STNG

MONACO, Sept. 03, 2026 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE:STNG) (“Scorpio Tankers,” or the “Company”) announced today an update on its third quarter of 2026 average daily Time Charter Equivalent (“TCE”) rates and that it has entered into agreements to time charter-out three product tankers. Third Quarter 2026 TCE Rate Update Below is a summary of the average daily TCE revenue 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 third quarter of 2026 as of the date hereof: The above rates and coverage percentages are subject to change as the pool results, which include, but are not limited to, estimated results of voyages currently in progress, are finalized. Time Charter-Out Agreements The Company has recently entered into agreements to time charter-out two LR2 product tankers, STI Gladiator and STI Jermyn, and one MR product tanker, STI Pontiac. The agreements for STI Gladiator and STI Jermyn are each for a term of three years at rates of $40,188 per day and $42,500 per day, respectively. These time charters are expected to commence in September 2026. The agreement for STI Pontiac is for a term of three years at a rate of $23,900 per day. This time charter is expected to commence in the fourth quarter of 2026. Third Quarter 2026 Diluted Shares Outstanding The Company estimates that its fully diluted weighted average shares outstanding for the three months ended September 30, 2026 to be between 54.5 to 55.5 million shares. Following the issuance of the Company's 1.75% Convertible Senior Notes due 2031 (the "Convertible Notes") in April and May 2026, the diluted weighted average number of shares for the three months and nine months ended September 30, 2026 includes the potentially dilutive effect of the Convertible Notes and restricted shares issued under the Company’s equity incentive plan. The dilutive impact of the Convertible Notes is determined using the if-converted method, which assumes that the Convertible Notes were converted into common shares at the beginning of the period (or, at the date of issuance, if issued during the period). Under the if-converted method, net income is adjusted to add back the interest expense and other non-cash amortization expense associated with the Convertible Notes, while the weighted average number of shares outstanding is increased by the potential number of shares issuable upon conversion. The estimated diluted shares outstanding provided herein is preliminary and subject to change as the calculation is partially dependent upon the average price of the Company’s common stock during the period. Conversion will not be assumed for purposes of computing diluted earnings per share if the effect would be anti-dilutive. About Scorpio Tankers Inc. Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 75 product tankers (25 LR2 tankers, 36 MR tankers and 14 Handymax tankers) with an average age of 10.2 years. The Company has reached agreements or letters of intent for five MR newbuildings that are currently under construction with deliveries expected in 2027 and 2030, six LR2 newbuildings with deliveries expected in 2027 and 2029 and two VLCC newbuildings with deliveries expected in 2028. Additional information about the Company is available at the Company's website www.scorpiotankers.com. Information on the Company’s website does not constitute a part of and is not incorporated by reference into this press release. Forward-Looking Statements 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, 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, the impact of the current and future sanctions that may impact the transportation of petroleum products, the ongoing military conflict in Iran which has had a significant direct and indirect impact on the trade of crude oil and refined petroleum products, potential disruption of shipping routes due to accidents or political events, potential liability from pending or future litigation, general domestic and international political conditions, which have and may continue to disrupt certain global shipping routes, vessel 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. Contact Information Scorpio Tankers Inc. James Doyle – Head of Corporate Development & Investor Relations Tel: +1 203-900-0559Email: [email protected]

Scorpio Tankers’ second quarter performance aligned with Wall Street’s revenue expectations but received a negative market reaction, reflecting investor caution despite notable profit outperformance. Management pointed to strong operational execution, citing a balance sheet fortified by lower-cost financing, active vessel sales, and a focus on cash flow generation. CEO Emanuele Lauro highlighted the company’s ability to navigate volatility: “Our job is not to predict the cycle. Our job is to be prepared for it, and this is what we’re doing.” The quarter’s results were driven by strategic fleet renewal, disciplined capital allocation, and opportunistic trading between clean and crude markets, amid a backdrop of geopolitical instability and shifting trade flows. Is now the time to buy STNG? Find out in our full research report (it’s free). Revenue: $391.8 million vs analyst estimates of $392.6 million (75.9% year-on-year growth, in line) Adjusted EPS: $4.68 vs analyst estimates of $4.55 (2.8% beat) Adjusted EBITDA: $280.4 million vs analyst estimates of $287.2 million (71.6% margin, 2.4% miss) Operating Margin: 102%, up from 35.5% in the same quarter last year total vessels: down 14.5 year on year Market Capitalization: $3.37 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Omar Nokta (Clarksons Securities) asked about the trend of LR2 vessels trading between clean and crude markets. Chief Commercial Officer Lars Nielsen explained that fungibility between LR2s and Aframaxes has increased, driven by earnings differentials and opportunistic fleet management. Christopher Robertson (Deutsche Bank) questioned whether recent long-distance trading patterns are transient or structural. Nielsen responded that while some routes normalized post-disruption, overall longer voyages and ton-mile demand have become more enduring, underpinned by ongoing supply chain shifts. Ken Hoexter (Bank of America) sought views on the sustainability of elevated rate “floors” amid seasonal and geopolitical volatility. Head of Corporate Development James Doyle and Nielsen both cited longer voyage distances and rerouting as key factors sustaining higher rates, but noted outcomes remain highly dependent on geopolitical developments. Stephanie Moore (Jefferies) inquired about the potential for dilution from convertible notes and strategy for settlement. CFO Chris Avella explained that the company can settle the notes in cash or stock, with no immediate plans for dilution, emphasizing the focus on maintaining low cash costs. Liam Burke (B. Riley Securities) asked about the longevity of the aging MR fleet. Nielsen stated that, even in strong markets, vessels older than 20 years are rarely used in primary trade, indicating an impending wave of retirements that could further tighten supply. In the coming quarters, the StockStory team will be watching (1) the pace of fleet renewal and further vessel sales or newbuilding deliveries, (2) signs of structural changes in refinery locations and their impact on trade flows and ton-mile demand, and (3) the evolution of geopolitical risks in major shipping lanes. Monitoring time charter market activity and the company’s capital allocation decisions will also be critical to assessing Scorpio Tankers’ ability to sustain cash generation. Scorpio Tankers currently trades at $73.98, down from $78.53 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, July 30, 2026 at 8:00 a.m. ET Chief Executive Officer - Emanuele Lauro President - Robert Bugbee Chief Operating Officer - Cameron Mackey Chief Financial Officer - Chris Avella Chief Commercial Officer - Lars Dencker Nielsen Head of Corporate Development and Investor Relations - James Doyle Operator: Hello, welcome to the Scorpio Tankers second quarter 2026 conference call. I would now like to turn the call over to James Doyle, Head of Corporate Development and Investor Relations. Please go ahead, sir. James Doyle: Thank you for joining us today. Welcome to the Scorpio Tankers second quarter 2026 earnings conference call. On the call with me today are Emanuele Lauro, Chief Executive Officer. Robert Bugbee, President. Cameron Mackey, Chief Operating Officer. Chris Avella, Chief Financial Officer. Lars Dencker Nielsen, Chief Commercial Officer. Earlier today, we issued our second quarter earnings press release, which is available on our website, scorpiotankers.com. The information discussed on this call is based on information as of today, July 30th, 2026, may contain forward-looking statements that involve risk and uncertainty. Actual results may differ from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the forward-looking statement disclosure in the earnings press release, as well as Scorpio Tankers' SEC filings, which are available at scorpiotankers.com and sec.gov. Call participants are advised that the audio of this conference call is being broadcast live on the internet is also being recorded for playback purposes. An archive of the webcast will be made available on the investor relations page of our website for approximately 14 days. We will be giving a short presentation today. The presentation is available at scorpiotankers.com on the investor relations page under reports and presentations. The slides will also be available on the webcast. After the presentation, we will go to Q&A. For those asking questions, please limit the number of questions to two. If you have an additional question, please rejoin the queue. I'd like to introduce our Chief Executive Officer, Emanuele Lauro. Emanuele Lauro: Thank you, James, good morning or good afternoon to all. Last quarter, I spoke about our focus on the things that we can control, like strengthening our balance sheet, lowering our cost of capital, reducing our cash break evens, optimizing our fleet, securing attractive time charter contracts, returning capital to shareholders. That approach has not changed, during the second quarter, we continued to execute against each of these priorities. Financially, the results speak for themselves. The second quarter was the strongest in Scorpio Tankers history, generating adjusted EBITDA in excess of $300 million and adjusted net income of $243.7 million. We continue to strengthen our financial position. Today, our cash position stands at more than $1.9 billion. During the quarter, we completed one of the most attractive financing transactions in the company's history. We've issued $605 million of convertible bonds at a yield to maturity of approximately 1%. We also repaid, at the same time, $589 million of debt, which was carrying an interest rate between 5%-7.5%. Replacing our highest cost of capital debt with our lowest cost capital further improved our balance sheet and reduced our cost of funding while preserving significant financial flexibility. As a result, our daily cash break-evens remains approximately $11,000 per day, which is one of the lowest in the industry. We also continued during the second quarter to optimize our fleet. Since the beginning of the year, we have sold 19 vessels, most of them 11 or 12 years old, at prices above what we originally paid for them more than a decade ago. As a point of reference, the last four sales, which were all LR2s, were completed at prices above the cost of the LR2 newbuildings we currently have on order. Tomorrow, we will welcome the STI Moxie, our first MR newbuilding, who's delivering into the fleet tomorrow, as I said. This brings our order book down to 13 vessels. This reflects our philosophy on fleet renewal, realizing attractive values from older assets while reinvesting in more fuel-efficient vessels that will strengthen the fleet for many years to come. Returning capital to shareholders also remains a priority. During the quarter, we purchased approximately 2 million shares for $155 million, and today our board declared a quarterly dividend of $0.45 per share. These two actions combined represent more than $175 million returned to shareholders during the second quarter. On the commercial side, we entered into shelter agreements for three MR vessels for a minimum period of three years. These vessels are expected to enter the TC contracts in December of this year, allowing us to benefit on the current strong spot environment that we are experiencing. Customers do not commit to multi-year charters without confidence in the market, and we view these agreements as another encouraging indication of the long-term fundamentals of our business. While freight rates have moderated from the exceptional levels we've experienced early in the year, they remain at levels that continue to generate meaningful free cash flow for us. At the same time, geopolitical developments, particularly in the Middle East, continue to create uncertainty. We do not pretend to know how or when events will evolve. Shipping has always been and will remain a cyclical business. Markets rise and fall, geopolitical events introduce uncertainty that no one can really predict with precision. Our job is not to predict the cycle. Our job is to be prepared for it, and this is what we're doing. That is why we continue to strengthen our balance sheet, lower our cost of capital, reduce our cash break-evens, optimize our fleet, renew our asset base, and maintain sustainable liquidity. We believe these decisions positions Scorpio Tankers to generate meaningful cash flow when markets are strong, while giving us the resilience and financial flexibility to capitalize opportunities when conditions inevitably change. The philosophy has guided us for many years, it will continue to guide us in the years ahead. My opening remarks are over, I would like to turn the call back to James, please. Thank you. James Doyle: Thanks, Emanuele. Slide seven, please. In the second quarter, rates reached record highs. Records, by definition, aren't meant to last. We've seen geopolitical events drive rates to high levels before. What's more important is not the peak, it's the floor. Today, product tanker rates remain above $30,000 per day, despite lower seaborne volumes in what is typically the seasonally slower part of the year. At these levels, the company generates significant free cash flow. As Emanuele said, we don't pretend to know how or when the conflict in the Middle East will be resolved. What we do know is that global inventories, commercial, strategic, and floating, have been drawn down meaningfully. We also know the refinery dislocation is structural. Refining capacity has shifted farther from the consumer, and that isn't something that reverses quickly. Looking ahead, we believe the product tanker market is well-positioned. A global inventory restocking, combined with a recovery in underlying demand, should support higher seaborne exports, ton miles, and rates. Slide eight, please. After the MoU was signed in mid-June, tanker flows through the Strait of Hormuz rose to 12.6 million barrels per day, and closer to 17 million, including Saudi Arabia's Yanbu exports. The region is fragile. Last week, the Houthis attacked two commercial vessels in the Red Sea. We've seen this before. In 2024, rising risk in the Bab el-Mandeb pushed owners to reroute around the Cape of Good Hope, in some cases, more than doubling sailing distances. If that pattern repeats, it would mean incremental ton mile demand from rerouting alone, adding further support to freight rates. Slide nine, please. Ton mile demand has been the defining factor behind today's freight market. In June, seaborne refined product exports declined by 2.3 million barrels per day or 11% year-over-year. However, longer voyage distances have largely offset that decline, tightening effective supply and supporting a strong freight market despite lower volumes. Refinery dislocation has been a key component in driving ton mile demand, one we expect to continue. Slide 10, please. Refining margins have reached record levels. Geopolitical disruptions have exacerbated a dislocated refinery system. Since 2019, refined product demand has grown almost 4.5 million barrels per day, compared to 1.8 million barrels per day of net capacity additions. Compounding that, much of the new capacity that has come online sits in the Middle East and China, farther from the end consumer. Slide 11, please. As flows normalize, demand for refined products could increase by more than three million barrels per day through year-end. Global visible inventories are down over 400 million barrels since the start of the conflict, much of that demand will need to be met by increasing refinery runs rather than inventory draws. Given the refinery dislocation, that production increasingly has to be shipped, creating a constructive backdrop for product tankers. Slide 12, please. The Aframax LR2 crude tanker market is benefiting from two forces at once, disruption in the Middle East and rising crude production from the United States, Canada, and Latin America. Together, they have pushed seaborne volumes up by nearly one million barrels per day and spot rates above $100,000 per day. Given the spread, we've moved a few of our LR2s into the crude market to capture the higher earnings. Slide 13. This is particularly important when looking at the order book. While the order book is 20% of the fleet, more than half the order book is LR2s. Today, 66% of the LR2 fleet is trading crude oil, and we expect this to continue. As a result, the effective product tanker order book is smaller than it appears, reinforcing the view that fleet growth will be more moderate than expected. Slide 14, please. As you can see on the left, 21% of the product tanker fleet is already over 20 years old. By 2028, it will be 