• 2017 August 30 13:03

    SCF Group's H1 gross revenue rises 4.4% to $ 710.2 million

    SCF’s expanding industrial shipping business provides resilience in challenging conventional tanker market

    H1 2017 Highlights

    World’s first ice-breaking LNG carrier, Christophe de Margerie (Arc7 class, 172,600m3 cargo capacity), delivered into long-term time-charter with Yamal LNG

    New highly specialised ice-breaking platform supply vessel (IBSV) Gennadiy Nevelskoy (3,259 tonnes DWT) delivered in March. This was followed in June by Stepan Makarov (3,319 tonnes DWT), the first in a series of three new multifunctional ice-breaking standby vessels (MIB). All four vessels will operate on the Sakhalin-2 project under 20-year time-charters to Sakhalin Energy Investment Company

    USD 174 million, 15-year credit facility raised from Sberbank in March, to refinance two Arctic shuttle tankers (Mikhail Ulyanov and Kirill Lavrov) servicing the Prirazlomnoye project (the Pechora Sea).

    Successful raising of a further USD 150 million above the 2016 Eurobond issue, achieving one of the lowest yields for a global shipping company and which attracted widespread investors interest.


    Commenting on the Group’s results Sergey Frank, President and CEO of PAO Sovcomflot, said:

    “The first half of 2017 was very challenging for global tanker markets, with spot freight rates in all market segments nearing their historic lows. This has impacted severely upon the profitability of those owners focused solely on conventional shipping. During the first half of 2017, the benefit of the Group’s growing commitment to its specialised offshore and fixed income gas transportation businesses clearly demonstrated its worth. Despite the turbulent conditions seen in conventional markets, SCF Group has continued to demonstrate resilience whilst remaining able to position itself to take advantage of the future upswing in these markets when it comes.

    “In the first half, the Group continued to implement its strategy and demonstrated its capacity to innovate and break new ground. The Group took delivery of the World’s first ice breaking LNG carrier, Christophe de Margerie, two unique ultra-modern icebreaking platform supply vessels Gennadiy Nevelskoy and Stepan Makarov and placed the first ever orders for LNG-fuelled Aframax tankers, to provide a step reduction in shipping emissions.

    “Regardless of the adverse market conditions, we continue to enhance further the quality of our operations and implement operational programmes designed to provide for safe shipping, environmental protection and risk mitigation, to continue to attract talented seafarers and shore personnel, keeping in mind that human capital is one of SCF’s core competitive advantages.”

    Nikolay Kolesnikov, Executive Vice President, Chief Financial Officer, noted:

    “In the first half of 2017, the Group raised USD 341 million in debt capital, including a highly successful tap of our 2016 Eurobond issue. The latter was heavily oversubscribed, with one of the lowest yields seen for a global shipping company. It attracted significant international as well as domestic demand. The proceeds for the new capital raised, were used to retire the remainder of our maturing USD 800 million debut Eurobonds, issued in 2010. In addition, a 15-year credit facility was raised to refinance two shuttle tankers. Overall, the total debt capital raised by Sovcomflot during the period 2016 to 2017 is USD 1.6 billion.”

    “The robustness of Sovcomflot’s business model is underpinned by USD 8.0 billion of contracted future revenues and is reflected in its credit ratings and the cost of debt capital. The Group is rated BB+/stable by S&P (rating reconfirmed in August 2017) and Ba1/stable by Moody’s (both on a par with the Russian sovereign ratings from these agencies). Meanwhile, in June 2017 FitchRatings improved the outlook on its BB rating from “stable” to “positive”.

    H1 2017 Financial Highlights

     

     

    * Calculated on the adjusted basis as operating profit before depreciation and amortization adjusted by gain/(loss) on sale of subsidiaries, gain/(loss) on sale of equity-accounted investments, other operating revenues/(expenses) and interest income.

    On 16 March 2017, the Group concluded a USD 174.0 million 15-year credit facility with Sberbank, to refinance two Arctic shuttle tankers (Mikhail Ulyanov and Kirill Lavrov) servicing the Prirazlomnoye project.

    The Group’s subsidiary, SCF Capital, issued USD 150.0 million of unsecured Senior Notes on 10 April 2017, which mature on 16 June 2023. These were consolidated and form a single series with the Group’s existing Eurobonds (USD 750 million 5.375% Senior Notes due in 2023). The issue was 3.8 times over-subscribed and attracted significant international as well as domestic demand. Priced at USD 102.8, the Senior Notes had a yield of 4.85 per cent, representing the lowest-ever achieved for a global shipping company rated below investment grade.

    Dividends of Rouble (RUB) 3.12 per share, totalling RUB 6,141.0 million, equivalent to USD 106.9 million were declared on 16 June 2017 and paid on 27 June 2017 (2016 – RUB 3.04 per share totalling RUB 5,972.7 million equivalent to USD 92.9 million).

