The energy shipping company PAO Sovcomflot (SCF Group) has managed to increase its revenue base and achieved a profit of USD 11.9 million against a USD 106.2 million loss in 2017.
The annual results reflected a strong contribution from the industrial shipping business (comprising offshore services and LNG transportation). These activities now account for 57.2 per cent of the Group’s TCE revenues (up from a 50.9 per cent share in 2017).
Taking into account the challenging conditions in the conventional tanker markets, and in accordance with IFRS accounting standards, SCF Group undertook an impairment review of vessel values for the year ended 31 December 2018. This resulted in an impairment charge of USD 49.3 million (2017: USD 29.0 million).
Adjusting for this charge and other non-operating costs, amounting to USD 3.2 million in total (2017: USD 78.7 million), the Group achieved an adjusted profit of USD 6.9 million for the year (2017: USD (5.3) million loss).
Sergey Frank, President and CEO of Sovcomflot commented said: “During the reporting period, SCF Group achieved solid operating and financial results despite another difficult year for the conventional tanker market. A strong performance from the Group’s gas and offshore divisions offset continued weakness in the conventional tanker fleet over 2018 and helped drive the Group’s operating profit to USD 187.3 million."
"Looking forward, we remain firmly committed to growing our industrial businesses and this will be central to SCF Group strategy through to 2025. Whilst our conventional tanker fleet swung into profit in Q4 2018, it was insufficient to offset the impact of the dire tanker markets experienced by the industry as a whole in the first half of the year. The outlook for 2019 remains positive and our performance in Q1 2019 has exceeded expectations," he added.
There is industry optimism that 2H 2019 and 2020 in particular will provide better times for the tanker markets with increased demand for oil and oil products, restrained newbuilding supply and the potential for favourable disruption resulting from the introduction of Marpol 2020 towards the end of the year, he pointed out.
"The Company is well positioned to take advantage of continued improvement in the conventional tanker markets,” Sergey said.
Evgeniy Ambrosov, Senior Executive Vice-President, Business development, said: “Over 2018, we have implemented a series of projects in close cooperation with our esteemed partners. The start of commercial operations of our Green Aframax tanker series, with the flagship Gagarin Prospect, was the most conspicuous amongst them. This project was implemented with our partners Shell - together we are leading the industry towards the adoption of LNG fuel."
"A powerful fleet of icebreaking supply and standby vessels, servicing the offshore oil & gas projects on Sakhalin island, was reinforced with another vessel of the series Evgeny Primakov, which has started its work under the 20-year time-charter agreement with Sakhalin Energy. The cooperation with Novatek has seen its further success, when the icebreaking LNGC Christophe de Margerie loaded the first LNG cargo from Yamal LNG’s third train," he added.
"Our LNGCs and SCF Melampus started the open water “ship-to-ship” transfers of export cargo from Yamal LNG. We are grateful to our clients for their loyalty and the responsibility entrusted to us for the safe transportation of their cargoes - however strong the winds are and thick the ice is,” Evgeniy concluded.