MONACO--(GLOBE NEWSWIRE - May 2, 2023) - Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers" or the "Company") today reported its results for the three months ended March 31, 2023. The Company also announced that its board of directors (the "Board of Directors") has declared a quarterly cash dividend of $0.25 per common share.

For the three months ended March 31, 2023, the Company had net income of $193.2 million, or $3.40 basic and $3.27 diluted earnings per share.

For the three months ended March 31, 2023, the Company had adjusted net income (see Non-IFRS Measures section below) of $195.6 million, or $3.44 basic and $3.31 diluted earnings per share, which excludes from net income a $2.3 million, or $0.04 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on certain lease financing obligations and related extinguishment costs.

For the three months ended March 31, 2022, the Company had a net loss of $84.4 million, or $1.52 basic and diluted loss per share.

For the three months ended March 31, 2022, the Company had an adjusted net loss (see Non-IFRS Measures section below) of $14.9 million, or $0.27 basic and diluted loss per share, which excludes from the net loss (i) a $67.7 million, or $1.22 per basic and diluted share, aggregate write-down of vessels held for sale and loss on the sale of vessels, and (ii) $1.9 million, or $0.03 per basic and diluted share, write-off or acceleration of the amortization of deferred financing fees on the debt or lease financing obligations relating to these vessel sales and related debt extinguishment costs.

On May 1, 2023, the Board of Directors declared a quarterly cash dividend of $0.25 per common share, with a payment date of June 30, 2023 to all shareholders of record as of June 13, 2023 (the record date). As of May 1, 2023, there were 59,455,820 common shares of the Company outstanding.

The Company announced that Brian Lee, the Chief Financial Officer, will be stepping down at the end of September 2023 and will be replaced by Christopher Avella. Mr. Lee has been the Chief Financial Officer of Scorpio Tankers since the start of the Company in 2010.

Mr. Avella has been with Scorpio Tankers since 2010. He is currently the Chief Accounting Officer (since 2021) and Controller (since 2014). He also served as the Chief Financial Officer of Hermitage Offshore Services Ltd. between 2019 and 2021. Prior to joining Scorpio Tankers, he was with Ernst & Young in its audit practice from 2002 through 2006 and its transaction advisory services practice from 2006 through 2010 where he was a senior manager. Mr. Avella is a certified public accountant and has a B.S. in accounting from Rutgers University, an M.B.A. from Seton Hall University, and an M.S. in finance from Georgetown University.

Emanuele Lauro, Chairman and Chief Executive Officer commented, “Brian’s leadership and experience has been instrumental in the growth and development of the Company over the last 13 years. He has been with us since the beginning and leaves the Company in its strongest financial position with a well-trained team poised to maintain high standards. While we will miss Brian’s unparalleled temperament and character, I am truly grateful for his contributions to the Company and wish him the best on a well-deserved retirement.”

•Below is a summary of the average daily Time Charter Equivalent ("TCE") revenue (see Non-IFRS Measures section below) and duration of contracted voyages and time charters for the Company's vessels (both in the pools and outside of the pools) thus far in the second quarter of 2023 as of the date hereof (See footnotes to "Other operating data" table below for the definition of daily TCE revenue):

(1)     Expected Revenue Days are the total number of calendar days in the quarter for each vessel, less the total number of expected off-hire days during the period associated with major repairs or drydockings. Consequently, Expected Revenue Days represent the total number of days the vessel is expected to be available to earn revenue. Idle days, which are days when a vessel is available to earn revenue, yet is not employed, are included in revenue days. The Company uses revenue days to show changes in net vessel revenues between periods.

•Below is a summary of the average daily TCE revenue earned by the Company's vessels during the first quarter of 2023:

•The Company is in discussions with a group of financial institutions for a term loan and revolving loan of up to the aggregate of $750.0 million to $1.0 billion. This facility is expected to bear interest at SOFR plus a margin of 1.95% per annum. The proceeds of this facility are expected to mainly be used to repay (and re-finance) more expensive lease financing, along with financing certain of the Company’s unencumbered vessels. The credit facility is subject to credit approval from the banks, customary conditions precedent, and negotiation and execution of definitive documentation.

