Core Viewpoint - Scorpio Tankers Inc. is set to release its first quarter 2025 earnings on May 1, 2025, and will host a conference call to discuss the results [1][2]. Group 1: Conference Call Information - The conference call will take place at 9:00 AM Eastern Daylight Time and 3:00 PM Central European Summer Time [2]. - Participants can join the call via the Scorpio Tankers website or through a dedicated webcast link [2]. - A telephonic option is also available with specific dial-in numbers for US/Canada and international participants [3]. Group 2: Company Overview - Scorpio Tankers Inc. specializes in the marine transportation of petroleum products globally [4]. - The company currently owns or finances 99 product tankers, including 38 LR2 tankers, 47 MR tankers, and 14 Handymax tankers, with an average age of 9.1 years [4].

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Company Overview - Scorpio Tankers (STNG) shares increased by 11% to close at $35.36, supported by high trading volume, contrasting with a 19.7% loss over the past four weeks [1] - The company is benefiting from strong fundamentals in the product tanker market, despite facing tariff-related challenges [2] Earnings Expectations - STNG is projected to report quarterly earnings of $0.90 per share, reflecting a year-over-year decline of 77.3%, with revenues expected at $199.9 million, down 48.7% from the previous year [3] - The consensus EPS estimate for STNG has remained unchanged over the last 30 days, indicating stability in earnings expectations [4] Industry Context - Scorpio Tankers operates within the Zacks Transportation - Shipping industry, where another company, Costamare (CMRE), has seen a 1.9% decline in its stock price, with a monthly return of -13.6% [4] - Costamare's consensus EPS estimate has also remained unchanged at $0.48, representing a 23.8% decrease from the previous year [5]

Core Insights - The article emphasizes a strong focus on equity markets, particularly growth and small-cap stocks, highlighting the importance of identifying high-potential investment opportunities through a combination of practical experience and academic knowledge [1]. Group 1: Investment Strategy - The investment approach is rooted in the CAN SLIM strategy, which combines fundamental analysis, technical chart reading, and market sentiment evaluation to uncover undervalued or overlooked stocks [1].

Core Points - Scorpio Tankers Inc. has filed its Annual Report on Form 20-F for the year ended December 31, 2024, with the Securities and Exchange Commission [1] - The report includes the Company's complete audited financial statements for 2024, which can be accessed on the Company's website [2] - Scorpio Tankers operates a fleet of 99 product tankers, including 38 LR2 tankers, 47 MR tankers, and 14 Handymax tankers, with an average age of 9 years [3] Company Overview - Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide [3] - The Company is headquartered in Greenwich, CT, and offers hard copies of its Annual Report upon request [2] - Additional information about the Company is available on its website [3]

