Sovcomflot Returns to Profit amid Improved Market Conditions

Russia’s shipping major Sovcomflot (SCF) reported a turnaround in the first half of 2019 attributed to success in industrial projects and improved market conditions.

The company’s net profit reached USD 91 million for the six-month period ended June 30, against a net loss of USD 57.8 million seen in the same period a year earlier.

Gross revenue was up by 16.6 percent to USD 828 million, compared to USD 710.1 million, while time charter equivalent (TCE) revenue increased by 19.1 percent to USD 609 million, compared to USD 511.3 million.

Sovcomflot’s EBITDA for the first half of the year surged to USD 381.2 million compared to USD 267.7 million, representing a rise of 42.4 percent.

“The company achieved significant growth in the first half of 2019 compared to the same period in 2018, exceeding our budget plans. The successful operation of SCF’s vessels serving industrial oil and gas projects, together with the growth of revenues from fleet operations in the conventional tanker market segments (oil and petroleum products), reflected certain improvements in the freight market, although spot rates did not reach their historical averages,” Sergey Frank, President and CEO of PAO Sovcomflot said.

“Based on the supply-demand ratio forecasts for tanker tonnage, and taking into account the seasonality factor, we remain cautiously optimistic about the results for the second half of the year, as well as the prospects for 2020.”