Larger fleet boosts Scorpio figures

Feb 28 2014

For the fourth quarter of last year, Scorpio Tankers reported net income of $5.8 mill, compared with a net loss of $4.9 mill for 4Q12.

The company said that its adjusted net loss for 4Q13 was $14.5 mill, which excluded $41.4 mill, resulting from the investment in Dorian LPG, a $21.2 mill write-down resulting from the designation of certain older vessels as 'held for sale' and an unrealised gain on derivative financial instruments of $0.1 mill.

During 4Q12, Scorpio Tankers’ adjusted net loss was $3.6 mill, which excluded a $1.3 mill unrealised loss on derivative financial instruments.

For the full year, the company reported net income of $17 mill. The adjusted net loss was $3.7 mill. This compares with a 2012 net loss of $26.5 mill. The adjusted net loss for 2012 was $11.9 mill.

Scorpio Tankers said that the reasons for the swing were due to TCE revenue increasing by $24 mill to $52.3 mill, which was primarily driven by an increase in the average number of operating vessels (owned and time chartered-in) to 47.2 from 23.8 for 4Q13 and 4Q12, respectively.

However, this was offset by an overall decrease in TCE revenue per day to $12,080 from $13,392 for 4Q13 and 4Q12, respectively.

Vessel operating costs in 4Q13 increased by $4.4 mill to $12.6 mill from $8.2 mill reported in 4Q12. This was primarily driven by an increase in the company's owned fleet to an average of 19 vessels from 12 vessels. This increase was offset by an overall decrease in vessel operating costs per day to $7,071 from $7,348.

The overall decrease was driven by the growth in the fleet of newly delivered MRs, which realised improved operating performance when compared to the company's older vessels.

Charterhire expenses went up by $22 mill to $36.2 mill, as a result of an increase in the average number of vessels timechartered-in to 28.2 from 11.8 for 4Q13 and 4Q12, respectively.

Depreciation expenses increased by $2.3 mill to $6.9 mill. This was primarily as a result of an increase in the average number of owned vessels. 

General and administrative expenses increased by $8.1 mill to $11.2 mill. This was driven by a $5.5 mill increase in the amortisation of restricted stock (non-cash) and an overall increase in other general and administrative expenses due to the significant growth in the company's fleet and newbuilding programme.

A write-down of vessels held for sale of $21.2 mill related to the designation of certain vessels as held-for-sale at 31st December, 2013 and the corresponding write-down to their estimated selling prices.

A gain on sale of VLGCs of $41.4 mill related to the gain recorded as a result of Scorpio’s contribution of 11 VLGCs under construction and $1.9 mill in cash, to Dorian in exchange for 30% of Dorian's outstanding shares.

Emanuele Lauro, CEO and chairman of the board commented, "Although our fourth quarter 2013 results reflect the deleterious effects of prolonged turnarounds of existing refineries and delays of commissioning the new refining assets, we remain confident in the underlying demand and supply thesis.

“Already in the first quarter (of this year), all of our vessel classes are experiencing higher returns than they did in the final quarter of 2013. We expect to be profitable this quarter; additionally, we have increased our quarterly dividend to $0.08 per share.

"As for the remainder of 2014, both new emissions regulations and customer preferences will leave us very well-positioned. By the end of the year, we will have a modern fuel-efficient fleet, which has significant commercial and technical benefits. Even though we expect the overall product market to continue to improve, we also expect there to be a bifurcation of returns between modern fuel-efficient and older vessels," he said.

As of 21st February, 2014, the company had $123.3 mill in cash. In January 2014, Scorpio Tankers drew down $72.4 mill from the 2010 revolving credit facility and the same month, drew down $52 mill from the 2011 credit facility. In February 2014, the company drew down $64.2 mill from the 2013 credit facility.

During 4Q13, the company made $260.9 mill of instalment payments on its newbuildings. Scorpio Tankers currently has 63 newbuildings on order with HMD, SPP, HSHI and DSME (30 MRs, 14 Handymaxes, 12 LR2s and seven VLCCs). 

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