•In March 2023, the Company entered into a time charter-out agreement on an LR2, STI Jermyn, for three years at a rate of $40,000 per day. This charter commenced in April 2023. During 2022 and so far in 2023, the Company has entered into a total of 15 time-charter out agreements (ten LR2s and five MRs), the terms of which are described in the fleet list below.

•In January 2023, the Company exercised the purchase options on STI Brooklyn, STI Rambla, STI Rose and STI Ville on the AVIC Lease Financing and repaid the aggregate outstanding lease obligation of $77.8 million as part of these transactions.

•In March 2023, the Company exercised the purchase option on STI Sanctity on the Ocean Yield Lease Financing and repaid the aggregate outstanding lease obligation of $27.8 million as part of this transaction.

•The Company has also given notice to exercise the purchase options on six LR2 product tankers and eight MR product tankers that are currently financed under lease financing arrangements (STI Steadfast, STI Supreme, STI Grace, STI Jermyn, STI Lavender, STI Lobelia, STI Magnetic, STI Marshall, STI Miracle, STI Magic, STI Mystery, STI Marvel, STI Mythic, and STI Magister). These repurchases are expected to occur in the second and third quarters of 2023 and result in an aggregate debt reduction of $352.7 million.

•The Company has executed or received commitments for three separate secured credit facilities for up to $391.5 million in aggregate. These facilities are expected to be collateralized by 22 vessels and bear interest at SOFR plus margins of between 1.90% and 1.975% per annum. The proceeds of these facilities are expected to be used to repay more expensive lease financing. $274.1 million has been drawn from two of these facilities as of the date of this press release.

•Since January 1, 2023 and through the date of this press release, the Company has repurchased an aggregate of 3,614,768 of its common shares in the open market at an average price of $52.22 per share.

•On May 1, 2023, the Board of Directors authorized to reset the 2023 Securities Repurchase Program up to an aggregate of $250 million of the Company’s securities.

•In March 2023, the Board of Directors appointed Ms. Sujata Parekh Kumar as an independent director to its Board of Directors. Ms. Kumar has over 40 years of experience in entrepreneurship and industry across a number of sectors including logistics, financial services, insurance, and shipping.

On February 15, 2023, the Board of Directors authorized a new Securities Repurchase Program (the "2023 Securities Repurchase Program") to purchase up to an aggregate of $250 million of the Company’s securities which, in addition to its common shares also currently consist of its Senior Unsecured Notes Due 2025 (NYSE: SBBA).

Below are purchases of the Company’s securities made in the first quarter and second quarters of 2023.

•From January 1, 2023 through February 15, 2023, the Company purchased an aggregate of 1,891,303 of its common shares in the open market at an average price of $50.27 per share. These purchases were made under the previous securities repurchase program, which ended on February 15, 2023.

•From February 16 through the date of this press release, the Company has purchased an aggregate of 1,723,465 of its common shares in the open market at an average price of $54.37 per share.

•On May 1, 2023, the Board of Directors authorized to reset the 2023 Securities Repurchase Program up to an aggregate of $250 million of the Company’s securities.

There is $250.0 million available under the 2023 Securities Repurchase Program as of May 1, 2023.

In January 2023, the Company exercised its purchase options on two MR product tankers (STI Brooklyn and STI Ville) and two LR2 product tankers (STI Rose and STI Rambla) which were previously financed on the AVIC Lease Financing. These purchases resulted in a debt reduction of $77.8 million.

In March 2023, the Company exercised the purchase option on STI Sanctity which was previously financed on the Ocean Yield Lease Financing. This purchase resulted in a debt reduction of $27.8 million.

In March 2023, the Company gave notice to exercise its purchase options on two LR2 product tankers that are currently financed under the 2021 CSSC Lease Financing (STI Grace and STI Jermyn), in addition to one LR2 product tanker (STI Lavender), and three MR product tankers (STI Magnetic, STI Marshall, and STI Miracle) which are currently financed under the $670.0 Million Lease Financing. All of these leases bear interest at LIBOR plus a margin of 3.50% per annum. The purchases are expected to occur in May 2023 and result in a debt reduction of $149.8 million.

