Timing was right for bulker exit, Sovcomflot's Kolesnikov says

Russian owner's financial chief says move to sell coal carriers is part of progression to shipping cleaner fossil fuels

Russian state shipowner Sovcomflot (SCF Group) took advantage of rising asset prices and strong markets to make an exit from the bulk carrier sector.

The tanker and LNG carrier specialist revealed 10 vessel sales in its first-half report, including the last two panamax bulkers in the fleet.

The 75,000-dwt Egor Letov (ex-NS Energy, built 2012) and the sister vessel NS Yakutia (built 2013) went to an unnamed Russian owner for a combined $40m, brokers said.

Chief financial officer Nikolay Kolesnikov told TradeWinds the good bulker market was "one of the reasons that we chose this moment to sell the ships".

Sovcomflot’s focus is on the liquid bulk and gas trades as the company moves toward transporting cleaner fuels.

Leaving was always the intention

The CFO added that it had long been the company's plan to exit the coal trades altogether.

As for the ageing tankers that were sold, Kolesnikov suggested that their fate was sealed.

"We would have done something about these assets, given their age profile and design, sooner or later anyway, as part of our ongoing fleet optimisation programme," he said.

The 10 ships brought in $112m.

"We did raise some proceeds, and those will be reinvested in the business," the CFO added.

Asked whether the tankers needed to be replaced, Kolesnikov said Sovcomflot already has a "substantial" newbuilding programme.

Replacements being readied

He added that technologically advanced vessels are being built for industrial projects with long-term charters.

"We are already renewing the fleet. The focus is on project business, fixed-term business, versus just having conventional tankers travelling round the world," the CFO said.

Could the shipowner sell more elderly ships this year?

"I don't think so," Kolesnikov said. "We have a very strong liquidity position, so it's always a decision on what makes more sense — to continue operating the assets or to use the market to capture disposal proceeds. Each individual case will be different."

Perfect storm for tankers

Kolesnikov also said it is hard to speculate on the course of future tanker markets.

"We are going through a perfect storm," he added.

Sovcomflot will continue to place an emphasis on operations and service to customers, the CFO said.

He described the company as "very robust", noting that it can withstand extreme market conditions.

"It's always darker before the dawn, but demand in terms of tonne-miles needs to improve to pre-pandemic levels, and we haven't seen that yet because of pandemic cases rising here and there and new variants," the executive said.