СовКомФлот

Sovcomflot: green shoots of recovery for tankers

TradeWinds

Russian group makes it back into profit in third quarter.

Russia's Sovcomflot (SCF Group) has made it back into the black amid signs of recovery for tankers.

Net earnings in the third quarter were $0.3m, from a loss of $22m a year ago.

Revenue grew to $396.4m from $350.5m.

It booked an impairment provision of $45.9m in the first nine months, to reflect the value of some older tankers in the historic freight market lows reached earlier in 2018.

CEO Sergey Frank said: “The group returned to positive numbers in the third quarter, with continued growth in SCF’s industrial, fixed income businesses.

"The offshore and gas divisional performances remain at the core of the group’s profitability and earnings performance, contributing now around 60% of the group’s net revenues.

"The green shoots of recovery in the conventional tanker market and in the larger crude sector in particular, are encouraging for the fourth quarter and may bring a welcome earnings boost on top of that provided by the gas and offshore divisions."

The company said tanker markets remained in a depressed state in the period as vessel supply continued to outstrip vessel demand.

But rates started a recovery towards the end of the quarter, for large crude carriers in particular.

The improvement has continued into the final three months and has resulted in a healthy increase in earnings across the group’s dirty tankers, a state of affairs that is forecast to hold steady in the near term and into the first quarter of 2019, it added.