Scorpio Tankers Inc. Announces Financial Results for the Third Quarter of 2013, Makes Further Progress on Financing, and Increases Its Quarterly Dividend

MONACO--(Marketwired - Oct 28, 2013) - Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers," or the "Company") today reported its results for the three and nine months ended September 30, 2013.

Results for the three months ended September 30, 2013 and 2012

For the three months ended September 30, 2013, the Company had an adjusted net income of $0.6 million (see Non-GAAP Measure section below), or $0.00 basic and diluted earnings per share, excluding a $0.1 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 $0.7 million, or $0.00 basic and diluted earnings per share. 

For the three months ended September 30, 2012, the Company had an adjusted net loss of $3.7 million (see Non-GAAP Measure section below), or $0.09 basic and diluted loss per share, excluding a $5.9 million, or $0.14 per share, loss from sales of vessels and a $3.0 million, or $0.07 per share, write-off of deferred financing fees. Including the aforementioned adjustments, the Company had a net loss of $12.5 million, or $0.30 basic and diluted loss per share for the three months ended September 30, 2012. 

Results for the nine months ended September 30, 2013 and 2012

For the nine months ended September 30, 2013, the Company had an adjusted net income of $10.8 million (see Non-GAAP Measure section below), or $0.08 basic and diluted earnings per share, excluding a $0.5 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 $11.2 million or $0.08 basic and diluted earnings per share. 

For the nine months ended September 30, 2012, the Company had an adjusted net loss of $8.3 million (see Non-GAAP Measure section below), or $0.21 basic and diluted loss per share, excluding a $10.4 million, or $0.26 per share, loss from sales of vessels and a $3.0 million, or $0.07 per share, write-off of deferred financing fees. Including the aforementioned adjustments, the Company recorded a net loss of $21.7 million, or $0.54 basic and diluted loss per share for the nine months ended September 30, 2012. 

Declaration of Dividend

On October 28, 2013, the Scorpio Tankers' board of directors declared a quarterly cash dividend of $0.07 per share, payable on December 18, 2013 to all shareholders as of December 3, 2013 (the record date). There are currently 191,656,422 shares outstanding.

Emanuele Lauro, chief executive officer and chairman of the board commented, "The past few months have been very exciting for us with the delivery of vessels and additional construction contracts for our Newbuilding Program, as well as a successful equity raising. I am pleased that we have made progress on financing our growth, having secured substantial commitments from KEXIM and KSURE."

Summary of Recent and Third Quarter Significant Events:

• Received loan commitments from a group of financial institutions led by DNB Bank ASA and Skandinaviska Enskilda Banken AB (publ) and from the Export-Import Bank of Korea ("KEXIM") for a total loan facility of up to $429.6 million (the "KEXIM Financing"). The KEXIM Financing incorporates an optional guarantee from KEXIM for the issuance by the Company, at the option of the Company, of a five year $125.3 million amortizing bond facility; the proceeds of which will reduce KEXIM's direct loan commitment in the KEXIM Financing. 
• Received an Acceptance of Insurance Agreement from Korea Trade Insurance Corporation ("KSURE") covering 95% of an up to $358.3 million KSURE tranche as part of a credit facility of up to $458.3 million (the "KSURE Financing") that is currently being finalized with a group of financial institutions.
• Exercised options with Hyundai Samho Heavy Industries ("HSHI") for the construction of two Very Large Gas Carriers ("VLGC") for approximately $75.0 million each, with deliveries scheduled in the first quarter of 2016.
• Reached agreements with certain unaffiliated third parties to issue shares in exchange for the transfer of ownership of four MR product tankers currently under construction in South Korea. The aggregate purchase price of the four vessels is $151.0 million with approximately 30% of the consideration consisting of the newly issued common shares. Deliveries of vessels are scheduled in the first and second quarters of 2014. 
• Reached agreements with HSHI and Daewoo Shipbuilding and Marine Engineering Co., Ltd. ("DSME") for the construction of a total of nine VLGC for approximately $75.6 million each with deliveries scheduled in the second, third and fourth quarters of 2015.
• Reached an agreement with Hyundai Mipo Dockyard ("HMD") to construct four product tankers consisting of two 52,000 dwt MR product tankers for approximately $35.0 million each (deliveries in the second quarter of 2015) and two Handymax ice class-1A (38,000 dwt) product tankers for approximately $32.0 million each (deliveries in the fourth quarter of 2014).
• Closed on an underwritten offering of 23 million common shares in August 2013 which includes the full exercise of the underwriters' overallotment of 3 million shares, raising aggregate net proceeds of $209.8 million.
• Declared and paid a quarterly cash dividend on the Company's common stock of $0.035 per share in September 2013.
• Took delivery of four MR tankers under the Company's Newbuilding Program, STI Le Rocher  and STI Larvotto in July, STI Fontvieille in August and STI Ville in September 2013. After delivery, each vessel began a time charter for up to 120 days at approximately $19,000 per day.
  
