Q1 2025 Scorpio Tankers Inc Earnings Call

<unk> corporate development and Investor Relations. Please go ahead Sir.

Speaker Change: Thank you for joining us today welcome to the Scorpio tankers first quarter 2025 earnings conference call on the call with me today are Emmanuel I Lauro, Chief Executive Officer, Robert Bugbee, President Cameron Mackey, Chief operating Officer, Chris <unk> Chief financial.

Speaker Change: Officer, Lars Denker Nielsen Chief commercial officer.

Speaker Change: Earlier today, we issued our first quarter earnings press release, which is available on our website at Scorpio tankers Dot com.

Speaker Change: The information discussed on this call is based on information as of today May one 2025 and may contain forward looking statements that involve risk and uncertainty.

Speaker Change: 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 Scorpio tankers dot com and SEC Dot Gov.

Speaker Change: All participants are advised that the audio of this conference call is being broadcast live on the Internet and 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 Scorpio tankers dot.

Speaker Change: 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 do you have an additional.

Emmanuel Laura: An additional question. Please rejoin the queue now I'd like to introduce our Chief Executive Officer Emmanuel Laura.

Emmanuel Laura: Thank you James and good morning, and good afternoon to all thank.

Speaker Change: Thank you for joining us today.

Speaker Change: We are pleased to report another quarter of strong financial results in the first quarter the company generated a $100 million and adjusted EBITDA.

Operator: Please wait, the conference will begin shortly.

Please wait the conference will begin shortly.

[music].

Speaker Change: $49 million adjusted net income.

Speaker Change: More so now than ever.

Operator: Hello, and welcome to the Scorpio Tankers Inc. 1st Quarter 2025 Conference.

Speaker Change: Hello, and welcome to the Scorpio Tankers, Inc. First quarter 225 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.

Speaker Change: And ourselves reported results with you in an environment marked by both strong earnings and persistent global uncertainty.

James Doyle: I would now like to turn the call over to James. Head of Corporate Development and Investor Relations. Thank you for joining us today. Welcome to the Scorpio Tankers First Quarter 2025 Earnings Conference Call.

Speaker Change: On one hand structural changes such as refinery closers.

Speaker Change: Leasing demand for seaborne transportation of refined products.

Speaker Change: Thank you for joining us today welcome to the Scorpio tankers first quarter 2025 earnings conference call on the call with me today are Emmanuel a Lauro Chief Executive Officer, Robert Bugbee, President Cameron Mackey, Chief operating Officer, Chris <unk> Chief financial.

Speaker Change: Their policy shifts.

Speaker Change: And geopolitical developments.

James Doyle: 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 Denker Nielsen, Chief Commercial Officer. Earlier today, we issued our first 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, May 1st, 2025, and may contain forward-looking statements that involve risk and uncertainty. Actual results may differ materially 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.

Speaker Change: Two cloud visibility.

Speaker Change: In markets like Us, we don't get the luxury of clients and we offer it would not be good.

Speaker Change: And must prepare accordingly.

Speaker Change: And that is exactly what we've done the company is financially operationally and commercially stronger than it was last quarter we.

Speaker Change: Officer wire Stinker Nielsen Chief commercial officer.

Speaker Change: Earlier today, we issued our first quarter earnings press release, which is available on our website Scorpio tankers dot com.

Speaker Change: We have not.

<unk> balance sheet, reducing debt by $2 2 billion since 2022.

Speaker Change: The information discussed on this call is based on information as of today May one 2025 and may contain forward looking statements that involve risk and uncertainty.

Speaker Change: Expanding our revolving credit capacity and locking in low cost capital and lowering our daily cash breakeven to $12500 per day.

Speaker Change: Actual results may differ materially from those set forth in such statements.

Speaker Change: Our liquidity now stands at close to one 4 billion.

Speaker Change: 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 Scorpio tankers dot com and SEC Dot Gov call participants are advised that the audio of this conference call is being broadcast live on the Internet.

Speaker Change: Comprising of nearly $400 million in cash $838 million in undrawn revolving capacity and our investment in DHT.

Speaker Change: Operationally, we completed the special surveys all Drydocking of 10 vessels this quarter and 63 vessels over the last six quarters.

Operator: Call participants are advised that the audio of this conference call is being broadcasted live on the internet and 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.

Speaker Change: And 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 Scorpio tankers dot com on the Investor Relations page under reports and presentations the slides will also be.

Speaker Change: These upgrades will.

Speaker Change: <unk> and evidenced vessel efficiency, eliminating the need for repositioning voyages solely for drydocking purposes.

James Doyle: 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.

Speaker Change: Have you started maybe impacted earnings.

Speaker Change: Commercially we added one new vessel on time charter and had three to chop that is extended for one additional year.

Speaker Change: 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 now I'd like to introduce our Chief Executive Officer Emmanuel Laura.

Speaker Change: Recently, we've taken more and a more conservative approach to capital allocation.

Emanuele Lauro: Now I'd like to introduce our chief executive officer, Emanuele Lauro. Thank you, James, and good morning and good afternoon to all. Thank you for joining us today. We are pleased to report another quarter of strong financial results. In the first quarter, the company generated $123 million in adjusted EBITDA. and 49 million in adjusted netting.

Speaker Change: Because of our view on the product tanker market, which remains constructive.

Speaker Change: Due to the broader global uncertainty that continues to persist.

Emmanuel Laura: Thank you James and good morning, and good afternoon to all thank.

Speaker Change: Our outlook for both crude and oil refined products remains positive.

Speaker Change: Thank you for joining us today.

Speaker Change: We are pleased to report another quarter of strong financial results in the first quarter, the company generated $123 million and adjusted EBITDA.

Speaker Change: Tanker rates have begun in the second quarter of 2025 at higher levels than those seen in the first quarter.

Speaker Change: With our balance sheet. Thank you.

Speaker Change: $49 million adjusted net income.

Speaker Change: Side, our fleet upgraded and market fundamentals in our favor we are well equipped to navigate the uncertainty and continue creating long term value for our shareholders.

Emanuele Lauro: More so now than ever, we find ourselves reporting results within an environment marked by both strong product earnings and persistent global uncertainty. On one hand, structural changes, such as refinery closures, are increasing demand for sea-borne transportation of refined products. On the other, policy shifts, tariffs, and geopolitical developments continue to cloud these. In markets like this, we don't get the luxury of clarity and we operate with ambiguity and must prepare accordingly. And that is exactly what we've done. The company is financially, operationally, and commercially stronger than it was last year. We have materially strengthened our balance sheet, reducing debt by $2.2 billion since 2022.

Speaker Change: More so now than ever.

Speaker Change: And ourselves to reporting results with you in an environment marked by both strong earnings and persistent global uncertainty.

Speaker Change: My opening remarks are completed and I would like to turn the call to James Dougherty. Please James.

Speaker Change: On one hand structural changes such as refinery closers.

Speaker Change: Leasing demand for seaborne transportation of refined products.

James Dougherty: Thanks, Chris would you like to proceed.

Speaker Change: Their policy sheets.

Sure.

Speaker Change: And geopolitical developments.

James Dougherty: Thanks, James Thank you Manuel and good morning, or good afternoon, everyone.

Speaker Change: Two cloud visibility.

Speaker Change: In markets like these we don't get the luxury of guide and we offer it would not be good.

James Dougherty: I've been really emphasized we are surrounded by uncertainty.

James Dougherty: This is why our focus has been on what we can control rather than what is outside of our control.

Speaker Change: And most of that accordingly.

Speaker Change: And that is exactly what we've done the company is financially operationally and commercially stronger than it was last quarter.

James Dougherty: In this regard our strategic priority has been and continues to be the strengthening of our balance sheet.

Speaker Change: We have strengthened our balance sheet, reducing debt by $2 2 billion since 2022.

James Dougherty: Slide five please.

Emanuele Lauro: expanding our evolving credit capacity and locking in low-cost capital, and lowering our daily cash break evens to $12,500. Our liquidity now stands at close to 1.4 billion dollars. comprising of nearly $400 million in cash, $838 million in undrawn revolving capacity, and our investment in VHF. Operationally, we completed the special surveys or dry docking of 10 vessels this quarter and 63 vessels over the last six quarters. This upgrade will enhance and have enhanced vessel efficiency, eliminating the need for repositioning voyages solely for dry docking purposes.

James Dougherty: This quarter, we generated $123 $7 million, and adjusted EBITDA and $49 million or $1 <unk> per diluted share and adjusted net income.

Speaker Change: Expanding our revolving credit capacity and locking in low cost capital and lowering our daily cash breakeven to $12500 per day.

Speaker Change: Our liquidity now stands at close to one 4 billion.

James Dougherty: We've secured additional time charter coverage with a one year extensions on the charters for three of our two tankers at $31000 per day, along with a new two year time charter on one of our handy Max tankers at $24000 per day.

Speaker Change: Comprising of nearly $400 million in cash $838 million in undrawn revolving capacity and our investments in DHT.

Speaker Change: Operationally, we completed the special surveys all Drydocking of 10 vessels this quarter and 63 boxes over the last six quarters.

James Dougherty: We recently paid $50 million into our $225 million revolving credit facility.

James Dougherty: This amount covers all of the remaining quarterly principal amortization payments that were scheduled up until the loans maturity in January of 2028.

Speaker Change: These upgrades will emerge.

Speaker Change: And evidenced vessel efficiency, eliminating the need for repositioning voyages solely for drydocking purposes.

James Dougherty: Subject to the same amortization profile. These amounts can be re borrowed in the future under this revolving credit facility.

