Sovcomflot posts net loss in challenging market

Russia’s largest shipping company Sovcomflot plunged to a loss during the first half of the year on the back of a $42.2 million impairment. 

The shipper posted a loss of $57.8 million for the first six months of the year, which compares to a $15.2 million in profit during the same period last year.

Conventional tanker freight rates were well below the average levels seen over the last quarter of a century, the company said.

Spot tanker earnings in the first half of 2018 saw a substantial decline and, for some market segments, remained more than 50 percent below the levels of the first half of 2017.

Sovcomflot noted its time charter equivalent (TCE) revenue dropped from $530.8 million in the first half last year to $511.3 million during the period under review.

Speaking of the results, president and CEO of Sovcomflot Sergey Frank said, “During the first half of 2018, our gas transportation and offshore services returned double-digit growth in revenues and operating profits, fully in line with the group’s development strategy. Fixed income from these industrial shipping businesses grew to account for 59.1 percent of Sovcomflot’s total TCE revenue compared to 48.5 percent share in 1H 2017.”

He added the milestone of the first half was the long-term time-charter deal for the LNG-powered Aframax tankers with the Hague-based LNG giant Shell.

At the end of the first half of 2018, Sovcomflot had eight vessels under construction, scheduled for delivery from July 2018 to February 2020, comprising six ice-class LNG fuelled Aframax tankers, one Arctic shuttle tanker and one LNG carrier.