  

KEXIM Financing
In September 2013, the Company received loan commitments from a group of financial institutions led by DNB Bank ASA and Skandinaviska Enskilda Banken AB (publ) for loan commitments of up to $429.6 million, including a commitment from KEXIM for a commitment of up to $300.6 million (the "KEXIM Tranche").

The KEXIM Financing will be used to finance up to 60% of the contract price of 18 newbuilding product tankers upon delivery. The covenants are similar to those in the Company's existing credit facilities, and other terms and conditions of the loan are in accordance with OECD Guidelines. The KEXIM Financing is subject to executed documentation and is expected to close within the fourth quarter of 2013.

In addition to KEXIM's commitment of up to $300.6 million, KEXIM has also provided an optional guarantee for a five year amortizing note of $125.3 million (the "KEXIM Guaranteed Note") that may be issued by the Company at the Company's discretion in 2014; the proceeds of which will be used to reduce the $300.6 million KEXIM Tranche. 

KSURE Credit Facility
In October 2013, the Company received an Acceptance of Insurance Agreement from KSURE covering 95% of an up to $358.3 million KSURE tranche which will be a component of a credit facility of up to $458.3 million that is in the process of being finalized. The KSURE Financing will also include a commercial tranche (the "Commercial Tranche") of up to $100.0 million.

The KSURE Financing will be used to finance up to 60% of the contract price of up to 21 newbuilding product tankers upon delivery. The covenants are similar to those in the Company's existing credit facilities, and other terms and conditions of the loan are in accordance with OECD Guidelines. The facility is subject to credit approval from participating financial institutions as well as executed documentation, and is expected to close within the fourth quarter of 2013.

Newbuilding agreements

In September 2013, the Company reached agreements with certain unaffiliated third parties to issue shares in exchange for the transfer of ownership of four MR product tankers that are currently under construction with SPP Shipbuilding Co., Ltd. of South Korea ("SPP"). The aggregate purchase price of the four vessels is $151.0 million with approximately 30% of the consideration consisting of the newly issued shares having a valuation based on the fair market value of the shares at the time of issuance. The new common shares will be issued to Ceres, Valero and a group of institutional investors advised by JP Morgan Asset Management; the remainder of the purchase price will be paid to the shipyard from cash on hand and bank debt. Deliveries of the vessels are scheduled in the first and the second quarters of 2014. 

The transaction also includes a time charter-out agreement for each vessel for a fixed daily revenue amount at current market levels plus a profit sharing arrangement whereby earnings in excess of the base time charter rate will be split between the Company and charterer, Valero. The first vessel delivered will be time chartered-out for 24 months, and the remaining three will each be time chartered-out for 12 months. The transactions will be completed by way of novation of the existing shipbuilding agreements and remain subject to final documentation.

In August 2013, the Company reached an agreement with HMD to construct four product tankers consisting of two 52,000 dwt MR product tankers for approximately $35.0 million each and two Handymax ice class-1A (38,000 dwt) product tankers for approximately $32.0 million each. The MR tankers are scheduled to be delivered in the second quarter of 2015, and the Handymax ice class-1A tankers are scheduled to be delivered in the fourth quarter of 2014.

VLGC Newbuilding agreements

In October 2013, the Company exercised options with HSHI for the construction of two VLGC for approximately $75.0 million each. These vessels are expected to be delivered in the first quarter of 2016.

In July and August 2013, the Company reached agreements with HSHI and DSME for the construction of nine VLGC for approximately $75.6 million each. These vessels are expected to be delivered in the second, third and fourth quarters of 2015. 

These vessels are 84,000 cubic meter tankers designed for the carriage of liquefied petroleum gas ("LPG").

Underwritten offering and full exercise of underwriters' over-allotment

In August 2013, the Company closed on the sale of 20 million shares of common stock at an offering price of $9.50 per share. The underwriters also fully exercised their over-allotment option to purchase 3 million additional common shares at the offering price. The Company received aggregate net proceeds of $209.8 million after deducting underwriters' discounts and offering expenses. 

Time charter-in update

In October 2013, the Company entered into a new time charter-in agreement on an LR1 vessel that is currently time chartered-in. The new agreement is for two years at $14,525 per day and commenced upon the expiration of the existing charter in September 2013.

In August 2013, the Company agreed to time charter-in and took delivery of two 2007 built Handymax product tankers (37,412 dwt and 37,455 dwt, respectively). The first vessel is time chartered-in for 18 months at $12,500 per day with an option for the Company to extend the charter for an additional year at $13,500 per day. The second vessel is time chartered-in for one year at $12,500 per day with an option for the Company to extend the charter for an additional year at $13,250 per day. 

In August 2013, the Company declared an option on an LR2 vessel that is currently time chartered-in. The option period is for six months at $15,000 per day and commences upon the expiration of the existing charter in November 2013. 

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 at $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. 