In April 2023, the Company gave notice to exercise its purchase options on one LR2 product tanker (STI Lobelia), and five MR product tankers (STI Magic, STI Mystery, STI Marvel, STI Mythic, and STI Magister) which are currently financed under the $670.0 Million Lease Financing. These leases bear interest at LIBOR plus a margin of 3.50% per annum. The purchases are expected to occur in June 2023 and result in a debt reduction of $147.3 million.

The Company has executed or received commitments for three separate credit facilities for up to $391.5 million in aggregate (the "New Facilities").

The first credit facility (the "2023 $225.0 Million Credit Facility") is from a group of European financial institutions for a credit facility of up to $225.0 million. The 2023 $225.0 Million Credit Facility was executed in January 2023 and $184.9 million was drawn in February 2023 and $40.1 million was drawn in March 2023. Thirteen product tankers (STI Opera, STI Duchessa, STI Venere, STI Virtus, STI Aqua, STI Dama, STI Regina, STI San Antonio, STI Yorkville, STI Battery, STI Milwaukee, STI Madison, and STI Sanctity) were collateralized under this facility as part of these drawdowns. The 2023 $225.0 Million Credit Facility has a final maturity of five years from the signing date and bears interest at SOFR plus a margin of 1.975% per annum. The borrowings for the MRs are expected to be repaid in equal quarterly installments of $0.63 million per vessel for the first two years, and $0.33 million per vessel for the remaining term of the loan. The borrowings for the LR2s are expected to be repaid in equal quarterly installments of $0.8 million per vessel for the first two years, and $0.45 million per vessel for the remaining term of the loan. The remaining terms and conditions of the 2023 $225.0 Million Credit Facility, including financial covenants, are similar to those set forth in the Company’s existing credit facilities.

The second credit facility (the "2023 $49.1 Million Credit Facility") is from a North American financial institution for a credit facility of up to $49.1 million. The 2023 $49.1 Million Credit Facility was executed in February 2023 and was fully drawn in March 2023. Two LR2 product tankers, STI Rose and STI Rambla, were collateralized on this facility upon drawdown. This facility has a final maturity of five years from the drawdown date of each vessel and bears interest at SOFR plus a margin of 1.90% per annum. The borrowings are expected to be repaid in equal quarterly installments of $1.2 million in aggregate with a balloon payment at maturity. The terms and conditions of the 2023 $49.1 Million Credit Facility, including financial covenants, are similar to those set forth in the Company's existing credit facilities.

The third credit facility commitment (the "2023 $117.4 Million Credit Facility") is from a European financial institution for a credit facility of up to $117.4 million. The 2023 $117.4 Million Credit Facility is expected to be used to finance two Handymax product tankers, four MR product tankers and one LR2 product tanker. The 2023 $117.4 Million Credit Facility is expected to have a final maturity of five years from the drawdown date of each vessel and bear interest at SOFR plus a margin of 1.925% per annum. The terms and conditions of this credit facility, including financial covenants, will be similar to those set forth in the Company's existing credit facilities. The 2023 $117.4 Million Credit Facility is subject to customary conditions precedent, and the execution of definitive documentation, and is expected to close in the second quarter of 2023.

The proceeds of the New Facilities are expected to be used to repay more expensive lease financing.

The Company is in discussions with a group of financial institutions for a term loan and revolving loan (the “Credit Facility”) of up to the aggregate of $750.0 million to $1.0 billion. The Credit Facility is expected to consist of a 50% term loan and 50% revolving loan, have a final maturity of five years from the signing date (but not later than June 30, 2028), and bear interest at SOFR plus a margin of 1.95% per annum. Proceeds from the Credit Facility, primarily, are expected to be used to repay (and re-finance) more expensive lease financing, along with financing certain of the Company's unencumbered vessels. The terms and conditions, including financial covenants, of the Credit Facility are expected to be similar to the Company’s existing credit facilities. The Credit Facility is subject to credit approval from the banks, customary conditions precedent, and negotiation and execution of definitive documentation. There is no assurance that we will enter into the Credit Facility on the terms described above (which may be subject to change) or at all.

