Scorpio Tankers doubles Q1 revenue

MONACO : Scorpio Tankers announced a strong set of first quarter results, doubling its revenue and returning to profit in the first three months of 2023.

Profit of $193.2m in the first quarter 2023 compared to an $84.4m loss in the same period last year.

Time charter equivalent (TCE) earnings at Scorpio were $377.2m in the first quarter, up by $205.1m compared to the $172.0m recorded in Q1 2022, despite a drop in the average size of the fleet from 129.3 vessel in Q1 2022 to 113.0 in Q1 2023.

First quarter average daily TCE earnings on the spot market were $47,356 for LR2 tankers, $34,616 for MRs, and $38,349 for handymaxes while time charters were $29,887 for LR2s and $21,637 for MRs.

For the second quarter so far, earnings were marginally stronger in all segments and voyage types, except for a slight softening of handymax spot/pool rates.

Commenting on the market, Scorpio said the increased earnings reflect a market improvement that began at the end of the first quarter 2022.

“Initially, the easing of COVID-19 restrictions around the globe, the conflict in Ukraine, and strengthening refining margins resulted in significant increases in ton-mile demand as trade routes shifted and volumes increased,” said Scorpio.

More recently, easing restrictions in China and increased sanctions on Russian oil have supported the market, accelerating a trend of increased demand for transport of refined oil products while the orderbook remains near record lows.

The improvement in earnings is more noticeable thanks to the subdued state of the market in Q1 2022, where much of the world was still locked down due to COVID, impacting demand for petroleum products.

The company also managed to reduce overall vessel operating expenses, as daily costs were steady and the fleet shrank by 18 vessels.

Scorpio’s earnings release included a statement on the market volatility caused by the war in Ukraine, and the potential of the conflict and its market impact to adversely affect the company.