Improved Freight Rates Boost Sovcomflot’s Earnings

Improved Freight Rates Boost Sovcomflot's Earnings

Russian shipowner Sovcomflot (SCF) recorded a net profit of USD 109.1 million for the first nine months of 2014, a far cry from the company’s USD 5.3 million loss for to the same period last year.

Net profit for the third quarter 2014 was USD 45.4 million, almost five times more compared to USD 9.2 million the company had made in Q3 2013.

The company’s gross profit was USD 1.06 billion and USD 304.9 million for the nine months and the third quarter 2014, respectively.

Sergey Frank, President and CEO of OAO Sovcomflot, said: “Sovcomflot has performed strongly in the first nine months of 2014, with revenue and profits significantly ahead of the comparable period last year. These financial results reflect an improved freight rate environment over the period, especially within the crude oil segment of the tanker market. Equally, they demonstrate the benefits of our work to develop long-term relationships with ‘blue chip’ charterers across the globe, in order to provide safe and reliable transportation for their cargoes. During the period, we continued to focus on implementation of the Group’s strategy. This includes increasing the scale, range of services and contribution of our premium operations such as gas transportation and offshore support activities, with significant progress also being made in the seismic segment. The company took the delivery of two ultra-modern LNG carriers of the Velikiy Novgorod series, and a second VLCC (320,000 dwt). These ships are operated under long-term agreements with OAO Gazprom and Petrochina International (China) respectively. Elsewhere, we completed several important new long-term agreements, including for the construction and operation of four IBSV’s for Sakhalin Energy, and for a unique Arctic LNG carrier to serve the Yamal LNG project. The delivery of these vessels is scheduled from 2016 to 2017.”

As at 30 September 2014, the SCF Group fleet comprised 153 owned and chartered vessels (including vessels in joint ownership with third parties) amounting to over 12.7 million tonnes DWT in total.

There were ten vessels under construction at the period end (total 423,200 tonnes DWT), including: two LNG carriers; one ice-breaking LNG carrier; three Arctic shuttle tankers; one multi-functional ice breaking supply (MIB) vessel; three MIB standby vessels all of which are scheduled for delivery between December 2014 and March 2017 and all of which are contracted to Oil Majors on long term fixed income charters.

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