Conference Call

The Company will have a conference call on October 28, 2013 at 12:00 PM Eastern Daylight Time and 5:00 PM Central European Time.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (888)-215-7046 (U.S.) or 1 (913)-312-0659 (International). The conference participant passcode is 6328598. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.

Slides and Audio Webcast:

There will also be a simultaneous live webcast over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Webcast URL: http://www.visualwebcaster.com/event.asp?id=96603  

Current Liquidity

As of October 25, 2013, the Company had $381.9 million in cash and $75.5 million available to draw down from its 2010 Revolving Credit Facility. 

Debt

As of October 28, 2013, the Company's outstanding debt balance is as follows:

2010 Revolving Credit Facility		$	-	million
2011 Credit Facility			65.2	million
STI Spirit Credit Facility			23.4	million
Newbuilding Credit Facility			85.3	million
2013 Credit Facility			-	million
Total		$	173.9	million

Newbuilding Program

During the third quarter of 2013, the Company made $255.0 million of installment payments on its newbuilding vessels. The Company currently has 65 newbuilding vessel orders with HMD, SPP, HSHI and DSME (28 MRs, 14 Handymaxes, 12 LR2s and 11 VLGC). The estimated future payment dates and amounts are as follows*:

Q4 2013		$	215.7		million	**
Q1 2014			250.3		million
Q2 2014			397.5		million
Q3 2014			394.8		million
Q4 2014			323.1		million
Q1 2015			134.6		million
Q2 2015			249.2		million
Q3 2015			151.1		million
Q4 2015			197.3		million
Q1 2016			105.0		million
Total		$	2,418.6		million	***

*These are estimates only and are subject to change as construction progresses. 
**$47.0 million has been paid prior to the date of this press release. 
***Excludes the consideration of newly issued common shares of approximately 30% of the purchase price for four MRs currently under construction with first and second quarter 2014 deliveries.

Explanation of Variances on the Third Quarter of 2013 Financial Results Compared to the Third Quarter of 2012

For the three months ended September 30, 2013, the Company recorded net income of $0.7 million compared to a net loss of $12.5 million in the three months ended September 30, 2012. The following were the significant changes between the two periods:

• Time charter equivalent, or TCE revenues, a non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is also 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. The following table depicts TCE revenue for the three months ended September 30, 2013 and 2012:
  
  

	For the three months ended September 30,
In thousands of U.S. dollars	2013				2012
Vessel revenue	$	57,756			$	28,667
Voyage expenses		(1,249	)			(6,304	)
TCE revenue	$	56,507			$	22,363

• TCE revenue increased by $34.1 million to $56.5 million as a result of an increase in the average number of operating vessels (owned and time chartered-in) to 42.3 from 20.4 for the three months ended September 30, 2013 and 2012, respectively. Additionally, the Company experienced an overall increase in time charter equivalent revenue per day to $14,557 per day from $11,926 per day for the three months ended September 30, 2013 and 2012, respectively (see the breakdown of daily TCE averages below). 
  
  
• Vessel operating costs increased $4.7 million to $11.1 million from $6.4 million for the three months ended September 30, 2013 and 2012, respectively. This increase was primarily driven by an increase in the Company's owned fleet to an average of 17.3 vessels from 9.9 vessels for the three months ended September 30, 2013 and 2012, respectively. 
  
  
• Charterhire expense increased $19.3 million to $31.9 million as a result of an increase in the average number of time chartered-in vessels to 25.0 from 10.5 for the three months ended September 30, 2013 and 2012, respectively. See the Company's Fleet List below for the terms of these agreements.
  
  
• Depreciation expense increased $3.0 million to $6.4 million primarily as a result of an increase in the average number of owned vessels to 17.3 from 9.9 for the three months ended September 30, 2013 and 2012.
  
  
• General and administrative expenses increased $3.7 million to $6.5 million. This increase was driven by (i) a $3.0 million increase in restricted stock amortization (non-cash) and (ii) an overall increase in other general and administrative expenses due to the significant growth in the Company's fleet and Newbuilding program. 
  
  
• Financial expenses decreased $3.7 million to $0.4 million primarily as a result of the one-time write-off of deferred financing fees during the three months ended September 30, 2012 of $3.0 million relating to the amendment signed in July 2012 to extend the availability period of the 2011 Credit Facility to January 2014. 
  
