Scorpio Tankers Inc. Announces Financial Results for the Fourth Quarter of 2018, Declaration of a Quarterly Dividend, and Notice for the Redemption of its 8.25% Senior Unsecured Notes due June 2019

Monaco - Feb. 14, 2019

Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers", or the "Company") today reported its results for the three months and year ended December 31, 2018. The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.10 per share on the Company’s common stock and that it intends to redeem in full its 8.25% Senior Unsecured Notes, which are scheduled to mature in June 2019.

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 January 18, 2019.

Results for the three months ended December 31, 2018 and 2017
For the three months ended December 31, 2018, the Company's adjusted net loss (see Non-IFRS Measures section below) was $17.4 million, or $0.38 basic and diluted loss per share, which excludes from the net loss a $0.3 million, or $0.01 per basic and diluted share, write-off of deferred financing fees. For the three months ended December 31, 2018, the Company had a net loss of $17.7 million, or $0.38 basic and diluted loss per share.

For the three months ended December 31, 2017, the Company's adjusted net loss (see Non-IFRS Measures section below) was $39.2 million, or $1.38 basic and diluted loss per share, which excludes from the net loss (i) $1.3 million of transaction costs related to the merger with Navig8 Product Tankers Inc ("NPTI") and (ii) a $1.0 million write-off of deferred financing fees. The adjustments resulted in an aggregate reduction of the Company’s net loss by $2.3 million, or $0.08 per basic and diluted share. For the three months ended December 31, 2017, the Company had a net loss of $41.5 million, or $1.46 basic and diluted loss per share.

Results for the year ended December 31, 2018 and 2017
For the year ended December 31, 2018, the Company's adjusted net loss was $158.7 million (see Non-IFRS Measures section below), or $4.56 basic and diluted loss per share, which excludes from the net loss (i) an aggregate loss of $17.8 million recorded on the Company's exchange of an aggregate of $203.5 million of its convertible notes in the second and third quarters of 2018, (ii) a $13.2 million write-off of deferred financing fees, and (iii) $0.3 million of transaction costs related to the merger with NPTI. The adjustments resulted in an aggregate reduction of the Company's net loss by $31.3 million or $0.90 per basic and diluted share. For the year ended December 31, 2018, the Company had a net loss of $190.1 million, or $5.46 basic and diluted loss per share.

For the year ended December 31, 2017, the Company's adjusted net loss was $101.7 million (see Non-IFRS Measures section below), or $4.72 basic and diluted loss per share, which excludes from the net loss (i) a $23.3 million loss on sales of vessels, (ii) $36.1 million of transaction costs related to the merger with NPTI, (iii) a $5.4 million gain recorded on the purchase of the four NPTI subsidiaries that own four LR1 tankers, and (iv) a $2.5 million write-off of deferred financing fees. The adjustments resulted in an aggregate reduction of the Company's net loss by $56.5 million, or $2.62 per basic and diluted share. For the year ended December 31, 2017, the Company had a net loss of $158.2 million, or $7.35 basic and diluted loss per share.

Intention to redeem all of the Company's 8.25% Senior Unsecured Notes due June 2019
The Company has announced that it has issued a notice of redemption for all $57,500,000 aggregate principal amount of its 8.25% Senior Unsecured Notes due June 2019 (the "Senior Notes Due June 2019") to be redeemed on March 18, 2019 (the "Redemption Date"). The redemption price of the Senior Notes Due June 2019 is equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the Redemption Date. A notice of redemption is being distributed to all registered holders of the Senior Notes Due June 2019 by Deutsche Bank Trust Company Americas.

January 2019 Reverse Stock Split
On January 18, 2019, the Company effected a one-for-ten reverse stock split. The Company's shareholders approved the reverse stock split and change in authorized common shares at the Company's special meeting of shareholders held on January 15, 2019. Pursuant to this reverse stock split, the total number of authorized common shares was reduced to 150.0 million shares and common shares outstanding were reduced from 513,975,324 shares to 51,397,470 shares (which reflects adjustments for fractional share settlements). The par value was not adjusted as a result of the reverse stock split. All share and per share information contained in this press release has been retroactively adjusted to reflect the reverse stock split.

The Company believes that the increased market price for its common shares as a result of implementing the reverse stock split has and will improve the marketability and liquidity of the Company's common shares and will encourage interest and trading in the Company's common shares. In addition, the Company believes that a number of institutional investors and investment funds are reluctant to invest, and in some cases may be prohibited from investing, in lower-priced stocks and that brokerage firms are reluctant to recommend lower-priced stocks to their clients. By effecting a reverse stock split, the Company believes it may be able to raise the market price of its common shares to a level where its common shares could be viewed more favorably by potential investors. Other investors may also be dissuaded from purchasing lower-priced stocks because brokerage commissions, as a percentage of the total transaction, tend to be higher for lower-priced stocks. A higher share price after a reverse stock split could alleviate this concern.

There can be no assurance that the reverse stock split will achieve any of the desired results.

Declaration of Dividend
On February 13, 2019, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on or about March 28, 2019 to all shareholders of record as of March 13, 2019 (the record date). As of February 13, 2019, there were 51,397,470 common shares outstanding.

Summary of Other Recent and Fourth Quarter Significant Events

Below is a summary of the average daily Time Charter Equivalent (TCE) revenue (see Non-IFRS Measures section below) and duration for voyages fixed for the Company's vessels thus far in the first quarter of 2019 as of the date hereof (See footnotes to 'Other operating data' table below for the definition of daily TCE revenue):

-- For the LR2s in the pool: approximately $24,000 per day for 60% of the days.
-- For the LR1s in the pool: approximately $19,000 per day for 55% of the days.
-- For the MRs in the pool: approximately $17,000 per day for 55% of the days.
-- For the ice-class 1A and 1B Handymaxes in the pool: approximately $18,000 per day for 50% of the days.