31%. On the right, roughly 25% of the Aframax LR2 fleet and 9% of the MR Handy fleet are sanctioned with average ages of 19-21 years old. In a normal market, much of this older tonnage would have already exited the fleet. The combination of an aging fleet and a meaningful share of sanctioned tonnage points to further tightening of effective supply. Slide 15, please. When you adjust for aging vessels, sanctioned capacity, and LR2 crossover, effective supply growth is lower than the headline order book implies. We expect fleet growth to average roughly 3%-4% over the next three years and potentially lower. As refinery utilization and seaborne flows increase to support demand and global restocking, the market should tighten further. Near term, that means higher refinery runs and seaborne exports. Longer-term refining capacity stays constrained while the fleet ages. We expect ton-mile demand to outpace fleet growth. With that, I'd like to turn it over to Chris. Chris Avella: James. Good morning. Good afternoon, everyone. Slide 17, please. This quarter, we generated $300.5 million in adjusted EBITDA and $388 million in net income on an IFRS basis. This includes a $154 million gain on the sale of 10 vessels during the quarter. Additionally, we declared a $0.45 per share dividend and repurchased $155 million of our common stock, thus returning an aggregate of over $175 million to shareholders. The chart on the right shows the evolution of our net debt position since December of 2021. Our capital allocation policy over this period has been headlined by debt reduction. As you can see, this approach has resulted in a reduction of our net debt position by $4.2 billion from a net debt position of $2.9 billion at the end of 2021 to a net cash position of $1.3 billion as of today. To put this balance sheet transformation into context, our net cash position is worth approximately $26 per share as of today. This balance sheet strength provides the company with considerable optionality, particularly in a market environment defined by elevated volatility and geopolitical uncertainty. Slide 18, please. The chart on the left shows our outstanding debt by type since December of 2021. Over the course of four years, we transformed our balance sheet by transitioning out of expensive lease financing into more flexible, lower-cost secured debt. Our efforts didn't end there, as during the second quarter of this year and into July, we executed on a series of transactions that further transformed and strengthened our balance sheet. In April, we closed on an offering of $375 million in aggregate principal amount of five-year senior unsecured convertible notes bearing a 1.75% coupon rate and a conversion price of approximately $100 per share. Upon conversion, we have the option to settle the convertible notes in cash, shares of our common stock, or a combination thereof. In May, we executed a follow-on offering of these same convertible notes at a price of over 110 to par for gross proceeds of over $253 million. When taking this premium into account, the yield to maturity on the combined issuances is below 1%. We also closed on the sales of 15 vessels, all at cyclically high prices. We earned the highest average daily TCE rate in the company's history. We announced two new secured credit facilities with seven-year tenors and bearing margins of 120 basis points. We repaid $389 million of legacy secured debt, all of which was due to mature in 2028. We redeemed our $200 million, 7.5% coupon rate senior unsecured notes. As of today, we have $655 million of debt, $605 million of which consists of convertible debt. The chart on the right shows the trend in the weighted average margins on our secured debt. As I mentioned, in the second quarter of this year, we continued to focus on lowering our cost of debt by repaying over $389 million of debt across five credit facilities, all of which were scheduled to mature in 2028 and carried margins of between 170 and 197.5 basis points. Our efforts to lower our cost of capital didn't end there, as can be seen with our recently executed $50 million credit facility with Bank of America and recently announced $90 million credit facility commitment from Standard Chartered and DekaBank. Each of these credit facilities carry margins of just 120 basis points and have seven-year tenors. Slide 19, please. The chart on the left shows our liquidity profile. We had $2.2 billion in cash as of July 28th and an additional $483 million in availability under revolving credit facilities for a total of $2.4 billion in available liquidity. We've entered into agreements or letters of intent to purchase 14 new building vessels and to contribute equity for the minority interest in a joint venture of eight VLCCs. The chart on the right is a waterfall reflecting the commitments under these agreements or letters of intent. Our remaining new building and joint venture commitments total just over $978 million as of today, excluding any potential financing. Our disciplined allocation of capital over the past three years has afforded us the financial flexibility to enter into these agreements. As shown in the payment waterfall on the top right, these payment obligations are spread out over the next four years. Hypothetically speaking, we could pay for all of these vessels today in cash without having to raise any additional capital. Slide 20, please. Our cash breakeven rate, which includes vessel operating costs, cash G&A, cash interest payments and commitment fees, and any scheduled loan amortization, is below $11,000 per day and is at the lowest level in the company's history. This rate continued to decline given the cash interest savings resulting from our Q2 repayment of $389 million in secured debt, along with the July redemption of our senior unsecured notes of $200 million. To illustrate our cash generation potential at these cash breakeven levels, at $20,000 per day, the company can generate up to $246 million in cash flow per year. At $30,000 per day, the company can generate up to $520 million in cash flow per year. This concludes our presentation for today. On behalf of the management team, we'd like to thank you for your time and attention, and now we'd like to turn the call over to Q&A. Operator: Thank you. We will now be opening the Q&A session. If you'd like to ask a question, please press star, then the number one on your telephone keypad. To withdraw your question, please press star one again. Thank you. Your first question comes from Omar Nokta with Clarksons Securities. Please go ahead. Omar Nokta: Thank you. Hey, guys. Good morning. Good afternoon. Thanks for the presentation. I just wanted to ask maybe a couple of perhaps maybe market-weighted questions, but also pertaining to Scorpio. I wanted to ask on LR2 specifically and how that's been developing recently. In the past, it seemed that there was somewhat of a separation, you would say, for product players that were looking at their LR2s, keeping them clean, and then maybe crude players who owned LR2s traded them dirty. Has that changed? Are clean owners like yourselves starting to trade the LR2s more actively in the dirty market? James, you mentioned in your presentation that you've switched a few ships into the crude trade and also how two-thirds of the fleet today is also running dirty. I guess just kind of big picture as we think about how LR2s are trading today, are they becoming a bit more fungible, if that's the right term, in terms of moving in and out of the crude trade? I guess I'm asking that because when I look at your performance for the third quarter so far, that $65,000 on the LR2s, it seems that's perhaps tracking closer to the dirty Aframax average versus, say, the clean LR2s. Any color you can give on that would be helpful. Thank you. Lars Dencker Nielsen: Hi, Omar. It's Lars here. To be honest, we have always been kind of dipping into the dirty market as well on the Aframaxes. We look at it and have always looked at it from an opportunistic vessel-by-vessel perspective. There's not kind of a broad fleet strategy in terms of that. You mentioned fungible. It has been the case for a couple of years now that the fungibility between LR2 and Aframax has been very apparent, and we have seen a lot of cross-trading for the last couple of years. When we have seen the markets spike on the clean, we have been holding the ships in the clean. When we have seen, as we have seen over the last period, a very strong Atlantic basin on the Aframaxes, we decided to tap into that. Clearly, it's not only us that has been doing this. We count today about 170, maybe just over 170 clean LR2s only trading in that market. You've got over 100 and 350, I think it is, Aframaxes trading dirty. A lot of them, obviously, in the Atlantic basin. The thing that's really interesting, in my view, is that even with that amount of ships coming into that market, because of the ton-mile that James was talking to about before and of course, the volumes in general, that market has been strong throughout. There's no doubt in my mind, as you've had that kind of low number of LR2s kind of going into the Aframax market, that it wouldn't take very much before you start seeing the LR2s as we have been seeing over the last week now, our rates in the West moving up. Suddenly you see a kind of a normalization, and it will be the case that you start seeing ships moving back into clean as well. I think, and I've mentioned this before on these calls, that you need to today look LR2s and Aframaxes as a much closer unison unit. Omar Nokta: Yeah. Thanks, Lars. That's quite helpful commentary. Then maybe just as a follow-up, you just referenced what we've seen in the Atlantic here over the past couple of weeks. Can you maybe just give a perspective on what's driving that? We've seen it seems like across the board, whether it's LR2s, LR1s, MRs, everything seems to be moving quite a bit higher here over the past couple of weeks relative to what we've been seeing. It looks like rates perhaps are approaching kind of maybe not the highs yet, but it seems that they're at their highest levels in at least a few months. What's been behind this latest move? Lars Dencker Nielsen: First of all, I've been doing this for a long time. I've never seen a July or August market like this, right? This is not what you would consider to be a normal kind of summer lull. First of all, you've got great refining margins, talking about the MRs. The U.S. Gulf has been running at extremely high utilization rates. You obviously have all the different geopolitical kind of backdrop, which obviously influences the things, Russia being one. They don't have the exports that they had. You have the issues with the Bab el-Mandeb, you have the issues with Hormuz, you have the issues with stocks in general being low. It's quite clear that the volatility that we have seen talking about the MRs has been profound. TC we know about, we had kind of a bit of a drop. You see now another resurgence, as you could see on the rate reports today, where TC 14 is now moving up from their lows and have now moved north of Worldscale 320, maybe will go beyond that. The triangulation element on the Atlantic Basin has been strong. The same, to be honest, goes also with the Aframaxes. I think the activity both in the Mediterranean has been strong. We have the issues around CPC, talking about geopolitical issues. The dislocations tends to be, in any case, always somewhat positive for tankers in general. The ton-mile story is valid, and we see it every day. The spreads and the arbs are opening stuff for business. Of course, the advent of more oil coming out of South America and the U.S. has certainly been underpinning the dirty market as well. Omar Nokta: Great. Yeah, thanks, Lars. That's a very helpful insight. I'll pass it back. Operator: Your next question comes from Chris Robertson with Deutsche Bank. Please go ahead. Chris Robertson: Hi. Good morning, everybody. Thank you for taking my questions here. Fantastic job of what you guys are doing on the balance sheet and all the issues that you've raised on what you can control. Kudos to you there. Just wanted to ask, maybe on the market, when the situation in the Mideast kicked off and there were some very unusual, very long-distance trading patterns, at least initially during that height of the disruption, can you comment as to, have some of those routes been more enduring, and can you give some examples of how things are trading now on some of those longer and unusual routes? Lars Dencker Nielsen: If we go back, when it all kicked off during the second quarter, we saw some really uncommon kind of voyages, which obviously a lot of it is down to the stress factors that were in place and short-term fixes and so on. I think there was a calibration that took place after that, which meant that the long-term routing still very much is in vogue. It has also helped that we have seen a little bit of an uptick on the Chinese exports, that suddenly there's more of a balance on these things. It's quite clear that when you kind of overlay that with the issues with the Russian exports having dwindled and South America and other Africa as well have been suffering from that, you've been seeing other supply chains being created which have increased the ton miles as well, then they are then sharing in the kind of the same supply pot, if you will. We have seen over the last couple of weeks, another kind of uptick in Asia, which has been interesting. The transpacific moves has increased substantially. We haven't really seen China moving up to something that is kind of over what we had anticipated, there has been a general kind of understanding of where oil is coming from until, I guess, the next shock comes in and we'll see something different. It tends to be that there is somewhat of a normalization. Everything underpinned still by kind of extended ton mile. Chris Robertson: Thank you. Just a follow-up question, maybe as it related to Omar's line of questions around the LR2s trading dirty. Just wanted to better understand the dynamic here, just because such a great percentage of the LR2 fleet is trading dirty at the moment. In your opinion, is that mostly due to the geopolitical disruptions and the ton-mile dynamics there? Could the downside be the unwinding of geopolitical risk? What would keep that as a more enduring force going forward versus more transient? Lars Dencker Nielsen: I think the short answer, to be honest, Chris, is that it's all a question of time charter equivalent. You had the TD25 or the med market ramping up towards $150,000 a couple of weeks ago. You had a quietening LR2 market with all the uncertainties going around with the Hormuz and so on, which of course is a primary trade for clean. People were saying, Well, the spreads are simply too great for us not to dip into that. What we know from the last couple of years is that if that spread flips, vessels will very quickly move into clean again. A case in point was, if you recall, a couple of years ago, you had the LR2 market out of the AG trading at, I think it was around $8 million, and the Aframax/VLCC in particular market was languishing at that point. You saw suddenly what we had not seen before, a large number of vessels kind of cannibalizing into the clean markets, which was kind of new to the industry. That kind of flip-flopping, in particular on the Aframaxes, the coded Aframaxes, has been taking place over the last couple of years to a larger extent. There certainly is a lot more runs under the belt for people to understand how you should do this as efficiently as you can and cost efficiently as you can. One company being us as well and being able to do that. We don't fear or have any issues with that kind of fungibility and don't consider that to be transient, but to be a lot more market-related in terms of one way or the other. Chris Robertson: Appreciate it, Lars. Thank you, guys. I'll turn it over. Operator: Your next question comes from Ken Hoexter with Bank of America. Please go ahead. Ken Hoexter: Hey, great. Good morning and good afternoon. Emanuele, James, great rundown. Thank you for that. You emphasized, I think, James, in your presentation, the floor is more important than the peak with rates remaining above 30,000 in this backdrop. Maybe a little bit of your thoughts on the floor in this backdrop, just given, I think, Lars, you were just mentioning never seen a July like this. Maybe thoughts on the floor, thoughts on seasonality and where we go from here. James Doyle: Lars, do you want me to take that? Lars Dencker Nielsen: You can start, James. I’ll follow on. I thought the question was for you. James Doyle: Thanks, Ken. Look, typically you get through peak gasoline season, end of the summer, and you go into maintenance. What we've seen is because of the longer voyage distances, the rerouting, we're seeing unique voyages as Lars highlighted, and we think that's going to continue as disruptions and potentially rerouting as a result of Red Sea specifically, as vessels go around the Cape of Good Hope, and also disruptions with refining capacity in Russia. Russia's export ban on gasoline and diesel, that's going to increase Atlantic Basin MR volumes for compliant ships, Africa, Latin America. At the same time, we expect more naphtha to go from the U.S. Gulf to Asia. I think there's a constructive dynamic there. Lars highlighted the strength on the LR2s and Aframax is trading crude oil. We think that's going to pick up as you get into maintenance here, because there'll be more crude volume from the Atlantic Basin that needs to go to Asia. Ken Hoexter: All right. Lars, did you want to jump in or do you want me to follow up? I guess I'll throw in the follow-up, anybody can jump in. You mentioned inventories were down about 400 million barrels since the start of the conflict with much current