Scorpio Tankers Inc.

Hello, and welcome to the Scorpio Tankers Incorporated First Quarter 2020 Conference Call. I would now like to turn the call over to Brian Lee, Chief Financial Officer. Please go ahead, sir.

Thank you, Operator, and thank everyone for joining us today. Welcome to the Scorpio Tankers 2020 First Quarter Earnings Conference Call. On the call with me are Emmanuel Loro, our Chief Executive Officer, Robert Bugbee, President Cameron Mackey, Chief Operating Officer, Lars Decker Nelson, Commercial Director, David Morant, Managing Director, James Doyle, Senior Financial Analyst. Earlier today, we issued our 2020 first quarter earnings press release, which is available on our website. The information discussed on this call is based on information as of today, May 6, 2020, and may contain forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For discussion of these risks and uncertainties, you should review the forward-looking statement disclosure in the earnings press release that we issued today, as well as Scorpio Tankers SEC filings, which are available at scorpiotankers.com and sec.gov. If you have any specific modeling questions, you can contact me later and discuss offline. As a reminder, in the variance explanation section of the press release, we gave guidance on future depreciation G&A and charter hire expense. And now I'd like to turn the call over to Emmanuel Loro.

Thank you, Brian. Good afternoon and welcome to our first quarter earnings call. Thanks for your time today. Firstly, I would like to express our solidarity with all affected negatively by the COVID-19 and its impact worldwide. The human toll in lives and on both physical and mental health is truly shocking. We stand with our employees, our customers, our shareholders and broader stakeholders in expressing our condolences, sympathies and support to first responders and health workers, as well as anybody else who's been affected. As far as the business is concerned, this quarter we report our best quarter since 2015, with the fleet averaging nearly $23,000 per day. On top of this, we believe that the disclosed second quarter bookings to date will result in consensus moving meaningfully higher. We have recently welcomed many new investors to our register who see the opportunity in the company's ownership of the world's largest bit of modern product anchors. Whilst the global economic backdrop is gloomy, our company is prepared, operationally, financially, as well as commercially. Our leadership in the LR segment is bearing fruit. We completed the acquisition of the modern Trafigura fleet as recently as September last year, further reinforcing this leadership. The present spot market on LR2s is now in excess of $100,000 per day. Since August of last year, many LR2s decided to trade in crude oil. As we know, once these vessels dirty up, they cannot easily return to carry clean products. the shift of vessels has significantly tightened supply for modern LR2s, and our fleet is now earning a significant premium in respect to their counterparts in the crude trade. Furthermore, amidst the current strong rate environment, we must remind you of the long-term trends that run in our favor, and if anything, have been further reinforced by recent events. Supply of new tonnage remains anemic against the backdrop of a rapidly aging fleet. Simply put, we have never seen an order book so low with rates so high. Many new refineries, particularly in the Middle East, are yet to come online, with a transformative positive impact on product anchors on miles. The euphoria of January surrounding scrubber installation has been replaced with almost universal gloom. By Q4, we expect the middle ground to prevail and have taken the opportunity to defer some of our installations, thereby freeing up around 500 revenue days between the second quarter and the fourth quarter this year. For the rest of 2020, we are comfortable that our tightened supply and increased floating storage provide solid market fundamentals even while the underlying economic picture needs time to improve. Every day, our cash accumulates. Furthermore, we are expecting our forward cover to increase as our customers require vessels for storage. In due course, we will provide an update on this cover as we capitalize on the current environment. My opening remarks are concluded, and I would like to turn the call to Robert Bugbee.