Scorpio Tankers Inc. announces update on Q3 2022 events, including the Q3 daily tce revenues and exercise of purchase options
Scorpio Tankers Inc. announces an update on Q3 2022 events, including the Q3 2022 quarter to date Daily TCE Revenues and the exercise of purchase options on eight ships.
Third Quarter of 2022 Daily Time Charter Equivalent (“TCE”) Revenues
Below is a summary of the average daily TCE revenue and duration of contracted voyages in the pools and spot market and time charters outside of the pools for the Company’s vessels thus far in the third quarter of 2022:
(1) TCE Revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management.
(2) Projected Revenue Days are the total number of calendar days in the quarter for each vessel, less the total number of projected off-hire days during the period associated with major repairs or drydockings. Consequently, Projected Revenue Days represent the total number of projected days available for the vessel to earn revenue. Idle days, which are days when a vessel is available to earn revenue, yet is not employed, are included in revenue days. We use revenue days to show changes in net vessel revenues between periods.
The Exercise of Purchase Options on Eight Ships
The Company has given notice to exercise its purchase options on two Handymax product tankers (STI Battersea and STI Wembley), four MR product tankers (STI Ville, STI Texas City, STI Meraux and STI Brooklyn), and two LR2 product tankers (STI Rose and STI Rambla). These vessels were sold and leased back by the Company in the third quarter of 2018. The leases bear interest at LIBOR plus a margin of 3.60% – 3.70% per annum. The purchases, which are expected to occur in the fourth quarter of 2022, are expected to result in a debt reduction of $133 million for the Company and a reduction of the breakeven by approximately $665 per day.
As previously announced in June 2022, the Company exercised its purchase options on six 2014 built MR product tankers (STI Opera, STI Virtus, STI Venere, STI Aqua, STI Dama, and STI Regina), and this transaction was concluded in August 2022 when the Company repurchased the six vessels for $95 million, which reduced its debt balance for the same amount. The transactions reduced the Company’s breakeven by approximately $555 per day.
New Time Charter Out Agreement
In August 2022, the Company entered into a time charter-out agreement on a LR2 product tanker, STI Lombard, for three years at the rate of $32,750 per day. The charterer has the option to extend the term of this agreement for an additional year at $34,750 per day. If this option is declared, the charterer has the option to further extend the term of this agreement for an additional year at $36,750 per day.
Fully Diluted Share Count for Q3 2022
The Company estimates that the fully diluted weighted average number of shares for the earnings per share calculation under the if-converted method will be approximately 63 million shares for the three months ended September 30, 2022.
Source: Scorpio Tankers Inc.