Emanuele Lauro: that have historically impacted our nation. Commercially, we added one new vessel on-time charter and had three LR2 charters extended for one additional. Recently, we've taken more and a more conservative approach to capital allocation, not because of our view on the product banker market, which remains constructive, but due to the broader global uncertainty that continues to persist. Our outlook for both crude and oil-refined products remains positive. Power tanker rates have begun the second quarter of 2025 at higher levels than those seen in the first quarter. With our balance sheets fortified, our fleet upgraded, and market fundamentals still in our favor, we are well equipped to navigate uncertainty and continue creating long-term value for our shareholders.

Historically impacted earnings.

Speaker Change: Commercially we added one new vessel on time charter and had three two chapters extended 41 additional year.

James Dougherty: This repayment following our $200 million Nordic bond issuance in January where a portion of the proceeds were used to redeem our then existing senior unsecured notes, which were due to mature in June of 2025 to $70 $6 million.

Speaker Change: Recently, we've taken a more and a more conservative approach to capital allocation.

Speaker Change: Because of our view on the product tanker market, which remains constructive.

James Dougherty: Thus far this year, we increased our investment in DHT by purchasing an additional $4 3 million shares at an average price of $10 67 per share.

Speaker Change: Due to the broader global uncertainty that continues to persist.

Speaker Change: Our outlook for both crude and oil decline Publix remains positive.

James Dougherty: The aggregate increase in ownership demonstrates our constructive view on the crude tanker market.

Speaker Change: Tanker rates has begun in the second quarter of 2025 at higher levels than those seen in the first quarter.

James Dougherty: We were also opportunistic having divested 700000 shares at $11 85 per share.

Speaker Change: With our balance sheets.

Speaker Change: Side, our fleet upgraded and market fundamentals in our favor.

James Dougherty: We highlight that this investment has the dual benefit of having meaningful exposure to the VLCC market. While also having the liquidity to move in and out of the position as opportunities arise.

Speaker Change: Ill equipped to navigate the uncertainty and continue creating long term value for our shareholders.

Emanuele Lauro: My opening remarks are concluded, and I would like to turn the call to James Doyle, please. Thanks, C.

Speaker Change: My opening remarks are completed and how you would like to turn the call to James go ahead. Please James.

James Dougherty: Slide six please.

James Dougherty: The chart on the left shows our liquidity profile.

Christopher Avella: Chris, would you like to proceed? Sure. Thanks, James. Thank you, Emanuele.

James Doyle: Thanks, Chris would you like to proceed.

James Dougherty: As you can see we have access to over $1 2 billion in liquidity as of today.

Speaker Change: Sure.

James Doyle: Thanks, James Thank you Manuel and good morning, or good afternoon, everyone.

James Dougherty: This is approximately $1 $4 billion. If you include our investment in DHT.

Christopher Avella: Good morning or good afternoon, everyone. As Emanuele emphasized, we are surrounded by uncertainty. This is why our focus has been on what we can control rather than what is outside of our control. In this regard, our strategic priority has been and continues to be the strengthening of our balance sheet.

James Doyle: And then while I emphasize we are surrounded by uncertainty.

James Dougherty: Our liquidity consists of cash of $397 million along with.

This is why our focus has been on what we can control rather than what is outside of our control.

James Dougherty: $838 million of drawdown availability under three revolving credit facilities.

James Doyle: In this regard our strategic priority has been and continues to be the strengthening of our balance sheet.

James Dougherty: This level of revolving debt was made partially possible by the February execution of our new $500 million revolving credit facility, which is secured by 26 vessels.

Christopher Avella: Slide five, please. This quarter we generated $123.7 million in adjusted EBITDA and $49 million or $1.03 per diluted share in adjusted net income. We've secured additional time charter coverage with the one year extensions on the charters for three LR2 tankers at $31,000 per day, along with a new two year time charter on one of our HandyMax tankers at $24,000 per day. We recently paid $50 million into our $225 million revolving credit facility. This amount covers all of the remaining quarterly principal amortization payments that were scheduled up until the loan's maturity in January of 2028. Subject to the same amortization profile, these amounts can be re-borrowed in the future under this revolving credit plan.

James Doyle: Slide five please.

James Doyle: This quarter, we generated $123 $7 million, and adjusted EBITDA and $49 million or $1 <unk> per diluted share and adjusted net income.

James Dougherty: While it is currently Undrawn this facility bears a low cost of debt with a margin of 185 basis points when drawn and the seven year tenure with no amortization in the first two years.

James Doyle: We've secured additional time charter coverage with a one year extensions on the charters for three of our two tankers at $31000 per day, along with a new two year time charter on one of our handy Max tankers at $24000 per day.

James Dougherty: This facility has enabled us to lock in low cost secured financing through February of 2030 to date that is well past the 2028 maturities of the remainder of our secured bank debt.

James Dougherty: The chart on the right shows the progression of our net debt since December 31, 2021, which has declined almost $2 $4 billion to a net debt balance of $535 million as of the date of this press release.

James Doyle: We recently paid $50 million into our $225 million revolving credit facility.

James Doyle: This amount covers all of the remaining quarterly principal amortization payments that were scheduled up until the loans maturity in January of 2028.

James Dougherty: In uncertain times, such as these we believe that it is important to maintain a diverse capital structure with multiple sources of funding and maximum flexibility.

James Doyle: Subject to the same amortization profile. These amounts can be re borrowed in the future under this revolving credit facility.

James Dougherty: Slide seven please.

Christopher Avella: This repayment follows our $200 million Nordic bond issuance in January, where a portion of the proceeds were used to redeem our then-existing senior unsecured notes, which were due to mature in June of 2025 for $70.6 million. Thus far this year, we increased our investment in DHT by purchasing an additional 4.3 million shares at an average price of $10.67 per share. This aggregate increase in ownership demonstrates our constructive view on the crude tanker market. But we were also opportunistic, having divested 700,000 shares at $11.85 per share. We highlight that this investment has the dual benefit of having meaningful exposure to the VLCC market while also having the liquidity to move in and out of the position as opportunities arise.

James Dougherty: The chart on the left breaks down our outstanding debt by type and illustrates our ongoing shift away from high cost and flexible lease financing towards lower cost more flexible bank lending.

James Doyle: This repayment following our $200 million Nordic bond issuance in January where a portion of the proceeds were used to redeem our then existing senior unsecured notes, which were due to mature in June of 2025 to $70 $6 million.

James Dougherty: Starting at the bottom we have $72 million of legacy lease financing obligations outstanding on three vessels that are financed with ocean yield.

James Doyle: Thus far this year, we increased our investment in DHT by purchasing an additional $4 3 million shares at an average price of $10 67 per share.

James Dougherty: These leases are expensive and under the terms, we will soon have a window to declare purchase options and repurchase two of these vessels within this year and the third within February of 2026.

James Doyle: The aggregate increase in ownership demonstrates our constructive view on the crude tanker market.

James Doyle: We were also opportunistic having divested 700000 shares at $11 85 per share.

James Dougherty: In the Middle is our secured bank debt with the lending group dominated by experienced European shipping lenders, whom we have strong relationships with.

James Doyle: We highlight that this investment has the dual benefit of having meaningful exposure to the VLCC market. While also having the liquidity to move in and out of the position as opportunities arise.

James Dougherty: All of this debt matures in 2028 and bears interest at margins below 200 basis points.

Christopher Avella: Slide six, please. The chart on the left shows our liquidity profile. As you can see, we have access to over $1.2 billion in liquidity as of today. This is approximately $1.4 billion if you include our investment in DHT. Our liquidity consists of cash of $397 million, along with $838 million of drawdown availability under three revolving credit facilities. This level of revolving debt was made partially possible by the February execution of our new $500 million revolving credit facility, which is secured by 26 vessels. While it is currently undrawn, this facility bears a low cost of debt with a margin of 185 basis points when drawn and a seven-year tenor with no amortization in the first two years.

James Dougherty: These facilities can be repaid at any time without penalty and we currently have significant headroom under all of the financial covenants.

James Doyle: Slide six please.

James Doyle: The chart on the left shows our liquidity profile.

James Dougherty: Further to this.

James Doyle: As you can see we have access to over $1 2 billion in liquidity as of today.

James Dougherty: About $300 million of our secured borrowings has drawn revolving debt and.

James Doyle: This is approximately $1 $4 billion. If you include our investment in DHT.

James Dougherty: An important tool that we can use if we want to repay the debt yet maintain access access to the liquidity in the future.

James Doyle: Our liquidity consists of cash of $397 million along with.

James Dougherty: At the top is our recently issued $200 million five year senior unsecured notes, which were issued in the Nordic bond market at a seven 5% coupon rate.

James Doyle: $838 million of drawdown availability under three revolving credit facilities.

James Dougherty: These bonds were issued in January of this year immediately prior to the tariff driven turmoil that has consumed financial markets recently and significantly altered the landscape for new bond issuances.

James Doyle: This level of revolving debt was made partially possible by the February execution of our new $500 million revolving credit facility, which is secured by 26 vessels.

James Doyle: While it is currently Undrawn this facility bears a low cost of debt with a margin of 185 basis points when drawn and the seven year tenure with no amortization in the first two years.

James Dougherty: This bond issuance was a testament to our years long efforts to strengthen our balance sheet and improve our credit profile.

James Dougherty: Bond issuance was well oversubscribed and set the record for the lowest credit spread for any shipping company issuing U S dollar denominated bonds in the Nordic bond market.

Christopher Avella: This facility has enabled us to lock in low cost secured financing through February of 2032, a date that is well past the 2028 maturities of the remainder of our secured bank debt.

James Doyle: This facility has enabled us to lock in low cost secured financing through February of 2030 to date that is well past the 2028 maturities of the remainder of our secured bank debt.

