Scorpio Tankers Raises Dividend 67% on $127.4 Million Q3 Adjusted Profit

Scorpio Tankers Inc. (NYSE: STNG) increased its quarterly dividend by 67% after reporting $127.4 million of adjusted net income for the third quarter of 2026, while its cash holdings continued to exceed total debt. The product tanker owner also expanded its newbuilding program and secured additional multi-year charters as it deployed capital across shareholder returns, fleet renewal and strategic investments.

The company raised its quarterly dividend to $0.75 per share from $0.45, with payment scheduled for December 2026. Adjusted earnings were $2.79 per basic share and $2.49 per diluted share. Adjusted EBITDA totaled $172.2 million, while time charter equivalent revenue reached $249.1 million. TCE revenue, adjusted EBITDA and adjusted net income are non-IFRS measures.

Scorpio reported net income of $224.3 million, including a $152.6 million gain on asset sales. Operating cash flow before changes in working capital was $175.5 million. During the quarter, the company repaid $200 million of debt and paid $22.5 million in dividends.

Tanker rates and charter coverage

Scorpio’s third-quarter TCE rates, including vessels operating under time charters, averaged $55,184 per day for LR2 tankers, $31,073 for MR tankers and $24,157 for Handymax vessels.

As of October 27, the company had booked 44% of available fourth-quarter LR2 days at $181,000 per day, 47% of MR days at $56,000 and 37% of Handymax days at $40,000. These figures cover only the booked portions of the quarter and do not represent rates for all available operating days.

The company also added contracted revenue through four time charter-out agreements reached in July and August. Two 2015-built MR tankers were chartered for three years at $23,900 per day. A 2016-built LR2 was fixed for three years at $42,500 per day, while a 2017-built LR2 was chartered for three years at $40,188 per day.

Scorpio said higher refinery runs and increased seaborne refined-product exports were supporting product tanker earnings. Its market presentation also pointed to low visible inventories, shifts in global refining capacity and longer transportation distances as factors affecting tanker demand. On the supply side, the company highlighted the aging global fleet, sanctions and the use of LR2 tankers in crude and dirty-product trades as constraints on effective product tanker capacity.

Net cash position supports fleet investment

Scorpio had $2.05 billion of cash and cash equivalents as of October 26, compared with $655 million of gross debt, resulting in net cash of about $1.40 billion. Including $483 million available under revolving credit facilities, total liquidity was $2.54 billion. The company said it has no debt maturities until 2028.

The balance sheet reflects substantial deleveraging from the end of 2021, when Scorpio had $3.16 billion of gross debt and net debt of $2.93 billion. In July 2026, it redeemed $200 million of 7.5% senior unsecured notes that had been scheduled to mature in January 2030.

Scorpio continued to reshape its fleet during and after the quarter. In September, it agreed to sell three product tankers. The $37.5 million sale of a 2014-built, scrubber-fitted MR closed during the month. Sales of two scrubber-fitted LR2 tankers—one built in 2014 for $70 million and another built in 2015 for $73 million—were expected to close in the fourth quarter.

At the same time, the company committed to additional newbuildings. It agreed in August and September to purchase four scrubber-fitted LR2 product tankers for $72.8 million each, with delivery scheduled for 2029. It also ordered two scrubber-fitted very large crude carriers for $135 million each, with deliveries expected in 2028.

The presentation listed 17 directly owned newbuildings scheduled for delivery between 2027 and 2030, comprising five MRs, eight LR2s and four VLCCs. Scorpio also has a minority interest in a joint venture associated with eight VLCC newbuildings, equivalent to one vessel on a proportional basis. Estimated newbuilding payments are concentrated between late 2026 and 2029, although the company cautioned that installment timing and amounts may change as construction progresses.

Scorpio’s operating fleet consisted of 74 product tankers with an average age of approximately 10.3 years, including two vessels classified as held for sale. The company estimated its fleet-wide cash breakeven at $11,000 per day.

Separately, Scorpio invested $38.4 million in October to acquire 2.4 million common shares of Volare Shipping Ltd. as part of Volare’s initial public offering.

Risks and uncertainties

Scorpio’s outlook remains exposed to fluctuations in charter rates and vessel values, changes in tanker demand, bunker prices, drydocking and insurance expenses, and the performance of charter counterparties. The company also identified financing availability, environmental and government regulation, litigation, geopolitical conditions and potential shipping-route disruptions as material uncertainties. Its fourth-quarter bookings, newbuilding schedules and market projections are forward-looking and may differ from actual results.