The computation of earnings or loss per share is determined by taking into consideration the potentially dilutive shares arising from the Company’s equity incentive plan. These potentially dilutive shares are excluded from the computation of earnings or loss per share to the extent they are anti-dilutive.

For the three months ended March 31, 2023, the Company’s basic weighted average number of shares outstanding was 56,834,813. For the three months ended March 31, 2023, the Company’s diluted weighted average number of shares outstanding was 59,111,952 which included the potentially dilutive impact of restricted shares issued under the Company's equity incentive plan.

The Company has scheduled a conference call on May 2, 2023 at 8:00 AM Eastern Daylight Time and 2:00 PM Central European Summer Time. The dial-in information is as follows:

US Dial-In Number: 1 (833) 630-1956

International Dial-In Number: +1 (412) 317-1837

Conference ID: 10178106

Participants should dial into the call 10 minutes before the scheduled time. 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.

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: https://edge.media-server.com/mmc/p/5d8emazp

As of April 27, 2023, the Company had $586.6 million in unrestricted cash and cash equivalents. Within the next two weeks, the Company is expected to receive approximately $100 million from the Scorpio tanker pools with respect to the monthly cash distribution for April. The Company is also expected to draw down approximately $117.4 million from a credit facility that has been committed but is pending closing (described above, under the heading "New Executed or Committed Financings").

Set forth below is a table summarizing the drydock, scrubber, and ballast water treatment system activity that occurred during the first quarter of 2023 and the estimated expected payments to be made, and offhire days that are expected to be incurred, for the Company's drydocks, ballast water treatment system installations, and scrubber installations through 2023 and 2024:

(1)    These costs include estimated cash payments for drydocks, ballast water treatment system installations and scrubber installations. These amounts include installment payments that are due in advance of the scheduled service and may be scheduled to occur in quarters prior to the actual installation. In addition to these installment payments, these amounts also include estimates of the installation costs of such systems.  The timing of the payments set forth are estimates only and may vary as the timing of the related drydocks and installations finalize. 

(2)    Represents the total estimated off-hire days during the period, including vessels that commenced work in a previous period.

(3)    Represents the number of vessels scheduled to commence drydock, ballast water treatment system, and/or scrubber installations during the period. It does not include vessels that commenced work in prior periods but will be completed in the subsequent period. The number of vessels in these tables may reflect a certain amount of overlap where certain vessels are expected to be drydocked and have ballast water treatment systems and/or scrubbers installed simultaneously.  Additionally, the timing set forth in these tables may vary as drydock, ballast water treatment system installation and scrubber installation times are finalized.

(a)    Includes one BWTS installation.

(b)    Includes three BWTS installations.

(c)    Includes five scrubber installations and one BWTS installation.

(d)    Includes seven scrubber installations.

Set forth below is a summary of the principal balances of the Company’s outstanding indebtedness as of the dates presented:

			In thousands of U.S. Dollars			Outstanding Principal as of December 31, 2022			Outstanding Principal as of March 31, 2023			Outstanding Principal as of April 27, 2023
1			Hamburg Commercial Credit Facility			$	33,732		$	32,909		$	32,909
2			Prudential Credit Facility			39,286			37,899			37,437
3			2019 DNB / GIEK Credit Facility			38,338			36,559			36,559
4			BNPP Sinosure Credit Facility			80,576			80,576			75,122
5			2020 $225.0 Million Credit Facility			37,765			36,482			36,482
6			2023 $225.0 Million Credit Facility (1)			—			225,000			216,525
7			2023 $49.1 Million Credit Facility (2)			—			49,088			49,088
8			Ocean Yield Lease Financing (3)			114,860			84,372			83,687
9			BCFL Lease Financing (LR2s)			68,310			65,598			64,733
10			CSSC Lease Financing			121,276			117,635			116,421
11			BCFL Lease Financing (MRs)			53,202			49,202			47,750
12			AVIC Lease Financing (4)			77,769			—			—
13			2020 CMBFL Lease Financing			38,090			37,279			37,279
14			2020 TSFL Lease Financing			40,607			39,777			39,777
15			2020 SPDBFL Lease Financing			83,511			81,887			81,887
16			2021 AVIC Lease Financing			84,635			82,822			82,822
17			2021 CMBFL Lease Financing			68,045			66,415			66,010
18			2021 TSFL Lease Financing			49,997			48,902			48,902
19			2021 CSSC Lease Financing			48,631			47,315			46,877
20			2021 $146.3 Million Lease Financing			133,699			130,404			127,109
21			2021 Ocean Yield Lease Financing			63,933			62,490			62,009
22			2022 AVIC Lease Financing			113,804			111,512			111,512
23			IFRS 16 - Leases - 3 MR			21,138			19,063			18,338
24			IFRS 16 - Leases - $670.0 Million			475,939			464,813			461,061
25			Unsecured Senior Notes Due 2025			70,571			70,571			70,571
			Gross debt outstanding			1,957,714			2,078,570			2,050,867
			Cash and cash equivalents			376,870			612,655			586,596
			Net debt			$	1,580,844		$	1,465,915		$	1,464,271

.

(1)    The 2023 $225.0 Million Credit Facility was executed in January 2023, with $184.9 million and $40.1 million drawn in February and March 2023, respectively. Thirteen product tankers (11 MRs and two LR2) were collateralized under this facility as part of these drawdowns. The 2023 $225.0 Million Credit Facility has a final maturity of five years from the signing date and bears interest at SOFR plus a margin of 1.975% per annum. The borrowings for the MRs are expected to be repaid in equal quarterly installments of $0.63 million per vessel for the first two years, and $0.33 million per vessel for the remaining term of the loan. The borrowings for the LR2s are expected to be repaid in equal quarterly installments of $0.8 million per vessel for the first two years, and $0.45 million per vessel for the remaining term of the loan. The remaining terms and conditions of the 2023 $225.0 Million Credit Facility, including financial covenants, are similar to those set forth in the Company’s existing credit facilities.

(2)    The 2023 $49.1 Million Credit Facility was executed in February 2023 and was fully drawn in March 2023. Two LR2 product tankers were collateralized on this facility upon drawdown. The 2023 $49.1 Million Credit Facility has a final maturity of five years from the drawdown date of each vessel and bears interest at SOFR plus a margin of 1.90% per annum. The borrowings are expected to be repaid in equal quarterly installments of $1.2 million in aggregate with a balloon payment at maturity. The terms and conditions of the 2023 $49.1 Million Credit Facility, including financial covenants, are similar to those set forth in the Company's existing credit facilities.

(3)    In September and October 2022, the Company gave notice to exercise the repurchase options on STI Sanctity, STI Steadfast, and STI Supreme on the Ocean Yield Lease Financing. In March 2023, the Company exercised the purchase option on STI Sanctity resulting in a debt reduction of $27.8 million. The remaining transactions are expected to occur in the second and third quarters of 2023 resulting in debt reductions of $27.8 million per vessel.

(4)    In January 2023, the Company exercised the repurchase options on STI Brooklyn, STI Rambla, STI Rose, and STI Ville on the AVIC Lease Financing and repaid the aggregate outstanding lease obligation of $77.8 million as part of these transactions.

Set forth below are the estimated expected future principal repayments on the Company's outstanding indebtedness as of March 31, 2023, which includes principal amounts due under the Company's secured credit facilities, lease financing arrangements, Senior Notes Due 2025, and lease liabilities under IFRS 16 (which also include actual scheduled payments made during the second quarter of 2023 through April 27, 2023):

(1)    Amounts represent the principal payments due on the Company’s outstanding indebtedness as of March 31, 2023.