  

Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Profit or Loss
(unaudited)
			For the three months ended September 30,								For the nine months ended September 30,
In thousands of U.S. dollars except per share and share data			2013				2012				2013				2012
Revenue
	Vessel revenue		$	57,756			$	28,667			$	154,213			$	85,278
Operating expenses:
	Vessel operating costs			(11,137	)			(6,374	)			(27,635	)			(22,158	)
	Voyage expenses			(1,249	)			(6,304	)			(3,782	)			(19,950	)
	Charterhire			(31,877	)			(12,588	)			(79,345	)			(29,479	)
	Depreciation			(6,377	)			(3,389	)			(16,665	)			(10,213	)
	Loss from sale of vessels			-				(5,879	)			-				(10,404	)
	General and administrative expenses			(6,522	)			(2,815	)			(14,572	)			(8,404	)
	Total operating expenses			(57,162	)			(37,349	)			(141,999	)			(100,608	)
Operating income / (loss)				594				(8,682	)			12,214				(15,330	)
Other (expense) and income, net
	Financial expenses			(448	)			(4,108	)			(2,323	)			(6,583	)
	Realized gain on derivative financial instruments			3				286				25				286
	Unrealized gain on derivative financial instruments			118				38				483				38
	Financial income			400				4				950				6
	Other expenses, net			-				(49	)			(106	)			(73	)
	Total other expense, net			73				(3,829	)			(971	)			(6,326	)
Net income / (loss)			$	667			$	(12,511	)		$	11,243			$	(21,656	)
Earnings / (loss) per share
	Basic and diluted		$	0.00			$	(0.30	)		$	0.08			$	(0.54	)

Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(unaudited)
		As of
In thousands of U.S. dollars		September 30, 2013				December 31, 2012
Assets
Current assets
Cash and cash equivalents		$	447,368			$	87,165
Accounts receivable			73,961				36,438
Prepaid expenses and other current assets			3,871				956
Inventories			3,498				2,169
Total current assets			528,698				126,728
Non-current assets
Vessels and drydock			640,855				395,412
Vessels under construction			371,236				50,251
Other assets			14,045				889
Total non-current assets			1,026,136				446,552
Total assets		$	1,554,834			$	573,280
Current liabilities
Bank loans			13,754				7,475
Accounts payable			9,194				11,387
Accrued expenses			3,254				3,057
Derivative financial instruments			675				844
Total current liabilities			26,877				22,763
Non-current liabilities
Bank loans			157,543				134,984
Derivative financial instruments			309				743
Total non-current liabilities			157,852				135,727
Total liabilities			184,729				158,490
Shareholders' equity
Issued, authorized and fully paid in share capital:
	Share capital		1,888				650
	Additional paid in capital		1,462,232				519,493
Treasury shares			(7,938	)			(7,938	)
Hedging reserve			(236	)			(329	)
Accumulated deficit			(85,841	)			(97,086	)
Total shareholders' equity			1,370,105				414,790
Total liabilities and shareholders' equity		$	1,554,834			$	573,280

Scorpio Tankers Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(unaudited)
	For the nine months ended September 30,
In thousands of U.S. dollars	2013				2012
Operating activities
Net income / (loss)	$	11,243			$	(21,656	)
Loss from sale of vessels		-				10,404
Depreciation		16,665				10,213
Amortization of restricted stock		6,738				2,598
Amortization of deferred financing fees		538				3,844
Straight-line adjustment for charterhire expense		7				225
Unrealized gain on derivative financial instruments		(483	)			(38	)
		34,708				5,590
Changes in assets and liabilities:
Drydock payments		(1,448	)			(150	)
Increase in inventories		(1,328	)			(77	)
Increase in accounts receivable		(37,523	)			(5,575	)
(Increase)/decrease in prepaid expenses and other current assets		(2,942	)			129
(Increase)/decrease in other assets		(394	)			2,442
Increase in accounts payable		1,337				4,413
(Decrease)/increase in accrued expenses		(29	)			598
		(42,327	)			1,780
Net cash (outflow) / inflow from operating activities		(7,169	)			7,370
Investing activities
Acquisition of vessels and payments for vessels under construction		(585,182	)			(176,556	)
Proceeds from disposal of vessels		-				101,335
Net cash outflow from investing activities		(585,182	)			(75,221	)
Financing activities
Bank loan repayment		(24,102	)			(75,989	)
Bank loan drawdown		52,050				124,173
Debt issuance costs		(12,266	)			(2,944	)
Gross proceeds from issuance of common stock		983,537				27,000
Equity issuance costs		(35,531	)			(1,137	)
Purchase of treasury shares		-				(2,440	)
Dividends paid		(10,684	)			-
Net cash inflow from financing activities		953,004				68,663
Increase in cash and cash equivalents		360,203				812
Cash and cash equivalents at January 1,		87,165				36,833
Cash and cash equivalents at September 30,	$	447,368			$	37,645

Scorpio Tankers Inc. and Subsidiaries
Other operating data for the three and nine months ended September 30, 2013 and 2012
(unaudited)
		For the three months ended September 30,						For the nine months ended September 30,
		2013			2012			2013			2012
Adjusted EBITDA(1)(in thousands of U.S. dollars)		$	10,830		$	1,715		$	35,536		$	8,098
Average Daily Results
Time charter equivalent per day(2)		$	14,557		$	11,926		$	15,388		$	12,719
Vessel operating costs per day(3)			6,851			6,935			6,656			7,690
Aframax/LR2
TCE per revenue day (2)		$	10,876		$	15,809		$	12,803		$	10,940
Vessel operating costs per day(3)			9,112			7,645			7,799			8,622
Panamax/LR1
TCE per revenue day (2)		$	13,349		$	13,613		$	13,519		$	14,609
Vessel operating costs per day(3)			8,174			7,271			7,570			7,783
MR
TCE per revenue day (2)		$	17,304		$	10,972		$	17,706		$	11,195
Vessel operating costs per day(3)			5,956			6,593			5,930			7,338
Handymax
TCE per revenue day (2)		$	13,029		$	11,106		$	14,246		$	12,804
Vessel operating costs per day(3)			7,157			5,524			6,690			7,414
Fleet data
Average number of owned vessels			17.3			9.9			14.9			10.4
Average number of time chartered-in vessels			25.0			10.5			21.1			8.4
Drydock
Expenditures for drydock (in thousands of U.S. dollars)			-			-			-			-

