Tanker market’s slowdown has slashed SCF Group’s net profit to USD 39.9 million during the first quarter of the year from USD 103.1 million booked a year earlier.
“Tanker freight market experiences significant headwinds, with some spot market segment TCE rates down over 40 per cent year-on-year,” Russia’s shipping major Sovcomflot said.
The company’s TCE revenues came at USD 274.4 million, a decrease from USD 290.8 million posted in the first quarter of 2016. EBITDA also saw a dip to USD 161.2 million, from the previous year’s USD 193.6 million.
During the quarter, the company secured a USD 174 million 15-year credit facility with Sberbank, to refinance two Arctic shuttle tankers (Mikhail Ulyanov and Kirill Lavrov) servicing Prirazlomnoye project.
Sovcomflot said that the final installment payments for three ice-breaking stand-by vessels for the Sakhalin 2 project scheduled for delivery until the end of the current year have been fully funded with no envisaged cash outlay by the group, further stressing that the group does not face any refinancing needs for the rest of the year.
In addition, the world’s first ice-breaking LNG tanker, Christophe de Margerie, was delivered during Q1 and entered in long-term time-charter agreement with Yamal LNG.
“The first quarter saw a significant downturn in the global tanker market. Despite the challenges faced in the conventional market segment, Sovcomflot showed resilience and was able to outperform many of its peers. Our offshore business segment performed especially well and now represents over 40 per cent of our operating profit,” Sergey Frank, President and CEO of PAO Sovcomflot, said.
“With the long-term nature of many of our charters, some being over 25 years in duration, Sovcomflot’s earnings and cash flow visibility is unprecedented for the industry. Indeed, overall contracted future revenues stood at nearly USD 8 billion at the quarter end,” Nikolay Kolesnikov, Executive Vice President, Chief Financial Officer, added.
The group’s fleet comprises 148 vessels with a total deadweight of over 13.1 million tonnes.