Sovcomflot Profits Up on Stronger Tanker Market

Russia's state-owned tanker carrier Sovcomflot (SCF Group) reported improvements on both the top and bottom line in the third quarter benefiting from a stronger tanker market.

The energy shipping company posted a net profit of  $26m as revenue increased in the third quarter.

Sergey Frank, Chairman of the Board of Directors of PAO Sovcomflot, said: “We are satisfied with the Group’s performance over the third quarter. Sovcomflot steadily follows through on its strategy of increasing the share of large-scale industrial shipping projects in its portfolio."

He added: "During the reporting period, Sovcomflot achieved a major strategic milestone when we agreed with NOVATEK to establish a new joint venture, SMART LNG. This new JV is envisaged to ensure safe and sustainable shipping solutions for the year-round transportation of LNG produced by Arctic LNG-2 as well as other current and prospective projects of NOVATEK.”

Igor Tonkovidov, President and CEO of PAO Sovcomflot, said: “During the third quarter, the Group achieved a steady increase in its operating and financial performance, with a growth in net profit, as the market remained volatile while demonstrating an upswing in conventional tanker rates. The Group has increased its revenues from offshore services, including the shuttle transportation of crude oil, and from conventional tanker operations.”

In September 2019, SCF Group and NOVATEK agreed to establish a joint venture, SMART LNG, which will own and operate the fleet of LNG carriers transporting liquefied gas for current and prospective projects of NOVATEK.

In September 2019, the Group took delivery of Mikhail Lazarev, the latest in the Shturman Albanov series of Arctic shuttle tankers employed for the Novy Port project by Gazprom Neft.

In September 2019, two joint venture companies belonging to SCF Group and NYK Line signed a new USD 176 million credit facility for eight years with a consortium of three leading banks: Sumitomo Mitsui Banking Corporation; Société Générale, and Shinsei Bank. The facility was used towards refinancing Grand Aniva and Grand Elena, ice-class LNG carriers employed on the Sakhalin-2 project. With this facility, SCF Group pioneered the adoption of the Poseidon Principles, an environmental initiative supported by stakeholders involved with ship finance, that promotes a low carbon future for the global shipping industry.

In September 2019, Korolev Prospect became the first large-capacity crude oil tanker to cross the full length of the Northern Sea Route using only cleaner-burning LNG fuel.