James Dougherty: The chart on the right shows our actual outstanding debt from the end of 2021 through the end of April 2025, along with a bridge showing the changes in our estimated debt balance through the end of June 2025.

Christopher Avella: The chart on the right shows the progression of our net debt since December 31st, 2021, which has declined almost $2.4 billion to a net debt balance of $535 million as of the date of this press release.

James Doyle: The chart on the right shows the progression of our net debt since December 31, 2021, which has declined almost $2 $4 billion to a net debt balance of $535 million as of the date of this press release.

James Dougherty: The uptick in our gross debt over the first four months of this year resulted from the $200 million Nordic bond issuance offset by the repayment of our then existing senior unsecured notes, which were due to mature in June for $76 million.

Christopher Avella: In uncertain times such as these, we believe that it is important to maintain a diverse capital structure with multiple sources of funding and maximum flexibility.

James Doyle: In uncertain times, such as these we believe that it is important to maintain a diverse capital structure with multiple sources of funding and maximum flexibility.

Christopher Avella: Slide seven, please. The chart on the left breaks down our outstanding debt by type and illustrates our ongoing shift away from high-cost, inflexible lease financing towards lower-cost, more flexible bank lending. Starting at the bottom, we have $72 million of legacy lease financing obligations outstanding on three vessels that are financed with ocean yields.

James Dougherty: Along with the recent $50 million payment into our $225 million revolving credit facility.

James Doyle: Slide seven please.

James Doyle: The chart on the left breaks down our outstanding debt by type and illustrates our ongoing shift away from high cost and flexible lease financing towards lower cost more flexible bank lending.

James Dougherty: Slide eight please.

James Dougherty: Our debt repayment obligations from now until the end of the first quarter of 2026 are highly manageable at approximately $10 million per quarter.

James Doyle: Starting at the bottom we have $72 million of legacy lease financing obligations outstanding on three vessels that are financed with ocean yield.

James Dougherty: Additionally, since the beginning of last year. The company has recently completed.

James Dougherty: The periodic special surveys on almost 60% of the fleet.

Christopher Avella: These leases are expensive, and under the terms, we will soon have a window to declare purchase options and repurchase two of these vessels within this year, and the third within February of 2026. In the middle is our secure bank debt, with a lending group dominated by experienced European shipping lenders whom we have strong relationships with. All of this debt matures in 2028 and bears interest at margins below 200 basis points. These facilities can be repaid at any time without penalty, and we currently have significant headroom under all of the financial covenants.

James Doyle: These leases are expensive and under the terms, we will soon have a window to declare purchase options and repurchase two of these vessels within this year and the third within February of 2026.

James Dougherty: Our forward dry dock schedule as light as we come to the end of the year.

James Dougherty: With far fewer off hire days as compared to last year.

James Dougherty: Additionally, the work performed during these drydocks is expected to enhance the operating efficiency of each vessel going forward.

James Doyle: In the Middle is our secured bank debt.

James Doyle: With the lending group dominated by experienced European shipping lenders, whom we have strong relationships with.

James Dougherty: Slide nine please.

James Doyle: All of this debt matures in 2028 and bears interest at margins below 200 basis points.

James Dougherty: Okay.

James Dougherty: The strength of our balance sheet positions us to continue to generate excess cash flow even in challenging rate environment, given our low cash breakeven levels.

James Doyle: These facilities can be repaid at any time without penalty and we currently have significant headroom under all of the financial covenants.

Christopher Avella: Further to this... About $300 million of our secured borrowings is drawn revolving debt, an important tool that we can use if we want to repay the debt yet maintain access to the liquidity in the future. At the top is our recently issued $200 million five-year senior unsecured notes, which were issued in the Nordic bond market at a 7.5% coupon rate. These bonds were issued in January of this year, immediately prior to the tariff-driven turmoil that has consumed financial markets recently and significantly altered the landscape for new bond issuers. This bond issuance was a testament to our years-long efforts to strengthen our balance sheet and improve our credit profile.

James Dougherty: Further to this our operating leverage positions us to benefit from spikes in spot market rates that have been commonplace over the past three years.

James Doyle: Further to this.

James Doyle: About $300 million of our secured borrowings has drawn revolving debt an important tool that we can use if we want to repay the debt yet maintain access access to the liquidity in the future.

James Dougherty: To illustrate our cash generation potential at $20000 per day, the company can generate up to $271 million in cash flow per year.

James Doyle: At the top is our recently issued $200 million five year senior unsecured notes, which were issued in the Nordic bond market at a seven 5% coupon rate.

$30000 per day, the company can generate up to $632 million in cash flow per year and up $40000 per day. The company can generate up to $994 billion in cash flow per year.

James Doyle: These bonds were issued in January of this year immediately prior to the tariff driven turmoil that has consumed financial markets recently and significantly altered the landscape for new bond issuances.

James Dougherty: This concludes our financial overview and now I would like to turn the call over to James who will give an update on the product tanker market.

James Doyle: Bond issuance was a testament to our years long efforts to strengthen our balance sheet and improve our credit profile.

Christopher Avella: The bond issuance was well oversubscribed and set the record for the lowest credit spread for any shipping company issuing U.S. dollar-denominated bonds in the Nordic bond market.

James Doyle: The bond issuance was well oversubscribed and set the record for the lowest credit spread for any shipping company issuing U S dollar denominated bonds in the Nordic bond market.

James Dougherty: Thank you Chris Slide 11 please.

James Dougherty: As the menu only highlighted product tanker rates started the second quarter at higher levels than those seen in the first.

Christopher Avella: The chart on the right shows our actual outstanding debt from the end of 2021 through the end of April 2025, along with a bridge showing the changes in our estimated debt balance through the end of June 2025. The uptick in our gross debt over the first four months of this year resulted from the $200 million Nordic bond issuance offset by the repayment of our then-existing senior unsecured notes, which were due to mature in June for $70.6 million, along with the recent $50 million payment into our $225 million revolving credit facility.

James Doyle: The chart on the right shows our actual outstanding debt from the end of 2021 through the end of April 2025, along with a bridge showing the changes in our estimated debt balance through the end of June 2025.

James Dougherty: Binary maintenance occurred earlier this year with peak maintenance in February and March as opposed to April and May.

James Dougherty: As capacity came back online in April seaborne seaborne volumes increased in rates showed a steady improvement near.

James Doyle: The uptick in our gross debt over the first four months of this year resulted from the $200 million Nordic bond issuance offset by the repayment of our then existing senior unsecured notes, which were due to mature in June for $70 6 million along with the recent $50 million payment into our $225 million revolving.

James Dougherty: Near term catalysts, including higher naphtha volumes increased OPEC output and a swing of <unk> moving into the crude trade point to a strong market.

James Dougherty: However policy shifts tariffs sanctions and geopolitical cross currents have made the macro backdrop less predictable.

James Dougherty: Until the fog lifts our visibility into the back half of this year is limited.

James Doyle: Credit facility.

Christopher Avella: Slide eight, please. Our debt repayment obligations from now until the end of the first quarter of 2026 are highly manageable at approximately $10 million per quarter. Additionally, since the beginning of last year, the company has recently completed the periodic special surveys on almost 60% of the fleet.

James Doyle: Slide eight please.

James Dougherty: London mental still Kelsey.

James Doyle: Our debt repayment obligations from now until the end of the first quarter of 2026 are highly manageable at approximately $10 million per quarter.

James Dougherty: Demand for refined products remains robust inventory sit below five year averages and refining margins have improved.

James Dougherty: 12 please.

James Doyle: Additionally, since the beginning of last year.

James Dougherty: Seaborne refined product exports have been strong averaging $20 8 million barrels per day in April which is one 2 million barrels a day above their April five year average ton mile demand has increased 13%, excluding Russia, and 19%, including Russia compared to 2019 levels seaborne.

James Doyle: The company has recently completed the periodic special surveys on almost 60% of the fleet.

Christopher Avella: Our forward dry dock schedule is light as we come to the end of the year. far fewer off-fire days as compared to last year. Additionally, the work performed during these dry docks is expected to enhance the operating efficiency of each vessel going forward.

James Doyle: Our forward dry dock schedule as light as we come to the end of the year.

James Doyle: With far fewer off hire days as compared to last year.

James Doyle: Additionally, the work performed during these dry docks is expected to enhance the operating efficiency of each vessel going forward.

James Dougherty: Exports continue to increase in travel longer distances slide 13. Please.

Christopher Avella: Slide nine, please. The strength of our balance sheet positions us to continue to generate excess cash flow even in challenging rate environments given our low cash break even level. Further to this, our operating leverage positions us to benefit from spikes in spot market rates that have been commonplace over the past three years.

James Doyle: Slide nine please.

James Dougherty: We have seen limited changes to Red Sea and Russian refined product flows most product tankers still transit around the Cape of good hope, although case volumes have tapered since October.

James Doyle: Okay.

James Doyle: The strength of our balance sheet positions us to continue to generate excess cash flow even in challenging rate environment, given our low cash breakeven levels.

James Dougherty: Brushing barrels continue to move but on longer voyages.

James Doyle: Further to this our operating leverage positions us to benefit from spikes in spot market rates that have been commonplace over the past three years.

James Dougherty: The Russia, Ukraine piece still be reached many tanker servicing Russian trades would struggle to reenter western markets because of their age operating history and insurance are maintenance shortcomings.

Christopher Avella: To illustrate our cash generation potential, at $20,000 per day, the company can generate up to $271 million in cash flow per year. At $30,000 per day, the company can generate up to $632 million in cash flow per year. And at $40,000 per day, the company can generate up to $994 million in cash flow per year.

James Doyle: To illustrate our cash generation potential at $20000 per day, the company can generate up to $271 million in cash flow per year.

James Dougherty: The limitation would favor conventional non sanctioned vessels, if Europe presumed Russian imports by.

