser of 60% of the loan amount or fair market value, with such amount, once drawn, available on a revolving basis. In general, drawdowns under the term loan are available until January 31, 2015 and drawdowns under the revolving loan are available until July 31, 2015 and each will bear interest at LIBOR plus an applicable margin of 3.50%.
The term loan is payable and the revolving loans reduced, in each case, in an amount equal to 1/60th of such loan on a consecutive quarterly basis until final maturity on the sixth anniversary of the facility.
The 2013 Credit Facility includes financial covenants that are similar to the covenants in the other credit facilities.
Time chartered-in update
In July 2013, the Company agreed to time charter-in and took delivery of a 2008 built, 73,666 dwt, LR1 product tanker for one year for approximately $14,000 per day. This agreement contains an option for the Company to extend the charter for an additional year at $15,000 per day.
In July 2013, the Company entered into new agreements on two vessels that are currently time chartered-in. The agreements are for two Handymax product tankers for one year at $12,800 per day (2005 built, 40,471 dwt and 2006 built, 40,426 dwt). These agreements commenced in July 2013 upon expiration of the prior agreements. These agreements also contain options for the Company to extend the charters for an additional year at $13,550 per day.

Source: Scorpio Tankers Inc.