(1)	See Non-GAAP Measure section below
(2)	Freight rates are commonly measured in the shipping industry in terms of time charter equivalent per day (or TCE per day), which is calculated by subtracting voyage expenses, including bunkers and port charges, from vessel revenue and dividing the net amount (time charter equivalent revenues) by the number of revenue days in the period. Revenue days are the number of days the vessel is owned less the number of days the vessel is off-hire for drydock and repairs.
(3)	Vessel operating costs per day represent vessel operating costs excluding non-recurring expenses (for example insurance deductible expenses for repairs) divided by the number of days the vessel is owned during the period.

Fleet List as of October 28, 2013
	Vessel Name		Year Built				DWT		Ice class		Employment		Vessel type
	Owned vessels
1	STI Highlander		2007				37,145		1A		SHTP (1)		Handymax
2	STI Amber		2012				52,000		-		SMRP (4)		MR
3	STI Topaz		2012				52,000		-		SMRP (4)		MR
4	STI Ruby		2012				52,000		-		SMRP (4)		MR
5	STI Garnet		2012				52,000		-		SMRP (4)		MR
6	STI Onyx		2012				52,000		-		SMRP (4)		MR
7	STI Sapphire		2013				52,000		-		SMRP (4)		MR
8	STI Emerald		2013				52,000		-		SMRP (4)		MR
9	STI Beryl		2013				52,000		-		SMRP (4)		MR
10	STI Le Rocher		2013				52,000		-		SMRP (4)		MR
11	STI Larvotto		2013				52,000		-		SMRP (4)		MR
12	STI Fontvieille		2013				52,000		-		SMRP (4)		MR
13	STI Ville		2013				52,000		-		Spot		MR
14	Noemi		2004				72,515		-		SPTP (2)		LR1
15	Senatore		2004				72,514		-		SPTP (2)		LR1
16	STI Harmony		2007				73,919		1A		SPTP (2)		LR1
17	STI Heritage		2008				73,919		1A		SPTP (2)		LR1
18	Venice		2001				81,408		1C		SPTP (2)		Post-Panamax
19	STI Spirit		2008				113,100		-		SLR2P (3)		LR2
	Total owned DWT						1,148,520
	Vessel Name		Year Built				DWT		Ice class		Employment		Vessel type		Daily Base Rate		Expiry (5)
	Time Chartered-In vessels
20	Freja Polaris		2004				37,217		1B		SHTP (1)		Handymax		$12,700		14-Apr-14		(6)
21	Kraslava		2007				37,258		1B		SHTP (1)		Handymax		$12,800		18-May-14		(7)
22	Krisjanis Valdemars		2007				37,266		1B		SHTP (1)		Handymax		$12,800		14-Apr-14		(8)
23	Jinan		2003				37,285		-		SHTP (1)		Handymax		$12,600		28-Apr-15
24	Iver Progress		2007				37,412		-		SHTP (1)		Handymax		$12,500		03-Mar-15		(9)
25	Iver Prosperity		2007				37,455		-		SHTP (1)		Handymax		$12,500		20-Oct-14		(10)
26	Histria Azure		2007				40,394		-		SHTP (1)		Handymax		$12,600		04-Apr-14		(11)
27	Histria Coral		2006				40,426		-		SHTP (1)		Handymax		$12,800		17-Jul-14		(12)
28	Histria Perla		2005				40,471		-		SHTP (1)		Handymax		$12,800		15-Jul-14		(12)
29	STX Ace 6		2007				46,161		-		SMRP (4)		MR		$14,150		17-May-14		(13)
30	Targale		2007				49,999		-		SMRP (4)		MR		$14,500		17-May-14		(14)
31	Ugale		2007				49,999		1B		SMRP (4)		MR		$14,000		15-Jan-14		(15)
32	Gan Triumph		2010				49,999		-		SMRP (4)		MR		$14,150		20-May-14
33	Nave Orion		2013				49,999		-		SMRP (4)		MR		$14,300		25-Mar-15		(16)
34	Freja Lupus		2012				50,385		-		SMRP (4)		MR		$14,760		26-Apr-14		(17)
35	Gan-Trust		2013				51,561		-		SMRP (4)		MR		$16,250		06-Jan-16		(18)
36	Usma		2007				52,684		1B		SMRP (4)		MR		$13,500		03-Jan-14		(19)
37	SN Federica		2003				72,344		-		SPTP (2)		LR1		$11,250		15-May-15		(20)
38	King Douglas		2008				73,666				Spot		LR1		$14,000		08-Aug-14		(21)
39	Hellespont Promise		2007				73,669		-		SPTP (2)		LR1		$12,500		16-Dec-13		(22)
40	FPMC P Eagle		2009				73,800		-		SPTP (2)		LR1		$14,525		09-Sep-15
41	FPMC P Hero		2011				99,995		-		SLR2P (3)		LR2		$14,750		02-May-14		(23)
