Scorpio Tankers is maintaining its massive spending spree on its own undervalued shares.
The Emanuele Lauro-led, New York-listed product tanker owner said it had acquired 851,978 shares this week at an average price of $46.74 each, for an outlay of more than $39.8m.
The stock closed at $47.05 on Thursday. There are still 55.3m shares outstanding.
Buybacks of more than 7m shares so far in 2023 have taken a sizeable chunk out of the repurchase programme, Fearnley Securities noted.
Scorpio has therefore reset its authorisation to the tune of $250m, which could include its senior notes due in 2025.
The owner had previously renewed the programme on 1 May.
The company has said it intends to continue buying its own shares as long as they trade at a discount to net asset value (NAV).
Fearnley Securities estimates NAV at $67 per share. The stock price is only 70% of this figure.
The buybacks are highly likely to continue, the investment bank believes.
The repurchases are being made in tandem with a series of tanker buybacks from leases, reducing debt.
Debt slashed since 2021
Gross debt has come down by more than $1bn since the end of 2021, as product rates soared and cash rolled in.
Management’s focus is on cutting borrowings and refinancing the more expensive sale-and-leaseback deals.
In April, Scorpio Tankers spent $69m on its own shares.
Fearnley Securities has a “buy” rating on the stock, with a target price of $80.