Below is a summary of the average daily TCE revenue earned on the Company's vessels during the fourth quarter of 2018:

-- For the LR2s in the pool: $15,948 per revenue day.
-- For the LR1s in the pool: $13,548 per revenue day.
-- For the MRs in the pool: $14,338 per revenue day.
-- For the ice-class 1A and 1B Handymaxes in the pool: $14,749 per revenue day.

During November 2018, December 2018 and January 2019, the Company repurchased 1,351,265 of its common shares at an average price of $17.20 per share under its Securities Repurchase Program.

From August 2018 through November 2018, the Company entered into agreements with two separate suppliers to retrofit a total of 77 of the Company's tankers with Exhaust Gas Cleaning Systems ("Scrubbers"), which are expected to be installed throughout 2019 and 2020. The Company also obtained options to retrofit 18 additional tankers under these agreements. The total estimated investment for these systems, including estimated installation costs, is expected to be between $2.0 and $2.5 million per vessel and the Company is currently in discussions with potential lenders to finance a portion (approximately 60-70%) of these investments. The Company's estimates of future payments and offhire days under these agreements are described below under the heading Drydock, Scrubber and Ballast Water Treatment Update.

In December 2018, the Company paid a quarterly cash dividend with respect to the fourth quarter of 2018 on the Company's common stock of $0.10 per share.

In October 2018, the Company closed on the previously announced agreement to refinance seven of its vessels through a $157.5 million lease financing arrangement. This transaction is described below and was part of the Company's previously announced refinancing initiatives.

In October 2018, the Company raised net proceeds of approximately $319.6 million in an underwritten public offering of 18.2 million shares of common stock (including 2.0 million shares of common stock issued when the underwriters partially exercised their overallotment option to purchase additional shares) at a public offering price of $18.50 per share. Scorpio Bulkers Inc., or SALT, and Scorpio Services Holding Limited, or SSH, each a related party, purchased 5.4 million common shares and 0.5 million common shares, respectively, at the public offering price. $157.5 Million Sale and Leaseback
In July 2018, the Company agreed to sell and leaseback six MR product tankers (STI San Antonio, STI Benicia, STI St. Charles, STI Yorkville, STI Mayfair and STI Duchessa) and one LR2 product tanker (STI Alexis) to an international financial institution. The borrowing amount under the arrangement was $157.5 million in aggregate, and these agreements, which have been accounted for as financing arrangements, closed in October 2018. In September 2018, the Company repaid the outstanding indebtedness for two vessels consisting of $14.2 million on the HSH Credit Facility and $13.6 million on the K-Sure Credit Facility, in advance of the October closing of these transactions. Upon closing, the remaining proceeds were partially utilized to repay the outstanding indebtedness of $59.2 million on the 2016 Credit Facility and the outstanding indebtedness of $25.8 million on the DVB 2017 Credit Facility for the remaining five vessels.

Each agreement is for a fixed term of seven years, and the Company has options to purchase the vessels beginning at the end of the third year of each agreement. The leases bear interest at LIBOR plus a margin of 3.0% per annum and will be repaid in equal quarterly principal installments of $0.5 million per MR and $0.6 million for the LR2. Each agreement also has a purchase obligation at the end of the seventh year. The Company is subject to certain additional terms and conditions under this arrangement, including financial covenants, which are similar to those set forth in its existing lease financing arrangements.

$250 Million Securities Repurchase Program
In May 2015, the Company's Board of Directors authorized a Securities Repurchase Program to purchase up to an aggregate of $250 million of the Company's securities which, in addition to its common shares, currently consist of its (i) Convertible Notes due 2019, which were issued in June 2014, (ii) Unsecured Senior Notes Due 2020 (NYSE: SBNA), which were issued in May 2014, (iii) Senior Notes Due June 2019 (NYSE: SBBC), which were issued in March 2017, and (iv) Convertible Notes due 2022, which were issued in May and July 2018.

Since January 2018 through the date of this press release, the Company has acquired an aggregate of 1,351,265 of its common shares at an average price of $17.20 per share; the repurchased shares are being held as treasury shares. There are 51,397,470 shares outstanding as of February 13, 2019.

As of the date hereof, the Company has the authority to purchase up to an additional $123.8 million of its securities under its Securities Repurchase Program. The Company may repurchase its securities 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 Securities Repurchase Program to repurchase any of its securities.

Diluted Weighted Number of Shares
Diluted earnings per share is determined using the if-converted method. Under this method, the Company assumes that its Convertible Notes due 2019 and Convertible Notes due 2022 (which were issued in June 2014 and May 2018, respectively) were converted into common shares at the beginning of each period and the interest and non-cash amortization expense associated with these notes of $6.0 million and $23.5 million during the three months and year ended December 31, 2018, respectively, were not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive.

For the three months and year ended December 31, 2018, the Company's basic weighted average number of shares was 46,382,795 and 34,824,311, respectively. The weighted average number of shares, both diluted and under the if-converted method, were anti-dilutive for the three months and year ended December 31, 2018, respectively, as the Company incurred net losses.

As of the date hereof, the Convertible Notes due 2019 and Convertible Notes due 2022 are not eligible for conversion.

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Scorpio Tankers Inc. press release