demand needs to be met by refinery runs versus inventory draws. Maybe your thoughts on the time frame, I guess, in terms of if we're going into maintenance season, the drawdown or the ability for refineries to continue to meet that demand versus then timeframe for beginning to restock. James Doyle: There was a lot of crude that was shipped in June, and it takes about 30 days for that to get to Asia, 45 days to get to Europe. That's arriving now. I think runs are going to pick up in those regions, and you'll get increased regional trading, which is going to be fantastic for the medium-range ships. If you looked at refinery runs year-over-year, I think July was down about 5 million barrels per day. Out of the Middle East refining capacity, the only refinery that's actually down right now is Jazan. As things normalize, we expect runs to pick back up here. While you might have the U.S. Gulf maintenance coming in, say, September, we expect runs throughout the rest of the world to pick up at the same time. That's going to create a constructive dynamic for us. Also the fleet's really out of its normal positioning. I think that's going to be constructive as well. Ken Hoexter: Thanks, James. Thanks, guys. Operator: Thanks, Ken. Your next question comes from Stephanie Moore with Jefferies. Please go ahead. Stephanie Moore: Great. Good morning and good afternoon, everyone. I think maybe just continuing the thread of the last conversation here. Do you think that the events that really we've seen over certainly the last six months, but maybe even the last 12 months, have structurally changed, really that LR2 market from anything we've historically seen? How are you weighing maybe the supply and demand landscape over the next 12 months? Thanks. Lars Dencker Nielsen: I’ll start, James. What's happened over the last six months, it's just a good question. What's going to happen tomorrow? We don't know. What we want to look at is just the pure fundamentals in terms of what are we looking at. One thing I think is for sure is that, the longer voyage distances that are in place, they certainly tighten supply. This has been a key thesis over the last number of years for the reasons that James mentioned in his prepared remarks. That has not changed. It has also not changed that the issues of the sanctioned fleet and the age of the same is certainly getting to a place where in a normal market environment, those ships will not exist. I'm of the opinion that those sanctions vessels will never enter into the primary trade again. We know that crude has kind of developed in further field areas. We know where the refineries are. That's also further afield. That certainly has not changed. What certainly has changed is that there's a lot more dislocations and disruptions that take place and have been taking place over the last more than six months, a couple of years, I would even say that. In terms of any dislocation that we have seen has always created a potential for product tankers and now also for the crude market. It's clear that if you then look over the medium-term and say, well, we're in a position right now where considering the issues that we've had facing the global economy and the stock draws that have been taking place and the flat price that also kind of follows, you'd say, well, at some point in time, you're going to have to think about how you're going to get into a min ops situation. I think underlying, that's all great, and I'll just kind of reiterate James's point about what are we looking at here in terms of the age profile of ships as we move over the next couple of years, what is the fleet profile coming on board over the next couple of years, and you put all of those things in there and in a normal circumstance, it doesn't look scary to me. We are living in a very highly uncertain political environment. You've got things coming in left, right field every single day, more or less. One of the key elements that we try to do at any given time from an operational commercial perspective is be as nimble as we can to react to these changes as they come on a very frequent basis. Stephanie Moore: Understood. Thank you. Just for my follow-up here. I think following the refinancing activity, your debt profile is now heavily weighted towards the converts. How should we think about this potential dilution, conversion scenarios, and maybe your preferred method of settlement, especially should the stock trade meaningfully above the conversion price? Thanks. Robert Bugbee: Hi, Stephanie. Thanks for the question. Look, we're fresh off the convertible, we're obviously happy with the transaction and the execution of it. One of the biggest features of the notes is that we can settle it in cash or shares. The trigger for that is 130% over the conversion price. I think everybody here on the call would be thrilled if we get to those levels. We'll address that if it happens in terms of how we'll choose to settle it. Right now, the maximum number of shares that can be issued is 6 million shares. That's what the conversion rate is. That's something for down the road. Right now we're happy with how it fits into our capital structure, and in particular, the low cash costs which have driven down our cash breakevens on the notes. Stephanie Moore: Understood. Thank you, guys. Operator: Your next question comes from Sherif Elmaghrabi with BTIG. Please go ahead. Sherif Elmaghrabi: Just one for me today. During the quarter, one of your LR2s had its time charter extended. Looking at the rest of the fleet, there's a handful of other tankers rolling off time charter in the next year or so. I'm wondering if you're seeing a higher likelihood that these time charters get extended, if there's even options to do so, and maybe your thoughts on what you're seeing in the time charter market more broadly. Thanks. Lars Dencker Nielsen: On that particular time charter, it was an option historically that was in place. Any time charters that we would do today would be new time charters in the market. In terms of time charter strategy, we've always been very opportunistic about it to have a balanced view on how much of our fleet would be on time charter. We have a number of ships rolling off. We have been looking, and has also been reported that two time charters have been secured at levels that we have not seen before. It's also an interesting point is that time charter inquiry, generally speaking, even over the summer months, has been high, which is interesting. The people that are looking at time charters tend to be the oil companies, and now some of the traders are coming in as well. There is a generally good level of demand on that. When it comes to ourselves, very much a balanced approach as we've had for a while. Certainly dominated by a view that we would look at this opportunistically, and very much so that the people that, the counterparties that we deal with are people that we have long-standing strategic relationships with that we can build around it. Sherif Elmaghrabi: Great call as always, Lars. Thank you. Operator: Liam Burke, please go ahead. Liam Burke: Yes, thank you. Prior to the dust-up in early in 2026, prior to the dust-up in the Mid East, the outlook for the product tankers was great. You had an aging fleet, you had redistribution of global capacity. Presuming that things get to normal someday, are we looking at redistribution to continue, or are some of the traditional refiners, not in the Mid East, not in China, will they continue to refine oil, or do you expect the process to continue? Robert Bugbee: Lars, I can take that. Hey, Liam. Thanks for the question. Lars Dencker Nielsen: Hey, James. James Doyle: No, we absolutely expect the refinery dislocation to continue. It takes at a minimum, seven years probably to build a new refinery, and many of those refineries haven't started construction today. If you think about demand in emerging markets where we see a lot of growth, there's not refining capacity being built there. In developed markets, northern U.S., west coast U.S., we've closed capacity. We see a scenario where ton-miles are going to continue to grow over time. If anything, what we've seen as a result of this conflict, if you look at crude price changes versus product price changes and cracks have moved meaningfully. I think that reflects how dislocated the refining capacity system is, and we'll be happy to transport those cargoes to consuming regions. Liam Burke: Okay. I guess on the supply side, we've got an aging fleet, especially on the MR side. Have extended rates going to, at the far end, extend the life of some of these older MRs? Or would you anticipate the traditional rule of, once it hits a certain age, refiners don't want to use the vessel? James Doyle: Lars? Lars Dencker Nielsen: Yeah. I think it's fair to say that there's a hard stop at 20 these days for vessels. We've been seeing that even in strong markets. It's not that long ago where people were looking at 15, and people were saying, Well, I don't want to time charter ship that's more than 10. That has moved towards a higher level in terms of age. Even during the very strong markets from a primary trade perspective, it's very uncommon that we've been seeing ships over 20 being traded. Deep dive being obviously the exception, but it's clear that if you look at overall from a fleet segment perspective, and you look at the age profile on MRs as you rightfully point out, but also on the Aframaxes, it is an interesting kind of picture that's being drawn over the next couple of years in terms of what that age profile is going to look like. Liam Burke: Great. Thank you, Lars. Thank you, James. James Doyle: Thanks, Liam. James Doyle: Your last question comes from Kristoffer Skeie with Arctic Securities. Please go ahead. Kristoffer Skeie: Hey, guys. Thanks for a good presentation as always. I was just wondering if you can comment on the VLCC joint venture and the rationale behind the investment. Who are the other partners? Where are the vessels ordered, and for what price typical, and what type of leverage levels you are aiming for? In other words, what's the equity commitment there? Emanuele Lauro: Thanks for the question. I think from financial standpoint, the exposure, as you can see, is not meaningful compared to our balance sheet. The reason why we did this investment is more strategic. The partner is the UBO of the largest private shipbuilder in China, and we have a relationship with this gentleman for many years. This opportunity came about where he was looking for a partner in the shipping side, and not only potentially in order to operate the vessels once they get delivered. We thought that it made sense for us to get the opportunity, even though as you see financially, it's not a meaningful transaction for our balance sheet. That's the reason. On the expectations on the rates the ships are delivering far away, we are going to take delivery of the Hanwha ships before that. So far, I think that it's too early to talk about market expectations, and our guess is as good as anyone's. We like the sector. We believe in the sector. We've been looking at getting exposure gradually, you may remember with the DHT investment. Once we divested from DHT in the latter part of 2025, we decided to get into the physical part of the investment by ordering the ships at Hanwha, and this joint venture is a nice top up with a strategic twist for us. Kristoffer Skeie: Thanks a lot for a good answer. Looks quite interesting. Emanuele Lauro: Sure. Operator: That concludes with our question-and-answer session. I would now like to turn the call over back to Emanuele Lauro, CEO, for the closing remarks. Please go ahead. Emanuele Lauro: Thank you very much, operator. I don't have any closing remarks. Just wanted to thank everybody for their time and continued support, and look forward to speaking with you going forward. Thank you. Operator: Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect. Before you buy stock in Scorpio Tankers, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Scorpio Tankers wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,232,139!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 3, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Scorpio Tankers (STNG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

In the second quarter of 2026, Scorpio Tankers Inc. posted record results, with net income rising to US$387.54 million and diluted earnings per share from continuing operations reaching US$7.37, alongside a declared quarterly dividend of US$0.45 per share payable on August 31, 2026. Beyond headline earnings, the company combined record adjusted EBITDA of over US$300 million with vessel sales, debt refinancing, and more than US$175 million returned to shareholders, while lowering its cash break-even to below US$11,000 per day. We’ll now examine how this record profitability and reduced cash break-even level affect Scorpio Tankers’ existing investment narrative and risk-reward profile. Rare earth metals are the new gold rush. Find out which 29 stocks are leading the charge. To own Scorpio Tankers, you need to believe that tight product tanker supply, longer trading routes, and a relatively young fleet can offset structural energy transition risks and spot-rate volatility. The latest record quarter and lower cash break-even strengthen the near term case for cash generation, but do not remove the key risk of future overcapacity from a 20% order book and potential demand pressure on refined products. The most relevant update here is Scorpio Tankers’ record second quarter, with net income of US$387.54 million and diluted EPS of US$7.37. Combined with adjusted EBITDA above US$300 million and a cash break-even below US$11,000 per day, this result reinforces the current catalyst of strong free cash flow and balance sheet flexibility, but it contrasts with analyst expectations that both revenue and earnings may decline over the next few years. Yet even against these record results, investors should be aware that overcapacity risk in a 20% order book could still... Read the full narrative on Scorpio Tankers (it's free!) Scorpio Tankers’ narrative projects $763.7 million revenue and $244.0 million earnings by 2029. Uncover how Scorpio Tankers' forecasts yield a $99.22 fair value, a 27% upside to its current price. While recent results look very strong, the most pessimistic analysts were still assuming revenue could fall to about US$756.7 million and earnings to around US$198.2 million, which shows just how differently you and other investors might weigh today’s record quarter against longer term risks like faster energy transition and rising regulatory costs. Explore 3 other fair value estimates on Scorpio Tankers - why the stock might be worth 18% less than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Scorpio Tankers research is our analysis highlighting 4 key rewards and 4 important warning signs that could impact your investment decision. Our free Scorpio Tankers research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Scorpio Tankers' overall financial health at a glance. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: The future of work is here. Discover the 36 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. Invest in the nuclear renaissance through our list of 88 elite nuclear energy infrastructure plays powering the global AI revolution. Explore 26 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include STNG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Scorpio Tankers (STNG) just paired record second quarter results with another cash return to shareholders. The company reported very strong profitability and confirmed a US$0.45 quarterly dividend alongside vessel sales and refinancing moves. See our latest analysis for Scorpio Tankers. The recent earnings beat and dividend confirmation have helped Scorpio Tankers hold strong positive momentum, with a 30 day share price return of 11.98% and a year to date share price return of 56.69%. Over a longer horizon, total shareholder return sits at 70.11% over one year and roughly 7x over five years, suggesting investors have been rewarded for staying invested even through shorter term pullbacks such as the 6.18% share price decline over the past 90 days. If Scorpio Tankers has caught your attention, it can be useful to see what else is moving in related areas of the market. Take the next step and check out 35 power grid technology and infrastructure stocks After Scorpio Tankers’ record quarter and a strong run in the share price, the question is simple. Does it make more sense to build a position now on this momentum, or wait for a cleaner entry as things cool off? Scorpio Tankers’ most followed narrative pegs fair value at $99.22, above the recent $77.86 close, which raises big questions about how future cash generation is being framed. Read the complete narrative. Want to understand why a declining revenue and earnings profile still supports a higher fair value anchor? The answer sits in the margin reset, the long term P/E assumption, and how analysts are discounting those cash flows. Result: Fair Value of $99.22 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Scorpio Tankers’ story can change quickly if product tanker overcapacity pressures day rates, or if stricter environmental rules push fleet costs and required capex higher. Find out about the key risks to this Scorpio Tankers narrative. The SWS DCF model paints a cooler picture than the 21.5% undervaluation narrative. On this cash flow view, Scorpio Tankers at $77.86 sits above an estimated future cash flow value of $63.53, which screens as overvalued. That leaves investors weighing earnings power against a more cautious cash flow signal. Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Scorpio Tankers for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 55 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With Scorpio Tankers presenting both strong shareholder returns and some open questions around future cash flows, it makes sense to review the underlying data yourself and then move quickly to form an independent view using the 4 key rewards and 4 important warning signs. If Scorpio Tankers has sharpened your focus, do not stop here. Fresh ideas often come from scanning broader opportunities that match your risk profile and income goals. Target potential mispricings by reviewing companies that appear attractively valued in the 55 high quality undervalued stocks. Strengthen the quality of your watchlist by checking stocks from the solid balance sheet and fundamentals stocks screener (45 results) that pair sturdy finances with consistent fundamentals. Spot potential early movers by scanning the screener containing 19 high quality undiscovered gems before they land on everyone else's radar. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include STNG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Scorpio Tankers Inc.? Here are five stocks we like better. Record second-quarter performance: Scorpio Tankers reported adjusted EBITDA of $300.5 million and adjusted net income of $243.7 million, with IFRS net income reaching $388 million after a $154 million gain from selling 10 vessels. Balance sheet and shareholder returns strengthened: The company refinanced expensive debt with $605 million of convertible bonds issued at roughly a 1% yield, reduced cash break-even below $11,000 per day, and ended with $2.4 billion in liquidity. It returned more than $175 million to shareholders through a $0.45 dividend and $155 million in share repurchases. Management sees supportive tanker fundamentals: Longer shipping distances, aging and sanctioned tonnage, and flexible deployment of LR2 vessels between clean-product and crude trades are supporting rates above $30,000 per day, despite lower refined-product volumes. 3 Stocks to Own If Gas Prices Keep Rising Scorpio Tankers (NYSE:STNG) reported its strongest quarterly results in company history for the second quarter of 2026, supported by elevated tanker rates, vessel sales and continued balance-sheet refinancing efforts. Chief Executive Officer Emanuele Lauro said the company generated adjusted EBITDA of more than $300 million and adjusted net income of $243.7 million during the quarter. Chief Financial Officer Chris Avella said adjusted EBITDA totaled $300.5 million, while IFRS net income was $388 million, including a $154 million gain from the sale of 10 vessels during the period. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now This Freight Stock Just Got an Upgrade and Institutional Buyers Management said it continued to focus on lowering funding costs, reducing cash break-even levels, renewing the fleet and returning capital to shareholders. Lauro said Scorpio Tankers issued $605 million of convertible bonds at a yield to maturity of approximately 1% and repaid $589 million of debt carrying interest rates between 5% and 7.5%. Avella said the company repaid more than $389 million of secured debt across five facilities during the second quarter and redeemed $200 million of 7.5% senior unsecured notes in July. → Microsoft Just Flipped the AI Spending Narrative Overnight Three Mid Caps Wall Street Sees Doubling Within 12 Months The company’s cash break-even rate, including vessel operating costs, cash general and administrative expense, cash interest and scheduled loan amortization, fell below $11,000 per day, according to Avella. He said that at a daily rate of $20,000, the company could generate up to $246 million in annual cash flow, while a $30,000 daily rate could generate up to $520 million. As of July 28, Scorpio Tankers had $2.2 billion in cash and $483 million of availability under revolving credit facilities, for total available liquidity of $2.4 billion, Avella said. He added that the company’s net debt position had improved by $4.2 billion since December 2021, reaching net cash of $1.3 billion, or approximately $26 per share. → Carrier Earnings Could Send the Stock to a New All-Time High The board declared a quarterly dividend of $0.45 per share. Scorpio Tankers also repurchased approximately 2 million shares for $155 million during the quarter. Lauro said the combined dividend and buyback represented more than $175 million returned to shareholders. Addressing the company’s convertible notes, President Robert Bugbee said Scorpio Tankers has the option to settle conversions in cash, common shares or a combination of both. The notes have a conversion trigger at 130% above the conversion price, he said, and the maximum number of shares that could be issued is 6 million. Since the beginning of the year, Scorpio Tankers has sold 19 vessels, primarily ships that were 11 or 12 years old, Lauro said. He said most of the vessels were sold for more than the company had paid for them more than a decade earlier. The company’s last four vessel sales were LR2 tankers sold at prices above the cost of LR2 newbuildings currently on order, according to Lauro. Scorpio Tankers was also set to take delivery of its first MR newbuilding, the STI Moxie, on July 31, reducing its orderbook to 13 vessels. Avella said the company has agreements or letters of intent involving 14 newbuilding vessels and an equity contribution toward a minority interest in a joint venture involving eight VLCCs. Remaining newbuilding and joint-venture commitments totaled slightly more than $978 million, excluding any potential financing, with payments spread over the next four years. Lauro said the VLCC joint venture was strategically motivated rather than financially significant relative to Scorpio Tankers’ balance sheet. He said the partner is the ultimate beneficial owner of a large private Chinese shipbuilder, with whom the company has had a relationship for years. Scorpio Tankers intends to potentially operate the vessels after delivery, he said. James Doyle, head of corporate development and investor relations, said product tanker rates remained above $30,000 per day despite lower seaborne volumes during what is usually a seasonally slower period. He said longer voyage distances have offset lower refined-product volumes and tightened effective vessel supply. According to Doyle, seaborne refined-product exports declined by 2.3 million barrels per day, or 11% year over year, in June. However, refinery capacity has increasingly shifted away from consuming regions, particularly toward the Middle East and China, supporting longer-distance trade. Doyle said global visible inventories had fallen by more than 400 million barrels since the start of the conflict referenced on the call. He said future refined-product demand would need to be met increasingly through higher refinery runs rather than further inventory drawdowns, potentially increasing seaborne exports. Management also pointed to an aging fleet and sanctioned tonnage as constraints on effective supply. Doyle said 21% of the product tanker fleet is more than 20 years old, a figure expected to reach 31% by 2028. He said the company expects fleet growth to average roughly 3% to 4% over the next three years, potentially lower after accounting for vessel age, sanctioned capacity and the crossover of LR2 tankers into crude trading. Chief Commercial Officer Lars Dencker Nielsen said Scorpio Tankers has moved some LR2s into the crude market to capture higher earnings, while continuing to assess deployment on a vessel-by-vessel basis. He said LR2 and Aframax vessels have become increasingly interchangeable between clean-product and crude trades over the past several years. Nielsen estimated that more than 170 clean LR2s were trading in the crude market and said the movement of vessels between clean and dirty trades depends primarily on relative time-charter-equivalent earnings. He said vessels could return quickly to clean-product trading if the rate spread changes. The company entered charter agreements for three MR vessels for minimum terms of three years, with the vessels expected to begin those charters in December. Lauro said the timing allows Scorpio Tankers to remain exposed to the current spot market before the agreements begin. Nielsen said time-charter inquiry has remained strong, including from oil companies and traders, though Scorpio Tankers continues to take an opportunistic and balanced approach to contracting its fleet. Scorpio Tankers Inc (NYSE: STNG) is an independent provider of marine transportation services, specializing in the carriage of refined petroleum products. The company’s core operations focus on moving clean petroleum cargoes—such as gasoline, diesel, jet fuel and naphtha—on a global scale. By catering to both spot and time charter markets, Scorpio Tankers enables energy companies, refiners and traders to manage their supply chains with flexibility and reliability. The company’s fleet is composed of modern, eco-designed product tankers, including medium range (MR) and long range (LR) vessels. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Scorpio Tankers Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Image source: The Motley Fool. Thursday, July 30, 2026 at 8:00 a.m. ET Chief Executive Officer - Emanuele Lauro President - Robert Bugbee Chief Operating Officer - Cameron Mackey Chief Financial Officer - Chris Avella Chief Commercial Officer - Lars Dencker Nielsen Head of Corporate Development and Investor Relations - James Doyle Operator: Hello, welcome to the Scorpio Tankers second quarter 2026 conference call. I would now like to turn the call over to James Doyle, Head of Corporate Development and Investor Relations. Please go ahead, sir. James Doyle: Thank you for joining us today. Welcome to the Scorpio Tankers second quarter 2026 earnings conference call. On the call with me today are Emanuele Lauro, Chief Executive Officer. Robert Bugbee, President. Cameron Mackey, Chief Operating Officer. Chris Avella, Chief Financial Officer. Lars Dencker Nielsen, Chief Commercial Officer. Earlier today, we issued our second quarter earnings press release, which is available on our website, scorpiotankers.com. The information discussed on this call is based on information as of today, July 30th, 2026, may contain forward-looking statements that involve risk and uncertainty. Actual results may differ from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the forward-looking statement disclosure in the earnings press release, as well as Scorpio Tankers' SEC filings, which are available at scorpiotankers.com and sec.gov. Call participants are advised that the audio of this conference call is being broadcast live on the internet is also being recorded for playback purposes. An archive of the webcast will be made available on the investor relations page of our website for approximately 14 days. We will be giving a short presentation today. The presentation is available at scorpiotankers.com on the investor relations page under reports and presentations. The slides will also be available on the webcast. After the presentation, we will go to Q&A. For those asking questions, please limit the number of questions to two. If you have an additional question, please rejoin the queue. I'd like to introduce our Chief Executive Officer, Emanuele Lauro. Emanuele Lauro: Thank you, James, good morning or good afternoon to all. Last quarter, I spoke about our focus on the things that we can control, like strengthening our balance sheet, lowering our cost of capital, reducing our cash break evens, optimizing our fleet, securing attractive time charter contracts, returning capital to shareholders. That approach has not changed, during the second quarter, we continued to execute against each of these priorities. Financially, the results speak for themselves. The second quarter was the strongest in Scorpio Tankers history, generating adjusted EBITDA in excess of $300 million and adjusted net income of $243.7 million. We continue to strengthen our financial position. Today, our cash position stands at more than $1.9 billion. During the quarter, we completed one of the most attractive financing transactions in the company's history. We've issued $605 million of convertible bonds at a yield to maturity of approximately 1%. We also repaid, at the same time, $589 million of debt, which was carrying an interest rate between 5%-7.5%. Replacing our highest cost of capital debt with our lowest cost capital further improved our balance sheet and reduced our cost of funding while preserving significant financial flexibility. As a result, our daily cash break-evens remains approximately $11,000 per day, which is one of the lowest in the industry. We also continued during the second quarter to optimize our fleet. Since the beginning of the year, we have sold 19 vessels, most of them 11 or 12 years old, at prices above what we originally paid for them more than a decade ago. As a point of reference, the last four sales, which were all LR2s, were completed at prices above the cost of the LR2 newbuildings we currently have on order. Tomorrow, we will welcome the STI Moxie, our first MR newbuilding, who's delivering into the fleet tomorrow, as I said. This brings our order book down to 13 vessels. This reflects our philosophy on fleet renewal, realizing attractive values from older assets while reinvesting in more fuel-efficient vessels that will strengthen the fleet for many years to come. Returning capital to shareholders also remains a priority. During the quarter, we purchased approximately 2 million shares for $155 million, and today our board declared a quarterly dividend of $0.45 per share. These two actions combined represent more than $175 million returned to shareholders during the second quarter. On the commercial side, we entered into shelter agreements for three MR vessels for a minimum period of three years. These vessels are expected to enter the TC contracts in December of this year, allowing us to benefit on the current strong spot environment that we are experiencing. Customers do not commit to multi-year charters without confidence in the market, and we view these agreements as another encouraging indication of the long-term fundamentals of our business. While freight rates have moderated from the exceptional levels we've experienced early in the year, they remain at levels that continue to generate meaningful free cash flow for us. At the same time, geopolitical developments, particularly in the Middle East, continue to create uncertainty. We do not pretend to know how or when events will evolve. Shipping has always been and will remain a cyclical business. Markets rise and fall, geopolitical events introduce uncertainty that no one can really predict with precision. Our job is not to predict the cycle. Our job is to be prepared for it, and this is what we're doing. That is why we continue to strengthen our balance sheet, lower our cost of capital, reduce our cash break-evens, optimize our fleet, renew our asset base, and maintain sustainable liquidity. We believe these decisions positions Scorpio Tankers to generate meaningful cash flow when markets are strong, while giving us the resilience and financial flexibility to capitalize opportunities when conditions inevitably change. The philosophy has guided us for many years, it will continue to guide us in the years ahead. My opening remarks are over, I would like to turn the call back to James, please. Thank you. James Doyle: Thanks, Emanuele. Slide seven, please. In the second quarter, rates reached record highs. Records, by definition, aren't meant to last. We've seen geopolitical events drive rates to high levels before. What's more important is not the peak, it's the floor. Today, product tanker rates remain above $30,000 per day, despite lower seaborne volumes in what is typically the seasonally slower part of the year. At these levels, the company generates significant free cash flow. As Emanuele said, we don't pretend to know how or when the conflict in the Middle East will be resolved. What we do know is that global inventories, commercial, strategic, and floating, have been drawn down meaningfully. We also know the refinery dislocation is structural. Refining capacity has shifted farther from the consumer, and that isn't something that reverses quickly. Looking ahead, we believe the product tanker market is well-positioned. A global inventory restocking, combined with a recovery in underlying demand, should support higher seaborne exports, ton miles, and rates. Slide eight, please. After the MoU was signed in mid-June, tanker flows through the Strait of Hormuz rose to 12.6 million barrels per day, and closer to 17 million, including Saudi Arabia's Yanbu exports. The region is fragile. Last week, the Houthis attacked two commercial vessels in the Red Sea. We've seen this before. In 2024, rising risk in the Bab el-Mandeb pushed owners to reroute around the Cape of Good Hope, in some cases, more than doubling sailing distances. If that pattern repeats, it would mean incremental ton mile demand from rerouting alone, adding further support to freight rates. Slide nine, please. Ton mile demand has been the defining factor behind today's freight market. In June, seaborne refined product exports declined by 2.3 million barrels per day or 11% year-over-year. However, longer voyage distances have largely offset that decline, tightening effective supply and supporting a strong freight market despite lower volumes. Refinery dislocation has been a key component in driving ton mile demand, one we expect to continue. Slide 10, please. Refining margins have reached record levels. Geopolitical disruptions have exacerbated a dislocated refinery system. Since 2019, refined product demand has grown almost 4.5 million barrels per day, compared to 1.8 million barrels per day of net capacity additions. Compounding