Russia: Sovcomflot Gross Revenue Climbs 9.6 Percent

Sovcomflot Gross Revenue Climbs 9.6 Percent

OAO Sovcomflot of Russia said its 2011 gross revenue rose 9.6 percent to USD 1,438.9 million compared with USD 1.312,9 million in 2010.

Highlights

  • Net profit for 2011 USD 53.7 million (2010: USD 164.3 million)
  • Total fleet size 155 owned and chartered vessels, representing 11.5 million tonnes DWT (2010:147 vessels)
  • Consolidation of market position in shuttle tanker segment through acquisition of 6-strong fleet servicing Sakhalin projects
  • Strong growth of Offshore Development Services segment – TCE revenue up 49.7 per cent to USD 181.0 million (2010: USD 121,0 million)
  • Suezmax tanker Vladimir Tikhonov (160,000 tonnes DWT) becomes the largest vessel to transit the Northern Sea Route, carrying a cargo of 120,000 tonnes of gas condensate.
  • Contract with Gazprom Global LNG Limited (GGLNG) signed for time charter of two ultra-modern TFDE ice-class LNG-carriers of nearly 170,000 cubic meters cargo capacity.
  • Aframax tanker Adygea begins serving Statoil-operated Peregrino oilfield in Brazil – marks entry to a new offshore sector
  • Marine seismic operations begun with new generation hi-tech X-bow 3D 1-A ice class vessel Vyacheslav Tikhonov.
  • First Group office opened outside Europe – SCF Unicom Singapore to address the potential of Asia

Sergey Frank, President and CEO of OAO Sovcomflot said:
2011 has been one of the toughest years for the shipping industry for decades. Despite this, Sovcomflot increased its top line revenue and remained in profit. This achievement owes much to the continuing hard work and dedication of our people at sea and ashore – something for which I am extremely grateful. We managed to successfully launch the updated business strategy aimed at providing specialized offshore marine services for the Arctic projects on the continental shelf of Russia.”

Given consensus forecasts of future conditions in the freight market, we do not expect significant improvements for the tanker industry in 2012. Rates in the spot market and time-charter rates will remain under pressure, as a result of the imbalance between supply and demand. The market value of tankers looks set to remain at historic lows.

Despite the challenges, Sovcomflot’s business model gives us cause for cautious optimism. With our strong ‘blue chip’ client base, diversified business portfolio, significant forward revenues of USD 5.5 billion and good liquidity, we can face the future with confidence.”

Evgeniy Ambrosov, Senior Executive Vice-President of OAO Sovcomflot commented:

The Group operates a chartering policy that is designed to provide an optimal mix of long-term earnings visibility, through vessels engaged on long-term time charter, with the flexibility to take advantage of opportunities on the spot market.During the year we have seen the benefit of the Group’s growing commitment to its offshore and gas transportation businesses, with revenues up for these segments by nearly 50 per cent and two per cent respectively.”

Nikolay Kolesnikov, Senior Executive Vice-President of OAO Sovcomflot, Chief Strategy & Financial Officer noted:
Sovcomflot continues to pursue a conservative financing strategy. This has enabled the business to maintain access to debt capital and to continue to invest in 2011 for the long-term, in markets with good potential such as Offshore and LNG, despite overall short-term market volatility.

There continue to be significant financial pressures on all shipping companies, due to factors such as very limited credit availability and depressed conventional tanker markets. However, Sovcomflot retains a competitive advantage from its high earnings stability and long-term earnings visibility.

Sergey Popravko, Senior Executive Vice-President of OAO Sovcomflot added:
As a Group we are committed to leveraging our competitive advantage in ice navigation. We continue to deploy innovative solutions in the construction of our vessels, to enable them to operate in challenging conditions, whilst minimising their environmental impact. The priority for our company remain human resources, since we see a growing demand for a better trained and educated industry workforce”.

LNG World News Staff, April 13, 2012

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