New York-listed Scorpio Tankers keeps outperforming with its fleet of more than 100 product tankers and has even taken a step to heed calls for fatter dividend payments.
The Monaco-based company notched up its quarterly distribution to $0.35 per share after another strong quarter that beats analysts’ earnings estimates. Scorpio had been paying $0.25 per share for the past two quarters, and $0.10 before that.
Meanwhile, it keeps cutting debt and has bought back $91m worth of shares since 1 July. More buybacks are coming as the company restocked its $250m shares-repurchase authorisation programme.
In October, the Emanuele Lauro-led company also gave notice that it would exercise purchase options on 10 more product tankers with an aggregate lease liability of $197.9m.
For the quarter past, Scorpio logged adjusted net income of $99.2m or $1.99 per share basic and $1.91 per share diluted earnings, on vessel revenue of $291m. This easily topped the $1.55-per-share profit expected by Wall Street analysts.
Adjusted Ebitda of $200m topped the $177m consensus bet of researchers.
Despite the earnings beat, the results fell markedly from an unusual countercyclical boom in the third quarter of 2022.
Scorpio then recorded an adjusted net income of $264.8m, or $4.81 basic and $4.28 diluted earnings per share, on adjusted revenue of $490m.
“TCE revenue for the three months ended 30 September 2023 remained strong despite a decline in daily TCE rates when compared to the same period in the prior year,” Scorpio said in an earnings report released before the start of trading on Thursday.
“The third quarter of 2022 reflected several key events and market conditions leading to a counter-seasonal spike in daily TCE rates. The third quarter of 2023 reflected a more normalised seasonal pattern whereby the beginning of the quarter was impacted by extended refinery maintenance, lower refining margins and a reduction in arbitrage opportunities, which all led to reduced refinery throughput and decreased volumes from major export regions.
“These conditions improved later in the quarter and daily TCE rates strengthened.”
Scorpio’s LR2s narrowly beat its MRs in time charter equivalent earnings for the quarter past, fetching $29,430 per day to $29,181 per day for the MRs. Handymaxes brought in $22,875 per day.
On the stock buyback front, Scorpio said it had repurchased 1.89m shares since 1 July at an average price of $48.02 per share. Of that, 1.65m shares were bought back within the quarter at an average $47.74. A further 241,288 shares came since 1 October at an average $49.88.
Scorpio has now restocked the buyback authorisation programme to its full $250m. The last time it was restored was 31 May.
Without one-time adjustments to its results, Scorpio had net income of $100.4m in the third quarter, or $2.01 basic and $1.93 diluted earnings per share.
The unadjusted numbers were $266.2m, or $4.84m basic and $4.31 diluted earnings per share, for the third quarter of 2022.
