Scorpio Tankers slides into red

Scorpio Tankers slides into red

Monaco-based tanker owner Scorpio Tankers has plunged into a net loss of USD 29.7 million for the three months ended December 31, 2016, compared to a net income of USD 34.2 million seen in the same quarter a year earlier.

The company’s revenue for the quarter also decreased to USD 106 million from USD 178.3 million reported in the fourth quarter of 2015.

Time Charter Equivalent (TCE) revenue dropped to USD 105.6 million at the end of the period from USD 178.1 million, driven by a decrease in overall time charter equivalent revenue per day to USD 12,465 per day from USD 21,057 for the three months ended December 31, 2016 and 2015, respectively.

For the full year Scorpio Tankers recorded a net loss of USD 24.9 million, against a net income of USD 217.7 million seen in the year ended December 31, 2015, while its revenue in the respective periods fell to USD 522.7 million from USD 755.7 million.

In December 2016, the company entered into agreements to bareboat-in seven Handymax ice-class 1A product tankers. The agreements include purchase options, which can be exercised through December 31, 2018. If the purchase options are not exercised, the company said that the bareboat-in agreements are set to expire on March 31, 2019.

Three of the vessels were previously time chartered-in by the company for USD 15,600 per day. These time charter-in contracts were cancelled in January 2017 and replaced by the new bareboat contracts at a rate of USD 7,500 per day. The remaining four vessels will be chartered-in, on a bareboat basis, for USD 6,000 per day. Two of these were delivered in February 2017 and the remaining two are expected to be delivered within the first quarter of 2017.

Following the end of 2016, the company received a commitment for a credit facility of up to USD 81.4 million from DVB Bank SE in January 2017 to refinance its previous facility with DVB Bank SE. The new credit facility, which will be used to refinance the existing indebtedness on four product tankers, has a final maturity of December 2021.

In the same month, the company secured commitments from a group of financial institutions led by Macquarie Bank Limited for a total loan facility of up to USD 172 million to partially finance the purchase of eight MR product tankers that are currently under construction at Hyundai Mipo Dockyard. 

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