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Jun 30
Scorpio Tankers Q2 2025 Earnings Report
Scorpio Tankers reported a significant decrease in net income and revenue for Q2 2025 compared to the same period last year, primarily due to the normalization of freight rates after the initial disruption in the Southern Red Sea.
Key Takeaways
Scorpio Tankers experienced a substantial decline in its financial performance for the second quarter of 2025, with net income falling to $73.5 million from $227.3 million in Q2 2024. This downturn was largely driven by a $150.7 million decrease in Time Charter Equivalent (TCE) revenue, as market conditions normalized following the elevated freight rates seen in the prior year due to Red Sea disruptions. Despite the revenue challenges, the company managed to reduce vessel operating costs and financial expenses, reflecting effective cost management and deleveraging efforts.
Net income for Q2 2025 was $73.5 million, a significant decrease from $227.3 million in Q2 2024.
TCE revenue decreased by $150.7 million to $222.8 million in Q2 2025, primarily due to the normalization of daily TCE rates.
Adjusted net income for Q2 2025 was $67.8 million, down from $188.4 million in Q2 2024.
The company declared a quarterly cash dividend of $0.40 per common share, maintaining its dividend payout.
Scorpio Tankers
Scorpio Tankers
Scorpio Tankers Revenue by Segment
Revenue by Segment
LR2 TCE Revenue (Pool/Spot) Revenue
CapyFin.comMR TCE Revenue (Pool/Spot) Revenue
CapyFin.comHandymax TCE Revenue (Pool/Spot) Revenue
CapyFin.com Forward Guidance
Scorpio Tankers anticipates continued operational activity in Q3 2025 with a focus on optimizing fleet utilization through various charter agreements. The company is also actively managing its debt and fleet through strategic vessel purchases and carbon capture technology adoption.
Positive Outlook
- Strong average daily TCE revenue expected for LR2 ($31,000), MR ($22,000), and Handymax ($19,000) vessels in Q3 2025.
- New bareboat charter-out agreement for STI Bosphorus at $13,150 per day (equivalent to $21,000 TCE) until 2037, providing long-term revenue stability.
- Exercise of purchase options on three vessels (STI Guard, STI Gallantry, STI Symphony) to reduce lease obligations and gain full ownership.
- Extension of long-term time charter-out agreements for three LR2s (STI Gratitude, STI Gladiator, STI Guide) at $31,000 per day for an additional year.
- Successful installation of onboard carbon capture technology on STI Spiga, demonstrating commitment to environmental initiatives and potential for future operational efficiencies.
Challenges Ahead
- Expected aggregate drydock costs of $19.1 million in Q3 2025 and $30.5 million in FY 2026, which will impact cash flow.
- Estimated aggregate off-hire days of 283 in Q3 2025 and 339 in FY 2026 due to drydocks and general repairs, reducing revenue days.
- Mandatory prepayment of $12.65 million on the 2023 $1.0 Billion Credit Facility due to the STI Bosphorus bareboat charter, with $9.2 million of this amount being non-redrawable.
- The overall market conditions for product tankers have normalized from the inflated freight rates of 2024, suggesting potentially lower spot market earnings compared to the peak.
- The company sold 2,745,218 common shares of DHT Holdings Inc., reducing its stake and potential future dividend income from this investment.