• 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 February 16

18:06 CMA CGM announces FAK rates from the Indian Subcontinent to North Europe and the Mediterranean
17:54 Future Outlook Forum will take place on 20 March as part of Intermodal Asia 2018
17:36 Global Container Terminals orders 10 more Konecranes RTGs for its terminals in British Columbia
17:09 University of Kent partnership helps the Port of Dover cut queues and boost efficiency
17:06 Port of Oakland reports 2.1 percent increase in export volume in January 2017
16:58 Container throughput of port Hong Kong (China) up 9.2% to 1.81 million TEUs in January 2018
16:35 Royal Vopak expands Vopak tank terminal (JTT) in the Port of Jakarta - Indonesia
16:05 DP World signs agreement with government of Jammu and Kashmir at World Government Summit
15:53 Murmansk Sea Fishing Port handled 11,600 t of fish in January 2018, up 26.1% Y-o-Y (photo)
15:26 Cargo traffic through NSR in 2017 grew by 36% Y-o-Y to 9.9 mln t
15:25 PPR 5 agrees on the outline of IMO draft guidelines for implementation of the 2020 sulphur limit
15:01 NOVATEK to invest USD 1.5 billion in construction of LNG terminal at Kamchatka
14:37 Rosmorport announces tender for maintenance dredging at Volga-Caspian Canal
14:14 22 icebreaker escort operations performed in eastern part of Gulf of Finland during 24 hours on February 15-16
13:49 TransContainer’s net income in 2017 more than doubled Y-o-Y to RUB 5.42 million
13:25 Nuclear power plant of Vaygach icebreaker breaks Arktika’s record
12:30 Rosmorport appoints Irina Egorova as Chief Accountant of its Vanino Branch (photo)
11:56 BSM and Babcock International Group collaborate on innovative LNG Supply Vessel
11:23 EBRD supports efficient grain logistics in Ukraine
11:00 WFS, Marinvest, IINO, Mitsui, NYK to build four new ocean-going vessels capable of running on methanol
10:28 Research vessel Admiral Vladimirsky leaves Mumbai port, India
10:00 Port of Rotterdam container throughput up 12.3% in 2017
10:00 Brent Crude futures price up 0.51% to $64.66, Light Sweet Crude – up 0.54% to $61.67
09:39 New DNV GL class notations aim to improve stern tube bearing performance
09:34 Bunker prices continue going down at the Port of Saint-Petersburg, Russia (graph)
09:15 Baltic Dry Index down to 1,089 points

2018 February 15

18:27 Largest vessel to call at The Port of Philadelphia arrives from the West Coast of South America
18:06 Ampelmann gangway system installed succesfully on the Wagenborg Offshore's Walk to Work vessel
17:06 CMA CGM announces FAK rates from North Europe to China & Far East
16:57 Bunker market in anticipation of upward correction
16:38 Container throughput drives growth in Rotterdam
16:05 Caterpillar Marine announces upgrades to reman models in commercial and yachting applications
15:57 Kont to build 4 cruise terminals in the Leningrad Region
15:24 Number of maritime accidents in North Sea Canal Area down in 2017
15:04 LUKOIL's hydrocarbon production in 2017 up 2.4% Y-o-Y to 2.23 million boe per day
14:39 Peresvet and Oslyabya, ships of RF Navy’s Pacific Fleet, sail in training zone in Sea of Japan
14:16 UN Environment visits IMO
13:43 Jan De Nul to install wind turbine generators in Germany
13:12 Seaborne cargo throughput in Hamburg was stable Y-o-Y at 136.5 million tons
12:25 Railway infrastructure management issues of importance to Lithuania discussed with EU Transport Commissioner
12:01 ClassNK releases new PrimeShip-HULL (HCSR) software
11:44 Repair of tanker "President Heydar Aliyev" of Azerbaijan Caspian Shipping Company completed
11:17 Fuel oil prices are going down at the Far East ports of Russia (graph)
11:17 RIKON AS plans to launch manufacturing of mobile cranes in the Port of Riga
10:53 18 icebreaker escort operations performed in eastern part of Gulf of Finland during 24 hours on February 14-15
10:26 Posidonia 2018 to host international unveil of industry titans JV – International Maritime Industries
10:02 Brent Crude futures price up 0.81% to $64.88, Light Sweet Crude – up 1.14% to $61.28
09:40 Sailors of RF Navy’s Caspian Flotilla start training for Sea Cup 2018
09:18 Baltic Dry Index up to 1,095 points

2018 February 14

18:14 Tilbury2 examination process begins
17:51 PortXL selected port related start-ups and scale-ups for 2018
17:25 The Finnish Supreme Court did not grant the leave to appeal on the fairway dues dispute between Finnlines and the Finnish State
17:03 Documentation for maintenance dredging at Kavkaz and Taman ports obtains state environmental approval (photo)
16:44 PTP enforced FAS decision on the appeal of Baltic Sea Tug Agency
16:25 CMA CGM announces PSS from North Europe to Canada East Coast
15:52 Rosmorport target classroom opens at Admiral Makarov State University of Maritime and Inland Shipping
15:17 Sberbank and Sovcomflot conclude new USD 106 million project financing agreement
14:53 Container Terminal Saint-Petersburg spent EUR 9.1 million under its development programme of 2017
14:30 Polarcus awarded 4D project in West Africa
14:01 Keel laying ceremony held at AVIC Dingheng shipyard for Sirius Shipping’s first of two Evolution vessels