OAO Sovcomflot, Russia’s largest shipping company, has announced its financial and operating results for the first half of 2014.
- Gross revenue of US$ 675.2 million
- Time charter equivalent revenues up 16.7% to US$ 490.7 million
- EBITDA of US$ 251.7 million
- Net profit of US$ 63.6 million
President and CEO, Sergey Frank
“The tanker market remains challenging, with freight rates fluctuating near their historic lows during Q2 after a strong start to the year in Q1 from which Sovcomflot benefited from improved conditions within the crude oil segment in particular. With a stronger presence in the higher margin gas transportation and offshore markets the Group is able to report robust results for the first half, with solid growth in earnings.
“Looking ahead, tanker market conditions remain volatile and so we are cautious about the market outlook for the full year. However, a significant and growing portion of Sovcomflot’s revenues comes from long-term charter contracts supporting industrial energy projects in the LNG transportation and offshore services sectors which will underpin our earnings going forward and these sectors continue to be key areas of focus in our long-term business strategy.”
Chief Operating Officer, Evgeny Ambrosov
“Supported by a highly skilled team both at sea and ashore, with a balanced portfolio of modern conventional tanker fleet and technically sophisticated vessels, servicing a growing number of industrial projects, we are well placed to continue serving the evolving energy transportation needs of our clients. This is especially true in heavy ice and harsh environment conditions with a third of our fleet comprising of ice class vessels. During the first half of 2014 we maintained a balanced mix of fixed income and spot market operations. Our chartering policy has proven its worth, enabling Sovcomflot to ride out the significant tanker market volatility of recent years and maintain a steady pace in growing the business.”
Chief Financial Officer, Nikolay Kolesnikov
“Our business model continues to provide welcome earnings visibility, at a time of market volatility. Significantly, the Group’s future contracted revenues reached US$ 7.2 billion at the end of the first half of 2014. Throughout the first half, our gearing has remained stable, ending the period below 46% and with positive free cash flow. During the first half we continued to manage our assets proactively, with the addition of two new vessels and the disposal of eight older tankers from our fleet. As we report our half year results today, the Group has taken delivery of Pskov, its second 170,200 m3 Atlanticmax ice class LNG carrier on a long-term charter to Gazprom”.
TCE (time charter equivalent) revenues for H1 2014 were US$ 38.2 million, an increase of 74.4% on the first half of 2013. This performance reflects a robust freight market for gas carriers and continued expansion of the SCF Group fleet.
The Group’s corporate strategy places a priority on the development of its LNG transportation activities. To this end there were four LNG vessels (including one ice-breaking LNG vessel) on order at the period end, each of over 170,000 m3 capacity, for delivery up to Q1 2016. All the vessels have long-term time-charter arrangements in place with Gazprom, Shell or Yamal LNG as charterers.
On 2 February 2014, Sovcomflot took delivery of Velikiy Novgorod. This advanced design 170,000 m3 capacity LNG carrier is constructed to ice class Ice2 and is engaged on a 15-year time charter to Gazprom.
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/lng-shipping/29082014/sovcomflot-h1-2014-results-1308/