Sovcomflot Sees Constant Profit Increase

By Finance

Russia’s energy shipping specialist PAO Sovcomflot (SCF) has posted a net profit of USD 298.8 million for the nine months ended September 30, an increase of 174 percent compared to USD 109.1 million net profit for the same period last year, driven mostly by booming crude oil/products tanker market, and long-term LNG charters.

The company also reported a net profit increase of 81.3% in the third quarter of 2015, worth USD 82.5 million, compared to last year’s third quarter net profit of USD 45.5 million.

SCF added that their gross revenue increased by 7.9 percent to USD 1.14 billion for the nine month period ended September 30, 2015, against the last year’s equivalent of USD 1.06 billion. The third quarter 2015 revenue increased by 1.2 percent to USD 388.6 million, compared to USD 384.1 million for the same period last year.

“Sovcomflot is satisfied with a strong set of third quarter results, which in turn have contributed to a very positive operating and financial performance for the nine months of 2015 results. This has been possible through a combination of positive underlying tanker market conditions, and the Group’s proven business model that continues to serve us well,” Sergey Frank, President and CEO of OAO Sovcomflot, said.

The company’s time charter equivalent revenues for the nine month period of 2015 increased by 18.9 percent to USD 946.6 million against last year’s USD 795.6 million.

“In line with our strategy, the Group has maintained a steady capital expenditure programme through the shipping cycle. The addition earlier this year of two high-spec LNG carriers, employed under long-term contracts, has contributed to a growth in operating profit of some 75 per cent from the gas transportation segment compared to same period last year. The fact that about 35 per cent of the Group’s operating profit is derived from long-term fixed-rate charters, in the gas transportation and upstream services segments, provides a welcome level of future earnings stability. On the conventional tankers side, Sovcomflot has benefited from good exposure to the market during the industry upcycle,” Nikolai Kolesnikov, Executive Vice-President, Chief Financial Officer, said.

The SCF Group currently owns 143 vessels, including vessels in joint ownership with third parties, amounting to 12.41 million dwt in total.

The company also has eight newbuildings currently under construction. The newbuildings include one ice-breaking Arctic LNG carrier, one multifunctional ice-breaking (MIB) supply vessel, three MIB standby vessels, and three Arctic shuttle tankers scheduled, for delivery between June 2016 and April 2017 at a total contracted cost of USD 1.28 billion.
All eight newbuildings are contracted to oil majors on long term fixed income charters, SCF said.

Source: worldmaritimenews.com