Scorpio Tankers (STNG) Capital Link’s 2026 Virtual Corporate Presentation Series summary

Market Overview and Recent Trends

• Product tanker rates have surged, with LR2s earning over $50,000/day and MRs near $30,000/day, reflecting tightening supply and robust demand across all major regions.

• Time-charter demand is strong and diversified, with major players securing long-term charters, indicating broad market confidence.

• Geopolitical events, including Red Sea disruptions, Russia-Ukraine conflict, and sanctions on Russian and Venezuelan exports, have increased inefficiencies and supported higher rates.

• Ton-mile demand has risen 20% since 2019 due to refinery closures in the West and new capacity in the Middle East, leading to longer voyages.

• The order book stands at 19% of the fleet, but effective supply growth is limited by an aging fleet and a high share of sanctioned or crude-trading vessels.

Financial Performance and Capital Allocation

• Net cash position is $383 million, with total liquidity of $1.7 billion and trailing 12-month EBITDA of $520 million.

• Cash break-even is $11,000/day, enabling positive cash flow even in weak markets; at $30,000/day, free cash flow would reach $630 million.

• Over $2.5 billion in debt repaid and $1 billion returned to shareholders via buybacks and dividends in recent years.

• Dividend policy prioritizes regular, sustainable increases, with no plans for extraordinary payouts; buybacks are opportunistic and not rushed.

• Continued focus on optimizing the balance sheet, lowering leverage, and reducing cost of debt.

Fleet Strategy and Renewal

• Operates the world's largest product tanker fleet, with 93 modern, fuel-efficient vessels averaging 9.8 years in age and 8 newbuilds on order.

• Recent strategy includes selling older ships at strong prices and reinvesting in new builds to maintain a young, scalable fleet.

• Eight new builds are on order, with $558 million in remaining CapEx through 2028; no rush for further renewal, but opportunistic approach to asset value securitization.

• Several vessels are chartered out on multi-year contracts at competitive rates, with new charters commencing in 2025 and 2026.

• By 2028, 31% of the global fleet will be over 20 years old, likely leading to increased scrapping and further tightening supply.