Sovcomflot back in profit for 2014

SOVCOMFLOT is back in the black after booking a $83.9m profit for 2014, benefiting from both the upturn in tanker market and gas carrier fleet expansion as it reversed the full-year loss seen in 2013. Revenues at the Russian state-owned tanker giant rose 9.9% to $1.3bn.

Star performer was SCF’s gas transportation business, which saw a 72.4% increase in timecharter equivalent revenues to $83.2m, on the back of increased capacity.

Meanwhile, the crude segment saw revenues rise by 22.4% to $421.1m, despite a one vessel drop in the size of its crude fleet, which fell to 60 vessels.
Sergey Frank, Sovcomflot president and chief executive, said: “Our conventional tanker fleet was able to reap benefits resulting from improved market conditions, where we believe there is still some potential for the rates to firm up.”

The first quarter of 2015 looks “quite promising” and fundamentals give grounds for optimism that earnings performance in 2015 will exceed that of the previous year, he added.

Kolesnikov: "We have enjoyed stable liquidity and retained access to the international financial markets.”

Sovcomflot's crude segment saw revenues rise by 22.4% to $421.1m, despite a one vessel drop in the size of its fleet.

At the end of 2014, Sovcomflot had a fleet of 153 owned and chartered vessels totaling more than 12.7m dwt, with a further 10 vessels due for delivery between now and March 2017.

All of the newbuildings already have long-term charter backing lined up.
The ships include two conventional LNG carriers, an ice-breaking LNG carrier and three Arctic shuttle tankers.
Chief financial officer Nikolay Kolesnikov highlighted 40.9% increase in earnings before interest, taxation, depreciation and amortisation to $538.2m, from $382.1m last time round.

“Sovcomflot’s stronger operational performance in 2014, with ebitda growth of 40% year-on-year reflecting the contribution of newly delivered vessels, as well as the tanker market recovery, resulted in improving the company’s credit position, and we have enjoyed stable liquidity and retained access to the international financial markets,” he said.

He pointed in particular to the $319m project finance facility with a 10-year tenor, signed off with a consortium of leading European banks in December 2014.