Sovcomflot posts operating profit over 9M’17 rising by 50.5% to USD 131.2 million
PAO Sovcomflot (SCF Group), a world leader in energy shipping and servicing offshore upstream oil and gas projects, today reported its results for the nine-month (9M) period ended 30 September 2017.
Nine months 2017 highlights:
- A strong performance from the Group’s Offshore business division saw 9M 2017 time charter equivalent (TCE) revenue grow by 55.9 per cent to USD 274.6 million (9M 2016: USD 176.1 million), with operating profit over the period rising by 50.5 per cent to USD 131.2 million (9M 2016: USD 87.1 million)
- Ice-breaking platform supply / standby vessels Gennadiy Nevelskoy and Stepan Makarov were delivered into long-term time-charters with Sakhalin Energy Investment Co Ltd. (SEIC) to serve the Sakhalin-2 project
- In August, the ice-class shuttle tanker Vasily Dinkov’s (LU6, 71, 254 tonnes dwt) long-term time-charter with Lukoil Group, serving the Varandey project, was extended for a further five years
- The world’s first ice-breaking LNG carrier, Christophe de Margerie (Arc7 class, 172,600m3 cargo capacity), was delivered into long-term time-charter with Yamal LNG. In August, she successfully completed her first commercial voyage, transporting LNG through the Northern Sea Route (NSR) from Norway to South Korea, becoming the world’s first merchant vessel to travel the full length of the NSR without icebreaker escort
- Completion of series of refinancing deals totalling USD 324.0 million, including an additional USD 150 million tap of the 2016 USD 750 million Eurobond issue and a new USD 174.0 million long-term Sberbank facility for the Prirazlomnoye Project vessels, Kirill Lavrov and Mikhail Ulyanov
- The Group has received a number of industry awards and notations including Seatrade’s ‘Deal of the Year’ award for its USD 750 million 7-year Eurobond bond offering and subsequent tap in 2017, and Lloyd’s List’s ‘Tanker Operator of the Year’ award at its annual Global Awards, as well as shortlistings in September for four separate Platts Global Energy Awards.
Commenting on the results, Sergey Frank, President and CEO of PAO Sovcomflot, said:
“This year has proven to be a very challenging period for the tanker industry and the situation now faced by many conventional tanker shipowners is especially severe. An over-supply of tonnage and reduced demand, resulting from oil capacity cut-backs led by OPEC, have resulted in low freight rates over a sustained period which have weighed upon the earnings of all participants in the tanker shipping industry. With tanker freight rates in some segments of the spot market declining by more than 50 per cent year-on-year, Sovcomflot’s results have not been immune from the earnings weakness affecting our industry".
Nikolai Kolesnikov, Executive Vice-President, Chief Financial Officer, commented:
“Sovcomflot’s performance in the first nine months of 2017 reflects the harsh realities of the tanker market. However, the significant decline in tanker market freight rates over the period was countered by our higher value-added industrial shipping activities in offshore and gas transportation which we have been growing consistently over the past years and which currently account for up to 50 per cent of the Group’s total invested capital.”
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 150 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.
Read more at the Group’s website: www.scf-group.com