Home / Shipping News / Dry Bulk Market / Scorpio Bulkers Inc. Reports Net 9-Month Loss of $206.4 Million

Scorpio Bulkers Inc. Reports Net 9-Month Loss of $206.4 Million

Scorpio Bulkers Inc. reported its results for the three months ended September 30, 2020.

The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.05 per share on the Company’s common shares.

Share and per share results included herein have been retroactively adjusted to reflect the one-for-ten reverse stock split of the Company’s common shares, which took effect on April 7, 2020.

Results for the Three and Nine Months Ended September 30, 2020 and 2019

For the third quarter of 2020, the Company’s GAAP net loss was $36.6 million, or $3.12 per diluted share, including:

  • a non-cash loss of approximately $3.7 million and cash dividend income of $0.2 million, or $0.30 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc.; and
  • a write-down of assets of approximately $19.6 million, or $1.67 per diluted share, related to the classification of the SBI Rock as held for sale and the agreement to sell the SBI Sousta, both of which are Kamsarmax vessels.

For the same period in 2019, the Company’s GAAP net loss was $1.9 million, or $0.28 per diluted share. These results include a non-cash gain of approximately $1.0 million and cash dividend income of $0.5 million, or $0.23 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc., a partial reversal of the write-downs of the SBI Puma and SBI Cougar of approximately $0.2 million, or $0.03 per diluted share, and the write-off of deferred financing costs of approximately $0.5 million, or $0.10 per diluted share.

Total vessel revenues for the third quarter of 2020 were $46.7 million, compared to $63.2 million for the same period in 2019. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the third quarter of 2020 was a loss of $13.9 million and EBITDA for the third quarter of 2019 was $26.3 million, respectively .

For the third quarter of 2020, the Company’s adjusted net loss was $17.0 million, or $1.45 adjusted per diluted share, which excludes the impact of the write-down of assets of approximately $19.6 million relating to the classification of one Kamsarmax vessel as held for sale and the agreement to sell another. Adjusted EBITDA for the third quarter of 2020 was $5.7 million .

For the third quarter of 2019, the Company’s adjusted net loss was $2.1 million, or $0.31 adjusted per diluted share, which excludes the partial reversal of the write-downs of the SBI Puma and SBI Cougar of approximately $0.2 million. Adjusted EBITDA for the third quarter of 2019 was $26.1 million .

For the first nine months of 2020, the Company’s GAAP net loss was $206.4 million, or $23.34 per diluted share, including:

  • a loss of approximately $106.7 million and cash dividend income of $0.9 million, or $12.31 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc.;
  • a write-down of assets of approximately $36.6 million, or $4.14 per diluted share, related to the classification of the four vessels as held for sale (SBI Taurus, SBI Bolero, SBI Jaguar and SBI Rock) and the agreement to sell the SBI Sousta; and
  • a write-off of approximately $0.4 million, or $0.04 per diluted share, of deferred financing costs on the credit facilities related to the SBI Taurus, SBI Bolero and SBI Jaguar.

For the first nine months of 2019, the Company’s GAAP net income was $29.6 million, or $4.25 per diluted share. These results include a non-cash gain of approximately $68.6 million and cash dividend income of $1.6 million, or $10.09 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc., a write-down of assets either sold or held for sale and write-off of related deferred financing costs totaling approximately $12.5 million, or $1.79 per diluted share, and the write-off of deferred financing costs of approximately $3.2 million, or $0.45 per diluted share.

Total vessel revenues for the first nine months of 2020 were $113.7 million, compared to $164.3 million for the same period in 2019. EBITDA for the first nine months of 2020 was a loss of $134.6 million and EBITDA for the first nine months of 2019 was $116.8 million .

For the first nine months of 2020, the Company’s adjusted net loss was $169.4 million, or $19.16 adjusted per diluted share, which excludes the impact of the write-down of assets of approximately $36.6 million and the write-off of deferred financing costs on credit facilities related to the three sold vessels of approximately $0.4 million. Adjusted EBITDA for the first nine months of 2020 was a loss of $97.9 million .