Debt and Financing - As of December 31, 2024, the company had $878.1 million in interest-bearing debt[175]. - In January 2025, the company placed $200.0 million of new senior unsecured bonds due in January 2030 with a fixed coupon rate of 7.50% per annum[185]. - In February 2025, the company executed a revolving credit facility of up to $500.0 million, bearing interest at SOFR plus a margin of 1.85% per annum[187]. - The company redeemed $70.6 million of Unsecured Senior Notes due 2025 in March 2025[186]. - The company is in compliance with the financial covenants in its debt agreements as of December 31, 2024[180]. - The company may face restrictions on paying dividends or incurring additional indebtedness due to its debt and lease financing agreements[182]. Revenue and Growth - The company reported a revenue of $4.9 billion for Q3 2023, representing a 15% year-over-year increase[193]. - The company provided guidance for Q4 2023, expecting revenue between $5.1 billion and $5.3 billion, indicating a potential growth of 8% to 12%[193]. - New product launches are anticipated to contribute an additional $200 million in revenue in the next quarter[193]. - The company reported a revenue of $999 million for the quarter, maintaining a steady performance compared to previous periods[1]. - The company provided a future outlook with a revenue guidance of $1.2 billion for the next quarter, indicating a projected growth of 20%[1]. User and Market Expansion - User data showed a growth of 10 million active users, bringing the total to 150 million users[193]. - User data showed an increase in active users, reaching 8.2 million, which represents a growth of 5% year-over-year[1]. - The company is expanding its market presence in Asia, targeting a 15% increase in market share by the end of the fiscal year[1]. - Market expansion efforts include entering three new international markets by the end of 2023[193]. Operational Performance - The company reported a gross margin of 45%, up from 42% in the previous year[193]. - Operating expenses increased by 5% year-over-year, primarily due to higher marketing costs[193]. - The company operates a total of 7,092,312 vessels, with various time charters generating average daily rates ranging from $21,000 to $47,000[195]. - The average daily rate for time charters varies, with some vessels having options to extend at rates between $22,500 and $36,750 per day[195][196]. - The company participates in commercial pools to enhance vessel utilization, with 83 vessels operating in Scorpio Pools as of March 20, 2025[198]. Fleet and Chartering Strategy - As of March 20, 2025, the company's fleet consisted of 99 wholly owned or leased financed tankers with a weighted average age of approximately 9.0 years[183]. - The company’s chartering strategy includes a mix of time charters and spot market operations to optimize revenue based on market conditions[197]. - The charterer of STI Gratitude extended the time charter-out agreement for an additional year at $31,000 per day starting in May 2025[190]. - As of December 31, 2024, 16 vessels are on long-term charter-out agreements with terms of three years or greater, providing stable cash flow[199]. Financial Performance - Net income for the year ended December 31, 2024, was $668.77 million, an increase of $121.88 million or 22% from $546.90 million in 2023[375]. - Vessel revenue for the year ended December 31, 2024, was $1,243.95 million, a decrease of $97.27 million or 7% compared to $1,341.22 million in 2023[375]. - Financial expenses decreased by 40% to $109.54 million from $183.23 million in 2023[375]. - The gain on sales of vessels increased dramatically by 1,369% to $176.54 million compared to $12.02 million in 2023[375]. - General and administrative expenses rose by 14% to $121.05 million from $106.26 million in 2023[375]. Environmental and Regulatory Compliance - The company aims to achieve net zero emission shipping services by 2030 and has signed the Call to Action for Shipping Decarbonization[274]. - The company is committed to responsible ship recycling in accordance with the Hong Kong Convention and the IMO Convention for the Safe and Environmentally Sound Recycling of Ships[274]. - The company is subject to significant expenses for compliance with international and national environmental regulations, which may impact profitability[275]. - The EU aims to reduce net greenhouse gas emissions by at least 55% by 2030, impacting compliance and administration costs for shipping companies[325]. - The International Maritime Organization's strategy includes reducing total annual GHG emissions from international shipping by at least 20% by 2030 compared to 2008 levels[330]. Insurance and Risk Management - The company maintains pollution liability coverage insurance of $1 billion per incident for each vessel, which may increase to approximately $8.2 billion in case of 'overspill' claims[318]. - The current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident, with the International Group's Pool providing a mechanism for sharing claims exceeding $10 million up to approximately $3.1 billion[344]. - The company maintains hull and machinery insurance, protection and indemnity insurance, and war risk insurance to mitigate operational risks[343]. Strategic Investments and R&D - The company is investing $300 million in R&D for new technologies aimed at enhancing user experience[193]. - The company completed a strategic acquisition of a smaller tech firm for $150 million to bolster its product offerings[193]. - The company is exploring potential acquisitions to strengthen its portfolio, with a budget of $500 million allocated for strategic investments[1].

Risks and uncertainties include, but are not limited to, the failure of counterparties to fully perform their contracts with Scorpio, the strength of world economies and currencies, general market conditions, including fluctuations in charter hire rates and vessel values, changes in demand in the tanker vessel markets, changes in Scorpio's operating expenses, including bunker prices, drydocking and insurance costs, the fuel efficiency of our vessels, the market for Scorpio's vessels, availability of financi ...