that, much of the new capacity that has come online sits in the Middle East and China, farther from the end consumer. Slide 11, please. As flows normalize, demand for refined products could increase by more than three million barrels per day through year-end. Global visible inventories are down over 400 million barrels since the start of the conflict, much of that demand will need to be met by increasing refinery runs rather than inventory draws. Given the refinery dislocation, that production increasingly has to be shipped, creating a constructive backdrop for product tankers. Slide 12, please. The Aframax LR2 crude tanker market is benefiting from two forces at once, disruption in the Middle East and rising crude production from the United States, Canada, and Latin America. Together, they have pushed seaborne volumes up by nearly one million barrels per day and spot rates above $100,000 per day. Given the spread, we've moved a few of our LR2s into the crude market to capture the higher earnings. Slide 13. This is particularly important when looking at the order book. While the order book is 20% of the fleet, more than half the order book is LR2s. Today, 66% of the LR2 fleet is trading crude oil, and we expect this to continue. As a result, the effective product tanker order book is smaller than it appears, reinforcing the view that fleet growth will be more moderate than expected. Slide 14, please. As you can see on the left, 21% of the product tanker fleet is already over 20 years old. By 2028, it will be 31%. On the right, roughly 25% of the Aframax LR2 fleet and 9% of the MR Handy fleet are sanctioned with average ages of 19-21 years old. In a normal market, much of this older tonnage would have already exited the fleet. The combination of an aging fleet and a meaningful share of sanctioned tonnage points to further tightening of effective supply. Slide 15, please. When you adjust for aging vessels, sanctioned capacity, and LR2 crossover, effective supply growth is lower than the headline order book implies. We expect fleet growth to average roughly 3%-4% over the next three years and potentially lower. As refinery utilization and seaborne flows increase to support demand and global restocking, the market should tighten further. Near term, that means higher refinery runs and seaborne exports. Longer-term refining capacity stays constrained while the fleet ages. We expect ton-mile demand to outpace fleet growth. With that, I'd like to turn it over to Chris. Chris Avella: James. Good morning. Good afternoon, everyone. Slide 17, please. This quarter, we generated $300.5 million in adjusted EBITDA and $388 million in net income on an IFRS basis. This includes a $154 million gain on the sale of 10 vessels during the quarter. Additionally, we declared a $0.45 per share dividend and repurchased $155 million of our common stock, thus returning an aggregate of over $175 million to shareholders. The chart on the right shows the evolution of our net debt position since December of 2021. Our capital allocation policy over this period has been headlined by debt reduction. As you can see, this approach has resulted in a reduction of our net debt position by $4.2 billion from a net debt position of $2.9 billion at the end of 2021 to a net cash position of $1.3 billion as of today. To put this balance sheet transformation into context, our net cash position is worth approximately $26 per share as of today. This balance sheet strength provides the company with considerable optionality, particularly in a market environment defined by elevated volatility and geopolitical uncertainty. Slide 18, please. The chart on the left shows our outstanding debt by type since December of 2021. Over the course of four years, we transformed our balance sheet by transitioning out of expensive lease financing into more flexible, lower-cost secured debt. Our efforts didn't end there, as during the second quarter of this year and into July, we executed on a series of transactions that further transformed and strengthened our balance sheet. In April, we closed on an offering of $375 million in aggregate principal amount of five-year senior unsecured convertible notes bearing a 1.75% coupon rate and a conversion price of approximately $100 per share. Upon conversion, we have the option to settle the convertible notes in cash, shares of our common stock, or a combination thereof. In May, we executed a follow-on offering of these same convertible notes at a price of over 110 to par for gross proceeds of over $253 million. When taking this premium into account, the yield to maturity on the combined issuances is below 1%. We also closed on the sales of 15 vessels, all at cyclically high prices. We earned the highest average daily TCE rate in the company's history. We announced two new secured credit facilities with seven-year tenors and bearing margins of 120 basis points. We repaid $389 million of legacy secured debt, all of which was due to mature in 2028. We redeemed our $200 million, 7.5% coupon rate senior unsecured notes. As of today, we have $655 million of debt, $605 million of which consists of convertible debt. The chart on the right shows the trend in the weighted average margins on our secured debt. As I mentioned, in the second quarter of this year, we continued to focus on lowering our cost of debt by repaying over $389 million of debt across five credit facilities, all of which were scheduled to mature in 2028 and carried margins of between 170 and 197.5 basis points. Our efforts to lower our cost of capital didn't end there, as can be seen with our recently executed $50 million credit facility with Bank of America and recently announced $90 million credit facility commitment from Standard Chartered and DekaBank. Each of these credit facilities carry margins of just 120 basis points and have seven-year tenors. Slide 19, please. The chart on the left shows our liquidity profile. We had $2.2 billion in cash as of July 28th and an additional $483 million in availability under revolving credit facilities for a total of $2.4 billion in available liquidity. We've entered into agreements or letters of intent to purchase 14 new building vessels and to contribute equity for the minority interest in a joint venture of eight VLCCs. The chart on the right is a waterfall reflecting the commitments under these agreements or letters of intent. Our remaining new building and joint venture commitments total just over $978 million as of today, excluding any potential financing. Our disciplined allocation of capital over the past three years has afforded us the financial flexibility to enter into these agreements. As shown in the payment waterfall on the top right, these payment obligations are spread out over the next four years. Hypothetically speaking, we could pay for all of these vessels today in cash without having to raise any additional capital. Slide 20, please. Our cash breakeven rate, which includes vessel operating costs, cash G&A, cash interest payments and commitment fees, and any scheduled loan amortization, is below $11,000 per day and is at the lowest level in the company's history. This rate continued to decline given the cash interest savings resulting from our Q2 repayment of $389 million in secured debt, along with the July redemption of our senior unsecured notes of $200 million. To illustrate our cash generation potential at these cash breakeven levels, at $20,000 per day, the company can generate up to $246 million in cash flow per year. At $30,000 per day, the company can generate up to $520 million in cash flow per year. This concludes our presentation for today. On behalf of the management team, we'd like to thank you for your time and attention, and now we'd like to turn the call over to Q&A. Operator: Thank you. We will now be opening the Q&A session. If you'd like to ask a question, please press star, then the number one on your telephone keypad. To withdraw your question, please press star one again. Thank you. Your first question comes from Omar Nokta with Clarksons Securities. Please go ahead. Omar Nokta: Thank you. Hey, guys. Good morning. Good afternoon. Thanks for the presentation. I just wanted to ask maybe a couple of perhaps maybe market-weighted questions, but also pertaining to Scorpio. I wanted to ask on LR2 specifically and how that's been developing recently. In the past, it seemed that there was somewhat of a separation, you would say, for product players that were looking at their LR2s, keeping them clean, and then maybe crude players who owned LR2s traded them dirty. Has that changed? Are clean owners like yourselves starting to trade the LR2s more actively in the dirty market? James, you mentioned in your presentation that you've switched a few ships into the crude trade and also how two-thirds of the fleet today is also running dirty. I guess just kind of big picture as we think about how LR2s are trading today, are they becoming a bit more fungible, if that's the right term, in terms of moving in and out of the crude trade? I guess I'm asking that because when I look at your performance for the third quarter so far, that $65,000 on the LR2s, it seems that's perhaps tracking closer to the dirty Aframax average versus, say, the clean LR2s. Any color you can give on that would be helpful. Thank you. Lars Dencker Nielsen: Hi, Omar. It's Lars here. To be honest, we have always been kind of dipping into the dirty market as well on the Aframaxes. We look at it and have always looked at it from an opportunistic vessel-by-vessel perspective. There's not kind of a broad fleet strategy in terms of that. You mentioned fungible. It has been the case for a couple of years now that the fungibility between LR2 and Aframax has been very apparent, and we have seen a lot of cross-trading for the last couple of years. When we have seen the markets spike on the clean, we have been holding the ships in the clean. When we have seen, as we have seen over the last period, a very strong Atlantic basin on the Aframaxes, we decided to tap into that. Clearly, it's not only us that has been doing this. We count today about 170, maybe just over 170 clean LR2s only trading in that market. You've got over 100 and 350, I think it is, Aframaxes trading dirty. A lot of them, obviously, in the Atlantic basin. The thing that's really interesting, in my view, is that even with that amount of ships coming into that market, because of the ton-mile that James was talking to about before and of course, the volumes in general, that market has been strong throughout. There's no doubt in my mind, as you've had that kind of low number of LR2s kind of going into the Aframax market, that it wouldn't take very much before you start seeing the LR2s as we have been seeing over the last week now, our rates in the West moving up. Suddenly you see a kind of a normalization, and it will be the case that you start seeing ships moving back into clean as well. I think, and I've mentioned this before on these calls, that you need to today look LR2s and Aframaxes as a much closer unison unit. Omar Nokta: Yeah. Thanks, Lars. That's quite helpful commentary. Then maybe just as a follow-up, you just referenced what we've seen in the Atlantic here over the past couple of weeks. Can you maybe just give a perspective on what's driving that? We've seen it seems like across the board, whether it's LR2s, LR1s, MRs, everything seems to be moving quite a bit higher here over the past couple of weeks relative to what we've been seeing. It looks like rates perhaps are approaching kind of maybe not the highs yet, but it seems that they're at their highest levels in at least a few months. What's been behind this latest move? Lars Dencker Nielsen: First of all, I've been doing this for a long time. I've never seen a July or August market like this, right? This is not what you would consider to be a normal kind of summer lull. First of all, you've got great refining margins, talking about the MRs. The U.S. Gulf has been running at extremely high utilization rates. You obviously have all the different geopolitical kind of backdrop, which obviously influences the things, Russia being one. They don't have the exports that they had. You have the issues with the Bab el-Mandeb, you have the issues with Hormuz, you have the issues with stocks in general being low. It's quite clear that the volatility that we have seen talking about the MRs has been profound. TC we know about, we had kind of a bit of a drop. You see now another resurgence, as you could see on the rate reports today, where TC 14 is now moving up from their lows and have now moved north of Worldscale 320, maybe will go beyond that. The triangulation element on the Atlantic Basin has been strong. The same, to be honest, goes also with the Aframaxes. I think the activity both in the Mediterranean has been strong. We have the issues around CPC, talking about geopolitical issues. The dislocations tends to be, in any case, always somewhat positive for tankers in general. The ton-mile story is valid, and we see it every day. The spreads and the arbs are opening stuff for business. Of course, the advent of more oil coming out of South America and the U.S. has certainly been underpinning the dirty market as well. Omar Nokta: Great. Yeah, thanks, Lars. That's a very helpful insight. I'll pass it back. Operator: Your next question comes from Chris Robertson with Deutsche Bank. Please go ahead. Chris Robertson: Hi. Good morning, everybody. Thank you for taking my questions here. Fantastic job of what you guys are doing on the balance sheet and all the issues that you've raised on what you can control. Kudos to you there. Just wanted to ask, maybe on the market, when the situation in the Mideast kicked off and there were some very unusual, very long-distance trading patterns, at least initially during that height of the disruption, can you comment as to, have some of those routes been more enduring, and can you give some examples of how things are trading now on some of those longer and unusual routes? Lars Dencker Nielsen: If we go back, when it all kicked off during the second quarter, we saw some really uncommon kind of voyages, which obviously a lot of it is down to the stress factors that were in place and short-term fixes and so on. I think there was a calibration that took place after that, which meant that the long-term routing still very much is in vogue. It has also helped that we have seen a little bit of an uptick on the Chinese exports, that suddenly there's more of a balance on these things. It's quite clear that when you kind of overlay that with the issues with the Russian exports having dwindled and South America and other Africa as well have been suffering from that, you've been seeing other supply chains being created which have increased the ton miles as well, then they are then sharing in the kind of the same supply pot, if you will. We have seen over the last couple of weeks, another kind of uptick in Asia, which has been interesting. The transpacific moves has increased substantially. We haven't really seen China moving up to something that is kind of over what we had anticipated, there has been a general kind of understanding of where oil is coming from until, I guess, the next shock comes in and we'll see something different. It tends to be that there is somewhat of a normalization. Everything underpinned still by kind of extended ton mile. Chris Robertson: Thank you. Just a follow-up question, maybe as it related to Omar's line of questions around the LR2s trading dirty. Just wanted to better understand the dynamic here, just because such a great percentage of the LR2 fleet is trading dirty at the moment. In your opinion, is that mostly due to the geopolitical disruptions and the ton-mile dynamics there? Could the downside be the unwinding of geopolitical risk? What would keep that as a more enduring force going forward versus more transient? Lars Dencker Nielsen: I think the short answer, to be honest, Chris, is that it's all a question of time charter equivalent. You had the TD25 or the med market ramping up towards $150,000 a couple of weeks ago. You had a quietening LR2 market with all the uncertainties going around with the Hormuz and so on, which of course is a primary trade for clean. People were saying, Well, the spreads are simply too great for us not to dip into that. What we know from the last couple of years is that if that spread flips, vessels will very quickly move into clean again. A case in point was, if you recall, a couple of years ago, you had the LR2 market out of the AG trading at, I think it was around $8 million, and the Aframax/VLCC in particular market was languishing at that point. You saw suddenly what we had not seen before, a large number of vessels kind of cannibalizing into the clean markets, which was kind of new to the industry. That kind of flip-flopping, in particular on the Aframaxes, the coded Aframaxes, has been taking place over the last couple of years to a larger extent. There certainly is a lot more runs under the belt for people to understand how you should do this as efficiently as you can and cost efficiently as you can. One company being us as well and being able to do that. We don't fear or have any issues with that kind of fungibility and don't consider that to be transient, but to be a lot more market-related in terms of one way or the other. Chris Robertson: Appreciate it, Lars. Thank you, guys. I'll turn it over. Operator: Your next question comes from Ken Hoexter with Bank of America. Please go ahead. Ken Hoexter: Hey, great. Good morning and good afternoon. Emanuele, James, great rundown. Thank you for that. You emphasized, I think, James, in your presentation, the floor is more important than the peak with rates remaining above 30,000 in this backdrop. Maybe a little bit of your thoughts on