Russia's Shipping Major Reports Strong 1H 2014

By George Backwell September 2, 2014

OAO Sovcomflot (SCF Group), Russia’s largest shipping company and a global leader in seaborne energy transportation and offshore services, has announced its financial and operating results for the six months ended 30 June 2014.

Highlights:

Gross revenue (Freight and Hire) up to USD 675.2 million in H1 2014 (H1 2013: USD 628.4 million)
Time charter equivalent revenues up 16.7 per cent to USD 490.7 million in H1 2014 (H1 2013: USD 420.4 million)
EBITDA increases 30.1 per cent to USD 251.7 million in H1 2014 (H1 2013: USD 193.4 million)
Net profit up to USD 63.6 million in H1 2014 (H1 2013: Net loss of USD 14.5 million)
Further expansion of LNG fleet as Velikiy Novgorod, tri-fuel 170,200m³ Atlanticmax ice class LNG carrier delivered - first vessel of series specially designed for and employed under a long-term charter by Gazprom Group
VLCC SCF Shanghai (321,280 tonnes dwt) enters service on long-term time-charter agreement with PetroChina International
Arctic shuttle tanker Mikhail Ulyanov transports the first shipment of crude oil from Russia’s first offshore energy project on the Arctic shelf
Sovcomflot and France’s CGG establish a new JV marine seismic company to focus on the growing 3D seismic market in the Arctic and sub-Arctic regions
Successful completion by SCF Group company Novoship of modernization at the Port of Sochi for 2014 Winter Olympic Games
SCF played a key role in organizing the first ever races of tall ships in the Black Sea – “SCF Black Sea Tall Ships Regatta” that took place in May and called on four ports – Varna, Novo, Sochi and Constanta.

Commenting on the Group’s results Sergey Frank, President and CEO of OAO Sovcomflot, commented:

“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.”