• 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.




2017 November 24

12:12 Lead buoy tender of Project BLV04 build for FSUE Rosmorport is put into operation (photo)
12:00 Public Transport Authority raises Saudi flag on Bahri’s fifth VLCC received in 2017
11:30 GVT to increase the frequency of its rail shuttle service between Rotterdam and Chengdu in China
11:14 Europort confirms role as international maritime business hub
11:01 British ports welcome Budget announcements on Brexit scenario funding and freight review
10:45 Financial support for the Polar Code and the Sustainable Development Goals
10:31 European ports welcome the EP Transport Committee vote for a stronger CEF budget
10:11 Finnlines finishes the first lengthening project of ro-ro vessel
10:01 Brent Crude futures price down 0.27% to $63.38, Light Sweet Crude – up 0.76% to $58.46
09:37 Bunker prices are flat at the Port of Saint-Petersburg, Russia (graph)
09:20 Baltic Dry Index up to 1,445 points
07:48 Palau International Ship Registry is the fastest growing flag

2017 November 23

18:05 CMA CGM announces FAK rates from Asia to Mediterranean
17:54 Mercury-1 ferry of Azerbaijan Caspian Shipping Company successfully passed sea test after major repairs
17:35 Ophir issues update on the status of the Fortuna FLNG project
17:20 Opatija, Croatia hosts three-day conference “The Port of Rijeka, Gateway of the Baltic-Adriatic Core Network Corridor”
17:05 Navantia and Bath Iron Works team for the US Navy Future Guided Missile Frigates
16:50 Throughput of Chinese ports up 7.2% to 7.23 bln t in 10M’17
16:35 COSCO (Guangdong) Shipyard delivers research/survey vessel to Guangzhou Marine Geological Survey
16:05 CMA CGM announces GRI from Asia to ECSA
16:03 Bunker prices may turn into irregular phase in the lead-up to OPEC’s meeting
15:44 Okskaya shipyard lays down the first non-self-propelled oil barge in a series of ten vessels ordered by STLC
15:33 European Sea Ports Organisation welcomes a deadline for global solution on CO2 from shipping
15:00 Ports of Ayr and Troon celebrate delivery of new Scottish-built pilot vessel
14:19 Corvette Soobrazitelny, Baltic Fleet, performed some training missions in piracy affected areas in Gulf of Aden
14:02 Wärtsilä engines and exhaust gas cleaning chosen for new cruise ship
13:23 Navigation 2017 to close in Azov-Don Basin of Russia’s IWW on 1 December 2017
13:02 Oldendorff Carriers receives IBJ Bulk Ship Operator of the Year award
12:36 Russia’s General Board of State Expert Review approves Phase I of Bagayevsky Hydrosystem project
12:10 Ports of Ayr and Troon celebrate delivery of new Scottish-built pilot vessel
11:52 Marine Recruiting Agency goes on with the program of RTG operators training
11:29 Coal exports via Rosterminalugol terminal hit 22 mln t milestone this year (photo)
11:04 MGO prices are still high at the Far East ports of Russia (graph)
10:41 Throughput of port Kaliningrad in Jan-Oct'17 grew by 16% to 11.28 mln t
10:18 Brent Crude futures price down 0.25% to $63.16, Light Sweet Crude – down 0.21% to $57.90
09:53 Ukraine’s water transport carried 0.5 mln passengers in Jan-Oct'17, up 30.2%, Y-o-Y
09:35 Port of Singapore throughput up 5.9% to 519.68 mln t in 10M’17
09:17 Baltic Dry Index up to 1,413 points

2017 November 22

18:02 Throughput of port Vyborg up 13% to 1.24 mln t in 10M’17
17:46 New research reveals ‘golden period’ ahead for the Port of Barrow
17:24 Iceland accedes to air pollution treaty
17:03 MSC receives the ‘Container Line of the Year’ award
16:35 Throughput of port Primorsk in 10M’17 down 9% Y-o-Y to 49.40 mln t
16:03 Scottish energy ports capability directory launched
15:47 Throughput of port Vysotsk up 2% to 14.42 mln t in 10M’17
15:21 Cargo transportation by Ukraine’s water transport down 13.3% to 4.8 mln t in 10M’17
15:03 Otto Energy confirms the installation of the jacket and decks comprising the SM 71 F Platform
14:44 Throughput of port Ust-Luga up 11% to 85.04 mln t in 10M’17
14:36 APM Terminals opens a new era for Puerto Quetzal
14:22 Okskaya shipyard will build a series of six trawlers for fishing company Variant
14:03 Forth Ports installs NORBIT survey system for the Forth and the Tay
13:21 DOF sells the vessel Skandi Møgster
12:39 ABB Ability™ Marine Pilot Vision looks beyond human vision for ship automation
12:16 Crowley provides ATB to deliver jet fuel from U.S. mainland to Puerto Rico
12:15 Throughput of Big Port St. Petersburg up 10% to 44.01 mln t in 10M’17
11:46 Navigation season at the main route of the Volga-Baltic Waterway is over (photo)
11:08 Hapag-Lloyd buys low carbon refrigerant containers from Maersk Container Industry
10:51 Bunker prices are flat at the Port of Saint-Petersburg, Russia (graph)
10:30 Brent Crude futures price up 0.13% to $62.30, Light Sweet Crude – up 0.12% to $56.49
10:07 Wagenborg Offshore chooses ULSTEIN PX121 design