42	FPMC P Ideal		2012				99,993		-		SLR2P (3)		LR2		$15,000		09-Jan-14		(24)
43	Densa Alligator		2013				105,708		-		SLR2P (3)		LR2		$16,500		17-Sep-14		(25)
44	Khawr Aladid		2006				106,003		-		SLR2P (3)		LR2		$15,400		11-Jul-15
45	Fair Seas		2008				115,406		-		SLR2P (3)		LR2		$16,250		31-Jan-14		(26)
46	Pink Stars		2010				115,592		-		SLR2P (3)		LR2		$16,125		10-Apr-14
47	Four Sky		2010				115,708		-		SLR2P (3)		LR2		$16,250		02-Sep-14
48	Orange Stars		2011				115,756		-		SLR2P (3)		LR2		$16,125		06-Apr-14
	Total time chartered-in DWT						1,913,611
	Newbuildings currently under construction
	Vessel Name		Yard				DWT		Ice class				Vessel type
	Product tankers
49	Hull 2451		HMD		(27)		38,000		1A				Handymax
50	Hull 2452		HMD		(27)		38,000		1A				Handymax
51	Hull 2453		HMD		(27)		38,000		1A				Handymax
52	Hull 2454		HMD		(27)		38,000		1A				Handymax
53	Hull 2462		HMD		(27)		38,000		1A				Handymax
54	Hull 2463		HMD		(27)		38,000		1A				Handymax
55	Hull 2464		HMD		(27)		38,000		1A				Handymax
56	Hull 2465		HMD		(27)		38,000		1A				Handymax
57	Hull 2476		HMD		(27)		38,000		1A				Handymax
58	Hull 2477		HMD		(27)		38,000		1A				Handymax
59	Hull 2478		HMD		(27)		38,000		1A				Handymax
60	Hull 2479		HMD		(27)		38,000		1A				Handymax
61	Hull 2499		HMD		(27)		38,000		1A				Handymax
62	Hull 2500		HMD		(27)		38,000		1A				Handymax
63	Hull 2389		HMD		(27)		52,000						MR
64	Hull 2390		HMD		(27)		52,000						MR
65	Hull 2391		HMD		(27)		52,000						MR
66	Hull 2392		HMD		(27)		52,000						MR
67	Hull 2449		HMD		(27)		52,000						MR
68	Hull 2450		HMD		(27)		52,000						MR
69	Hull 2458		HMD		(27)		52,000						MR
70	Hull 2459		HMD		(27)		52,000						MR
71	Hull 2460		HMD		(27)		52,000						MR
72	Hull 2461		HMD		(27)		52,000						MR
73	Hull 2492		HMD		(27)		52,000						MR
74	Hull 2493		HMD		(27)		52,000						MR
75	Hull S1138		SPP		(28)		52,000						MR
76	Hull S1139		SPP		(28)		52,000						MR
77	Hull S1140		SPP		(28)		52,000						MR
78	Hull S1141		SPP		(28)		52,000						MR
79	Hull S1142		SPP		(28)		52,000						MR
80	Hull S1143		SPP		(28)		52,000						MR
81	Hull S1144		SPP		(28)		52,000						MR
82	Hull S1145		SPP		(28)		52,000						MR
83	Hull S1167		SPP		(28)		52,000						MR
84	Hull S1168		SPP		(28)		52,000						MR
85	Hull S1169		SPP		(28)		52,000						MR
86	Hull S1170		SPP		(28)		52,000						MR
87	Hull S5122		SPP		(28)		52,000						MR
88	Hull S5123		SPP		(28)		52,000						MR
89	Hull S5124		SPP		(28)		52,000						MR
90	Hull S5125		SPP		(28)		52,000						MR
91	Hull S703		HSHI		(29)		114,000						LR2
92	Hull S704		HSHI		(29)		114,000						LR2
93	Hull S705		HSHI		(29)		114,000						LR2
94	Hull S706		HSHI		(29)		114,000						LR2
95	Hull S709		HSHI		(29)		114,000						LR2
96	Hull S710		HSHI		(29)		114,000						LR2
97	Hull S715		HSHI		(29)		114,000						LR2
98	Hull S716		HSHI		(29)		114,000						LR2
99	Hull 5394		DSME		(30)		114,000						LR2
100	Hull 5395		DSME		(30)		114,000						LR2
101	Hull 5398		DSME		(30)		114,000						LR2
102	Hull 5399		DSME		(30)		114,000						LR2
	Total product tankers DWT						3,356,000
	Vessel Name		Yard				Vessel size (cbm)						Vessel type
	LPG Carriers
103	Hull 2336		DSME		(31)		84,000						VLGC
104	Hull 2337		DSME		(31)		84,000						VLGC
105	Hull 2338		DSME		(31)		84,000						VLGC
106	Hull S749		HSHI		(32)		84,000						VLGC
107	Hull S750		HSHI		(32)		84,000						VLGC
108	Hull S751		HSHI		(32)		84,000						VLGC
109	Hull S752		HSHI		(32)		84,000						VLGC
110	Hull S755		HSHI		(32)		84,000						VLGC
111	Hull S756		HSHI		(32)		84,000						VLGC
112	Hull S753		HSHI		(32)		84,000						VLGC
113	Hull S754		HSHI		(32)		84,000						VLGC
	Total LPG carriers (cbm)						924,000