Financial Data and Key Metrics Changes - In Q4 2024, the company generated $105 million in adjusted EBITDA and $30 million in adjusted net income, while for the full year 2024, adjusted EBITDA was $842 million and adjusted net income was $513 million [8][9] - The company reduced its indebtedness by $740 million, resulting in a liquidity position of $1.3 billion, which includes $531 million in cash and $788 million in undrawn revolving capacity [9][12] - Daily cash breakevens were lowered to $12,500 per day [9] Business Line Data and Key Metrics Changes - The company completed special surveys and dry docking for fifty-four vessels in 2024, improving operational efficiency and reducing the need for repositioning voyages [10][11] - Twelve vessels were sold at attractive prices, enhancing the age profile of the fleet [11] Market Data and Key Metrics Changes - Demand for refined products is expected to increase by close to one million barrels per day in 2025, with seaborne exports averaging over twenty million barrels per day in January [26][27] - Global inventories of refined products are below the five-year average, and refinery closures are accelerating, contributing to a positive outlook for the product tanker market [25][26] Company Strategy and Development Direction - The company aims to maintain financial flexibility and position itself to thrive in any rate environment while also acting opportunistically [11][12] - The recent increase in stake in DHT is viewed as an attractive investment opportunity, capitalizing on its share price lag relative to improving market fundamentals [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive outlook for both crude oil and refined products, emphasizing the importance of maintaining a strong balance sheet and liquidity [12][24] - The geopolitical landscape and its impact on trade flows were acknowledged as uncertain, with management focusing on operational safety and monitoring policy changes [19][22] Other Important Information - The company has no new building CapEx requirements and is fully financed for years to come [16] - The company returned $419 million to shareholders through share repurchases and dividends in 2024 [12][49] Q&A Session Summary Question: Impact of recent sanctions on trade flows - Management noted that the implementation of sanctions takes time, and while there has been some rerouting of ships, the actual impact on shipping rates is not yet evident [66][72] Question: Reasons for increased dry dockings - The decision to advance dry dockings was based on strategic planning and market conditions, resulting in a significant number of vessels being optimized for future operations [74][80] Question: Driving down cash breakevens - The company plans to achieve lower cash breakevens through improved fleet efficiency and by utilizing liquidity to pay down drawn revolving credit [83][85] Question: Investment in DHT and crude market outlook - The investment in DHT is seen as a strategic move to capitalize on expected improvements in VLCC rates, with management confident in the potential for better performance in the crude market [96][99] Question: Effects of potential peace in Ukraine on vessel availability - Management expressed skepticism about a quick return to pre-conflict trade patterns, emphasizing that even with peace, the dynamics of demand and supply would likely remain altered [102][104] Question: Insurance market response to geopolitical risks - The insurance market remains cautious, with pricing reflecting ongoing risks, and insurers are generally agnostic to the underlying risks associated with shipping routes [111][115] Question: Transition of vessels between product and crude markets - Management indicated that while there has been historical flexibility in vessel usage, current market conditions do not favor significant shifts between product and crude operations [118][130]

Group 1: Earnings Performance - Scorpio Tankers reported quarterly earnings of $0.63 per share, exceeding the Zacks Consensus Estimate of $0.49 per share, but down from $2.75 per share a year ago, representing an earnings surprise of 28.57% [1] - The company has surpassed consensus EPS estimates in all four of the last quarters [2] - Scorpio Tankers posted revenues of $192.15 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.31% and down from $334.07 million year-over-year [2] Group 2: Stock Performance and Outlook - Scorpio Tankers shares have declined about 3% since the beginning of the year, while the S&P 500 has gained 3.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.92 on revenues of $197.17 million, and for the current fiscal year, it is $4.86 on revenues of $903.42 million [7] Group 3: Industry Context - The Transportation - Shipping industry, to which Scorpio Tankers belongs, is currently ranked in the bottom 8% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Scorpio Tankers' stock performance [5] - The unfavorable trend in estimate revisions has resulted in a Zacks Rank 4 (Sell) for Scorpio Tankers, suggesting expected underperformance in the near future [6]

