Scorpio Tankers Inc. has provided an update on its average daily Time Charter Equivalent ("TCE") rates for the third quarter of 2026 and announced that it has entered into agreements to time charter-out three product tankers. Scorpio Tankers is one of the world's largest product tanker owners and operators, with a fleet spanning LR2, LR1, MR and Handymax vessels that transport refined petroleum products and, increasingly, clean petroleum and chemical cargoes. Such quarterly TCE updates are a common practice in the tanker sector, giving investors visibility into revenue generation ahead of formal earnings reports.

Third Quarter 2026 TCE Rate Update

The company disclosed a summary of the average daily TCE revenue and the duration of contracted voyages and time charters for its vessels, both inside and outside of the pools, thus far in the third quarter of 2026 as of the date of the announcement. TCE is the industry-standard revenue metric for shipping companies, representing income per vessel per day after deducting voyage-related costs such as fuel and port fees, which makes it the key measure of profitability across tanker operators. The company noted that these rates and coverage percentages are subject to change as the pool results—including, but not limited to, estimated results of voyages currently in progress—are finalized. Much of Scorpio's fleet operates within commercial pools, which aggregate vessels from multiple owners to improve utilization and access to cargo, meaning final pool allocations can shift reported results.

Time Charter-Out Agreements

Scorpio Tankers has recently agreed to time charter-out two LR2 product tankers, STI Gladiator and STI Jermyn, and one MR product tanker, STI Pontiac.

The agreements for STI Gladiator and STI Jermyn are each for a term of three years, at rates of $40,188 per day and $42,500 per day, respectively. These time charters are expected to commence in September 2026.

The agreement for STI Pontiac is for a term of three years at a rate of $23,900 per day, with commencement expected in the fourth quarter of 2026.

Multi-year charter-out agreements of this kind lock in fixed daily revenue for the owner while transferring voyage costs and commercial risk to the charterer, reducing the company's direct exposure to spot market rate fluctuations on those vessels for the term of the contract.

Third Quarter 2026 Diluted Shares Outstanding

Scorpio Tankers estimates its fully diluted weighted average shares outstanding for the three months ended September 30, 2026 to be between 54.5 and 55.5 million shares.

Following the issuance of the company's 1.75% Convertible Senior Notes due 2031 (the "Convertible Notes") in April and May 2026, the diluted weighted average number of shares for the three months and nine months ended September 30, 2026 includes the potentially dilutive effect of the Convertible Notes and restricted shares issued under the company's equity incentive plan.

The dilutive impact of the Convertible Notes is determined using the if-converted method, which assumes that the Convertible Notes were converted into common shares at the beginning of the period, or at the date of issuance if issued during the period. Under this method, net income is adjusted to add back the interest expense and other non-cash amortization expense associated with the Convertible Notes, while the weighted average number of shares outstanding is increased by the potential number of shares issuable upon conversion.

The company cautioned that the estimated diluted shares outstanding is preliminary and subject to change, as the calculation is partially dependent on the average price of the company's common stock during the period. Conversion will not be assumed for purposes of computing diluted earnings per share if the effect would be anti-dilutive.

Source: Scorpio Tankers