(2)    Repayments include the Company's exercise of its purchase options on two LR2 product tankers (STI Grace and STI Jermyn) which are currently financed under the 2021 CSSC Lease Financing. These purchases are expected to occur in May 2023, and the aggregate outstanding lease liability is expected to be $46.9 million at the date of purchase.

(3)    Repayments include the Company's exercise of its purchase options on eight MR product tankers (STI Magnetic, STI Marshall, STI Miracle, STI Magic, STI Mystery, STI Marvel, STI Mythic, and STI Magister) and two LR2 product tankers (STI Lavender and STI Lobelia) which are currently financed under the IFRS 16 - Leases - $670.0 Million lease financing. These purchases are expected to occur in May and June 2023, and the aggregate outstanding lease liability is expected to be $250.2 million at the dates of purchase.

(4)    Repayments include the Company’s exercise of its purchase options on two LR2 product tankers (STI Steadfast, and STI Supreme). These vessels are currently financed under the Ocean Yield Lease Financing. The purchases are expected to occur in the second and third quarters of 2023 with a debt reduction of $27.8 million per vessel.

(5)    Repayments include (i) $15.0 million for the scheduled purchase options on three MR product tankers (STI Topaz, STI Ruby, and STI Garnet), which are currently financed under the BCFL Lease Financing (MRs); and (ii) $27.7 million for the scheduled maturity payments on the 2019 DNB / GIEK Credit Facility.

(6)    Repayments include (i) $10.2 million for the scheduled purchase options on two MR product tankers (STI Onyx and STI Amber), which are currently financed under the BCFL Lease Financing (MRs); and (ii) $28.0 million for the scheduled maturity payments on the Hamburg Commercial Credit Facility.

For the three months ended March 31, 2023, the Company recorded net income of $193.2 million compared to a net loss of $84.4 million for the three months ended March 31, 2022. The following were the significant changes between the two periods:

•TCE revenue, a Non-IFRS measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is 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 voyages, time charters, and pool charters), and it provides useful information to investors and management. The following table sets forth TCE revenue for the three months ended March 31, 2023 and 2022:

•TCE revenue for the three months ended March 31, 2023 increased by $205.1 million to $377.2 million, from $172.0 million for the three months ended March 31, 2022. Overall average TCE revenue per day increased to $37,500 per day during the three months ended March 31, 2023, from $15,415 per day during the three months ended March 31, 2022. The average number of vessels was 113.0 during the three months end March 31, 2023 as compared to 129.3 during the three months ended March 31, 2022. The decrease in the average number of vessels was due to the previously disclosed sales of 18 vessels during the year ended December 31, 2022.

◦TCE revenue for the three months ended March 31, 2023 reflected the continued strength in the product tanker market that began at the end of the first quarter of 2022 and has continued in 2023. Initially, the easing of COVID-19 restrictions around the globe, the conflict in Ukraine, and strengthening refining margins resulted in significant increases in ton-mile demand as trade routes shifted and volumes increased. More recently, volumes and trade routes continue to be impacted by the continued easing of COVID-19 restrictions, particularly in China, along with the implementation of sanctions on the export of Russian crude oil and refined petroleum products. These changes have accelerated a structural shift in the product tanker market that had been years in the making, where increasing demand for the seaborne transportation of refined petroleum products is outpacing the growth in the worldwide fleet of product tankers given a near record low orderbook for newbuilding vessels.

◦TCE revenue for the three months ended March 31, 2022 was subdued for most of the quarter which reflected the continued adverse market conditions that were brought on by the COVID-19 pandemic. The end of the quarter reflected an improving spot market for product tankers which was triggered by myriad factors including (i) the easing of COVID-19 restrictions around the globe which resulted in increased personal mobility and the demand for refined petroleum products; (ii) strengthening refining margins which, combined with low global refined petroleum product inventories, increased demand for the seaborne transportation of refined petroleum products, and; (iii) the volatility brought on by the conflict in Ukraine, which disrupted supply chains for crude oil and refined petroleum products, changing volumes and trade routes, and thus increased ton-mile demand for refined petroleum products.

