PAO Sovcomflot: Q3/9M 2016 Results

Accountancy, Shipmanagement — By on November 18, 2016 at 12:59 PM
Sergey Frank President & CEO of Sovcomflot

Sergey Frank President & CEO of Sovcomflot

 

2016 – Third Quarter/Nine Months Results*

(*Q3/Nine months to 30 September 2016 – unaudited, prepared under IFRS)

 

Strategic focus and sound financing underlie robust performance

 

18 November 2016: PAO Sovcomflot (SCF Group), one of the world leaders in energy shipping and servicing offshore upstream oil and gas projects, has today reported results for the third quarter (3Q) and nine month (9M) periods ended 30 September 2016.

Key figures:

USD millions

3Q 2016

3Q 2015

%

Gross revenue (Freight and hire)

359.1

386.2

-7.0

EBITDA*

174.6

204.3

-14.5

Net profit

52.1

81.6

-36.2

During the third quarter, the ClarkSea Tanker Index (Clarksons Average Tanker Earnings) has dropped by 61.5 per cent year-on-year (from USD 28,799 to USD 11,097).

USD millions

9M 2016

9M 2015

%

Gross revenue (Freight and hire)

1,039.4

1,135.7

-8.5

EBITDA*

579.0

644.3

-10.1

Net profit

218.1

297.9

-26.8


During
 the nine months of 2016, the ClarkSea Tanker Index (Clarksons Average Tanker Earnings) has dropped by 40.9 per cent year-on-year (from USD 30,556 to USD 18,056).

3Q 2016 Highlights: 

  • Acquisition of nine ice-class tankers of MR, LRII, and Aframax classes following successful bid at auction of assets of Primorsk International Shipping Ltd (PRISCO), under that company’s bankruptcy proceedings. This acquisition has allowed Sovcomflot to further consolidate its position as the world’s biggest owner and operator of ice-class tankers.
  • Expansion of participation in Sakhalin-2 project with the acquisition of two ice-breaking supply vessels (IBSVs) from Swire Pacific Offshore. This acquisition has also allowed Sovcomflot to strengthen its global leadership in the IBSV segment.
  • Five new vessels launched over the nine months: pioneering 172,600 m3 capacity ice breaking LNG carrier (Arc7 ice class) for Yamal LNG project (January); three new Arctic shuttle tankers for Novy Port project (February, April, June), and a new ice-breaking supply vessel to serve Sakhalin-2 project (June).
  • SCF Group’s technical management subsidiaries consolidated under new single governance structure with a new brand, SCF Management Services, as part of Sovcomflot’s continuous efforts to further optimize its corporate governance system.
  • Long-term credit facilities concluded with several international banks in 3Q 2016 for a total amount of USD 252 million, to complete a series of debt fundraisings totalling USD 1.26 billion, enabling Sovcomflot’s capex requirements to be fully covered.
  • Sovcomflot receives port of Long Beach, California environmental achievement award.

Commenting on the results, Sergey Frank, President and CEO of PAO Sovcomflot, said:

“Despite the tanker market conditions being challenging in the third quarter, with spot rates under notable pressure – for the key tanker classes, the rates have dropped by more than a half year-on-year – Sovcomflot achieved good results for the period. We have consolidated further our leading positions in several segments of the global energy shipping market, and have also expanded our long-term time-charter portfolio.”

“During the third quarter, we also remained alert to opportunities to add vessels to our fleet that represent a good strategic fit. Over the period we acquired eleven modern and well maintained vessels, that help enhance the overall performance of our fleet and contribute to achieving SCF’s strategic goals.”

Evgeny Ambrosov, Senior Executive Vice-President, Chief Operating Officer, commented:

“During this quarter, our LNG transportation and offshore business units performed particularly well. This reflects the Group’s Development Strategy, which prioritises participation in long-term industrial projects with a fixed high rate of return and the adoption of energy-saving and green technologies.”

Nikolai Kolesnikov, Executive Vice-President, Chief Financial Officer, commented:

“During the third quarter, the Group completed long-term credit facilities for a total amount of USD 252 million. This concluded a series of financing transactions amounting to USD 1.26 billion in total, to refinance maturing debt and to fund further fleet renewal.

“With the benefit of this latest round of financing, Sovcomflot has its capex requirements now fully funded and has significantly enhanced its debt repayment profile, whilst improving its liquidity position and strengthening its overall corporate credit rating.”

A detailed fleet list is available at the Group’s website: www.scf-group.com

___

PAO Sovcomflot (SCF Group) is one of the world’s leading shipping companies, specialising in the transportation of crude oil, petroleum products, and liquefied gas, as well as servicing offshore upstream oil and gas installations and equipment. The Group’s fleet comprises 153 vessels with a total deadweight of approximately 13 million tonnes. The company is registered in St. Petersburg with offices in Moscow, Novorossiysk, Murmansk, Vladivostok, Yuzhno-Sakhalinsk, London, Limassol, and Dubai.

The Group offers a wide range of vessels in the market segments most demanded by major Russian oil and gas companies. With its own technical development and unique approach to advanced technologies, Sovcomflot can meet the most demanding customer requirements, providing effective transportation for oil & gas companies. www.scf-group.ru

* Calculated on the adjusted basis as operating profit before depreciation and amortization adjusted by gain/(loss) on sale of subsidiaries, gain/(loss) on sale of equity-accounted investments, other operating revenues/(expenses) and interest income.

 

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