Revenues Soar at Russia’s PAO Sovcomflot

PAO Sovcomflot (SCF Group), which serves the energy shipping and offshore services to the oil and gas industries, reported in the first half of 2019 revenues rose 16.6% ($828m vs. $710.1m), TCE revenue rose 19.1% ($609m vs. $511.3m) and EBITDA rose 42.4% ($381.2m vs. $267.7m) as compared to the first half of 2018.

Highlights from the first half included:

• Korolev Prospect, Vernadsky Prospect and Samuel Prospect LNG-fuelled 114,000 DWT Aframax tankers added to the fleet.

•In March 2019, the Group celebrated the 10th anniversary of the start of LNG shipments from the Sakhalin-2 project. Over the past decade, Grand Aniva and her sistership Grand Elena have successfully completed over 300 voyages, delivering some 43.5 million cubic metres of LNG to Asian customers.

•In April 2019, the Arctic shuttle tanker Mikhail Ulyanov delivered the milestone 10-millionth tonne of commercial oil produced at the Prirazlomnaya offshore platform in the Pechora Sea (operated by Gazprom Neft). This cargo of oil was the 150th from the platform since shipments began in April 2014.

•In May 2019, Sovcomflot signed a new $297 million limited recourse credit facility, for up to 10 years, with ING Bank; KfW IPEX-Bank, and Crédit Agricole Corporate and Investment Bank. The funds will be used towards the financing of two new-generation 174,000-cubic metres Atlanticmax LNG carriers, which will operate under long-term charters to Shell.

“The company achieved significant growth in the first half of 2019 compared to the same period in 2018, exceeding our budget plans,” said Sergey Frank, President and CEO, PAO Sovcomflot. “The successful operation of SCF’s vessels serving industrial oil and gas projects, together with the growth of revenues from fleet operations in the conventional tanker market segments (oil and petroleum products), reflected certain improvements in the freight market, although spot rates did not reach their historical averages.

“The main direction of the Group's strategy to 2025 was approved by the Board of Directors on 23 May 2019. It envisages a steady increase in Sovcomflot’s operational and financial performance through further growth in the share of advanced vessels servicing large-scale energy projects in the Arctic Sea Basin, as well as through continued dedication to operational excellence and highest safety, sustainability and quality standards achieved with a reduced environmental impact - in line with Sovcomflot’s philosophy of ‘Safety Comes First’. We will continue delivering competitive services to our clients using cutting edge pioneering technologies and preserving our highly-professional pool of human resources at sea and ashore.

“Based on the supply-demand ratio forecasts for tanker tonnage, and taking into account the seasonality factor, we remain cautiously optimistic about the results for the second half of the year, as well as the prospects for 2020”.