The Company also had an increased number of vessels operating outside of the Scorpio pools during the three months ended March 31, 2023, which led to an increase in voyage revenue and voyage expenses for this period.

•Vessel operating costs for the three months ended March 31, 2023 decreased by $11.2 million to $73.7 million, from $84.8 million for the three months ended March 31, 2022. Vessel operating costs per vessel per day remained consistent at $7,244 per day for the three months ended March 31, 2023 as compared to $7,290 for the three months ended March 31, 2022. The aggregate reduction is due to the sale of 18 owned or lease financed vessels during the year ended December 31, 2022 (seven of which closed during the first quarter of 2022).

•Depreciation expense – owned or sale leaseback vessels for the three months ended March 31, 2023 decreased by $3.6 million to $40.5 million, from $44.1 million for the three months ended March 31, 2022. This decrease was attributable to the sale of 17 of the Company's owned or sale leaseback vessels during the year ended December 31, 2022 (16 of which were in the first quarter of 2022). These vessels were written down to their net realizable value upon being designated as held for sale, and depreciation expense ceased being recorded upon that designation.

•Depreciation expense - right of use assets for the three months ended March 31, 2023 decreased by $0.2 million to $9.5 million from $9.7 million for the three months ended March 31, 2022. Depreciation expense - right of use assets reflects the straight-line depreciation expense recorded under IFRS 16 - Leases. This decrease is attributable to the sale of one of the Company's right of use asset vessels. This vessel was written down to its net realizable value upon being designated as held for sale during the first quarter of 2022, and depreciation expense ceased being recorded upon that designation. The Company had four LR2s and 17 MRs that were accounted for under IFRS 16 - Leases during the three months ended March 31, 2023.

•General and administrative expenses for the three months ended March 31, 2023, increased by $9.8 million to $22.3 million, from $12.5 million for the three months ended March 31, 2022. This increase was primarily due to an increase in compensation related costs. Due to the increase in stock price and a recent grant, the amortization of the restricted stock awards are expected to increase general and administrative expenses by approximately $8.0 million per quarter in the upcoming quarters. The awards granted to employees vest ratably in years three, four, and five following the initial grant.

•Net loss on sales of vessels for the three months ended March 31, 2022 was $67.7 million. During the first quarter of 2022, the Company entered into agreements to sell 17 vessels, consisting of two LR2s, 12 LR1s, and three MRs. Seven of these sales closed within the first quarter of 2022 (six LR1s and one MR) and the remaining sales closed within the second and third quarters of 2022.

•Financial expenses for the three months ended March 31, 2023 increased by $5.5 million to $43.5 million, from $38.0 million for the three months ended March 31, 2022. This increase was primarily attributable to 400+ basis point increases in benchmark rates, primarily LIBOR, during the three months ended March 31, 2023 as compared to the three months ended March 31, 2022. This increase was partially offset by the overall reduction in the Company's average indebtedness to $2.0 billion from $3.1 billion during the three months ended March 31, 2023 as compared to the three months ended March 31, 2022, arising from the aforementioned sales of 18 vessels (and repayments of the related debt or lease financing obligations), the exercise of purchase options on 27 lease financed vessels (six in August 2022, 16 in December 2022, four in January 2023, and one in March 2023), the maturity of the Convertible Notes Due 2022 in May 2022 and the conversion of the Convertible Notes Due 2025 in December 2022. Additionally, the Company recorded $2.3 million of debt extinguishment related costs during the three months ended March 31, 2023, as compared to $1.9 million during the three months ended March 31, 2022. This was accompanied by an aggregate decrease of $5.3 million in the amortization of deferred financing fees and accretion on both the convertible notes and debt assumed in business combinations, which were $1.5 million during the three months ended March 31, 2023 as compared to $6.8 million during the three months ended March 31, 2022.

(1)     The computation of diluted earnings per share for the three months ended March 31, 2023 includes the effect of potentially dilutive unvested shares of restricted stock. The computation of diluted loss per share for the three months ended March 31, 2022 excludes the effect of potentially dilutive unvested shares of restricted stock and the Convertible Notes Due 2022 (which were repaid in full upon maturity in May 2022) and Convertible Notes Due 2025 (which were fully converted to common shares in December 2022) because their effect would have been anti-dilutive.