James Doyle: At $30000 per day, the company can generate up to $632 million in cash flow per year and at $40000 per day. The company can generate up to $994 billion in cash flow per year.

James Dougherty: Slide 14 please.

James Dougherty: The USTR proposed port fees generated plenty of headlines, but the impact looks modest for product tankers. The first section <unk> one targets vessels that are owned or operated by a Chinese entity.

Christopher Avella: This concludes our financial overview.

James Doyle: This concludes our financial overview now I would like to turn the call over to James who will give an update on the product tanker market.

James Doyle: And now I'd like to turn the call over to James, who will give an update on the product tanker model. Thank you, Chris. Slide 11. As Emanuele highlighted, product tanker rates started the second quarter at higher levels than those seen in the first. Refinery maintenance occurred earlier this year, with peak maintenance in February and March, as opposed to April and May. As capacity came back online in April, seaborne volumes increased and rates showed a steady improvement. Near-term catalysts, including higher NAPDA volumes, increased OPEC output, and a swing of LR2s moving into the crude trade, point to a strong market.

James Dougherty: The second section annex two targets vessels that are built in China.

James Dougherty: However, <unk> has several exemptions, which reduced the impact on product tankers.

James Doyle: Thank you Chris Slide 11 please.

James Dougherty: Vessels under 55000 deadweight tons, including EMR tankers and below are exempt.

Speaker Change: As the menu only highlighted product tanker rates started the second quarter at higher levels than those seen in the first refinery maintenance occurred earlier this year with peak maintenance in February and March as opposed to April and May.

James Dougherty: That's arriving in Dallas are also excluded rough.

James Dougherty: Roughly 90% of U S refined product imports and exports move on MLR product tankers and the United States is a major exporter.

James Doyle: As capacity came back online in April.

Speaker Change: Seaborne volumes increased in rates showed a steady improvement.

James Dougherty: The impact on product tankers is expected to be minimal.

Speaker Change: Near term catalysts, including higher naphtha volumes increased OPEC output and a swing of LR twos moving into the crude trade point to a strong market.

James Dougherty: 15 please.

James Dougherty: Over the medium term refinery rationalization is arguably one of if not the most important drivers of refined product trade flows we continue to see closures in global refining capacity.

James Doyle: However, policy shifts, tariffs, sanctions, and geopolitical cross-currents have made the macro backdrop less predictable. Until the fog lifts, our visibility into the back half of this year is limited, but fundamentals still look healthy. Demand for refined products remains robust, inventories sit below five-year averages, and refining margins have improved.

Speaker Change: However policy shifts tariffs sanctions and geopolitical crosscurrents have made the macro backdrop less predictable.

James Dougherty: Over the last five years global net refining capacity growth has been 1 million barrels.

Speaker Change: Until the fog lesser visibility into the back half of this year is limited the fundamentals still look healthy demand.

James Dougherty: Last week Valero announced that they will close their 150000 barrel per day <unk> refinery in California in 2026.

Speaker Change: Demand for refined products remains robust inventory sit below five year averages and refining margins have improved.

Steve: Refinery space, Steve capital outlays to stay compliant with tightening regulations and for older refineries. The economics may no longer work.

James Doyle: Slide 12, please. Reborn refined product exports have been strong, averaging 20.8 million barrels per day in April, which is 1.2 million barrels a day above their April five-year average.

Speaker Change: 12 please.

Speaker Change: Seaborne refined product exports have been strong averaging $20 8 million barrels per day in April which is $1 2 million barrels a day above their April five year average ton mile demand has increased 13%, excluding Russia, and 19%, including Russia compared to 2019 levels seaborne.

Steve: We anticipate further closures potentially at an accelerated pace if the economy softens as we saw in Australia refinery closures don't eliminate demand they simply reroute, it and often across oceans and over longer distances.

James Doyle: Ton-mile demand has increased 13 percent, excluding Russia, and 19 percent, including Russia, compared to 2019 levels. Newborn exports continue to increase and travel longer distances.

Steve: Slide 16 please.

Speaker Change: Exports continue to increase in travel longer distances slide 13. Please.

James Doyle: Line 13, please. We have seen limited changes to Red Sea and Russian refined product flows. Most product tankers still transit around the Cape of Good Hope, although Cape volumes have tapered since October. Russian barrels continue to move, but on longer voyages.

Steve: We thought it would be useful to look at refined product demand under different global economic slowdown after.

Speaker Change: We have seen limited changes to Red Sea and Russian refined product flows most product tankers still transit around the Cape of good hope, although case volumes have tapered since October.

Steve: After our racks invasion of Kuwait, the Asian currency crisis in September 11, Slash Dotcom bubble total refined product demand in fall it merely grew at a slower rate during.

Speaker Change: Russian barrels continue to move but on longer voyages.

Steve: During the financial crisis consumption dropped 7% in 2008, and one 7% in 2009 before recovering in 2010.

James Doyle: Should a Russia-Ukraine peace deal be reached, many tankers servicing Russian trades would struggle to reenter Western markets because of their age, operating history, and insurance or maintenance shortcomings. The limitation would favor conventional non-sanctioned vessels if Europe presumed Russian.

Speaker Change: The Russia, Ukraine piece still be reached many tankers servicing Russian trades would struggle to reenter western markets because of their age operating history and insurance are maintenance shortcomings.

Steve: Essentially outside of Covid, there was a relatively quick recovery in demand.

Speaker Change: The limitation would favor conventional non sanctioned vessels, if Europe presumed Russian imports by.

Steve: So what happened to seaborne exports in ton miles during these periods slide 17. Please.

James Doyle: 514, please. The USTR proposed port fees generated plenty of headlines, but the impact looks modest for product tankers. The first section, Annex 1, targets vessels that are owned or operated by a Chinese entity. The second section, annex two, targets vessels that are built in China. However, Annex 2 has several exemptions which reduce the impact on product tank.

Steve: Similarly.

Speaker Change: Slide 14 please.

Steve: Outside of Covid mild recessionary environment seaborne refined product exports in ton miles experienced moderate declines followed by quick recoveries in demand interestingly seaborne exports in ton mile demand increased through the global financial crisis.

Speaker Change: The USTR proposed port fees generated plenty of headlines, but the impact looks modest for product tankers. The first section annex one targets vessels that are owned or operated by a Chinese entity.

Speaker Change: The second section annex two targets vessels that are built in China.

Steve: From 2007 to 2010 ton mile demand increase close to 19%.

Speaker Change: However, <unk> has several exemptions, which reduced the impact on product tankers.

James Doyle: Vessels under 55,000 deadweight tons, including MR tankers and below, are exempt.

Steve: The challenge is typically the supply side and the best evidence of this is slide 18. Please.

Speaker Change: Vessels under 55000 deadweight tons, including EMR tankers and below are exempt.

James Doyle: that's surviving in Dallas are also excluded. Roughly 90% of U.S. refined product imports and exports move on MR product tankers, and the United States is a major exporter. Thus, the impact on product tankers is expected to be minimal.

Steve: In 2003 to 2010, the product tanker fleet grew by 114% in January 2007, the order book Rich reached 63% of the existing fleet.

Speaker Change: So having in Dallas are also excluded rough.

Speaker Change: Roughly 90% of U S refined product imports and exports move on MLR product tankers in the United States is a major exporter.

Steve: So despite the 19% increase in ton miles during the global financial crisis fleet growth outpaced demand today.

Speaker Change: The impact on product tankers is expected to be minimal.

James Doyle: Slide 15, please. Over the medium term, refinery rationalization is arguably one of, if not the most important drivers of refined product trade flow. We continue to see closures in global refining capacity. Over the last five years, global net refining capacity growth has been one million barrels.

Speaker Change: 15 please.

Speaker Change: Over the medium term refinery rationalization is arguably one of if not the most important drivers of refined product trade flows we continue to see closures in global refining capacity over the last five years global net refining capacity growth has been 1 million barrels.

Steve: Today, the order book is 20% of the existing fleet and a good share of those new builds our LR twos that may end up in the crude trade layer on an aging fleet and the supply picture looks far more modest.

Steve: 19 please.

James Doyle: Last week, Valero announced that they will close their 150,000 burro per quay, Benicia refinery in California in 2026. Refineries face steep capital outlays to stay compliant with tightening regulations, and for older refineries, the economics may no longer work. We anticipate further closures, potentially at an accelerated pace if the economy softens. As we saw in Australia, refinery closures don't eliminate demand, they simply reroute it, and often across oceans and over longer distances.

Steve: As the product tanker order book is LR two vessels as highlighted in the past owners have opted to build coated LR two vessels over non coated aframax vessels to have the optionality to trading clean products. As a result, 46% of the combined Aframax LR two fleet will be LR twos by 2020.

Speaker Change: Last week Valero announced that they will close their 150000 barrel per day <unk> refinery in California in 2026.

Speaker Change: Refinery space, Steve capital outlays to stay compliant with tightening regulations and for older refineries. The economics may no longer work.

Speaker Change: We anticipate further closures potentially at an accelerated pace if the economy softens as we saw in Australia refinery closures don't eliminate demand they simply reroute, it and often across oceans and over longer distances.

Steve: The challenge with this is that four times as much crude oil is carried on aframax LR two vessels compared to clean products.

Steve: This is why 40% to 50% of DLR two fleet has historically traded crude oil.

James Doyle: Slide 16, please. We thought it would be useful to look at refined product demand under different global economic slowdown. After Iraq's invasion of Kuwait, the Asian currency crisis in September 11 slash dot com bubble, total refined product demand didn't fall, it merely grew at a slower rate.

Steve: We expect this ratio to continue because it would be difficult for 46% of the aframax LR to flee to carry 20% of the overall volume.