the floor in this backdrop, just given, I think, Lars, you were just mentioning never seen a July like this. Maybe thoughts on the floor, thoughts on seasonality and where we go from here. James Doyle: Lars, do you want me to take that? Lars Dencker Nielsen: You can start, James. I’ll follow on. I thought the question was for you. James Doyle: Thanks, Ken. Look, typically you get through peak gasoline season, end of the summer, and you go into maintenance. What we've seen is because of the longer voyage distances, the rerouting, we're seeing unique voyages as Lars highlighted, and we think that's going to continue as disruptions and potentially rerouting as a result of Red Sea specifically, as vessels go around the Cape of Good Hope, and also disruptions with refining capacity in Russia. Russia's export ban on gasoline and diesel, that's going to increase Atlantic Basin MR volumes for compliant ships, Africa, Latin America. At the same time, we expect more naphtha to go from the U.S. Gulf to Asia. I think there's a constructive dynamic there. Lars highlighted the strength on the LR2s and Aframax is trading crude oil. We think that's going to pick up as you get into maintenance here, because there'll be more crude volume from the Atlantic Basin that needs to go to Asia. Ken Hoexter: All right. Lars, did you want to jump in or do you want me to follow up? I guess I'll throw in the follow-up, anybody can jump in. You mentioned inventories were down about 400 million barrels since the start of the conflict with much current demand needs to be met by refinery runs versus inventory draws. Maybe your thoughts on the time frame, I guess, in terms of if we're going into maintenance season, the drawdown or the ability for refineries to continue to meet that demand versus then timeframe for beginning to restock. James Doyle: There was a lot of crude that was shipped in June, and it takes about 30 days for that to get to Asia, 45 days to get to Europe. That's arriving now. I think runs are going to pick up in those regions, and you'll get increased regional trading, which is going to be fantastic for the medium-range ships. If you looked at refinery runs year-over-year, I think July was down about 5 million barrels per day. Out of the Middle East refining capacity, the only refinery that's actually down right now is Jazan. As things normalize, we expect runs to pick back up here. While you might have the U.S. Gulf maintenance coming in, say, September, we expect runs throughout the rest of the world to pick up at the same time. That's going to create a constructive dynamic for us. Also the fleet's really out of its normal positioning. I think that's going to be constructive as well. Ken Hoexter: Thanks, James. Thanks, guys. Operator: Thanks, Ken. Your next question comes from Stephanie Moore with Jefferies. Please go ahead. Stephanie Moore: Great. Good morning and good afternoon, everyone. I think maybe just continuing the thread of the last conversation here. Do you think that the events that really we've seen over certainly the last six months, but maybe even the last 12 months, have structurally changed, really that LR2 market from anything we've historically seen? How are you weighing maybe the supply and demand landscape over the next 12 months? Thanks. Lars Dencker Nielsen: I’ll start, James. What's happened over the last six months, it's just a good question. What's going to happen tomorrow? We don't know. What we want to look at is just the pure fundamentals in terms of what are we looking at. One thing I think is for sure is that, the longer voyage distances that are in place, they certainly tighten supply. This has been a key thesis over the last number of years for the reasons that James mentioned in his prepared remarks. That has not changed. It has also not changed that the issues of the sanctioned fleet and the age of the same is certainly getting to a place where in a normal market environment, those ships will not exist. I'm of the opinion that those sanctions vessels will never enter into the primary trade again. We know that crude has kind of developed in further field areas. We know where the refineries are. That's also further afield. That certainly has not changed. What certainly has changed is that there's a lot more dislocations and disruptions that take place and have been taking place over the last more than six months, a couple of years, I would even say that. In terms of any dislocation that we have seen has always created a potential for product tankers and now also for the crude market. It's clear that if you then look over the medium-term and say, well, we're in a position right now where considering the issues that we've had facing the global economy and the stock draws that have been taking place and the flat price that also kind of follows, you'd say, well, at some point in time, you're going to have to think about how you're going to get into a min ops situation. I think underlying, that's all great, and I'll just kind of reiterate James's point about what are we looking at here in terms of the age profile of ships as we move over the next couple of years, what is the fleet profile coming on board over the next couple of years, and you put all of those things in there and in a normal circumstance, it doesn't look scary to me. We are living in a very highly uncertain political environment. You've got things coming in left, right field every single day, more or less. One of the key elements that we try to do at any given time from an operational commercial perspective is be as nimble as we can to react to these changes as they come on a very frequent basis. Stephanie Moore: Understood. Thank you. Just for my follow-up here. I think following the refinancing activity, your debt profile is now heavily weighted towards the converts. How should we think about this potential dilution, conversion scenarios, and maybe your preferred method of settlement, especially should the stock trade meaningfully above the conversion price? Thanks. Robert Bugbee: Hi, Stephanie. Thanks for the question. Look, we're fresh off the convertible, we're obviously happy with the transaction and the execution of it. One of the biggest features of the notes is that we can settle it in cash or shares. The trigger for that is 130% over the conversion price. I think everybody here on the call would be thrilled if we get to those levels. We'll address that if it happens in terms of how we'll choose to settle it. Right now, the maximum number of shares that can be issued is 6 million shares. That's what the conversion rate is. That's something for down the road. Right now we're happy with how it fits into our capital structure, and in particular, the low cash costs which have driven down our cash breakevens on the notes. Stephanie Moore: Understood. Thank you, guys. Operator: Your next question comes from Sherif Elmaghrabi with BTIG. Please go ahead. Sherif Elmaghrabi: Just one for me today. During the quarter, one of your LR2s had its time charter extended. Looking at the rest of the fleet, there's a handful of other tankers rolling off time charter in the next year or so. I'm wondering if you're seeing a higher likelihood that these time charters get extended, if there's even options to do so, and maybe your thoughts on what you're seeing in the time charter market more broadly. Thanks. Lars Dencker Nielsen: On that particular time charter, it was an option historically that was in place. Any time charters that we would do today would be new time charters in the market. In terms of time charter strategy, we've always been very opportunistic about it to have a balanced view on how much of our fleet would be on time charter. We have a number of ships rolling off. We have been looking, and has also been reported that two time charters have been secured at levels that we have not seen before. It's also an interesting point is that time charter inquiry, generally speaking, even over the summer months, has been high, which is interesting. The people that are looking at time charters tend to be the oil companies, and now some of the traders are coming in as well. There is a generally good level of demand on that. When it comes to ourselves, very much a balanced approach as we've had for a while. Certainly dominated by a view that we would look at this opportunistically, and very much so that the people that, the counterparties that we deal with are people that we have long-standing strategic relationships with that we can build around it. Sherif Elmaghrabi: Great call as always, Lars. Thank you. Operator: Liam Burke, please go ahead. Liam Burke: Yes, thank you. Prior to the dust-up in early in 2026, prior to the dust-up in the Mid East, the outlook for the product tankers was great. You had an aging fleet, you had redistribution of global capacity. Presuming that things get to normal someday, are we looking at redistribution to continue, or are some of the traditional refiners, not in the Mid East, not in China, will they continue to refine oil, or do you expect the process to continue? Robert Bugbee: Lars, I can take that. Hey, Liam. Thanks for the question. Lars Dencker Nielsen: Hey, James. James Doyle: No, we absolutely expect the refinery dislocation to continue. It takes at a minimum, seven years probably to build a new refinery, and many of those refineries haven't started construction today. If you think about demand in emerging markets where we see a lot of growth, there's not refining capacity being built there. In developed markets, northern U.S., west coast U.S., we've closed capacity. We see a scenario where ton-miles are going to continue to grow over time. If anything, what we've seen as a result of this conflict, if you look at crude price changes versus product price changes and cracks have moved meaningfully. I think that reflects how dislocated the refining capacity system is, and we'll be happy to transport those cargoes to consuming regions. Liam Burke: Okay. I guess on the supply side, we've got an aging fleet, especially on the MR side. Have extended rates going to, at the far end, extend the life of some of these older MRs? Or would you anticipate the traditional rule of, once it hits a certain age, refiners don't want to use the vessel? James Doyle: Lars? Lars Dencker Nielsen: Yeah. I think it's fair to say that there's a hard stop at 20 these days for vessels. We've been seeing that even in strong markets. It's not that long ago where people were looking at 15, and people were saying, Well, I don't want to time charter ship that's more than 10. That has moved towards a higher level in terms of age. Even during the very strong markets from a primary trade perspective, it's very uncommon that we've been seeing ships over 20 being traded. Deep dive being obviously the exception, but it's clear that if you look at overall from a fleet segment perspective, and you look at the age profile on MRs as you rightfully point out, but also on the Aframaxes, it is an interesting kind of picture that's being drawn over the next couple of years in terms of what that age profile is going to look like. Liam Burke: Great. Thank you, Lars. Thank you, James. James Doyle: Thanks, Liam. James Doyle: Your last question comes from Kristoffer Skeie with Arctic Securities. Please go ahead. Kristoffer Skeie: Hey, guys. Thanks for a good presentation as always. I was just wondering if you can comment on the VLCC joint venture and the rationale behind the investment. Who are the other partners? Where are the vessels ordered, and for what price typical, and what type of leverage levels you are aiming for? In other words, what's the equity commitment there? Emanuele Lauro: Thanks for the question. I think from financial standpoint, the exposure, as you can see, is not meaningful compared to our balance sheet. The reason why we did this investment is more strategic. The partner is the UBO of the largest private shipbuilder in China, and we have a relationship with this gentleman for many years. This opportunity came about where he was looking for a partner in the shipping side, and not only potentially in order to operate the vessels once they get delivered. We thought that it made sense for us to get the opportunity, even though as you see financially, it's not a meaningful transaction for our balance sheet. That's the reason. On the expectations on the rates the ships are delivering far away, we are going to take delivery of the Hanwha ships before that. So far, I think that it's too early to talk about market expectations, and our guess is as good as anyone's. We like the sector. We believe in the sector. We've been looking at getting exposure gradually, you may remember with the DHT investment. Once we divested from DHT in the latter part of 2025, we decided to get into the physical part of the investment by ordering the ships at Hanwha, and this joint venture is a nice top up with a strategic twist for us. Kristoffer Skeie: Thanks a lot for a good answer. Looks quite interesting. Emanuele Lauro: Sure. Operator: That concludes with our question-and-answer session. I would now like to turn the call over back to Emanuele Lauro, CEO, for the closing remarks. Please go ahead. Emanuele Lauro: Thank you very much, operator. I don't have any closing remarks. Just wanted to thank everybody for their time and continued support, and look forward to speaking with you going forward. Thank you. Operator: Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect. Before you buy stock in Scorpio Tankers, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Scorpio Tankers wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 30, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Scorpio Tankers (STNG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Scorpio Tankers (STNG) came out with quarterly earnings of $4.68 per share, beating the Zacks Consensus Estimate of $4.51 per share. This compares to earnings of $1.41 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +3.77%. A quarter ago, it was expected that this shipping company would post earnings of $2.73 per share when it actually produced earnings of $3.02, delivering a surprise of +10.62%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Scorpio Tankers, which belongs to the Zacks Transportation - Shipping industry, posted revenues of $391.8 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.90%. This compares to year-ago revenues of $222.76 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Scorpio Tankers shares have added about 54.5% since the beginning of the year versus the S&P 500's gain of 6.9%. While Scorpio Tankers has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Scorpio Tankers was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.56 on $220.78 million in revenues for the coming quarter and $12.15 on $1.15 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Transportation - Shipping is currently in the top 17% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Navigator Holdings (NVGS), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This transportaion company for the natural gas and and chemical industry is expected to post quarterly earnings of $0.52 per share in its upcoming report, which represents a year-over-year change of +271.4%. The consensus EPS estimate for the quarter has been revised 10.3% higher over the last 30 days to the current level. Navigator Holdings' revenues are expected to be $130.42 million, up 14% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Scorpio Tankers Inc. (STNG) : Free Stock Analysis Report Navigator Holdings Ltd. (NVGS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

