Sovcomflot says tanker freight market experiences significant headwinds, with some spot market segment TCE rates down over 40 per cent year-on-year. However, diversified fleet and balanced freight policy enable SCF Group to outperform peer group.
Q1 2017 Highlights:
- TCE revenues USD 274.4 million (Q1 2016: USD 290.8 million)
- EBITDA USD 161.2 million (Q1 2016: USD 193.6 million)
- Net profit USD 39.9 million (Q1 2016: USD 103.1 million)
- World’s first ice-breaking LNG tanker, Christophe de Margerie (Arc7 and 172,600m3 cargo capacity), delivered and entered in long-term time-charter agreement with Yamal LNG.
- New ice-breaking platform supply vessel (IBSV) for Sakhalin-2 project named Gennadiy Nevelskoy delivered to serve the Sakhalin II project for 20 years under the long-term time-charter agreement with Sakhalin Energy Investment Company
- New order of innovative LNG-fuelled 1A ice-class Aframax tankers enabling year-round export operations from the Russian Baltic. Vessels be the first LNG-fuelled Aframax tankers in the world, ships to come into operation starting from Q3 2018.
- USD 174 million 15-year credit facility raised from Sberbank, to refinance two Arctic shuttle tankers (Mikhail Ulyanov and Kirill Lavrov) servicing Prirazlomnoye project
- Tanker Shturman Albanov named Ship of the Year at 2017 Marine Propulsion Awards
- SCF’s USD 750 million 7-year bond offering received ‘Institutional Debt Deal of the Year 2016’ award by Marine Money (an international maritime finance publication)
Commenting on the Q1 2017 results Sergey Frank, President and CEO of PAO Sovcomflot, said: “The first quarter saw a significant downturn in the global tanker market. Despite the challenges faced in the conventional market segment, Sovcomflot showed resilience and was able to outperform many of its peers. Our offshore business segment performed especially well and now represents over 40 per cent of our operating profit. Meanwhile our strategy implementation continued according to plan, backed by skilled, experienced seafarers and shore-personnel, that enable such vessels to reach their full potential. For this, I should like to thank all my colleagues for their expertise and continued dedication.”
Nikolay Kolesnikov, Executive Vice President, Chief Financial Officer, added: “With the long-term nature of many of our charters, some being over 25 years in duration, Sovcomflot’s earnings and cash flow visibility is unprecedented for the industry. Indeed, overall contracted future revenues stood at nearly USD 8 Billion at the quarter end. During the quarter, the Group successfully raised USD 174 million of 15-year long-term debt from Sberbank, to refinance our two Arctic shuttle tankers Mikhail Ulyanov and Kirill Lavrov.” Final instalment payments for three ice-breaking stand-by vessels for the Sakhalin 2 project scheduled for delivery until the end of the current year have been fully funded with no envisaged cash outlay by the Group, nor does the Group face any refinancing needs for the rest of the year.
IAA PortNews says revenues of tanker companies saw a considerable reduction in QI’2017. According to Clarkson’s, provider of analyses in the field of international shipping and shipbuilding, the fall of time-charter spot rates against QI’2016 for Aframax tankers was as low as 40%, for Suezmax – 52%. The fall against QI’2015 is even deeper: 55% for Aframax tankers and 63% for Suezmax tankers.
Analytical Department of IAA PortNews has compared financial reports published by the world’s 8 largest tanker fleet operators . In terms of net profit, Sovcomflot holds the leading position with USD 40 mln for QI’2017. In the reporting period, net profit of USD 10 mln is also earned by Euronav (Germany) – USD 34.3 mln, Gener&Maritime (USA) – USD 26.8 mln, Teekay (Canada) – USD 11 mln, Maersk Tankers (Denmark) – USD 10 mln.
SCF Group of companies (SCF) 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 148 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.