Speaker Change: <unk> 16 please.

Speaker Change: We thought it would be useful to look at refined product demand under different global economic slowdowns after Iraq invasion of Kuwait, The Asian currency crisis in September 11th Slash Dotcom bubble total refined product demand in fall it merely grew at a slower rate during the financial crisis consumption.

Steve: Slide 20 please.

Steve: As one would imagine older vessels carry less cargo and travel shorter distances as the graph on the left highlights a 20 year old product tankers ton mile demand declined 45% compared to a 12 year old vessel.

James Doyle: During the financial crisis consumption dropped point 7% in 2008, and 1.7% in 2009, before recovering in 2010. Essentially, outside of COVID, there was a relatively quick recovery in demand. So what happened to seaborne exports in ton-miles during these periods?

Speaker Change: Dropped 7% in 2008, and one 7% in 2009 before recovering in 2010.

Steve: We're not for older vessels servicing the Russian trade the decline would be over 60%.

Speaker Change: Essentially outside of Covid, there was a relatively quick recovery in demand.

Steve: Thus, even if the vessels scrapped its carrying significantly less cargo reducing effective fleet growth.

Speaker Change: So what happened to seaborne exports in ton miles during these periods slide 17. Please.

James Doyle: Slide 17, please. Tim O'Reilly Outside of COVID, in mild recessionary environments, seaborne refined product exports and tonnemiles experienced moderate declines followed by quick recoveries in demand.

Steve: And a significant fleet growth highlighted from 2003 to 2010.

Speaker Change: Similarly.

Speaker Change: Side of Covid mild recessionary environment seaborne refined product exports in ton miles experienced moderate declines followed by quick recoveries in demand interestingly seaborne exports in ton mile demand increased through the global financial crisis from 2007 to 2010 ton mile demand increased close.

Steve: Is turning 20 years old every year through 2030.

James Doyle: Interestingly, seaborne exports and tonnemile demand increased through the global financial crisis. From 2007 to 2010, ton-mile demand increased close to 19%.

Steve: And the right hand graph you can see the age profile, including the order book of 17, 5% of the fleet today is older than 20 years by 2028 that number increases to 30%.

James Doyle: The challenge is typically the supply side, and the best evidence of this is slide 18, please. In 2003 to 2010, the product tanker fleet grew 114%. In January 2007, the order book reached 63% of the existing fleet. So despite the 19% increase in ton miles during the global financial crisis, wheat growth outpaced demand. Today, the order book is 20% of the existing fleet, and a good share of those new builds are LR2s that may end up in the crude trade. Layer on an aging fleet, and the supply picture looks far more modern.

Steve: Slide 21.

Speaker Change: 19%.

Steve: Given the age of the fleet and likelihood of LR two vessels trading crude oil fleet growth could be lower than expected and scenario two we assume 40% of <unk>, new builds carry crude and scrapping remains minimal.

Speaker Change: <unk> is typically the supply side and the best evidence of this.

Speaker Change: 2018 please.

Speaker Change: In 2003 to 2010, the product tanker fleet grew 114% in January 2007, the order book Rich reached 63% of the existing fleet.

Steve: So the product tanker fleet will increase by roughly 3% per year.

Steve: And scenario three using the same LR two assumptions, but.

Speaker Change: So despite the 19% increase in ton miles during the global financial crisis fleet growth outpaced demand.

Steve: Accounting for capacity declines for vessels, 21% to 27 years old effective fleet growth drops to about 1% per year.

Speaker Change: Today, the order book is 20% of the existing fleet and a good share of those new builds our LR twos that may end up in the crude trade layer on an aging fleet and the supply picture looks far more modest.

Steve: Contrast ton mile demand has compounded at a three 6% annual growth rates since 2000.

James Doyle: Fly Nike. Half the product tanker order book is LR2 vessels. As highlighted in the past, owners have opted to build coated LR2 vessels over non-coated AfriMax vessels to have the optionality to trade in clean products. As a result, 46% of the combined AFRMAX LR2 fleet will be LR2s by 2028. The challenge with this is that four times as much crude oil is carried on AFRMAX LR2 vessels compared to clean product. This is why 40 to 50 percent of the LR2 fleet has historically traded crude oil. We expect this ratio to continue because it would be difficult for 46 percent of the AfriMax LR2 fleet to carry 20 percent of the overall volume.

Steve: Strong demand modest supply growth and structural shifts in refining capacity continue to add ton miles.

Speaker Change: <unk> please.

Speaker Change: Ask the product tanker order book is LR two vessels as highlighted in the past owners have opted to build coated LR two vessels over non coated aframax vessels to have the optionality to trading clean products. As a result, 46% of the combined Aframax LR two fleet will be LR twos by 2020.

Steve: The balance of probability you still point to a constructive outlook.

Steve: We remain mindful of the broader macro uncertainty and feel well positioned with a young fleet and our strong balance sheet with that we'd like to open it up for Q&A.

Steve: At this time I would like to remind everyone in order to ask a question Press Star then the number one and your telephone keypad.

Speaker Change: Eight.

Speaker Change: The challenge with this is that four times as much crude oil is carried on Aframax LR two vessels compared to clean products. This is why 40% to 50% of DLR two fleet has historically traded crude oil.

Steve: We ask that you limit your questions to queue.

Steve: We will pause for just a moment to compile the QED roster.

Speaker Change: We expect this ratio to continue because it would be difficult for 46% of the aframax LR to flee to carry 20% of the overall volume.

Steve: The first question comes from AMR knockdown from Jefferies. Your line is open.

Speaker Change: Thank you Hey, guys good morning.

James Doyle: Find 20, please. As one would imagine, older vessels carry less cargo and travel shorter distances. As the graph on the left highlights, a 20-year-old product tanker's ton-mile demand declines 45% compared to a 12-year-old vessel. And if it were not for older vessels servicing the Russian trade, the decline would be over 60%.

Speaker Change: By 'twenty. Please.

Steve: Today's.

Steve: Today's report is just about as business as usual as you can get.

As one would imagine older vessels carry less cargo and travel shorter distances as the graph on the left highlights a 20 year old product tankers ton mile demand declined 45% compared to a 12 year old vessel.

Steve: Special with this backdrop of what's going on in the broader markets and.

Steve: Entered into some nice charters just wanted to ask maybe.

Steve: In terms of ship values, clearly theres been a.

Steve: The significant disconnect between where the equities are.

Speaker Change: We're not for other vessels servicing the Russian trade the decline would be over 60%.

Steve: And tanker values and solve obviously not just for Scorpio, but across the board and it seems like something has to give at some point maybe they converge one meets the other so.

James Doyle: Thus, even if the vessel is not scrapped, it's carrying significantly less cargo, reducing effective fleet growth. and the significant fleet growth highlighted from 2003 to 2010. is turning 20 years old every year through 2030. In the right-hand graph, you can see the age profile, including the order book, 17.5% of the fleet today is older than 20 years. By 2028, that number increases to 30%.

Speaker Change: Thus, even if the vessel is not scrapped its carrying significantly less cargo reducing effective fleet growth.

Steve: So far we're seeing tanker rates as evidenced by your guidance so far they are rising.

Speaker Change: And the significant fleet growth highlighted from 2003 to 2010.

Steve: How are you thinking about where ship values are you seeing them holding up as their transactions going on and that can give you a barometer of what's happening what are you seeing from your vantage point there.

Speaker Change: Is turning 20 years old every year through 2030.

Speaker Change: And the right hand graph you can see the age profile, including the order book of 17, 5% of the fleet today is older than 20 years by 2028 that number increases to 30%.

Speaker Change: I'll start Omar <unk> whaler here I think thats the correction that we've seen in ship values.

James Doyle: Slide 21. Given the age of the fleet and the likelihood of LR2 vessels trading crude oil, fleet growth could be lower than expected. In Scenario 2, we assume 40% of LR2 new builds carry crude and scrapping remains minimal. If so, the product tanker fleet would increase by roughly 3% per year.

Speaker Change: Slide 21.

Speaker Change: Closely related to the global uncertainty that characterize the.

Speaker Change: Given the age of the fleet and likelihood of LR two vessels trading crude oil fleet growth could be lower than expected and scenario two we assume 40% of the LR two new builds carry crude and scrapping remains minimal.

Speaker Change: The world in the last six months so the big correction has come in.

Speaker Change: It has been more pronounced as the global uncertainty increased.

Speaker Change: So the product tanker fleet would increase by roughly 3% per year.

James Doyle: And scenario three, using the same LR2 assumptions, but accounting for capacity declines for vessels 21 to 27 years old, effectively gross drops to about 1% per year. By contrast, ton-mile demand is compounded at a 3.6% annual growth rate since 2000. Strong demand, modest supply growth, and structural shifts in refining capacity continue to add to unmodified demand.

Speaker Change: And scenario three using the same <unk> assumptions, but.

Speaker Change: So the way we see it use.

Speaker Change: Accounting for capacity declines for vessels 21 to 27 years old effectively gross drops to about 1% per year.

Speaker Change: Difficult to read that these stages everything else as we've discussed in the opening remarks.

Speaker Change: The presentations.

Speaker Change: By contrast ton mile demand has compounded at a three 6% annual growth rate since 2000.

The fundamentals remain.

Speaker Change: Positive and like you just said, we think that Something's got to give in.

Speaker Change: Strong demand modest supply growth and structural shifts in refining capacity continue to add ton miles.

The values are going to be adjusted to match their rates.

James Doyle: The balance of probability still points to a constructive outlook, but we remain mindful of the broader macro uncertainty and feel well positioned with a young fleet and a strong balance sheet.

As soon as we as soon as the wells get some some com.

