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Sovcomflot profit falls 36%

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18 November 2016

Hal Brown

Lloyd's List

Seasonal tanker market weakness to blame for drop in profit

SOVCOMFLOT saw its third-quarter net profit drop to $52.1m from $81.6m in the same period last year, a 36% fall, as it felt the impact of seasonal tanker market weakness.

Gross revenue for Russia’s state-owned shipping company was $359.1m, down 7% from $386.2m.

Sovcomflot chief executive Sergey Frank said that tanker market conditions were challenging in the third quarter, with spot rates under notable pressure. For the key tanker classes, rates dropped by more than half year on year, he said.

However, there were positives to take away, such as a respectable result firmly in the black.

In addition, Sovcomflot “consolidated further our leading positions in several segments of the global energy shipping market, and have also expanded our long-term time charter portfolio”, said Mr Frank.

“During the third quarter, we also remained alert to opportunities to add vessels to our fleet that represent a good strategic fit,” he added.

During the quarter, the company acquired 11 modern vessels.

Also during the third quarter, Sovcomflot completed long-term credit facilities for a total of $252m. This concluded a series of financing transactions amounting to $1.26bn in total, to refinance maturing debt and to fund further fleet renewal.

Sovcomflot’s fleet amounts to 153 vessels, covering carriage of oil and oil products, as well as liquefied natural gas and offshore service vessels.

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