Sovcomflot’s Profit Soars as Tanker Market Strengthens
Russian shipping major Sovcomflot (SCF Group) closed the third quarter of this year with a significant increase in net profit year over year, aided by a stronger tanker market.
The company’s net profit rose to USD 25.9 million in Q3 2019 from USD 0.3 million seen in the corresponding period a year earlier.
Revenue for the third quarter of this year stood at USD 418.8 million, an improvement of 5.7 percent when compared to a revenue of USD 396.4 million in Q3 2018.
“During the third quarter, the group achieved a steady increase in its operating and financial performance, with a growth in net profit, as the market remained volatile while demonstrating an upswing in conventional tanker rates,” Igor Tonkovidov, President and CEO of PAO Sovcomflot, said.
“The group has increased its revenues from offshore services, including the shuttle transportation of crude oil, and from conventional tanker operations.”
For the nine months ended September 30, 2019, the company posted a net income of USD 116.9 million, returning from a loss of USD 57.5 million suffered in the same nine-month period of 2018.
Revenue for the first nine months of this year grew by 12.7 percent to USD 1.2 billion from USD 1.1 billion reported in the first three months last year.
During the third quarter, SCF Group and Novatek agreed to establish a joint venture which will own and operate a fleet of LNG carriers transporting LNG.
“We are satisfied with the group’s performance over the third quarter. Sovcomflot steadily follows through on its strategy of increasing the share of large-scale industrial shipping projects in its portfolio,” Sergey Frank, Chairman of the Board of Directors of PAO Sovcomflot, commented.
“During the reporting period, Sovcomflot achieved a major strategic milestone when we agreed with Novatek to establish a new joint venture, SMART LNG. This new JV is envisaged to ensure safe and sustainable shipping solutions for the year-round transportation of LNG produced by Arctic LNG-2 as well as other current and prospective projects of Novatek.”
Another operational highlight from the third quarter was a new USD 176 million credit facility agreed between two JV companies belonging to SCF Group and NYK Line and a consortium of three banks.
The facility was used towards refinancing Grand Aniva and Grand Elena, ice-class LNG carriers employed on the Sakhalin-2 project. With this facility, SCF Group pioneered the adoption of the Poseidon Principles, an environmental initiative supported by stakeholders involved with ship finance, that promotes a low carbon future for the global shipping industry.
“During the reporting period SCF Group, in partnership with NYK Line, raised USD 176 million of new debt financing. So far this year, the group has concluded credit facilities amounting to USD 473 million, clearly demonstrating Sovcomflot’s ability to access the global debt capital markets, notwithstanding the current volatility experienced within the tanker and finance industries respectively,” Nikolay Kolesnikov, Sovcomflot’s Executive Vice President & Chief Financial Officer, concluded.
Sovcomflot has a fleet of 147 vessels with a total deadweight of over 12.8 million tons. More than 80 vessels have an ice class.