    As at 30 June 2017, Sovcomflot was rated BB+/stable (S&P), Ba1/stable (Moody’s) and BB/positive (Fitch)

    A copy of the full consolidated financial statements is available in the investor section of the Group’s website: www.scf-group.com

    Business segment highlights

    The Group’s diversified business model continued to be a source of strength. A strong performance from the Offshore and Gas divisions was seen in the first half. In these segments, vessels generally focus on servicing industrial energy projects on long-term time charter. It provided relief against the deteriorating conditions witnessed in the conventional tanker markets, which were most noticeable in the second quarter of 2017. This balance of revenue sources helped gross revenue for the six months to 30 June 2017 to increase by 4.4 per cent to USD 710.2 million (H1 2016: USD 680.3 million).

    The Group’s divisional performance during the first half, based on time charter equivalent revenues, is summarised in the following table.

     

     

     

     

    * Time charter equivalent (TCE) represents shipping revenues less voyage expenses and is commonly used in the shipping industry to measure financial performance and to compare revenue generated from a voyage charter to revenue generated from a time charter.

    Key events

    In February, the Group contracted for the construction of four new generation liquefied natural gas (LNG) fuelled 114,000 deadweight ice-classed Aframax tankers, the first such tankers in the world to use LNG fuel in line with the fleet renovation programme.  Following this, the Group signed an agreement with Shell Western LNG B.V. (Shell) in April for the supply of LNG to these vessels, which are scheduled to be delivered to SCF from July 2018 to February 2019.

    The concept for these tankers was developed as part of the preparation for the construction of such vessels at Zvezda shipbuilding complex (Primorsky region of Russia’s Far East).

    It is envisaged that by 2021 the construction of such large-capacity tankers will commence at Zvezda. They will operate primarily between the Baltic and Northern Europe transporting crude oil and petroleum products. Each tanker will have an ice class 1B hull enabling year-round export operations from the Russian Baltic.

    In April, the icebreaking supply vessel (IBSV) Gennadiy Nevelskoy was delivered, followed in June by Stepan Makarov, the first in a series of three multifunctional icebreaking (MIB) standby vessels to be delivered to the Group. All four vessels will operate under twenty-year agreements with Sakhalin Energy Investment Company Ltd., servicing the Sakhalin-2 Project.

    The Group and the Admiral Nevelskoy Maritime State University (MSUN, Vladivostok) signed an agreement in April to establish a joint educational and research project entitled the “Floating Laboratory”. It will be based aboard the IBSV Gennadiy Nevelskoy. This agreement is the latest chapter in a long-term programme of cooperation between SCF Group and the MSUN.

    In April Marine Money named Sovcomflot’s USD 750 million 7-year Eurobond bond offering ‘Institutional Debt Deal of the Year 2016’ and Seatrade, its “Deal of the Year”. In April, Sovcomflot's Arctic shuttle tanker Shturman Albanov won the international award for ‘2016 Ship of the Year’ at the 2017 Marine Propulsion Awards.

    Events after the reporting period

    On 21 July 2017, the Group signed an agreement for the construction of a fourth in a series of Arctic shuttle tankers to service the Novy Port project, under a long-term time-charter with Gazpromneft. The vessel is due for delivery in October 2019.

    On 17 August 2017, the Group’s icebreaking LNG carrier Christophe de Margerie successfully completed her first commercial voyage, transporting liquefied natural gas (LNG) through the Northern Sea Route (NSR) from Norway to South Korea. The vessel set a new record for an NSR transit of just 6 days 12 hours and 15 minutes.

    Fleet summary

    As at 30 June 2017, the Group’s fleet (including vessels owned, chartered-in, and in joint ownership with third parties) comprised 149 vessels with a combined deadweight of approximately 13.1 million tonnes. At the end of the 1H 2017, the Group had six vessels under construction, scheduled for delivery from September 2017 to February 2019, comprising of two multifunctional ice breaking (MIB) standby vessels and four ice-class, LNG-fuelled Aframax crude oil tankers.

    A detailed fleet list is available at the Group’s website: www.scf-group.com

    About Sovcomflot

    PAO Sovcomflot (SCF Group) is one of the world's leading shipping companies, specialising in the transportation of crude oil, petroleum products, and liquefied gas, as well as servicing offshore upstream oil and gas installations and equipment. The Group’s fleet comprises 149 vessels with a total deadweight of over 13.1 million tonnes. The company is registered in St. Petersburg with offices in Moscow, Novorossiysk, Murmansk, Vladivostok, Yuzhno-Sakhalinsk, London, Limassol, and Dubai.

    The Group offers a wide range of vessels in the market segments most demanded by major Russian oil and gas companies. With its own technical development and unique approach to advanced technologies, Sovcomflot can meet the most demanding customer requirements, providing effective transportation for oil & gas companies.