(1)	This vessel operates in or is expected to operate in the Scorpio Handymax Tanker Pool (SHTP). SHTP is operated by Scorpio Commercial Management (SCM). SHTP and SCM are related parties to the Company.
(2)	This vessel operates in or is expected to operate in the Scorpio Panamax Tanker Pool (SPTP). SPTP is operated by SCM. SPTP is a related party to the Company.
(3)	This vessel operates in or is expected to operate in the Scorpio LR2 Pool (SLR2P). SLR2P is operated by SCM. SLR2P is a related party to the Company.
(4)	This vessel operates in or is expected to operate in the Scorpio MR Pool (SMRP). SMRP is operated by SCM. SMRP is a related party to the Company.
(5)	Redelivery from the charterer is plus or minus 30 days from the expiry date.
(6)	We have an option to extend the charter for an additional year at $14,000 per day.
(7)	We have an option to extend the charter for an additional year at $13,650 per day.
(8)	We have an option to extend the charter for an additional year at $13,650 per day. The agreement also contains a 50% profit and loss sharing provision whereby we split all of the vessel's profits and losses above or below the daily base rate with the vessel's owner.
(9)	We have an option to extend the charter for an additional year at $13,500 per day.
(10)	We have an option to extend the charter for an additional year at $13,250 per day.
(11)	We have an option to extend the charter for an additional year at $13,550 per day.
(12)	We have options to extend each charter for an additional year at $13,550 per day.
(13)	We have an option to extend the charter for an additional year at $15,150 per day.
(14)	We have options to extend the charter for up to three consecutive one year periods at $14,850 per day, $15,200 per day and $16,200 per day, respectively.
(15)	We have an option to extend the charter for an additional year at $15,000 per day.
(16)	We have an option to extend the charter for an additional year at $15,700 per day.
(17)	We have an option to extend the charter for an additional year at $16,000 per day.
(18)	The daily base rate represents the average rate for the three year duration of the agreement. The rate for the first year is $15,750 per day, the rate for the second year is $16,250 per day, and the rate for the third year is $16,750 per day. We have options to extend the charter for up to two consecutive one year periods at $17,500 per day and $18,000 per day, respectively.
(19)	We have an option to extend the charter for an additional year at $14,500 per day.
(20)	We have an option to extend the charter for an additional year at $12,500 per day. We have also entered into an agreement with the vessel's owner whereby we split all of the vessel's profits above the daily base rate.
(21)	We have an option to extend the charter for an additional year at $15,000 per day.
(22)	We have an option to extend the charter for an additional six months at $14,250 per day.
(23)	We have extended the charter for six months at $15,000 per day beginning in November 2013. Subsequent to that, we have options to extend the charter for two consecutive six month periods at $15,250 per day, and $15,500 per day respectively.
(24)	We have options to extend the charter for two consecutive six month periods at $15,250 per day and $15,500 per day respectively.
(25)	We have an option to extend the charter for one year at $17,550 per day.
(26)	We have options to extend the charter for two consecutive six month periods at $16,500 per day and $16,750 per day, respectively.
(27)	These newbuilding vessels are being constructed at HMD (Hyundai Mipo Dockyard Co. Ltd. of South Korea). 24 vessels are expected to be delivered in 2014 and two vessels in the second quarter of 2015.
(28)	These newbuilding vessels are being constructed at SPP (SPP Shipbuilding Co., Ltd. of South Korea ). 12 vessels are expected to be delivered during the second, third and fourth quarters of 2014 and four in the first and second quarters of 2015.
(29)	These newbuilding vessels are being constructed at HSHI (Hyundai Samho Heavy Industries Co., Ltd.). Six vessels are expected to be delivered in the third and fourth quarters of 2014 and two in the first quarter of 2015.
(30)	These newbuilding vessels are being constructed at DSME (Daewoo Shipbuilding and Marine Engineering). Two vessels are expected to be delivered in the fourth quarter of 2014 and two in the second quarter of 2015.
(31)	These newbuilding vessels are being constructed at DSME (Daewoo Shipbuilding and Marine Engineering). One vessel is expected to be delivered in the third quarter and two in the fourth quarter of 2015.
(32)	These newbuilding vessels are being constructed at HSHI (Hyundai Samho Heavy Industries Co., Ltd.). Two vessels are expected to be delivered each in the second quarter, third and fourth quarters of 2015 and two in the first quarter of 2016.