MONACO, July 30, 2026 (GLOBE NEWSWIRE) -- Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers" or the "Company") today reported its results for the three and six months ended June 30, 2026. The Company also announced that its board of directors (the "Board of Directors") has declared a quarterly cash dividend on its common shares of $0.45 per share. Results for the three months ended June 30, 2026 and 2025 For the three months ended June 30, 2026, the Company had net income of $387.5 million, or $8.47 basic and $7.37 diluted earnings per share. For the three months ended June 30, 2026, the Company had adjusted net income (see Non-IFRS Measures section below) of $243.7 million, or $5.33 basic and $4.68 diluted earnings per share, which excludes from net income (i) a $154.1 million, or $3.37 per basic and $2.88 per diluted share, gain on sales of vessels, (ii) a $20.2 million, or $0.44 per basic and $0.38 per diluted share, write-off of deferred financing fees and debt extinguishment costs (which includes $12.8 million for the make-whole premium on the redemption of the Company’s Unsecured Senior Notes Due 2030), (iii) $13.8 million, or $0.30 per basic and $0.26 per diluted share, fair value gain on financial liabilities measured at fair value, and (iv) $4.0 million, or $0.09 per basic and $0.07 per diluted share, of transaction costs related to the second quarter issuances of the Convertible Notes (described below). For the three months ended June 30, 2025, the Company had net income of $73.5 million, or $1.59 basic and $1.53 diluted earnings per share. For the three months ended June 30, 2025, the Company had adjusted net income (see Non-IFRS Measures section below) of $67.8 million, or $1.47 basic and $1.41 diluted earnings per share, which excludes from net income (i) a $7.5 million, or $0.16 per basic and diluted share, fair value gain on financial assets measured at fair value, and (ii) a $1.8 million, or $0.04 per basic and diluted share, loss on the extinguishment of debt and write-offs of deferred financing fees. Results for the six months ended June 30, 2026 and 2025 For the six months ended June 30, 2026, the Company had net income of $603.8 million, or $13.00 basic and $11.76 diluted earnings per share. For the six months ended June 30, 2026, the Company had adjusted net income (see Non-IFRS Measures section below) of $394.6 million, or $8.49 basic and $7.73 diluted earnings per share, which excludes from net income (i) a $220.1 million, or $4.74 per basic and $4.24 per diluted share, gain on sales of vessels, (ii) a $20.7 million, or $0.45 per basic and $0.40 per diluted share, write-off of deferred financing fees and debt extinguishment costs (which includes $12.8 million for the make-whole premium on the redemption of the Company’s Unsecured Senior Notes Due 2030), (iii) $13.8 million, or $0.30 per basic and $0.27 per diluted share, fair value gain on financial liabilities measured at fair value, and (iv) $4.0 million, or $0.09 per basic and $0.08 per diluted share, of transaction costs related to the second quarter issuances of the Convertible Notes (described below). For the six months ended June 30, 2025, the Company had net income of $131.7 million, or $2.85 basic and $2.74 diluted earnings per share. For the six months ended June 30, 2025, the Company had adjusted net income (see Non-IFRS Measures section below) of $116.8 million, or $2.53 basic and $2.43 diluted earnings per share, which excludes from net income (i) a $17.0 million, or $0.37 per basic and $0.35 per diluted share, fair value gain on financial assets measured at fair value, and (ii) a $2.1 million, or $0.05 per basic and $0.04 per diluted share, loss on the extinguishment of debt and write-offs of deferred financing fees. Declaration of Dividend On July 29, 2026, the Board of Directors declared a quarterly cash dividend of $0.45 per common share, with a payment date of August 31, 2026 to all shareholders of record as of August 17, 2026 (the record date). As of July 28, 2026, there were 50,081,352 common shares of the Company issued and outstanding. Summary of Second Quarter 2026 and Other Recent Significant Events 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 third quarter of 2026 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 estimated off-hire days during the period associated with 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 Expected Revenue days. The Company uses Expected 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 second quarter of 2026: In July 2026, the Company signed a Letter of Intent (“LOI”) to purchase two scrubber-fitted LR2 newbuilding product tankers for $72.8 million per vessel. The vessels are to be constructed by Jiangsu Hantong Ship Heavy Industry Co., Ltd. in China and deliveries are expected in the second and third quarters of 2029. In July 2026, the Company entered into an agreement pursuant to which it will acquire a minority ownership interest (less than 15%) in a joint venture which has entered into shipbuilding contracts to construct eight scrubber fitted Very Large Crude Carriers (“VLCCs”) with deliveries scheduled between the third quarter of 2029 and the second quarter of 2030. The equity portion of the investment is scheduled to be paid when installment payments become payable pursuant to the shipbuilding contracts. In June 2026, the Company entered into agreements to purchase two scrubber-fitted MR newbuilding product tankers for $46.33 million per vessel. The vessels are expected to be constructed at Jiangsu Yangzi-Mitsui Shipbuilding Co., Ltd. in China and deliveries are expected in the first quarter of 2030. Aside from a 10% initial deposit, the remaining payments are not due until 2028 or later. These agreements were previously announced as a letter of intent in May 2026. The Company recently reached agreements to time charter-out three 2015 built MR product tankers consisting of STI Notting Hill and STI Westminster, each for three years at a rate of $25,000 per day, and STI Bronx for three years at a rate of $23,900 per day. The time charters for STI Notting Hill and STI Westminster are expected to commence between September 1 and December 31, 2026, at the Company's discretion and STI Bronx is expected to commence in the fourth quarter of 2026. During the second quarter of 2026, the charterer of STI Guide exercised its additional option to extend the term of the time charter-out agreement for an additional year at $33,000 per day commencing July 2026. During the second quarter of 2026, the Company issued $605.0 million in aggregate principal amount of convertible senior notes due 2031 (the "Convertible Notes"). The Convertible Notes bear interest at a coupon rate of 1.75% and have an initial conversion rate of 9.9615 shares of common stock per $1,000 principal amount (equivalent to a conversion price of approximately $100.39 per share). The Convertible Notes were issued in two separate transactions of aggregate principal amounts of $375.0 million and $230.0 million in April and May 2026, respectively. The issuance in May 2026 was executed at a price of 110.25 to par for $253.6 million in gross proceeds and resulting in a combined yield to maturity on both issuances of below one percent. The Convertible Notes are scheduled to mature on April 15, 2031, unless earlier converted, repurchased, or redeemed. Upon conversion, the Company has the option to settle the Convertible Notes in cash, shares of its common stock, or a combination of cash and shares. During the second quarter of 2026, the Company repurchased 1,994,236 shares of its common stock at an average price of $77.72 per share as part of the April and May issuances of the Convertible Notes. In July 2026, the Company redeemed its outstanding 7.5% Senior Unsecured Notes due 2030 (the "Nordic Bonds"). The Notes had an aggregate principal amount outstanding of $200 million and were redeemed at a make-whole price of 106.4 to par plus accrued but unpaid interest. During the second quarter of 2026, the Company made unscheduled debt prepayments of $389.1 million in aggregate on certain of its secured credit facilities. This amount represents the aggregate debt outstanding under the 2023 $225.0 Million Revolving Credit Facility, the 2023 $49.1 Million Credit Facility, the 2023 $117.4 Million Credit Facility, the 2023 $1.0 Billion Credit Facility, and the 2023 $94.0 Million Credit Facility, all of which were scheduled to mature in 2028. In June 2026, the Company received a commitment from Standard Chartered Bank and DekaBank Deutsche Girozentrale for a credit facility of up to $90 million (the "Credit Facility"). The Credit Facility is expected to be used to finance a portion of the purchase price of four scrubber-fitted MR newbuilding product tankers, which are currently under construction at Jingjiang Nanyang Shipbuilding Co., Ltd. in China with expected deliveries in the second half of 2026 and 2027. The Credit Facility has a final maturity of seven years from the delivery date of each vessel and bears interest at SOFR plus a margin of 1.20% per annum. In July 2026, the Company closed on the sales of four LR2 product tankers for $285.8 million in aggregate and one MR for $35.0 million. These sales consisted of two 2014 built LR2 product tankers, STI Broadway and STI Condotti, two 2015 LR2 product tankers, STI Winnie and STI Lauren, and the 2015 built MR product tanker, STI Brooklyn. During the second quarter of 2026, the Company closed on the sales of 10 vessels including three 2014 built MR product tankers, STI Opera, STI Aqua and STI Regina, for $105.0 million, three 2015 built MR product tankers, STI Osceola, STI Seneca and STI Black Hawk, for $105.0 million, three 2014 built LR2 product tankers, STI Park, STI Sloane and STI Madison, for $195.0 million, and one 2015 built LR2 product tanker, STI Solidarity, for $60.0 million. Securities Repurchase Program In April 2026, the Company repurchased 1,344,809 shares of its common stock, concurrently with the closing of the initial $375.0 million principal amount of Convertible Notes in privately negotiated transactions at $74.36 per share. On May 4, 2026, the Board of Directors replenished and increased the 2023 Securities Repurchase Program to purchase up to an aggregate of $500.0 million of the Company’s securities, which currently include its common stock and Convertible Notes. This resets the program which had been previously replenished on July 29, 2024. On May 7, 2026, the Company repurchased 649,427 shares of its common stock, concurrently with the closing of the issuance of $230.0 million principal amount of Convertible Notes in privately negotiated transactions at $84.69 per share. As of July 30, 2026, $445.0 million remains available under the Company's 2023 Securities Repurchase Program. Diluted Weighted Number of Shares The computation of earnings per share is determined by taking into consideration the potentially dilutive shares arising from (i) the Company’s equity incentive plan, and (ii) the Company's Convertible Notes. Potentially dilutive shares are excluded from the computation of earnings per share to the extent they are anti-dilutive. The impact of the Convertible Notes on earnings or loss per share is computed using the if-converted method. Under this method, the Company first includes the potentially dilutive impact of restricted shares issued under the Company's equity incentive plan, and then assumes that its Convertible Notes, which were issued during the second quarter of 2026, were converted into common shares during each period. The if-converted method also assumes that the interest and non-cash amortization expense associated with these notes of $7.0 million during the three and six months ended June 30, 2026 were not incurred. Conversion is not assumed if the results of this calculation are anti-dilutive. For the three and six months ended June 30, 2026, the Company’s basic weighted average number of shares outstanding were 45,730,028 and 46,457,406, respectively. For the three and six months ended June 30, 2026, the Company’s diluted weighted average number of shares outstanding were 53,539,590 and 51,928,585, respectively, which included the potentially dilutive impact of restricted shares issued under the Company’s equity incentive plan and shares arising from the Company's Convertible Notes if converted. Diluted earnings per share for both the three and six months ended June 30, 2026 were calculated under the if-converted method. Conference Call Title: Scorpio Tankers Inc. Second Quarter 2026 Conference Call Date: Thursday, July 30, 2026 Time: 8:00 AM Eastern Daylight Time and 2:00 PM Central European Summer Time The conference call will be available over the internet, through the Scorpio Tankers Inc. website www.scorpiotankers.com and the webcast link: https://edge.media-server.com/mmc/p/36r967xe Participants for the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. The conference will also be available telephonically: US/CANADA Dial-In Number: 1-800-715-9871 International Dial-In Number: +1-646-307-1963 Please ask to join the Scorpio Tankers Inc. call. Participants should dial into the call 10 minutes before the scheduled time. Current Liquidity As of July 28, 2026, the Company had $2.0 billion in unrestricted cash and cash equivalents and $483.2 million of undrawn revolver capacity under the 2025 $500.0 Million Revolving Credit Facility. Debt Set forth below is a summary of the principal balances of the Company’s outstanding indebtedness as of the stated dates: (1) In April 2026, the Company repaid the outstanding balance of $21.3 million on the 2023 $225.0 Million Revolving Credit Facility related to STI Aqua, STI Regina, and STI Opera in advance of the sales of these vessels. In June 2026, the Company repaid the remaining outstanding balance and terminated the facility. (2) In May 2026, the Company repaid the remaining outstanding balance and terminated the facility. (3) In June 2026, the Company repaid the remaining outstanding balance and terminated the facility. (4) During the second quarter of 2026, the Company executed its previously announced 2026 $50.0 Million Credit Facility with Bank of America. This facility was drawn in full and two 2015 built LR2 product tankers, STI Rose and STI Alexis, were placed as collateral. The credit facility has a final maturity of seven years from the drawdown date of each vessel and bears interest at SOFR plus a margin of 1.20% per annum. (5) In June 2026, the Company issued a redemption notice to redeem its Unsecured Senior Notes Due 2030. The notes were redeemed in July 2026 at a make-whole price of 106.4 to par ($212.8 million) plus accrued but unpaid interest. The make-whole premium of $12.8 million was recorded as a debt extinguishment cost during the second quarter of 2026. (6) In the second quarter of 2026, the Company issued $605.0 million aggregate principal amount of Convertible Notes. The Convertible Notes were issued in two separate transactions of aggregate principal amounts $375.0 million and $230.0 million in April and May 2026, respectively. The issuance in May 2026 was executed at a price of 110.25 to par for $253.6 million in gross proceeds and resulted in a combined yield to maturity on both issuances of below one percent. The Convertible Notes are scheduled to mature on April 15, 2031, unless earlier converted, repurchased, or redeemed. Prior to January 15, 2031, the Convertible Notes are convertible at the option of the holders only under certain circumstances and during certain periods. On or after January 15, 2031, holders may convert their Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Convertible Notes may be settled at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of common stock. The initial conversion rate for each $1,000 principal amount of Convertible Notes is 9.9615 shares of common stock, equivalent to a conversion price of approximately $100.39 per share. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. The Convertible Notes are redeemable, in whole or in part (subject to certain limitations), for cash at the Company’s option at any time, and from time to time, on or after April 20, 2029 and on or before the 41st scheduled trading day immediately before the maturity date, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied. In addition, the Company has the right to redeem all, but not less than all, of the Convertible Notes if certain changes in tax law occur and certain other conditions are satisfied. Except as described in the two immediately preceding sentences, the Convertible Notes will not be redeemable at the Company’s option prior to the maturity date. The redemption price will be equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date. Set forth below are the estimated expected future principal repayments on the Company's outstanding indebtedness, which includes principal amounts due under the Company's secured credit facilities, Unsecured Senior Notes Due 2030 and Convertible Notes (which also include actual scheduled payments made from July 1, 2026 through July 28, 2026): (1) Reflects the redemption of the Company's Unsecured Senior Notes Due 2030 in July 2026. Newbuilding Vessels and Joint Venture As of July 28, 2026, the Company had commitments or signed letters of intent to construct (i) six scrubber-fitted LR2 product tankers, two with deliveries expected in the third quarter of 2027, one with delivery expected in the second quarter of 2029, two with deliveries expected in the third quarter of 2029, and one with delivery expected in the fourth quarter of 2029, (ii) six scrubber-fitted MR product tankers with one delivery expected in the third quarter of 2026, one delivery expected in the first quarter of 2027, two deliveries expected in the second quarter of 2027, and two deliveries expected in the first quarter of 2030 and (iii) two scrubber-fitted VLCCs with deliveries expected in the third and fourth quarters of 2028. Additionally, the Company is committed to fund its portion of the minority equity investment in a joint venture consisting of eight VLCCs under construction, which is scheduled to be funded as installment payments become due under the various shipbuilding contracts. As of July 28, 2026, the Company paid $97.2 million in installment payments related to its vessels under construction and VLCC joint venture. The table below summarizes the estimated remaining installment payments for the vessels under construction and VLCC joint venture (which also include actual scheduled payments made from July 1, 2026 through July 28, 2026) (1): (1) The installment payments are estimates only and are subject to change as construction progresses. (2) Amounts include installment payments under shipbuilding contracts in addition to the Company's commitment to fund its minority investment in a joint venture consisting of eight VLCCs under construction. Drydock and Off-Hire Update Set forth below is a table summarizing the drydock activity that occurred during the second quarter of 2026 and the estimated expected payments to be made for the Company's drydocks through the end of 2027. This table also includes an estimate of off-hire days for these periods which includes (i) estimated off-hire days for drydocks, and (ii) estimated off-hire time for general repairs. (1) These costs include estimated cash payments for drydocks. These amounts may include costs incurred for previous projects for which payments may not be due until subsequent quarters, or payments that are due in advance of the scheduled service and may be scheduled to occur in quarters prior to the actual drydocks. The timing of the payments set forth are estimates only and may vary as the timing of the related drydocks finalize. (2) Represents the total estimated off-hire days during the period for both drydockings or general repairs, including vessels that commenced work in a previous period. The number of off-hire days set forth in this table are estimates only and actual off-hire days may vary. (3) Represents the number of vessels scheduled to commence drydock. It does not include vessels that commenced work in prior periods but will be completed in a subsequent period. Additionally, the timing set forth in these tables may vary as drydock times are finalized. Explanation of Variances on the Second Quarter of 2026 Financial Results Compared to the Second Quarter of 2025 For the three months ended June 30, 2026, the Company recorded net income of $387.5 million compared to net income of $73.5 million for the three months ended June 30, 2025. 