Speaker Change: The balance of probability still point to a constructive outlook, but we remain mindful of the broader macro uncertainty and feel well positioned with a young fleet and our strong balance sheet with that we'd like to open it up for Q&A.

Manuel: Thank you Manuel and maybe just my second question.

Operator: With that, we'd like to open it up for Q&A. At this time, I would like to remind everyone in order to... Press star then the number 1 and you're done.

Speaker Change: Clearly in a different world today with tariffs and ongoing trade war and whatnot can you talk a little bit about what you've seen if theres been any changes over the past few weeks or months.

Speaker Change: At this time I would like to remind everyone.

Speaker Change: Ask your question Press Star then the number one on your telephone keypad.

Operator: We ask that you limit your questions. We will pause for just a moment to compile the Q&A.

Manuel: And chartering habits, especially as we think about.

Speaker Change: We ask that you limit your questions to queue.

Manuel: What happened roughly about a month ago at the beginning of April when it felt like things had gotten to a standstill did you see any of that make its way into products and any shifts since then.

Speaker Change: We will pause for just a moment to compile the Q&A roster.

Omar Nokta: The first question comes from Omar Nokta from Jeffreys, Carolina. Thank you. Hey, guys. Good morning. You know, today's report is just about as business as usual as you can get, especially with this backdrop of what's going on in the broader markets, and, you know, you entered into some nice charters. I just wanted to ask maybe, you know, in terms of ship values, clearly there's been a significant disconnect between where the equities are and tanker values, and so, obviously, not just for Scorpio, but across the board, and it seems like something has to give at some point.

Speaker Change: The first question comes from Amit <unk> from Jefferies. Your line is open.

Manuel: Thank you.

Manuel: Lars do you want to take a loss, yes, yes I'm here.

Speaker Change: Thank you Hey, guys good morning.

Speaker Change: Today's report is just about as business as usual as you can get.

Manuel: I think it's really interesting to see that.

Especially with this backdrop of what's going on in the broader markets.

Manuel: <unk> really come into play on particularly on the gas side.

Speaker Change: <unk> entered into some nice charters just wanted to ask maybe.

Manuel: What that really meant for for Napster.

Speaker Change: In terms of ship values, clearly theres been a significant.

Manuel: There isn't the currently still is a rally going on with cracks in the time spreads they're hitting all time highs for this year, we're seeing and have also talked about in the past about this perpetual west to east now that's.

Speaker Change: <unk> disconnect between where the equities are.

Speaker Change: And tanker values and solve obviously not just for Scorpio, but across the board and it seems like something has to give at some point maybe they converge one meets the other so.

Emanuele Lauro: You know, maybe they converge, or one meets the other. You know, so far, we're seeing tanker rates, as evidenced by your guidance so far, you know, they're rising. How are you thinking about where ship values are? Are you seeing them holding up? Is there a transaction going on that can give you a barometer of what's happening? What are you seeing from your vantage point there?

Manuel: That's been moving.

Manuel: But we can really start seeing that there is a lot of demand that is kind of coming in.

Speaker Change: So far we're seeing tanker rates as evidenced by your guidance so far the rising.

Manuel: NAFTA, probably is going to be favorite over propylene in terms of pricing.

Speaker Change: How are you thinking about where ship values are you seeing them holding up as their transactions going on and that can give you a barometer of what's happening what are you seeing from your vantage point there.

Manuel: It certainly is the case right now.

Manuel: For the.

Manuel: The crushers in tier one.

Manuel: Switching over to naphtha, which of course bodes well for particularly for the LR twos. So we're seeing a lot of naphtha being pointed towards China or Asia in general.

Emanuele Lauro: I'll start, Omar and Emanuele here. I think that the correction that we've seen in cheap values, it's... closely correlated to the global uncertainty that has characterized the world in the last six months. So, the big correction has come and has been more pronounced as the global uncertainty increased.

Speaker Change: I'll start Omar I think that the correction that we've seen in ship values.

Manuel: We don't see that changing.

Speaker Change: It's.

Speaker Change: Closely correlated to the global uncertainty that characterize the.

Manuel: Short term.

This is irrespective of the fact that ethane has been exempted from.

Speaker Change: The world in the last six months so the big correction has come in.

Manuel: From the from the terms it could happen, but propane as well is going to be played into that sort of thing stand right now.

Speaker Change: There has been more pronounced as the global uncertainty increased.

Manuel: Terms to see naphtha cracks have been remaining strong.

Emanuele Lauro: So, the way we see it is... Difficult to read at this stage, as everything else as we discussed in the opening remarks and in the presentations. The fundamentals remain positive, and like you just said, we think that something's got to give, and we think that the values are going to be readjusted to match the rates as soon as the world gets some count.

Manuel: The Asian markets.

So the way we see it.

Manuel: Yeah.

Speaker Change: Great. Thank you. Thank you thanks, Lars on an annually I'll turn it over.

Difficult to read that these stages.

Speaker Change: As we've discussed in the opening remarks.

Manuel: Yeah.

Manuel: Thank you.

Speaker Change: The presentations.

Speaker Change: The next question comes from Chris Robertson from Deutsche Bank.

Speaker Change: The fundamentals remain.

Speaker Change: Positive and like you just said, we think that Something's got to give in.

Speaker Change: Your line is open.

Speaker Change: Good morning, everybody. Thank you for taking my questions just wanted to focus a bit on.

Speaker Change: We think that the values are going to be adjusted to match the rates.

Speaker Change: The vessel Opex came down pretty significantly quarter over quarter kind of normalizing back to levels seen in 2024 can you just talk about kind of the change from <unk> to <unk> and what are what you think run rate opex will be going forward here.

Speaker Change: As soon as we as soon as the wells get some some count.

Emanuele Lauro: Thank you. Thanks, Emanuele.

Omar Nokta: And maybe just my second question.

Lars Nielsen: You know, clearly in a different world today with tariffs and ongoing trade war and whatnot, can you talk a little bit about what you've seen, if there's been any changes over the past few weeks or months or, you know, in chartering habits, especially as we think about what happened roughly about a month ago at the beginning of April, when it felt like things had gotten to a standstill. Did you see any of that make its way into products and any shifts since then?

Speaker Change: Thank you. Thanks, Emmanuel and then maybe just my second question.

Speaker Change: Clearly in a different world today with tariffs and ongoing trade war and whatnot can you talk a little bit about what you've seen if theres been any changes over the past few weeks or months.

Speaker Change: I'll take that one Chris.

Speaker Change: Chris obviously were happy to see the number come down, but as I've said on previous calls.

Speaker Change: And chartering habits, especially as we think about.

Speaker Change: One quarter doesn't necessarily set a trend.

Speaker Change: What happened roughly about a month ago at the beginning of April when it felt like things had gotten to a standstill did you see any of that make its way into products and any shifts since then.

Speaker Change: So of course, we're happy with the results, but if I were looking for a run rate I would really use like a trailing 12 months average.

Omar Nokta: Thank you.

Lars Nielsen: Lars, do you want to take this? Yeah, yeah, I'm here. I think it's really interesting to see that when the terrorists really came into play on, in particular, on the gas side, what that really meant for NAFTA. You know, there is, and there currently still is, a rally going on with cracks and the time spreads, you know, they're hitting all-time highs for this year. We're seeing, and have also talked about in the past, about this perpetual west to east NAFTA arc that's been moving, but we can really start seeing that there is a lot of demand that is kind of coming in as NAFTA probably is going to be favored over propane in terms of pricing.

Speaker Change: Thank you.

Speaker Change: Lars do you want to take a loss, yes, yes I'm here.

Speaker Change: And to help with that.

Speaker Change: So for the LR twos, I would say thats like slightly below or around $9000 per day.

Speaker Change: I think it's really interesting to see that.

Speaker Change: <unk> really came into play on particularly on the gas side.

Speaker Change: For the <unk> and the handy Max is I would say slightly below $8000 per day.

Speaker Change: What that really meant for napster.

Speaker Change: There is currently still is rally going on with cracks in the time spreads they're hitting all time highs for this year, we're seeing and have also talked about in the past about this perpetual west to east.

Speaker Change: On a normalized basis.

Speaker Change: Yeah.

Speaker Change: Okay, Great that's helpful.

Speaker Change: Going back to <unk> question a bit on.

Speaker Change: On naphtha versus some of the ethane based crackers.

Speaker Change: That's been moving.

Speaker Change: Do you have a sense of how many of the newer ethane based crackers in China have some feedstock flexibility versus those that don't and kind of what the bigger market opportunity might be.

Speaker Change: But we can really start seeing that there is a lot of demand that is kind of coming in.

Lars Nielsen: It certainly is the case right now that, you know, for the, for the crackers and so on, that they are probably switching over to NAFTA, which of course bodes well for, in particular, for the LR2s. So we're seeing, you know, a lot of NAFTA being pointed towards China or Asia in general. We don't see that kind of changing in the short term. This is irrespective of the fact that ethane has been exempted from the tariffs. It could happen that propane as well is going to be played into that. But if things stand right now, it turns to see that Napa cracks have been remaining strong in the Asian markets.

Speaker Change: Probably it's going to be favorite over propane in terms of pricing.

Speaker Change: It certainly is the case right now.

Speaker Change: For the quarter.

Speaker Change: If the arb is closed.

Speaker Change: The crushers in tier one, but they are probably switching over to naphtha, which of course bodes well for particularly for the LR twos. So we're seeing a lot of NAFTA being pointed towards China Asia in general.

Speaker Change: Better and favorable economics for naphtha.

Speaker Change: <unk>.

Speaker Change: I can start there maybe.

Speaker Change: James can follow on but I think China has about 300000 barrel per day <unk>.

Speaker Change: Page Napa switching capability.

