Sovcomflot posts its Y2015 results
2015 Highlights:
Gross revenue increased by 7.6 per cent to USD 1,483 million (2014: USD 1,378 million).
Time charter equivalent revenue (TCE)* increased by 18.8 per cent to USD 1,240.1 million (2014: USD 1,044.0 million).
EBITDA was USD 742.6 million, an increase of 38 per cent on the previous year (2014: USD 538.2 million).
Net profit increased to USD 354.5 million (2014: USD 83.9 million)
Total future contracted revenues amounted to USD 8.5 billion
LNG carriers SCF Melampus and SCF Mitre (each 170,200 m3 capacity) delivered and commenced long-term time charters to Royal Dutch Shell
USD 756 million of new debt capital raised, including two major long-term credit facility agreements to finance four new multi-functional ice breaking support vessels and three new Arctic shuttle tankers for Novy Port project on the Yamal peninsula. Total future revenues for these contracts amount to USD 2.9 billion. In 2015, Sovcomflot also signed two refinancing agreements amounting to USD 130 million in total.
Sergey Frank, President and CEO of Sovcomflot commented:
“We are very pleased with our results for 2015, which have exceeded our expectations. Significantly, there has been a fourfold increase in our bottom line profits in 2015 compared with the previous year.”
Audited Financial Results (Year to 31 December)
21 March 2016, Moscow: PAO Sovcomflot (‘SCF Group’), Russia’s largest shipping company and a global leader in the provision of seaborne energy solutions, has today announced its results for the year to 31 December 2015.
2015 Financial Highlights (IFRS audited accounts):
Gross revenue (freight and hire) for the year ended 31 December 2015 increased by 7.6 per cent to USD 1,483.0 million (2014: USD 1,378 1,377.9 million).
Time charter equivalent (TCE)* revenues for the year increased by 18.8 per cent to USD 1,240.1 million (2014: USD 1,044 million).
Earnings before interest, tax and depreciation (EBITDA)** were USD 742.6 million, an increase of 38.0 per cent on the previous year (2014: USD 538.2 million).
Net profit increased 4.2 fold to USD 354.5 million (2014: USD 83.9 million)
2015 Operating Highlights
Crude Oil Transportation
This is Sovcomflot’s largest business segment and included 59 vessels as at 31 December 2015 (2014: 60 vessels).
TCE revenue for the year ended 31 December 2015 increased by 28.7 per cent to USD 542.1 million (2014: USD 421.1 million). With global oil prices remaining depressed throughout 2015, Sovcomflot benefited from a significant increase in demand for crude oil tanker transportation.
Oil Products Transportation
This segment includes the transportation of refined petroleum, other oil products and chemicals. This fleet serving this business segment comprised 34 vessels as at 31 December 2015 (2014: 43 vessels).
TCE revenue for the period ended 31 December 2015 was USD 240.3 million (2014: USD 213.5 million), an increase of 12.6 per cent over the previous year with a significantly smaller fleet than in 2014.
During the year, Sovcomflot completed a modernization programme for LR I tankers, to improve their fuel-efficiency and to further reduce their environmental impact in line with the latest IMO and European directives.
Gas Transportation
This includes both LNG and LPG gas tankers, comprising 4 LNG carriers and 2 LPG carriers at the end of 2015 (2014: 2 LNG carriers and 2 LPG carriers).
TCE revenues increased by 65.3 per cent to USD 137.5 million (2014: USD 83.2 million). This result reflects a significant increase in Sovcomflot’s capacity, following the delivery of the 170,200 m3 cargo capacity LNG carriers SCF Melampus and SCF Mitre during the year. These vessels are the third and fourth respectively in a series of advanced design Atlanticmax vessels, each having an ‘Ice2’ ice class rating. Both ships are employed on a long-term time charter to Royal Dutch Shell.
In March, Sovcomflot’s LNG carrier Grand Elena completed her 100th voyage transporting gas from Prigorodnoye to Japan. Together with her sister ship Grand Aniva, the vessels have provided safe and dependable transportation from the Sakhalin LNG liquefaction facility since 2009.
