SCF Bounces Back to Profit

Russian shipping company PAO Sovcomflot (SCF Group) posted strong 2014 results amid recovery of conventional tanker market.

SCF rebounded from a loss of USD 39.2 million in 2013 posting a net profit of USD 83.9 million.

The group’s gross revenue increased 9.9 per cent to USD 1,387.4 million compared to USD 1,262.8 million from 2013.

ime charter equivalent increased 19.6 per cent to 1,044.0 million from 872.6 USD million in the same period of the preceding year.

“Sovcomflot’s strong 2014 performance resulted from two major factors. First, we consistently continued to execute our growth strategy in business areas yielding attractive rates of return.Second, our conventional tanker fleet was able to reap benefits resulting from improved market conditions, where we believe there is still some potential for the rates to firm up. These improvements to the top line coupled with enhanced organizational efficiencies being made and lower bunker costs stimulated our earnings growth and our bottom line results for 2014,” Sergey Frank, Sovcomflot President and CEO commented.

“Looking ahead, Sovcomflot Group is well positioned to benefit from the continued positive momentum of the tanker market upswing. The first quarter of 2015 is looking quite promising. Being based on fundamentals we are pretty optimistic that earnings performance in 2015 will exceed that of the previous year,” he added.

Three newbuildings were delivered in 2014: two tri-fueled Atlanticmax ice class Ice2 LNG carriers (Velikiy Novgorod and Pskov – each 170,200 m3 capacity) for long-term charter to Gazprom; a second VLCC, SCF Shanghai, for long-term charter to PetroChina International.

Commercial highlights for 2014 included the finalisation of contract with Sakhalin Energy for the construction and long term charter of four IBSV’s, deal with Gazprom for the construction and long term charter of three Arc-7 ice breaking shuttle tankers and contract with Yamal LNG for the construction and long term charter of the first ice-breaking  Arc-7 LNG carrier to serve the Yamal LNG Project.