For the first nine months of 2019, the Company’s adjusted net income was $42.1 million, or $6.04 adjusted per diluted share, which excludes the impact of the write-down of assets either sold or held for sale of approximately $12.0 million and the write-off of related deferred financing costs of approximately $0.4 million. Adjusted EBITDA for the first nine months of 2019 was $128.9 million.

TCE Revenue

TCE Revenue Earned during the Third Quarter of 2020

  • Our Kamsarmax fleet (which includes both scrubber fitted and non-scrubber fitted vessels) earned an average of $10,142 revenue per day.
  • Our Ultramax fleet (which includes both scrubber fitted and non-scrubber fitted vessels) earned an average of $8,930 revenue per day.

Voyages Fixed thus far for the Fourth Quarter of 2020, as of the date hereof

  • Kamsarmax fleet (which includes both scrubber fitted and non-scrubber fitted vessels): approximately $12,740 revenue per day on average for 42% of the days
  • Ultramax fleet (which includes both scrubber fitted and non-scrubber fitted vessels): approximately $11,226 revenue per day on average for 45% of the days

Cash and Cash Equivalents

As of October 26, 2020, the Company had approximately $105.5 million in cash and cash equivalents.

Recent Significant Events

COVID-19

Since the beginning of the calendar year 2020, the ongoing outbreak of the novel coronavirus (COVID-19) that originated in China in December 2019 and that has spread to most developed nations of the world has resulted in numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus. These measures have resulted in a significant reduction in global economic activity and extreme volatility in the global financial and commodities markets. A significant reduction in manufacturing and other economic activities has and is expected to continue to have a materially adverse impact on the global demand for raw materials, coal and other bulk cargoes that our customers transport on our vessels. This significant decline in the demand for dry bulk tonnage may materially and adversely impact our ability to profitably charter our vessels. When these measures and the resulting economic impact will end and what the long-term impact of such measures on the global economy will be are not known at this time. As a result, the extent to which COVID-19 will impact the Company’s results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted.

Quarterly Cash Dividend

In the third quarter of 2020, the Company’s Board of Directors declared and the Company paid a quarterly cash dividend of $0.05 per share totaling approximately $0.6 million.

On October 27, 2020, the Company’s Board of Directors declared a quarterly cash dividend of $0.05 per share, payable on or about December 15, 2020, to all shareholders of record as of November 13, 2020. As of October 27, 2020, 12,386,880 shares were outstanding.

Offshore Wind

Our transition continues, and our conviction towards offshore wind is validated constantly. We are witnessing an unprecedented alignment of scientific, political, and commercial forces, leading to accelerated plans around the world to develop wind energy. Shortly we expect to sign the contract for the construction of our first installation vessel, but other steps will follow. We are re-tooling our organization and our mission to deliver the service that our customers will require.

IMO 2020

As of October 26, 2020, the Company has completed the installation of scrubbers on 17 Ultramax vessels and 10 Kamsarmax vessels and expects installation to be completed on another Ultramax vessel in November 2020. In April 2020, the Company reached an agreement with its counterparties to postpone the installment of scrubbers on thirteen vessels until at least 2021 at no additional cost to the Company.

Financial Results for the Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019

For the third quarter of 2020, the Company’s GAAP net loss was $36.6 million, or $3.12 per diluted share, compared to a GAAP net loss of $1.9 million, or $0.28 per diluted share, for the same period in 2019. Results for the third quarter of 2020 include: a non-cash loss of approximately $3.7 million and cash dividend income of $0.2 million, or $0.30 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc., and charges of approximately $19.6 million, or $1.67 per diluted share, related to write-downs of the SBI Rock upon its classification as held for sale and the SBI Sousta, which the Company agreed to sell. Results for the third quarter of 2019 include a non-cash gain of approximately $1.0 million and cash dividend income of $0.5 million, or $0.23 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc., a partial reversal of the write-downs of the SBI Puma and SBI Cougar of approximately $0.2 million, or $0.03 per diluted share, and the write-off of deferred financing costs of approximately $0.5 million, or $0.10 per diluted share.

