Scorpio Tankers Inc.

Second quarter adjusted EBITDA was $300.5 million and adjusted net income was $243.7 million; IFRS net income was $388 million, which included a $154 million gain on the sale of 10 vessels. Management said cash stood at more than $1.9 billion, while the presentation cited $2.2 billion of cash as of July 28 and $2.4 billion of available liquidity including revolver capacity. The company said daily cash breakevens are below $11,000 per day. On capital returns, it repurchased about 2 million shares for $155 million and declared a $0.45 per share quarterly dividend. For financing, it issued $605 million of convertible bonds at approximately a 1% yield to maturity, repaid $589 million of debt at 5%-7.5%, and said its remaining order book is 13 vessels. No formal next-quarter or full-year financial guidance was given; instead, management said product tanker rates remain above $30,000 per day and that the market still supports meaningful free cash flow.

Emanuele Lauro framed the quarter as proof that Scorpio is executing on things it can control: balance sheet strength, lower cost of capital, lower breakevens, fleet optimization, and shareholder returns. His tone was confident but cautious, emphasizing that shipping is cyclical and that geopolitical events are unpredictable, so the company is preparing for whatever comes next rather than trying to forecast the cycle. He highlighted the record quarter, the low-cost refinancing, and the disciplined sale of older vessels and investment in newer assets as central to the strategy.

Chris Avella focused on the financial transformation of the balance sheet and the cash generation profile. He said the company generated $300.5 million of adjusted EBITDA and $388 million of IFRS net income, and noted the net debt position improved by $4.2 billion since the end of 2021 to net cash of $1.3 billion as of today. He also detailed the refinancing activity: $375 million of five-year convertibles at a 1.75% coupon, a follow-on convertible issuance of more than $253 million at a premium, repayment of over $389 million of legacy secured debt, and redemption of $200 million of 7.5% notes; he said outstanding debt is now $655 million, $605 million of which is convertible debt. He added that cash was $2.2 billion as of July 28 and that liquidity totaled $2.4 billion with revolver availability, while cash breakevens are below $11,000 per day.

Analysts pressed on the LR2 market, especially the growing use of LR2s in the dirty/crude trade. Management said LR2s and Aframaxes have become increasingly fungible over the past couple of years, with vessel-by-vessel opportunistic redeployment depending on where the TCE spread is best, and said vessels can move back to clean trade quickly if spreads flip. Questions also focused on whether the current disruption is creating a new structural floor for rates and ton-miles; management argued that long voyage distances, low inventories, refinery dislocation, and ongoing geopolitical rerouting are supporting the floor, even as seasonal maintenance approaches. In a later question, management said the convertible debt can be settled in cash, shares, or a mix, and that the trigger is 130% over the conversion price; the maximum shares issuable were cited as 6 million.