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 June 30, 2026, and 2025: TCE revenue for the three months ended June 30, 2026 increased by $169.0 million to $391.8 million, from $222.8 million for the three months ended June 30, 2025 despite the average number of vessels decreasing to 84.5 during the three months ended June 30, 2026 from 99.0 during the three months ended June 30, 2025. Overall, the average daily TCE revenue increased to $52,661 per vessel during the three months ended June 30, 2026, from $25,569 per vessel during the three months ended June 30, 2025. TCE revenue for the three months ended June 30, 2026 increased as compared to the same period in the previous year reflecting a significantly stronger product tanker market in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The three months ended June 30, 2026 were impacted by the conflict in the Middle East. Initially the disruptions stemming from the conflict caused daily spot TCE rates to spike to record levels as exports through the Strait of Hormuz ground to a halt and barrels had to be sourced from more distant markets, causing the global fleet to reposition to accommodate new trading patterns. As the quarter progressed, these initial disruptions gave way to an environment marked by lower export volumes and a repositioned global fleet. Consequently, daily spot TCE rates trended down from record highs towards the end of the quarter. Nevertheless, longer voyage distances from these new trade routes mitigated the impact of lower export volumes through the Strait of Hormuz, and kept daily spot TCE rates elevated as compared to the same quarter in the previous year. Vessel operating costs for the three months ended June 30, 2026 decreased by $3.9 million to $64.8 million, from $68.7 million for the three months ended June 30, 2025 due to a decrease in the average number of vessels, resulting from the sale of 11 MRs and nine LR2s since June 30, 2025. Vessel operating costs increased to $8,394 per vessel per day for the three months ended June 30, 2026 from $7,630 per vessel per day for the three months ended June 30, 2025 primarily due to higher repairs and maintenance and spares and stores expenses on LR2 and MR vessels, as well as the timing of certain expenses. Additionally, the repositioning and new trade routes that emerged as a result of the conflict in the Middle East led to increased vessel operating expenses as supply chains recalibrated. Depreciation expense for the three months ended June 30, 2026 decreased by $9.1 million to $36.2 million, from $45.3 million for the three months ended June 30, 2025. This decrease resulted from 25 vessels either being sold or classified as held for sale since June 30, 2025. General and administrative expenses for the three months ended June 30, 2026 increased by $16.9 million to $46.6 million, from $29.6 million for the three months ended June 30, 2025 primarily due to an increase in compensation related costs. Financial expenses for the three months ended June 30, 2026 increased by $14.8 million to $36.1 million, from $21.3 million for the three months ended June 30, 2025, as a result $20.2 million of debt extinguishment costs and write-offs of deferred financing fees associated with the repayment of $389.1 million of secured debt and the $12.8 million make-whole premium associated with the redemption of the Unsecured Senior Notes due 2030 (compared to $1.8 million during the prior year period). Excluding the debt extinguishment costs and write-offs of deferred financing fees, our financial expense decreased by $3.5 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. While our average debt remained consistent at $950.4 million compared to $946.5 million during the three months ended June 30, 2026 and June 30, 2025, respectively, our average cost of debt decreased due to the change in the composition of debt resulting from the issuance of the Convertible Notes and the repayment of our secured credit facilities. In addition, $1.3 million of interest was capitalized related to the installments paid on vessels under construction during the three months ended June 30, 2026.  Amortization of deferred financing fees was $1.5 million during the three months ended June 30, 2026 and $1.8 million during the three months ended June 30, 2025. Dividend income and fair value gain (loss) on financial assets measured at fair value through profit or loss, net for the three months ended June 30, 2025 was a gain of $9.3 million, consisting of a fair value gain of $7.5 million and $1.7 million of dividends related to our investment in DHT Holdings Inc., which was sold in the fourth quarter of 2025. Fair value gain on financial liabilities measured at fair value through profit or loss represents the change in the fair value of the embedded conversion derivative associated with our Convertible Notes since issuance. The embedded derivative is measured at fair value at each reporting date, with changes in fair value recognized in profit or loss in accordance with IFRS. Other income and (expenses), net include $4.0 million of transaction costs related to the issuance of the Convertible Notes during the three months ended June 30, 2026. Under IFRS, transaction costs incurred as part of a convertible financial instrument are apportioned to the conversion feature and to the underlying debt host. The costs apportioned to the conversion feature, accounted for as a derivative liability, are expensed upon issuance. The costs apportioned to the underlying debt host are recorded as part of the financial liability and amortized over the term of the instrument. (1) The computation of diluted earnings per share for the three and six months ended June 30, 2026, includes the effect of potentially dilutive unvested shares of restricted stock and the effect of the Convertible Notes under the if-converted method. The computation of diluted earnings per share for the three and six months ended June 30, 2025, includes the effect of potentially dilutive unvested shares of restricted stock. Fleet list as of July 28, 2026 Dividend Policy 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 2025 and 2026 were as follows: On July 29, 2026, the Board of Directors declared a quarterly cash dividend of $0.45 per common share, with a payment date of August 31, 2026 to all shareholders of record as of August 17, 2026 (the record date). As of July 28, 2026, there were 50,081,352 common shares of the Company issued and outstanding. About Scorpio Tankers Inc. Scorpio Tankers Inc. is a provider of marine transportation of petroleum products worldwide. Scorpio Tankers Inc. currently owns 74 product tankers (25 LR2 tankers, 35 MR tankers and 14 Handymax tankers) with an average age of 10.2 years. The Company has reached agreements or letters of intent for six MR newbuildings that are currently under construction with deliveries expected in 2026, 2027 and 2030, six LR2 newbuildings with deliveries expected in 2027 and 2029 and two VLCC newbuildings with deliveries expected in 2028. Additional information about the Company is available at the Company's website www.scorpiotankers.com. Information on the Company’s website does not constitute a part of and is not incorporated by reference into this press release. Non-IFRS Measures Reconciliation of IFRS Financial Information to Non-IFRS Financial Information 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 Second Quarter of 2026 Financial Results Compared to the Second Quarter of 2025". 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. Reconciliation of Net Income to Adjusted Net Income (1) Summation difference due to rounding Reconciliation of Net Income to Adjusted EBITDA(1) (1) Adjusted EBITDA is calculated by taking Net Income and adding back Financial Expenses (which include interest expense and amortization and write offs of deferred financing fees), Financial Income (which includes interest income), Depreciation, Equity settled share based compensation (which represents the amortization of restricted stock awards), dividend income, gains and losses on asset sales, fair value adjustments on assets and liabilities measured at fair value, and transaction costs allocated to the derivative liability arising from the Convertible Notes. Forward-Looking Statements 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, 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, the impact of the current and future sanctions that may impact the transportation of petroleum products, the ongoing military conflict in Iran which has had a significant direct and indirect impact on the trade of crude oil and refined petroleum products, potential disruption of shipping routes due to accidents or political events, potential liability from pending or future litigation, general domestic and international political conditions, which have and may continue to disrupt certain global shipping routes, vessel 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. Contact Information Scorpio Tankers Inc.James Doyle - Head of Corporate Development & Investor RelationsTel: +1 203-900-0559Email: [email protected]

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record financial performance: Scorpio Tankers Inc (NYSE:STNG) reported its strongest quarter ever, with adjusted EBITDA exceeding $300 million and adjusted net income of $243.7 million. Strengthened balance sheet: The company reduced net debt by $4.2 billion since 2021, achieving a net cash position of $1.3 billion, and lowered its cash breakeven to approximately $11,000 per day. Fleet optimization and renewal: Sold 19 older vessels at high prices, including LR2s above newbuilding costs, while taking delivery of a new MR vessel and reducing the order book to 13 ships. Shareholder returns: Returned over $175 million to shareholders in Q2 through $155 million in share repurchases and a $0.45 per share dividend. Favorable market fundamentals: Product tanker rates remain above $30,000 per day, supported by low global inventories, refinery dislocation, and an aging fleet, with ton-mile demand expected to outpace fleet growth. Geopolitical uncertainty: Conflicts in the Middle East and Red Sea create unpredictable risks that could disrupt operations or freight rates. Moderating freight rates: While still strong, rates have declined from exceptional early-2026 levels, potentially reducing future cash flow. Order book overhang: The product tanker order book is at 20% of the fleet, with LR2s comprising over half, posing a risk of oversupply if not absorbed by demand. Dependence on geopolitical disruptions: Current market strength is partly driven by temporary factors like rerouting and sanctions, which could unwind if tensions ease. Potential dilution from convertible notes: The $605 million convertible debt, with a conversion price near $100 per share, could lead to dilution of up to 6 million shares if the stock appreciates significantly. Warning! GuruFocus has detected 6 Warning Sign with STNG. Is STNG fairly valued? Test your thesis with our free DCF calculator. Q: Can you comment on the LR2 market and how it's developing? Are clean owners like Scorpio starting to trade LR2s more actively in the dirty market?A: Lars Danker-Nielsen, Chief Commercial Officer: We have always been opportunistic, moving vessels between the clean and dirty markets on a vessel-by-vessel basis. The fungibility between LR2s and Aframaxes has been apparent for a couple of years. We have seen a very strong Atlantic basin on the Aframaxes, so we decided to tap into that. Today, about 170 clean LR2s are only trading in the clean market, while over 250 Aframaxes are trading dirty. Even with that many ships moving into the crude market, it has remained strong due to ton-mile demand and volumes. If rates in the West move up, you will see ships moving back into clean. You need to look at LR2s and Aframaxes as a much closer unit. Q: What has been behind the recent move higher in rates across the board in the Atlantic Basin?A: Lars Danker-Nielsen, Chief Commercial Officer: I have never seen a July or August market like this. You have great refining margins, the US Gulf running at high utilization, and the geopolitical backdrop with Russia, Bab el-Mandeb, and Hormuz issues. Stocks are generally low. The volatility has been profound. The triangulation element on the Atlantic Basin has been strong, and the same goes for Aframaxes. The ton-mile story is valid, and the advent of more oil coming out of South America and the United States has been underpinning the dirty market. Q: When the situation in the Mideast kicked off, there were some very unusual, long-distance trading patterns. Have some of those routes been more enduring?A: Lars Danker-Nielsen, Chief Commercial Officer: When it all kicked off, we saw some very uncommon voyages due to stress factors. A calibration took place, and the long-term routing is still very much in vogue. An uptick in Chinese exports has helped balance things. With Russian exports dwindling and South America and Africa suffering, other supply chains have been created, increasing ton-miles. There has been a general understanding of where oil is coming from, with everything still underpinned by extended turmoil. Q: Is the large percentage of the LR2 fleet trading dirty mostly due to geopolitical disruptions? Could the downside be the unwinding of geopolitical risk?A: Lars Danker-Nielsen, Chief Commercial Officer: It's all a question of time charter equivalent. When the dirty market (TD25) ramped up to $150,000 and the clean LR2 market was quiet due to Hormuz uncertainties, the spreads were too great to ignore. If that spread flips, vessels will quickly move back into clean. This flip-flopping on Aframaxes has been taking place for a couple of years. We don't consider this to be transient, but more market-related. Q: You emphasized the floor is more important than the peak, with rates remaining above $30,000. What are your thoughts on the floor and seasonality?A: James Dull, Head of Corporate Development and IR: Typically, you get through peak gasoline season and go into maintenance. Because of longer voyage distances and rerouting, we are seeing unique voyages. We expect disruptions in the Red Sea and refining capacity in Russia to increase Atlantic basin MR volumes. We also expect more NAPTA to go from the US Gulf to Asia. The strength on LR2s and Aframaxes trading crude oil is expected to pick up as you get into maintenance, with more crude volume from the Atlantic Basin needing to go to Asia. Q: You mentioned inventories are down about 400 million barrels. What is the timeframe for refineries to meet demand, especially going into maintenance season?A: James Dull, Head of Corporate Development and IR: A lot of crude was shipped in June, taking 30-45 days to get to Asia and Europe, and it's arriving now. We expect runs to pick up in those regions, which is fantastic for medium-range ships. While the US Gulf might have maintenance in September, we expect runs throughout the rest of the world to pick up at the same time. The fleet is also out of its normal positioning, which will be constructive. Q: Do you think the events of the last six months have structurally changed the LR2 market? How are you weighing the supply and demand landscape over the next 12 months?A: Lars Danker-Nielsen, Chief Commercial Officer: The longer voyage distances tighten supply, and the issues of the sanctioned fleet and its age are getting to a point where they will not exist in a normal market. Sanctioned vessels will never enter the primary trade again. There is a lot more dislocation and disruption, which has always created potential for product tankers. Considering the stock draws and flat price, at some point you will have to think about getting into a minimum operating situation. The age profile of ships and the fleet profile on order over the next couple of years doesn't look scary. However, we are living in a highly uncertain political environment, so we try to be as nimble as possible. Q: Following the refinancing, your debt profile is heavily weighted towards converts. How should we think about potential dilution and your preferred method of settlement?A: Chris Avella, CFO: We are happy with the transaction. One of the biggest features is that we can settle it in cash or shares. The trigger for that is 130% over the conversion price. We would be thrilled if we get to those levels and will address it then. The maximum number of shares that can be issued is 6 million. Right now, we are happy with how it fits into our capital structure and the low cash costs, which have driven down our cash breakevens. Q: Are you seeing a higher likelihood that time charters get extended? What are you seeing in the time charter market more broadly?A: Lars Danker-Nielsen, Chief Commercial Officer: Any time charters we do today would be new ones in the market. We have been opportunistic and have secured two time charters at levels we have not seen before. Time charter inquiry has been high over the summer, with oil companies and traders looking. We take a balanced approach, dominated by a view to look at this opportunistically with counterparties we have long-standing strategic relationships with. Q: Presuming things get normal someday, do you expect the redistribution of global refining capacity to continue?For the complete transcript of the earnings call, please refer to the full earnings call transcript.