RUS

Sovcomflot Board of Directors reviews 2013 results

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On 11 April 2014, OAO Sovcomflot Board of Directors met to review SCF  Group results for 2013. The board approved the company’s annual report and  financial accounts for the last fiscal year.

SCF Board of Directors noted that despite the continuing unfavourable  conditions on the energy shipping market in 2013, the company was able to invest  fully in its fleet-expansion programme. SCF fleet gained 700,000 deadweight  tonnes in new vessels and maintained its good industry rankings for average  vessel age. Sovcomflot systematically expanded the share of Russian projects in  its business portfolio – focusing on offshore oil & gas project support. SCF  is one of the largest clients for Russia’s civil shipbuilding industry, provides  employment to over 8,500 Russian sailors, is active in its support of Russian  maritime education and makes a valuable contribution to the development of the  country’s coastal regions.

“The company’s main goal is to diversify and expand its business project  portfolio – focusing on long-term contracts to provide energy shipping and other  services to oil & gas companies engaged in the offshore development and  production of hydrocarbon resources in Russia and overseas. Its clear  development strategy means that SCF Group can maintain its stable financial  position, fully implement its current initiatives and programmes – especially  those connected with safety at sea and fleet expansion, and successfully  withstand the ongoing negative trends and challenges that have been affecting  the global tanker industry for the past five years.” – Ilya Klebanov,  Chairman of Sovcomflot Board of Directors

“Sovcomflot succeeded in preserving its operating margin despite the  financial crisis within the global tanker industry, which continued due to the  discrepancy between supply and demand. Gross revenue totalled $1,262.8m, net  profit (time-charter equivalent) was $872.6m (growth of 1.5%), EBITDA was  $382.1m, and adjusted net profit (excluding non-cash impairment provisions and  results on disposal of assets) came to $11.6m. The Sovcomflot Group fleet was  expanded with the introduction of several new vessels with a combined deadweight  of around 700,000 tonnes. The company broke into new energy transportation  segments: VLCC tanker and ice class gas carrier shipping. In the first quarter  of 2014, the freight market showed positive trends, especially in the crude oil  shipping segment. The existing approach to chartering out vessels in the company  fleet is ideally suited to this type of market correct and this is clearly  visible from the preliminary results of the first quarter. Initial data for the  first quarter of 2014 shows that company revenue could rise by 40% in comparison  with Q1 2013.” – Sergey Frank, President and CEO of Sovcomflot