Offshore Development Services
This comprises Sovcomflot’s shuttle tanker operations and specialised supply vessels. As of the 2015 year end, the fleet comprised 13 shuttle tankers and 4 ice breaking supply vessels (2014: unchanged).
TCE revenues for the year ended 31 December 2015 were USD 228.8 million (2014: USD 222.4 million), representing an increase of 2.9 per cent on the previous year.
In April a steel-cutting ceremony was held at Samsung Heavy Industries (Busan, South Korea) for Sovcomflot’s latest Arctic reinforced ice class Arc-7 shuttle tanker. The vessel is the first in a series of three, ordered by Sovcomflot under a long-term time charter agreement to transport oil from the Novoportovskoye oil field. Construction of this vessel is due for completion in July 2016.
Fleet
As at 31 December 2015, Sovcomflot’s fleet comprised 143 owned and chartered vessels (including vessels in joint ownership with third parties) amounting to over 12.4 million tonnes DWT in total.
Vessels under construction as at 31 December 2015 comprised eight vessels, with a total deadweight of 233,800 tonnes. This included: one ice-breaking Arctic LNG carrier; one multifunctional ice-breaking (MIB) supply vessel; three MIB standby vessels and three Arctic shuttle tankers scheduled for delivery between June 2016 and April 2017 at a total contracted cost to Sovcomflot of USD 1,279.0 million. All of the new build vessels are contracted to Oil Majors on long term fixed income charters.
Financial Highlights
Earnings per share for the year ended 31 December 2015 increased by 4.2 fold to USD 0.173 (2014: USD 0.041).
Dividends-per-share of RUB 0.57 for the year to 31 December 2015, amounting to RUB 1,126.0 million, equivalent to USD 20.5 million (2014: RUB 0.15, totalling RUB 300.0 million, equivalent to USD 9.0 million) were declared on 29 June 2015 and paid on 13 July 2015.
In December, Sovcomflot concluded a 14-year USD 340 million credit facility agreement with Russia’s Sberbank CIB – the first such long-term project finance arrangement between the parties. The funds will be applied towards the construction of three Arctic shuttle tankers to serve the Novy Port project operated by Gazprom Neft. This project, where commercial production is due to start later in 2016, will access one of the largest oil and gas condensate deposits in Russia’s Yamal peninsula. The new vessels will enable year-round shipments of crude oil from an offshore loading terminal in the Gulf of Ob.
This transaction marked the first structured ship financing agreement undertaken by a Russian bank and created a precedent for the further development of shipping finance from the domestic financial institutions.
Sovcomflot raised USD 756 million in long-term debt finance during 2015. The funds have been provided by a combination of international and domestic commercial banks and export credit agencies. Within this figure were two major long-term credit facility agreements: USD 416 million agreement with ING and Finnvera to finance four new multi-functional ice breaking support vessels, concluded in June, and USD 340 million agreement with Sberbank CIB, concluded at the end of 2015.
In 2015, Sovcomflot also signed two refinancing agreements amounting to USD 130 million in total.
During 2015 Sovcomflot’s credit ratings were affirmed by S&P (BB+) and by Moody’s (Ba2) (despite both agencies downgrading Russia’s sovereign rating) and notched up by Fitch Ratings (to BB). Additionally, Moody’s uplifted Sovcomflot issuer and SCF Capital bond rating to Ba3.
Group (PAO Sovcomflot) is Russia’s largest and one of the world’s leading shipping companies, specialising in the transportation of oil, petroleum products, LNG and LPG. As of 1Q 2016, the company’s fleet comprises140 vessels with a combined deadweight of over 12.2 million tonnes. The company is registered in St. Petersburg and has representative offices in Moscow, Novorossiysk, Murmansk, Vladivostok, Yuzhno-Sakhalinsk, London, Limassol, Singapore, and Dubai.