Scorpio Tankers’ first quarter results were received positively by the market, with management attributing performance to a combination of strong product tanker earnings and a focus on operational efficiency. CEO Emanuele Lauro noted that structural changes, such as refinery closures, have increased demand for seaborne transportation of refined products, even as policy shifts and geopolitical developments have introduced greater uncertainty. Operational improvements, including the completion of drydock upgrades on a significant portion of the fleet, also contributed to the company’s ability to maintain vessel efficiency and reduce repositioning costs.
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Scorpio Tankers (STNG) Q1 CY2025 Highlights:
- Revenue: $204.2 million vs analyst estimates of $200.8 million (47.6% year-on-year decline, 1.7% beat)
- Adjusted EPS: $1.03 vs analyst estimates of $0.74 (38.6% beat)
- Adjusted EBITDA: $123.7 million vs analyst estimates of $98.54 million (60.6% margin, 25.5% beat)
- Operating Margin: 29.6%, down from 62.9% in the same quarter last year
- total vessels: 99, down 11.9 year on year
- Market Capitalization: $1.93 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Scorpio Tankers’s Q1 Earnings Call
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Omar Nokta (Jefferies) asked about the disconnect between ship values and equity prices, and whether ship values are holding up or reflecting recent uncertainty. CEO Emanuele Lauro replied that ship values have corrected alongside rising global uncertainty but expects values to realign with rates when the macro outlook stabilizes.
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Omar Nokta (Jefferies) followed up on whether recent trade policy shifts and tariffs have altered chartering behavior. Chief Commercial Officer Lars Dencker Nielsen observed increased naphtha shipments to Asia and noted strong demand for LR2 vessels, with tariffs having limited immediate impact.
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Chris Robertson (Deutsche Bank) questioned the significant drop in vessel operating expenses, asking if this level was sustainable. CFO Chris Avella cautioned against extrapolating from a single quarter, suggesting a 12-month trailing average provides a more reliable estimate for future operating costs.
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Chris Robertson (Deutsche Bank) also asked about the flexibility of Chinese ethane-based crackers to switch feedstocks and the implications for naphtha demand. Management responded that there is meaningful switching capacity, especially as naphtha becomes favored in Asian markets.
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Liam Burke (B. Riley) inquired about the effect of increased crude production from OPEC and non-OPEC countries on the refined product market. Management stated the risk of cross-cannibalization from crude to product tankers has diminished and that low inventory levels could further support demand.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be monitoring (1) the pace and impact of further refinery closures and how they alter trade flows, (2) the effectiveness of the company’s ongoing capital allocation and cost management strategies in preserving liquidity, and (3) the evolution of policy and tariff developments that could shift supply-demand dynamics. Progress on maintaining vessel utilization and efficiency will also be key to performance.
Scorpio Tankers currently trades at $40.93, up from $37.70 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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