Scorpio Tankers Lifts Quarterly Dividend 67% To 75 Cents, Says 'The Party Hasn't Yet Begun'
The tanker owner pairs a larger payout with net cash of $1.4 billion and a pledge to keep raising the dividend every year.
Scorpio Tankers, which moves refined petroleum products by sea, raised its quarterly dividend 67%, from 45 cents to 75 cents a share, CEO Emanuele Lauro said on the company's Wednesday earnings call. He added that management expects to keep increasing the payout annually.
A payout set by feel, not formula
Asked by an analyst at BTIG how the 75-cent rate was chosen, President Robert Bugbee said the aim was a payout that is sustainable through the cycle and can rise every year. Management wanted a point where it was "so obvious we were going to make a strong step upwards," he said.
He was blunt about the method: "We haven't created a scientific tested process for this." Management had listened to some of its top long-only shareholders, he said, and called the raise "a significant step in a number of reoccurring steps."
The dividend is payable December 4 to holders of record on November 13, according to the company's release. Third-quarter adjusted EBITDA was $172 million and adjusted net income $127 million, and the company paid $23 million in dividends in the quarter.
From $3.1 billion of debt to net cash
Lauro said that five years ago the company carried $3.1 billion of debt against $230 million of cash. It now has $655 million of debt and more than $2 billion in cash.
CFO Chris Avella said net debt has fallen by $4.5 billion since the end of 2021, from $2.9 billion to a net cash position of $1.4 billion, or $27 per share. Cash break-evens, which include operating costs, interest and scheduled loan payments, are below $11,000 a day per vessel. At $30,000 a day the company can generate up to $520 million in cash flow a year, and up to $1.3 billion at $60,000 a day, he said.
Debt that was mostly expensive lease financing is now mostly fixed-rate convertible notes with a yield to maturity of about 1%. The $605 million of notes, issued in April and May, convert at about $99 per share. Avella said the company is in a window where it cannot redeem them, so any step would be open-market purchases, which he would not forecast.
Scorpio had $2.1 billion in cash as of October 26 and $2.5 billion of available liquidity. Avella said October hire payments of over $100 million are expected within the next week. About $1.3 billion of commitments for 17 newbuilding vessels and equity in a venture building eight VLCCs can be paid without new debt, he said.
Rates are climbing into winter
Scorpio, which as of March 19, 2026 owned 90 product tankers, has booked fourth-quarter LR2s at about $181,000 a day, MRs at $56,000 and Handymax ships at $40,000, Lauro said. Bugbee said LR2s earned about $168,000 a day in October and roughly $215,000 so far in November, while MRs earned about $53,000 and nearly $70,000.
Chief Commercial Officer Lars Dencker Nielsen said U.S. Gulf MR rates were north of $80,000 on Wednesday, and called Asia's strength unprecedented in his career. "The party hasn't really started yet," he said. Management attributed the surge to more crude moving from the Middle East, higher refinery runs and tight vessel supply.
The record date for the larger dividend is November 13, with payment on December 4.
Sources
- Scorpio Tankers GAAP EPS of $4.60 beats by $2.48, net revenue of $249.04M beats by $6.22M (STNG:NYSE) | Seeking Alpha — seekingalpha.com
- Wall Street splits over tanker boom - Splash247 — splash247.com
- Scorpio Tankers Inc. Announces Financial Results for the — globenewswire.com
