RUS

Sovcomflot posts big first-quarter profit as tanker market recovers

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Tradewinds

Sovcomflot is back in the black for the first quarter thanks to an upswing in the company's tanker business.

The Russian state shipowner posted $70.1m in profit for the three months of 2019, a marked improvement over the $16.1m loss reported for the same period last year.

Sovcomflot, also known as SCF Group, attributed the jump to a 53% year-on-year increase in profit for its crude tanker fleet.

Nikolai Kolesnikov, chief financial officer of Sovcomflot, told TradeWinds the improvements in the first quarter has been more pronounced in crude carriers than product tankers.

He described the upturn in tanker rates as “a pleasant change from the past two years” but was cautious about making predictions given the uncertainty over how IMO 2020 will play out.

“We need to give ourselves a bit more time to see what will happen as we move closer to the deadline,” Kolesnikov said.

With a stronger spot market has come a better window for period business, which Kolesniko said had been less attractive or non-existent previously. This, he explained, had allowed and would support a rebalancing of the market exposure.

“That will probably not be dissimilar to what our colleagues are doing,” he added. “I don’t think we have any special insights into how the markets will unfold.”

In addition to the bottom line growth, Ebitda shot up more than 60% from $127.3m to $206.8m.

Gross revenue was up nearly a fifth from $345.4m to $410.7m and TCE revenue jumped from $248.9m to $313.9m.