Speaker Change: Don't see that kind of changing in the short term.

Speaker Change: Overall in the complex you have to look at.

Speaker Change: This is irrespective of the fact that you think theres been exempted from.

Speaker Change: The different markets that are kind of adjacent to them as well.

Speaker Change: From the from the terms that could happen, but propylene as well is going to be played into that but as things stand right now.

Speaker Change: Where they can compensate for the lower PVH run rates realized in higher naphtha imports.

Speaker Change: Terms to see that naphtha cracks have been remaining strong.

Speaker Change: The matter is that we kind of going into driving season, but it seem a lot more naphtha heavy naphtha is moving into the gasoline pool that the way we are.

Speaker Change: The Asian markets.

Lars Nielsen: Great, thank you. Thanks Lars and Emanuele.

Speaker Change: Seeing a greater amount of macro moving from the mid <unk> kind of on that.

Lars: Great. Thank you, thanks, Lars and annually I'll turn it over.

Omar Nokta: I'll turn it over. Thank you.

Speaker Change: For loading ports going around the Cape.

Christopher Robertson: The next question comes from Chris Robertson from Toei Japan. Good morning, everybody. Thank you for taking my questions. I just wanted to focus a bit on the Vessel OpEx came down pretty significantly, quarter of a quarter, kind of normalizing back to level C and in 2024.

Speaker Change: Thank you.

Speaker Change: Two destinations in Asia.

Speaker Change: The next question comes from Chris Robertson from Deutsche Bank.

Speaker Change: Okay, great. Thank you very much I'll turn it over.

Speaker Change: Your line is open.

Chris Robertson: Good morning, everybody. Thank you for taking my questions just wanted to focus a bit on.

Speaker Change: Again, you do have a question.

Speaker Change: Star followed by the number of lines.

Chris Robertson: The vessel Opex came down pretty significantly quarter over quarter kind of normalizing back to levels seen in 2024 can you just talk about kind of the change from <unk> to <unk> and what you think run rate opex will be going forward here.

Speaker Change: The next question comes from Liam Burke from B Riley your.

Christopher Avella: Can you just talk about kind of the change from 4Q to 1Q and what you think run rate OpEx will be going forward here?

Speaker Change: Your line is open.

Speaker Change: Thank you.

Speaker Change: Had more crude production both from OPEC, plus putting out more barrels plus non OPEC countries coming online.

Christopher Avella: I'll take that one.

Christopher Avella: Hi, Chris. Pierce, obviously, we're happy to see the number come down, but as I've said on previous calls, you know, one quarter doesn't necessarily set a trend, so, of course, you know, we're happy with the results, but if I were looking for a run rate, I would really use, like, a trailing 12-month average, and to help with that, you know, so for the LR2s, I'd say that's, like, slightly below or around $9,000 per day. For the MRs and the handy maxes, I would say slightly below $8,000 per day on a normalized basis.

Chris Robertson: I'll take that one hi, Chris.

Speaker Change: How is that impacting your side of the market on the refined product side.

Chris Robertson: Chris obviously were happy to see the number come down, but as I've said on previous calls.

Speaker Change: Well I'll.

Chris Robertson: One quarter doesn't necessarily set a trend.

Speaker Change: I will start with the first part of it which is kind of pretty obvious is that.

Chris Robertson: So of course, we're happy with the results, but if I were looking for a run rate I would really use like a trailing 12 months average.

Speaker Change: Have you been on these calls before a lot of the questions has been about the crude clean.

Speaker Change: Clean switching and stuff like that.

Speaker Change: The risk of the.

Chris Robertson: And to help with that.

Speaker Change: Kind of.

Speaker Change: Cross cannibalization from the crude side for sure is no longer kind of an issue that we consider to be prevalent the crude markets have increased substantially.

Chris Robertson: <unk>.

Chris Robertson: So for the LR twos, I would say thats like slightly below or around $9000 per day.

Chris Robertson: For the <unk> and the handy Max is I would say slightly below $8 per day.

Speaker Change: Atlantic Basin the Aframax.

Speaker Change: Certainly a very strong we have seen over the last week, maybe 10 days.

Christopher Avella: Okay, great. That's helpful.

Chris Robertson: On a normalized basis.

Christopher Avella: I'm going back to Omar's question a bit on on NAFTA versus, you know, some of the ethane based crackers. Do you have a sense of how many of the newer ethane based crackers in China have some feedstock flexibility versus those that don't? And kind of what what the bigger market opportunity might be if the ARB is closed, or it's better favorable economics for NAFTA?

Speaker Change: <unk> going into dirty.

Chris Robertson: Okay, Great Thats helpful.

Speaker Change: There is also quite clear that if the crude prices continue to drop I'll be going into kind of back to a contango market.

Chris Robertson: Going back to <unk> question a bit on.

Chris Robertson: On naphtha versus some of the ethane based crackers.

Speaker Change: I think it's 400000 barrels.

Chris Robertson: Do you have a sense of how many of the newer ethane based crackers in China have some feedstock flexibility versus those that don't and kind of what the bigger market opportunity might be.

Speaker Change: Kind of additional production that came into may.

Speaker Change: Obviously, everybody talks about what we think is going to be doing over the next two to three months in terms of unwinding the cuts.

Speaker Change: Of course, it's going to be very strong sign for the vlccs, but that obviously flows through down to the aframax and thats substitution for sure will be another positive sign for the LR twos.

Chris Robertson: If the arb is closed or.

Chris Robertson: Better and favorable economics for naphtha.

Christopher Avella: I can start and then maybe James can follow on, but I think that China has about 300,000 barrels per day propane to naphtha switching capability, but I think overall in the complex you have to look at the different markets that are kind of adjacent to them as well, where they can compensate for lower PDH run rates, which provides them higher naphtha imports. But the fact of the matter is that, you know, where we kind of going into driving season would have seen a lot more naphtha, heavy naphtha moving into the Caspian pool of the west.

Chris Robertson: I can start there maybe.

Chris Robertson: James can follow on but I think that China has about 300000 barrel per day propane schnapper switching capability.

Speaker Change: So I think today, if we look at it.

Speaker Change: Remember correctly is that we're now at about 50 50 into the standard through versus the Aframax fleet, whereas we've had over the last 12 months probably a.

Chris Robertson: Overall in the complex you have to look at.

Chris Robertson: The different markets that are kind of adjacent to them as well.

Chris Robertson: Where they can compensate for lower PVH run rates.

Speaker Change: Stronger proponent of ships going.

Speaker Change: And clean that has now reversed.

Chris Robertson: All lines have been higher naphtha imports.

Chris Robertson: Fact of the matter is that.

Speaker Change: So it's interesting to note that if you look at the new buildings, which has been the other issue that we've been facing.

Chris Robertson: Kind of going into driving season, but it seemed a lot more naphtha heavy naphtha is moving into the gasoline pool that we're seeing a greater amount of macro moving from the merge.

Christopher Avella: We're seeing a greater amount of naphtha moving from the met kind of natural loading ports and going around the Cape to destinations in Asia. Okay, great.

Speaker Change: Loadings.

Speaker Change: Virgin tanks cargos loading out of Asia.

Speaker Change: I believe it's only five vlccs that are going to be delivered this year. So we don't have the same issue as we sold.

Chris Robertson: Now for loading ports going around the Cape.

Chris Robertson: Two destinations in Asia.

Christopher Avella: Thank you very much.

Operator: I'll turn it over. Again, if you have a question, kindly press star followed by the number.

Speaker Change: The prevalent.

Chris Robertson: Okay, great. Thank you very much I'll turn it over.

Speaker Change: Previous years.

Speaker Change: There's a lot of Suezmax is as well that are being delivered this year I think it's 23, however, with all this additional oil.

Chris Robertson: Again, you may have.

Chris Robertson: Christian.

Liam Burke: The next question comes from Liam Burke from B Reilly. Thank you. We've had more crude production both from OPEC plus putting out more barrels plus non-OPEC countries coming online.

Speaker Change: Very much suezmax focus and particularly the stop around Kazakhstan.

Chris Robertson: Chris Star followed by the number of lines.

Speaker Change: The next question comes from Liam Burke from B Riley Your line is now.

Speaker Change: It will be very positive for that particular market, but most importantly for our market will not have cannibalization substitution effect that we've seen in the previous years.

Liam Burke: Thank you.

Speaker Change: We've had more crude production both from OPEC, plus putting up more barrels plus non OPEC.

Speaker Change: Great.

Robert Bugbee: How is that impacting your side of the market on the refined product side? We, as Lars is talking about, is the actual ships themselves and how that's related into their spreads. But, you know, it's only a positive, especially, and the third thing to remember here is that inventories are very low compared, you know, in crude or in products. They're significantly below five-year averages. So, as Lars said, if you take the trade into contango, then, you know, that would give the option for even extra barrels in demand required to rebuild storage on top of basic demand.

Speaker Change: Add to this way and that obviously.

Liam Burke: Countries coming online.

Speaker Change: If you just look at the macro part of things.

Liam Burke: How is that impacting the U S side of the market on the refined product side.

Speaker Change: A more oil lower.

Speaker Change: Cheap oil.

Speaker Change: <unk>.

Speaker Change: Obviously very good.

Liam Burke: Well I'm going to talk about the first part of it which is kind of pretty obvious is that.

Speaker Change: The demand.

Speaker Change: And put pressure on alternative.

Liam Burke: You've been on these calls before a lot of the questions has been about crude clean.

Speaker Change: Second aspect is that.

Liam Burke: Clean switching and stuff like that.

Speaker Change: <unk>.

Liam Burke: At the risk of the.

Speaker Change: We.

Liam Burke: Kind of across.

Speaker Change: The log is talking about is the actual.