Business Strategy, Dividend Policy, and Stock Buyback Program

Business Strategy

The Company's primary objectives are to profitably grow the business and emerge as a major operator of medium-sized tanker vessels and gas carriers. The Company intends to acquire modern, high-quality tankers and gas carriers through timely and selective acquisitions. The Company is currently concentrating on product or coated tankers and gas carriers because of the fundamentals of these segments, which the Company believes includes:

• increasing demand for refined products and LPG,
• increasing ton miles (distance between new refiners and areas of demand), and
• reduced order book.
  
  

Dividend Policy

The declaration and payment of dividends is subject at all times to the discretion of the Company's board of directors. The timing and amount of dividends, if any, depends on the Company's earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.

On October 28, 2013, the Company's board of directors declared a quarterly cash dividend of $0.07 per share, payable on December 18, 2013 to all shareholders as of December 3, 2013 (the record date). On September 25, 2013, the Company paid a quarterly cash dividend on its common stock of $0.035 per share to all shareholders as of September 10, 2013 (the record date).

Share Buyback Program

On July 9, 2010, the Company's board of directors authorized a share buyback program of up to $20 million. The Company expects to repurchase these shares in the open market, at times and prices that are considered to be appropriate by the Company, but is not obligated under the terms of the program to repurchase any shares. 

As of October 28, 2013, the Company has purchased $7.9 million of shares in the open market at an average price of $6.78.

About Scorpio Tankers Inc.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 19 tankers (one LR2 tanker, four LR1 tankers, one Handymax tanker, 12 MR tankers, and one post-Panamax tanker) with an average age of 4.0 years, time charters-in 29 product tankers (eight LR2, four LR1, eight MR and nine Handymax tankers), and has contracted for 65 newbuilding vessels (28 MR, 12 LR2, and 14 Handymax ice class-1A product tankers, and 11 Very Large Gas Carriers), 44 of which are expected to be delivered within 2014, 19 within 2015 and the remaining two in the first quarter of 2016. Additional information about the Company is available at the Company's website www.scorpiotankers.com, which is not a part of this press release.

Non-GAAP Measures
This press release describes adjusted net income and Adjusted EBITDA, which are not measures prepared in accordance with IFRS (i.e. "Non-GAAP" measure). The Non-GAAP measures are presented in this press release as we believe that they provide investors with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.

Adjusted net income / (loss)

				For the three months ended September 30,
				2013								2012
In thousands of U.S. dollars except per share and share data				Amount				Per share				Amount				Per share
	Net income / (loss)			$	667			$	0.00			$	(12,511	)		$	(0.30	)
	Adjustments:
		Loss from sale of vessels			-				0.00				5,879				0.14
		Write off of deferred financing fees			-				0.00				2,977				0.07
		Unrealized gain on derivative financial instruments			(118	)			(0.00	)			(38	)			(0.00	)
	Total adjustments				(118	)			(0.00	)			8,818				0.21
	Adjusted net income/ (loss)			$	549			$	0.00			$	(3,693	)		$	(0.09	)
				For the nine months ended September 30,
				2013								2012
				Amount				Per share				Amount				Per share
	Net income / (loss)			$	11,243			$	0.08			$	(21,656	)		$	(0.54	)
	Adjustments:
		Loss from sale of vessels			-				0.00				10,404				0.26
		Write off of deferred financing fees			-				0.00				2,977				0.07
		Unrealized gain on derivative financial instruments			(483	)			(0.00	)			(38	)			(0.00	)
	Total adjustments				(483	)			(0.00	)			13,343				0.33
	Adjusted net income/ (loss)			$	10,760			$	0.08			$	(8,313	)		$	(0.21	)

Adjusted EBITDA

			For the three months ended September 30,								For the nine months ended September 30,
In thousands of U.S. dollars			2013				2012				2013				2012
Net income / (loss)			$	667			$	(12,511	)		$	11,243			$	(21,656	)
	Financial expenses			448				4,108				2,323				6,583
	Unrealized gain on derivative financial instruments			(118	)			(38	)			(483	)			(38	)
	Financial income			(400	)			(4	)			(950	)			(6	)
	Depreciation			6,377				3,389				16,665				10,213
	Amortization of restricted stock			3,856				892				6,738				2,598
	Loss from sale of vessels			-				5,879				0				10,404
	Adjusted EBITDA		$	10,830			$	1,715			$	35,536			$	8,098

Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for tanker vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.