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

The Company's dividends paid during 2022 and 2023 were as follows:

On May 1, 2023, the Company's Board of Directors declared a quarterly cash dividend of $$0.25 per common share, with a payment date of June 30, 2023 to all shareholders of record as of June 13, 2023 (the record date). As of May 1, 2023, there were 59,455,820 common shares of the Company outstanding.

The ongoing military conflict in Ukraine has had a significant direct and indirect impact on the trade of refined petroleum products. This conflict has resulted in the United States, the United Kingdom, and the European Union countries, among other countries and jurisdictions, implementing sanctions and executive orders against citizens, entities, and activities connected to Russia. Some of these sanctions and executive orders target the Russian oil sector, including a prohibition on the import of oil from Russia to the United States or the United Kingdom, and the European Union's recent ban on Russian crude oil and petroleum products which took effect in December 2022 and February 2023, respectively. The Company cannot foresee what other sanctions or executive orders may arise that affect the trade of petroleum products. Furthermore, the conflict and ensuing international response has disrupted the supply of Russian oil to the global market, and as a result, the price of oil and petroleum products has experienced significant volatility. The Company cannot predict what effect the higher price of oil and petroleum products will have on demand, and it is possible that the current conflict in Ukraine could adversely affect the Company's financial condition, results of operations, and future performance.

Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns, lease finances or bareboat charters-in 113 product tankers (39 LR2 tankers, 60 MR tankers and 14 Handymax tankers) with an average age of 7.3 years. Additional information about the Company is available at the Company's website www.scorpiotankers.com, which is not a part of this press release.

This press release describes time charter equivalent revenue, or TCE revenue, adjusted net income or loss, and adjusted EBITDA, which are not measures prepared in accordance with IFRS ("Non-IFRS" measures). The Non-IFRS measures are presented in this press release as we believe that they provide investors and other users of our financial statements, such as our lenders, with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These Non-IFRS measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with IFRS.

The Company believes that the presentation of TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful to investors or other users of our financial statements, such as our lenders, because they facilitate the comparability and the evaluation of companies in the Company’s industry. In addition, the Company believes that TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA are useful in evaluating its operating performance compared to that of other companies in the Company’s industry. The Company’s definitions of TCE revenue, adjusted net income or loss with adjusted earnings or loss per share, basic and diluted, and adjusted EBITDA may not be the same as reported by other companies in the shipping industry or other industries.

TCE revenue, on a historical basis, is reconciled above in the section entitled "Explanation of Variances on the First Quarter of 2023 Financial Results Compared to the First Quarter of 2022". The Company has not provided a reconciliation of forward-looking TCE revenue because the most directly comparable IFRS measure on a forward-looking basis is not available to the Company without unreasonable effort.

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," "expect," "anticipate," "estimate," "intend," "plan," "target," "project," "likely," "may," "will," "would," "could" 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, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although management believes 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 the Company’s control, there can be no assurance that the Company will achieve or accomplish these expectations, beliefs or projections. The Company undertakes no obligation, and specifically declines any obligation, except as required by law, to publicly update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.

In addition to these important factors, other important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward‐looking statements include unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the continuing impacts of the novel coronavirus (COVID-19) pandemic, including its effect on demand for petroleum products and the transportation thereof, expansion and growth of the Company’s operations, risks relating to the integration of assets or operations of entities that it has or may in the future acquire and the possibility that the anticipated synergies and other benefits of such acquisitions may not be realized within expected timeframes or at all, the failure of counterparties to fully perform their contracts with the Company, 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 the Company’s operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company’s 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, including the impact of the conflict in Ukraine, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off‐hires, and other factors. Please see the Company's filings with the SEC for a more complete discussion of certain of these and other risks and uncertainties.

Scorpio Tankers Inc.

James Doyle - Head of Corporate Development & Investor Relations

Tel: +1 646-432-1678

Email: investor.relations@scorpiotankers.com