Russia: Sovcomflot BoD Approves 2012 Budget

Russia - Sovcomflot BoD Approves 2012 Budget

At a regular meeting of the Board of Directors of OAO Sovcomflot, approval was given to the financial plan (budget) of the Sovcomflot Group of companies (SCF) for 2012, and the production and financial performance forecasts for 2013-2014.

The Chairman of Sovcomflot’s Board of Directors Ilya Klebanov said: “The financial plan has been prepared in accordance with existing budgeting procedures and with a forecast reflecting the future state of the freight market. The approved financial plan (budget) recognises the main development plans detailed in SCF’s strategy. These plans include: an increase in the company’s share of servicing major Russian and international industrial projects, connected with the offshore production of hydrocarbons and the transportation of liquefied natural gas (LNG); entering new high-tech market segments associated with the development of Arctic oil and gas deposits on the Continental shelf. The Board of Directors appreciates the serious attention paid, in SCF’s investment programme, to cooperation with Russian shipbuilders as well as to the implementation of the company’s innovative development programme.

Sovcomflot’s President & CEO Sergey Frank said: “Based on a consensus forecast of the future freight market conditions, we do not expect significant improvements for the tanker industry in 2012. Rates in the “spot” market and time-charter rates will remain under pressure, as a result of the negative ratio between supply and demand. The market value of oil tankers will remain at historic lows. However, the existing business model of Sovcomflot gives us grounds for cautious optimism. Its stability is provided by the high proportion of revenues arising from long-term contracts, with leading international and Russian oil and gas companies. Future revenues on existing contracts, in only the first ten months of 2011, rose by more than USD 1 billion to exceed USD 5.5 billion in total.”

World Maritime News Staff, December 15, 2011; Image: SCF