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PAO Sovcomflot Board reviews company’s operating results for first 9 months of 2021 and financial plan for 2022

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A meeting of the Board of Directors of PAO Sovcomflot (SCF Group) was held on 8 December 2021, at which the company's financial and operating results for the first 9 months of 2021 and the financial plan (budget) for 2022 were reviewed.

Despite the unfavorable market conditions, SCF Group maintained a highly efficient fleet operation and achieved positive financial results for the first 9 months of 2021: TCE revenue reached USD 829.7 million, adjusted net profit(1) amounted to USD 87.4 million, and EBITDA(2) was USD 507.3 million.

Next year, SCF Group will continue to develop consistently projects with fixed long-term revenues that are not subject to market fluctuations. Five new vessels are due for commissioning in 2022, to serve Exxon Neftegas, Rosneft, and Novatek. Meanwhile, contracted revenues for 2022 already total USD 804 million. The company remains cautiously optimistic about the gradual recovery in the conventional segment of the tanker market.

The Group plans to allocate to dividends for 2021 at least 50% of adjusted net profit.

Sergey Frank, Chairman of the Board of Directors of PAO Sovcomflot, noted:

"The company's operations, in the reporting period, had to face a "strong headwind" in the world tanker markets. Despite this, the company continued the consistent implementation of its current Strategy, which provides for preferential development of its industrial business segments. Seven new gas carriers were added to the shipbuilding programme, which are chartered on a long-term basis to first-class customers; nine long-term contracts in highly profitable business segments have also been signed. The contract backlog increased by USD 1.3 billion to reach USD 24 billion in total.

“It is good to note that despite the unfavorable external conditions for tanker shipowners, the company maintains a leading position in its energy transformation and the decarbonisation of shipping, whilst not abandoning its efforts to introduce advanced technical and process developments to cargo transportation and ensuring a high level of social protection for its personnel."

Igor Tonkovidov, President and CEO of Sovcomflot, noted:

"In the reporting period, the company continued the implementation of its sustainable development programme (SCF's Green Charter), approved by the Board of Directors in 2019. Our experts have developed and are constantly improving a set of efficient engineering and operational solutions that ensure the economically justified minimisation of our carbon footprint, in relation to each type of Aframax-class tankers involved in the transportation of oil and gas.

“The high quality of the services provided, which is largely backed by the professionalism and selfless work of the Group’s seafarers, is an important competitive advantage for Sovcomflot. The pandemic has also put additional pressure on our seafarers. Nevertheless, the operations of SCF's fleet did not cease for a minute, while ensuring the reliable and safe transportation of energy for our charterers. The Group has taken unprecedented measures to comply with the labour rights and terms of its seafarer contracts. The rate of crew changes on SCF’s vessels has consistently remained one of the highest amongst tanker companies across the world, throughout the entire pandemic."

1 – Adjusted profit/loss for the period – calculated as a net profit attributed to shareholders of PAO Sovcomflot less impairment for fixed and intangible assets, foreign exchange gains and losses and gains and losses related to revaluation of financial assets.

2 – Earnings before interest, tax, depreciation and amortisation adjusted for other non-operating expenses; hedge ineffectiveness and termination of hedge; gain on derecognition of dividend liability; loss on sale and dissolution of subsidiaries; foreign exchange gains; foreign exchange losses and gain/loss on sale of equity accounted investments.

SCF Press Office

PAO Sovcomflot (MOEX:FLOT) 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 production. As of the date of this release, the Group’s fleet comprises 133 vessels with a total deadweight of 11.6 million tonnes, including vessels owned through joint ventures. About 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; Prirazlomnoe; Novy Port; Yamal LNG; Tangguh (Indonesia). The company is headquartered in Saint Petersburg with offices in Moscow, Novorossiysk, Murmansk, Vladivostok, Yuzhno-Sakhalinsk, London, Limassol, and Dubai.