2018 June 19

18:06 100 million dollars to link the Nile with Suez Canal Region
17:03 DNV GL partners with the EU and Government of India to bring offshore wind to the Indian market
16:32 CMA CGM deploys its innovative solution for containers tracking, TRAXENS by CMA CGM
16:18 APM Terminals ‘Cool port’ barge service speeds up distribution from Rotterdam
16:02 Multraship acquires an ASD Tug from Med Marine for Terneuzen operations
15:32 Koper remains the most important port for Austria
15:02 CMA CGM announces GRR from East Coast South America to Africa, Gulf and West Coast North of India
14:32 Port of Oakland import volume flat in May 2018
14:25 Europort Romania maintains its position as the premier Black Sea martime event
14:02 British Ports Association comments on new report on Northern ‘Free Ports’ strategy proposal
13:32 Port seeks to double rail volume with Railport Antwerpen
13:02 Rijkswaterstaat awarded Van Oord the contract to dredge Marker Wadden channel
12:32 MOL to make full-scale move into subsea support vessel business by acquiring stake in AKOFS of Norway
12:28 HELCOM Heads of Delegation approve Baltic Sea Action Plan update process and welcome new HELCOM Chair
12:02 Bunker prices continue growing at the Far East ports of Russia (graph)
11:37 Damen and Saab announce partnership to participate on the tender for the Tamandaré Class Corvette
11:34 Saturnus, first vessel in the Evolution series, launched at AVIC
11:09 Marine Technics and Alexeev’s Hydrofoil Design Bureau extend joint projects
10:45 Arctia appoints Senior Vice President for Offshore and Marine Services
10:23 Brent Crude futures price down 0.64% to $74.86, Light Sweet Crude – down 0.62% to $65.28
10:01 Small missile ships of RF Navy’s Caspian Flotilla sail from Sevastopol to Mediterranean Sea
09:40 Rescuers of RF Navy’s Northern Fleet train in rendering assistance to submarine in Kola Bay
09:16 Baltic Dry Index up to 1,442 points

2018 June 18

18:12 Azerbaijan Caspian Shipping Company takes part in TransCaspian/Translogistica 2018
17:57 Legislative amendment promotes automatisation tests in maritime transport with regard to manning and watchkeeping
17:35 First major forum on the new Silk Road organised by the Port of Marseille Fos
17:05 Aker Solutions teams up with SAP for next steps in digitalizing its business
16:45 HMM signs Letter of Intent for its mega containership orders
16:24 Victor Olersky handed in his resignation notice
16:18 European Council extends sanctions on Crimea and Sevastopol for another year
16:05 DryShips announces agreements to sell two older Panamaxes
15:40 Tuapse Commercial Seaport elected seven BoD members
15:33 Poland holds World Maritime Day Parallel Event
15:13 IMO member states must progress on key sulphur cap issues at critical meeting in July
14:59 Average wholesale prices for М-100 HFO down to RUB 17,923 in RF spot market
14:13 Navios Maritime Containers announces acquisition of five containerships and options to acquire four additional containerships
13:35 Maersk launches a new line to the Middle East from Fos
13:00 Aker Arctic demonstrates autonomous vessel in model tests
12:36 ABB to improve Edda Fides floating hotel safety with leading digital technology
11:47 Freeport of Riga Authority and Port of Rotterdam Authority sign cooperation agreement
11:24 Port of Tallinn signs MoU with the City of Tallinn for development of the Old City Harbour area
11:01 Dorian LPG Board declines BW LPG'S unsolicited proposal
10:25 Brent Crude futures price down 0.76% to $72.88, Light Sweet Crude – down 1.73% to $63.73
10:12 Capital Product Partners L.P. announces new period charters for four of its product tankers
10:03 Port of Silloth invests £250,000 in new solar farm on Marshall Dock
09:41 Fishers fatalities give impetus to fishing vessel safety work
09:18 Baltic Dry Index up to 1,445 points

2018 June 17

18:40 Port of Oakland's largest terminal operator OK new lease to 2027
18:38 GoodBulk Ltd. announces delivery of Capesize vessel
18:32 Navios Maritime Partners announces sale of containership and options to sell four additional containerships

2018 June 15

18:35 Hapag-Lloyd implements Peak Season Surcharge from Mediterranean to USA
18:05 Wallenius Wilhelmsen Ocean adds Adelaide on the Australia service
17:54 Throughput of port Kaliningrad in 5M’18 up 12% Y-o-Y to 6.05 million tonnes
17:35 GTT conducts two FEED studies on two types of Gravity Based System
17:20 Throughput of port Vyborg in 5M’18 up 22% Y-o-Y to 610,900 tonnes
17:05 Port of Koper officially part of the New Silk Road
16:40 Yantar Shipyard launches yet another trawler of Project SK-3101R
16:35 Port of Long Beach volume up to 687,427 TEU in May 2018
16:05 Royal IHC joins PortXL
15:45 Throughput of port Vysotsk in 5M’18 declined by 3% Y-o-Y to 7.49 million tonnes