EBITDA for the third quarters of 2020 and 2019 were a loss of $13.9 million and a gain of $26.3 million, respectively .

For the third quarter of 2020, the Company’s adjusted net loss was $17.0 million, or $1.45 adjusted per diluted share, which excludes the impact of the write-down of assets of approximately $19.6 million. Adjusted EBITDA for the third quarter of 2020 was $5.7 million .

For the third quarter of 2019, the Company’s adjusted net loss was $2.1 million, or $0.31 adjusted per diluted share, which excludes the partial reversal of the write-downs of the SBI Puma and SBI Cougar of approximately $0.2 million. Adjusted EBITDA for the third quarter of 2019 was $26.1 million .

The Company’s vessel revenues for the third quarter of 2020 were $46.7 million, compared to $63.2 million in the third quarter of 2019. The Company’s TCE revenue (see Non-GAAP Financial Measures below) for the third quarter of 2020 was $45.0 million, a decrease of $17.7 million from the prior year period.

Total operating expenses for the third quarter of 2020 were $72.5 million, including the charge related to the classification of the SBI Rock as held for sale and the agreement to sell the SBI Sousta of approximately $19.6 million, compared to total operating expenses of $54.5 million in the third quarter of 2019, which also included a partial reversal of the write-downs of the SBI Puma and SBI Cougar of approximately $0.2 million.

Financial Results for the Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019

For the first nine months of 2020, the Company’s GAAP net loss was $206.4 million, or $23.34 per diluted share, including a loss of approximately $106.7 million and cash dividend income of $0.9 million, or $12.31 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc., a write-down of assets of approximately $36.6 million, or $4.14 per diluted share, related to the classification of four vessels (SBI Taurus, SBI Bolero, SBI Jaguar and SBI Rock) as held for sale and the agreement to sell the SBI Sousta and a write-off of approximately $0.4 million, or $0.04 per diluted share, of deferred financing costs on the credit facilities related to three vessels that were sold in the first nine months of 2020 (SBI Taurus, SBI Bolero and SBI Jaguar). For the first nine months of 2019, the Company’s GAAP net income was $29.6 million, or $4.25 per diluted share. These results include a non-cash gain of approximately $68.6 million and cash dividend income of $1.6 million, or $10.09 per diluted share, from the Company’s equity investment in Scorpio Tankers Inc., a write-down of assets either sold or held for sale and write-off of related deferred financing costs totaling approximately $12.5 million, or $1.79 per diluted share, and the write-off of deferred financing costs of approximately $3.2 million, or $0.45 per diluted share.

EBITDA for the first nine months of 2020 and 2019 were a loss of $134.6 million and a gain of $116.8 million, respectively .

For the first nine months of 2020, the Company’s adjusted net loss was $169.4 million, or $19.16 adjusted per diluted share, which excludes the impact of the write-down of assets of approximately $36.6 million and the write-off of deferred financing costs on credit facilities related to the three vessels sold of approximately $0.4 million. Adjusted EBITDA for the first nine months of 2020 was a loss of $97.9 million .

For the first nine months of 2019, the Company’s adjusted net income was $42.1 million, or $6.04 adjusted per diluted share, which excludes the impact of the write-down of assets either sold or held for sale of approximately $12.0 million and the write-off of related deferred financing costs of approximately $0.4 million. Adjusted EBITDA for the first nine months of 2019 was $128.9 million .

The Company’s vessel revenues for the first nine months of 2020 were $113.7 million compared to $164.3 million in the first nine months of 2019. The Company’s TCE revenue for the first nine months of 2020 was $109.2 million, a decrease of $54.3 million from the prior year period.

Total operating expenses for the first nine months of 2020 were $186.8 million, including the write-down of vessels of approximately $36.6 million, compared to $165.2 million in the first nine months of 2019, which included a charge related to the classification of vessels as sold or held for sale of approximately $12.0 million.
Source: Scorpio Bulkers Inc.

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