PAO Sovcomflot Q1 2017 Results

Accountancy, Company Profiles, News — By on May 23, 2017 at 5:15 PM

Sergey Frank President & CEO of Sovcomflot

Sovcomflot demonstrates resilience amid tanker market slowdown

Tanker freight market experiences significant headwinds, with some spot market segment TCE rates down over 40* per cent year-on-year. However, diversified fleet and balanced freight policy enable SCF Group to outperform peer group

Q1 2017 Highlights:

  • TCE revenues USD 274.4 million (Q1 2016: USD 290.8 million)
  • EBITDA USD 161.2 million (Q1 2016: USD 193.6 million)
  • Net profit USD 39.9 million (Q1 2016: USD 103.1 million)
  • World’s first ice-breaking LNG tanker, Christophe de Margerie (Arc7 and 172,600m3 cargo capacity),delivered and entered in long-term time-charter agreement with Yamal LNG.
  • New ice-breaking platform supply vessel (IBSV) for Sakhalin-2 project named Gennadiy Nevelskoy delivered to serve the Sakhalin II project for 20 years under the long-term time-charter agreement with Sakhalin Energy Investment Company
  • New order of innovative LNG-fuelled 1A ice-class Aframax tankers enabling year-round export operations from the Russian Baltic. Vessels be the first LNG-fuelled Aframax tankers in the world, ships to come into operationstarting from Q3 2018.
  • USD 174 million  15-year credit facility raised from Sberbank, to refinance two Arctic shuttle tankers (Mikhail Ulyanov and Kirill Lavrov) servicing Prirazlomnoye project
  • Tanker Shturman Albanov named Ship of the Year at 2017 Marine Propulsion Awards
  • SCF’s USD 750 million 7-year bond offering  received ‘Institutional Debt Deal of the Year 2016’ award by Marine Money (an international maritime finance publication)

Commenting on the Q1 2017 results Sergey Frank, President and CEO of PAO Sovcomflot, said:

“The first quarter saw a significant downturn in the global tanker market. Despite the challenges faced in the conventional market segment, Sovcomflot showed resilience and was able to outperform many of its peers. Our offshore business segment performed especially well and now represents over 40 per cent of our operating profit. Meanwhile our strategy implementation continued according to plan, backed by skilled, experienced seafarers and shore-personnel, that enable such vessels to reach their full potential. For this, I should like to thank all my colleagues for their expertise and continued dedication.”

Nikolay Kolesnikov, Executive Vice President, Chief Financial Officer, added:

“With the long-term nature of many of our charters, some being over 25 years in duration, Sovcomflot’s earnings and cash flow visibility is unprecedented for the industry. Indeed, overall contracted future revenues stood at nearly USD 8 Billion at the quarter end. During the quarter, the Group successfully raised USD 174 million of 15-year long-term debt from Sberbank, to refinance our two Arctic shuttle tankers Mikhail Ulyanov and Kirill Lavrov.” Final instalment payments for three ice-breaking stand-by vessels for the Sakhalin 2 project scheduled for delivery until the end of the current year have been fully funded with no envisaged cash outlay by the Group, nor does the Group face any refinancing needs for the rest of the year.

* Source: Clarkson’s Research


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