Liam Burke: Cross kind of authorization from the crude side that for sure is no longer kind of an issue that we consider to be prevalent the crude markets have increased substantially.

Speaker Change: So how that.

Speaker Change: That's relate to into the grid.

Speaker Change: But.

Liam Burke: Atlantic based mathematics.

Speaker Change: Tony Tony a positive.

Liam Burke: Certainly a very strong we have seen over the last week, maybe 10 days, but LR twos going into dirty.

Speaker Change: Especially with third thing to remember here is the inventories are very low.

Speaker Change: Ted.

Liam Burke: There is also quite clear that if the crude prices continue to drop I'll be growing into kind of back to a contango market.

Speaker Change: They'd already in products.

Speaker Change: <unk> below five year averages.

Speaker Change: If you.

Speaker Change: If you take the trade into contango.

Liam Burke: I think it's 400000 barrels.

Speaker Change: Then.

Speaker Change: <unk>.

Liam Burke: Kind of additional production that came into may.

Speaker Change: That would.

Speaker Change: If the option.

Liam Burke: We see everybody talks about what we think is going to be doing over the next two to three months in terms of unwinding the cuts.

Speaker Change: Even extra barrel.

Speaker Change: Demand required to rebuild storage.

Liam Burke: This of course, it's going to be very strong sign for the vlccs, but that obviously flows through down to the aframax and thats substitution for sure will be another positive sign for the LR twos.

Speaker Change: On top of.

Speaker Change: Basic demand.

Speaker Change: Great.

Speaker Change: Thank you Robert.

Speaker Change: And.

Speaker Change: On the tariff front of the USTR.

Speaker Change: Does that have any impact on the sale and purchase Chinese vessels.

Liam Burke: So I think today, if we look at it.

Remember correctly is that we're now at about 50 50 into the standard two versus the Aframax fleet, whereas we've had over the last 12 months probably.

Speaker Change: Yes.

Liam Burke: Stronger proponent of ships going.

Speaker Change: I'm not sure I think.

Speaker Change: Sure.

Liam Burke: And clean that has now reversed I think also it's interesting to note that if you look at the new buildings, which has been the other issue that we've been facing.

Speaker Change: I think the.

Speaker Change: Very insignificant for the product market.

Speaker Change: Okay.

Speaker Change: Thank you Robert.

Liam Burke: Loading.

Speaker Change: No problem.

Liam Burke: Virgin tanks cargos loading out of Asia I believe it's only five vlccs that are going to be delivered this year. So we don't have the same issue as we sold.

Speaker Change: The next question comes from fraud, Michael Dahl from Clarksons Securities. Your line is open.

Liam Burke: The prevalent.

Liam Burke: Previous years.

Liam Burke: There's a lot of Suezmax is as well that are being delivered this year I think it's 23, however, with all this additional oil, but very much a suezmax focus and particularly the stuff around Kazakhstan.

Michael Dahl: Hey, guys.

Yes, I guess, you just said that yes, there are it didn't matter that much but I just wanted to.

Michael Dahl: I'll open anyway, because thankfully the mr's are exempt.

Liam Burke: Be very positive for that particular market, but most importantly for our market will not have this cannibalization substitution effect that we've seen in the previous years.

Michael Dahl: So you can do.

Michael Dahl: Triangulation.

Michael Dahl: Without any problems.

Michael Dahl: Yes.

Speaker Change: Okay great.

Michael Dahl: LR twos in that format since our elastic sense, but I just wanted to ask if there arent any triangulation involving the U S Gulf anyway.

Liam Burke: I would add to this way and it obviously.

Liam Burke: If you just look at the macro part of things that a more oil more.

Nathan: Hi, Nathan.

Liam Burke: <unk>.

Michael Dahl: If so.

Speaker Change: Maybe owners Lucky you are at a very high share of Korean vessels could benefit from that.

Liam Burke: Obviously very good.

Liam Burke: The demand.

Liam Burke: And puts pressure on alternative.

Michael Dahl: Okay.

Michael Dahl: The first part I'll just take that.

Liam Burke: The second aspect is that.

Michael Dahl: On the <unk> choose the luxury market is insignificant.

Liam Burke: Great.

Liam Burke: The clause is talking about.

Michael Dahl: When it comes to the U S. So.

Liam Burke: Actual.

Michael Dahl: If it is Chinese built Korean built.

Liam Burke: The chips themselves.

Liam Burke: <unk>.

Michael Dahl: Part of the <unk> that is not an issue.

Liam Burke: Thats related into the spreads.

Michael Dahl: Comes a greater issue of course on the Aframax is but as you rightfully say prototype on balance considering the.

Liam Burke: Yes.

Speaker Change: Tony Tony a positive, especially in the third thing to remember here is the inventories are very low.

Michael Dahl: Fleet structure that we have in Scorpio, it's not going to present an issue for us.

Liam Burke: We paid.

Liam Burke: Or even products that significantly below five year averages.

Liam Burke: If you if.

Speaker Change: Okay perfect. That's it for me Thank you guys.

Liam Burke: If you take the trade into contango.

Speaker Change: I'm sorry.

Liam Burke: Then.

Liam Burke: <unk>.

Liam Burke: That would.

Liam Burke: It gives the option.

Even extra barrel.

Speaker Change: Q&A session.

Liam Burke: Demand required to rebuild storage on top of basic.

Speaker Change: I'll now turn the call over to Emmanuel now real for closing remarks.

Robert Bugbee: Thank you, Robert. And on the tariff front of the USTR. Does that have any impact on the sale and purchase of Chinese vessels? I'm not sure, I think the actual UFTR seems to be pretty insignificant for the product market. Okay, fine.

Liam Burke: Basic demand.

Speaker Change: Thank you very much for everybody's time today.

Liam Burke: Great.

Liam Burke: Thank you Robert.

Speaker Change: I don't have any further remarks look forward to speaking with you.

Liam Burke: And.

Liam Burke: On the tariff front of the USTR.

Speaker Change: In the future as the case, maybe thanks, a lot for your time and goodbye.

Liam Burke: Does that have any impact on the sale and purchase of Chinese vessels.

Speaker Change: Ladies and gentlemen that concludes today's call.

Liam Burke: Yes.

Speaker Change: Also joining and you may now disconnect.

Speaker Change: I'm not sure I think that too.

Liam Burke: It seems to be.

Robert Bugbee: Oh, thank you, Robert. No problem.

Liam Burke: Very insignificant for the product market.

Liam Burke: Okay.

Liam Burke: Thank you Robert.

Liam Burke: No problem.

Frode Morkedal: The next question comes from Frode Morkedal from Clarkson Securities. Hey guys. Um, yeah, I guess you just said the USDAR didn't matter that much, but I just wanted to... Follow-up anyway, because, yeah, thankfully the MRs are exempt, more or less, like, so you can do... triangulations without any problems, but I guess LR2s and AFROMAXes are not exempt, but I just wanted to ask if there are any triangulations involving the U.S. Gulf in any way, and if so, maybe owners like you with a very high share of Korean vessels could benefit from that.

Speaker Change: The next question comes from fraud, Michael Dahl from Clarksons Securities. Your line is open.

Speaker Change: Hey, guys.

Speaker Change: I guess, you just said that yesterday or it didn't matter that much but I just wanted to.

Speaker Change: All up anyway because.

Speaker Change: Thankfully the MRC.

Speaker Change: So you can do.

Speaker Change: Triangulation.

Speaker Change: Without any problems.

Speaker Change: Yes.

Speaker Change: LR twos in that format since our elastic sense, but I just wanted to ask if there arent any triangulation involving the U S Gulf anyway.

Speaker Change: And if.

Speaker Change: If so.

Maybe one just lucky you are at a very high share of Korean vessels could benefit from that.

Lars Nielsen: The first part, I'll just take that, and yeah, on the LR2s, the LR2 market is insignificant when it comes to the US. So, you know, if it's Chinese-built, Korean-built, for most part of the LR2s, that is not an issue. It becomes a greater issue, of course, on the Acromaxis, but as you rightfully said, Frode, I mean, on balance, considering the fleet structure that we have in Scorpio, it's not going to present an issue for us. Okay, perfect.

Speaker Change: Okay.

Speaker Change: The first part I'll just take that.

Speaker Change: On the <unk> choose the luxury market is insignificant.

Speaker Change: When it comes to the U S. So.

Speaker Change: If it is Chinese built Korean built for most part of the <unk> that is not an issue it becomes a greater issue of course on the Aframax is put as you rightfully said production on plan.

Speaker Change: Considering the.

Speaker Change: Fleet structure that we have in Scorpio, it's not going to present an issue for us.

Frode Morkedal: That's it for me. Thank you.

Speaker Change: Okay perfect. That's it for me Thank you guys.

Operator: That concludes our Q&A session.

Emanuele Lauro: I will now turn the call over to Emanuele Lauro for a closed call. Thank you very much for everybody's time today, I don't have any further remarks, look forward to speaking with you in the future as the case may be. Thanks a lot for your time.

Emmanuel Laura: That concludes our Q&A session I will now turn the call over to Emmanuel now real for closing remarks.

Emmanuel Laura: Thank you very much for everybody's time today.

Emmanuel Laura: I don't have any further remarks look forward to speaking with you.

Emmanuel Laura: In the future as the case, maybe thanks, a lot for your time and goodbye.

Operator: Ladies and gentlemen, that concludes today's event. Thank you all for joining, and you may now...

Emmanuel Laura: Ladies and gentlemen.

Emmanuel Laura: Concludes today's call. Thank you all.

Emmanuel Laura: Jamie and you may now disconnect.

Operator: Please wait, the conference will begin shortly.

Speaker Change: Please wait the conference will begin shortly.

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