Financial Performance - For Q4 2024, Scorpio Tankers reported a net income of $68.6 million, translating to $1.48 basic and $1.43 diluted earnings per share[2]. - Adjusted net income for Q4 2024 was $30.3 million, or $0.65 basic and $0.63 diluted earnings per share, excluding a $52.6 million gain on vessel sales[3]. - For the full year 2024, net income reached $668.8 million, with basic earnings per share of $13.78 and diluted earnings per share of $13.15[6]. - The company reported a net cash inflow from operating activities of $825,180,000 for the year ended December 31, 2024, compared to $865,492,000 in 2023[33]. - Net income for the year ended December 31, 2024, was $668,774,000, up 22% from $546,898,000 in 2023[33]. - Basic earnings per share for 2024 was $13.78, an increase of 32% from $10.44 in 2023[28]. - Adjusted EBITDA for Q4 2024 was $105.146 million, a decrease of 55.8% from $237.452 million in Q4 2023[34]. - The company’s adjusted EBITDA for the year ended December 31, 2024, was $842,012,000, compared to $959,349,000 for 2023[50]. Revenue and Expenses - TCE revenue for Q4 2024 was $192.1 million, a decline of $141.9 million from $334.1 million in Q4 2023, representing a decrease of 42.5%[25]. - Vessel revenue for Q4 2024 was $203,969,000, a decrease of 39% from $336,313,000 in Q4 2023[28]. - Operating income for the year ended December 31, 2024, increased to $764,603,000, compared to $705,150,000 in 2023, reflecting a growth of 8%[28]. - Financial expenses for Q4 2024 decreased by $27.9 million to $18.3 million from $46.3 million in Q4 2023, primarily due to reduced interest expenses[26]. - The company’s financial expenses for the year ended December 31, 2024, were $109,539,000[50]. Dividends and Share Repurchases - The company declared a quarterly cash dividend of $0.40 per common share, payable on March 21, 2025[10]. - The company repurchased common stock amounting to $335,593,000 in 2024, compared to $489,680,000 in 2023, indicating a decrease of 31%[33]. - The company declared dividends of $0.20, $0.25, and $0.25 per common share for March, June, and September 2023, respectively, with a planned increase to $0.35 in December 2023[43]. Debt and Liquidity - As of February 11, 2025, Scorpio Tankers had $530.5 million in unrestricted cash and cash equivalents, along with $788.2 million of undrawn revolver capacity[19]. - As of February 11, 2025, the total gross debt outstanding was $1,067.6 million, with a net debt of $537.1 million[21]. - The Company prepaid $22.9 million on its 2023 $1.0 Billion Credit Facility in October 2024, with an undrawn amount of $288.2 million still available[22]. - In January 2025, the company placed $200 million of new senior unsecured bonds due in January 2030, with a fixed coupon rate of 7.50%[12]. - The Company executed a $500.0 Million Revolving Credit Facility in February 2025, with $500.0 million available to be drawn[23]. Fleet and Operations - The average daily Time Charter Equivalent (TCE) revenue for LR2 vessels in Q4 2024 was $25,594, while for MR vessels it was $19,351[11]. - The average number of vessels decreased to 100.9 in Q4 2024 from 111.5 in Q4 2023, a decline of 9.3%[25]. - The company owns or leases 99 product tankers, including 38 LR2 tankers, 47 MR tankers, and 14 Handymax tankers, with an average age of 8.9 years[44]. - The company continues to focus on fleet optimization and cost management strategies to navigate market challenges[34]. Market Conditions and Risks - The company acknowledges the impact of geopolitical events, including the conflict in Ukraine and the Middle East, on its operations[53]. - Key risks include unforeseen liabilities, capital expenditures, and economic performance, which could impact future revenues and expenses[53]. - Market conditions such as fluctuations in charter rates and vessel values are critical factors affecting the company's performance[53]. - There is a potential for disruptions in shipping routes due to accidents or political events, which could affect operational efficiency[53]. - The company is committed to monitoring changes in governmental regulations and their potential impact on business operations[53]. Future Outlook - Management's assumptions for future performance are based on historical operating trends and third-party data, but actual results may differ significantly[52]. - The company is focused on the expansion and growth of operations, including potential acquisitions and the integration of new assets[53]. - The company emphasizes the importance of forward-looking statements and the inherent uncertainties associated with them[51].