Sovcomflot Board of Directors reviews 2018 results


At a meeting held on 11 April 2019, the Board of Directors of PAO Sovcomflot reviewed the results of SCF Group’s operations in 2018.

The Board gave provisional approval to the Group’s 2018 annual report and accounts.

The Board of Directors noted that during the reporting period, conditions in almost all the segments of the global freight market remained extremely challenging, with freight rates levels reaching the lowest in the last 25 years.

Against this background, SCF Group achieved solid operating and financial results, securing operating profit of USD 187.3 million and showing growth in key performance indicators: gross revenue (IFRS) increased by 5.9 per cent to USD 1.52 billion compared to 2017; net revenue increased by 1.6 per cent to USD 1.07 billion; EBITDA increased by 6.5 per cent to USD 580.7 million.

“Despite the freight market downturn creating unfavorable conditions for tanker owners, Sovcomflot has fully accomplished all the objectives set by the company’s strategy. By consistently implementing its strategy, the company was able to expand the participation of its fleet in high added-value industrial projects. Revenues from offshore operations and liquefied gas transportation grew steadily, accounting of 57 per cent of 2018 total net revenue”, said Ilya Klebanov, Chairman of the Board.

The Board noted that in 2018, Sovcomflot strengthened its position as the technology leader of the global tanker industry by successfully introducing a series of the world’s first Aframax oil tankers using LNG fuel as their primary fuel.

“The company's work in this area is fully consistent with the state program of the Russian Federation, which provides for expansion of the use of LNG fuel in the transportation sector. Being one of the largest customers of the Russian civil shipbuilding, Sovcomflot actively contributes to localizing the construction of new-generation tankers within Russia, at Zvezda Shipbuilding Complex in Primorsky region of the Russian Far East”, stressed Ilya Klebanov.

“In 2018, the company has grown its portfolio of long-term time-charter contracts with oil & gas majors, which enabled Sovcomflot to increase the amount of future contracted revenues by USD 1.7 billion. During Q4 2018, the conventional tanker shipping market saw the signs that the balance of the tonnage supply and demand for oil & petroleum products transportation is shifting, allowing spot freights rates to recover, a positive trend for shipowners that continued into Q1 2019. According to the management accounting system, the company's net revenue for Q1 2019 is more than 20 per cent higher than in the same period last year”, said Sergey Frank, CEO & President of Sovcomflot.

The Board of Directors proposed to allocate RUB 1.435 billion for payment of dividends.

SCF Press Office

Sovcomflot (SCF Group) is one of the world's leading energy shipping companies, specialising in the transportation of crude oil, petroleum products, and liquefied gas, as well as the servicing of offshore oil and gas exploration and production. The company’s fleet includes 146 vessels with a total deadweight of over 12.7 million tonnes. Over 80 vessels have an ice class.

Sovcomflot is involved in servicing large oil and gas projects in Russia and around the world: Sakhalin-1; Sakhalin-2; Varandey; Prirazlomnoye; Novy Port; Yamal LNG, and Tangguh (Indonesia). The company is headquartered in Saint Petersburg, with offices in Moscow, Novorossiysk, Murmansk, Vladivostok, Yuzhno-Sakhalinsk, London, Limassol, and Dubai.