Sovcomflot’s nine months results

Sovcomflot’s nine months results


PAO Sovcomflot (SCF Group), a leader in energy shipping and servicing offshore upstream oil and gas projects, has reported its results for the nine-month period ending September 30th 2017.

The 70% decline in the Clarksea Index has impacted adversely on the earnings of the group’s conventional tanker fleet over 2017 but it has been offset by the continued growth and resilience in the group’s Offshore and Gas fleets.

S - Sovcomflot

Highlights for the period include: A strong performance from the group’s Offshore business division saw time charter equivalent (TCE) revenue grow by 55.9% to $274.6m, with operating profit over the period rising by 50.5% to $131.2m; 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 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, was delivered into long-term time-charter with Yamal LNG; Completion of series of refinancing deals totalling $324m and The group received a number of industry awards and notations including Seatrade’s ‘Deal of the Year’ award for its $750m seven-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.

PAO Sovcomflot’s President and CEO, Sergey Frank 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.

“Despite this, however, Sovcomflot has continued with its core strategy of developing its specialised offshore and gas transportation operations over 2017. Our Offshore and harsh environment business segment was certainly the stand-out performer, with nine-month TCE revenue and operating profits both up over 50 per cent.

“Looking ahead into 2018, we anticipate a soft freight rate environment to remain in the conventional tanker sectors, whilst Sovcomflot’s industrial shipping model will remain a source of strength and balance. In the near term, we expect to strengthen our industrial business portfolio with the addition, in Q4 2017 and Q1 2018, of two further offshore vessels into the fleet which will be employed under long-term time-charter agreements with key clients. We are also engaged in opportunities which will provide further growth for the Group in both the Offshore and Gas sectors.

“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, and to attract and retain talented seafarers and shore personnel, keeping in mind that human capital is one of SCF’s core competitive advantages.”

For more information visit www.scf-group.com

20th Nov 2017

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