Russian shipping group Sovcomflot remained in the black for the first half of 2017, albeit with a much reduced profits, saying the result showed the resilience of its expanding industrial shipping business despite the “turbulent conditions” seen in conventional tanker markets.

The company posted EBITDA of $282.9m for the first six months of the year, compared to $374.6m in H1 2016, on gross revenues (freight and hire) up 4% to $710.2m from $680.3m.

Net profit slumped to $15.2m from $166m in H1 2016, however, due to a combination of factors. These included increased operational costs on a larger fleet following takeover of nine PRISCO tankers in H2 2016; higher financing and impairment costs, and lower forex gains.

“The first half of 2017 was very challenging for global tanker markets, with spot freight rates in all market segments nearing their historic lows,” commented Sovcomflot president and ceo Sergey Frank.

However, the group’s “growing commitment to its specialised offshore and fixed income gas transportation business clearly demonstrated its worth” during the period, he added, with overall results showing “resilience” and leaving Sovcomflot well-positioned to take advantage of a future upswing in conventional tanker markets.

The group took delivery of several newbuildings during H1 - including the world’s first ice-breaking LNG carrier Christophe de Margerie (pictured), ice-breaking platform supply vessel Gennadiy Nevelskoy and the first in a series of three new multifunctional ice-breaking standby vessels, all to operate on the Sakhalin-2 project under 20-year time charters to Sakhalin Energy Investment Co. In addition, it placed four newbuilding orders for the first ever LNG-fuelled Aframax tankers.

During the reporting period  the group also raised $341m in debt capital, including a highly successful ($150m) tap of its 2016 Eurobond issue "with one of the lowest yields seen for a global shipping company,” commented evp and cfo Nikolay Kolesnikov.

“The robustness of Sovcomflot’s business model is underpinned by $8bn of contracted future revenues,” he added.As of 30 June the Sovcomflot fleet (including vessels owned, chartered-in and in joint ownership) stood at 149 vessels of around 13.1m dwt, with another six newbuildings on order.

Source:seatrade-maritime.com