This excluded (i) $1.3 mill of transaction costs related to the merger with Navig8 Product Tankers (NPTI); (ii) a $1 mill write-off of deferred financing fees. The adjustments resulted in an aggregate reduction of the company’s net loss by $2.3 mill.
STI recorded a net loss of $41.5 mill for 4Q17, compared to $29.7 mill for 4Q16.
For the full year, the company's adjusted net loss was $101.7 mill, compared with $10.7 mill for 2016.
The 2017 figure excluded (i) a $23.3 mill loss on sales of vessels, (ii) $36.1 mill of transaction costs related to the merger with NPTI, (iii) a $5.4 mill gain recorded on the purchase of the four NPTI subsidiaries that own four LR1s, and (iv) a $2.5 mill write-off of deferred financing fees.
These adjustments resulted in an aggregate reduction of STI’s net loss by $56.5 mill.
For 2017, the company reported a net loss of $158.2 mill, compared with a loss of $24.9 mill for 2016.
Emanuele Lauro, CEO and chairman of the board, commented, “During the fourth quarter of 2017, we incurred some additional costs and reductions in revenue from the integration of the NPTI fleet. We believe that these steps were important in order to better capitalise on the improving product tanker market fundamentals. This improvement is being reflected in higher asset values and higher spot and forward time charter rates.”
In February 2018, STI entered into a timecharter-in agreement for a 2013 built, LR2 for six months at $14,300 per day. The Company has an option to extend the charter for an additional six months at $15,310 per day. This vessel is expected to be delivered before the end of March, 2018.
In January, 2018, the company also timechartered a 2012-built MR for one year at $14,000 per day. STI has an option to extend the charter for an additional year at $14,400 per day. This vessel is also expected to be delivered before the end of March, 2018.
In a subsequent conference call, Lauro said that 2017, including the 4Q, had been a much tougher period in product tankers than any market participants predicted.
“But as tough as it is, it only serves to reinforce our conviction in the magnitude and the duration of the upcycle when it comes. Particularly with an ageing industry fleet and the order book as multi-year lows.
“Amidst this industry downturn, at Scorpio Tankers, we have been concentrating on what we can control, whilst performing successfully the major technical challenge of integrating the fleet of Navig8 Product acquired in 2017. So, G&A expenses have been kept in check and have been reducing during this period both on a quarter-on-quarter and year-on-year basis.
“Operational expenses have also been kept in check, again with a marginal reduction on the year-over-year figure, which if we consider the takeover of the 27 vessels we have acquired during the second half of 2017, is by itself a good result. Our average fleet daily opex number in 2017 was $6,559 per day.
“The disappointing figure comes from the market. Our average TCE for the fleet in 2017 was $13,150 per day, which is around $2,600 per day lower than the 2016 figure.
“4Q17 was the quarter in which we took delivery of most of the fleet, which we have acquired from Navig8. By 31st December, we had 21 out of the 27 vessels under our technical management, 27 out of 27 under our commercial management. In addition, we have incurred cleaning costs for the five LR2s that were delivered to us with a crude cargo history. This has further negatively impacted our TCE,” he explained.