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Q3/9 months 2019 Results (Third quarter/nine months to 30 September 2019)

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Sovcomflot (SCF Group), a world leader in energy shipping and offshore services to the oil and gas industries, today reported its results for the third quarter (Q3) and nine months (9M) ending 30 September 2019.

Financial highlights for the third quarter to 30 September 2019

USD millions

Q3 2019

Q3 2018        

%

Gross revenue (Freight and hire)

418.8

396.4 

+5.7 

Time charter equivalent (TCE) revenue

293.9

262.6

+11.9

EBITDA*

173.1 

146.9 

+17.8

Net profit (loss)

25.9 

0.3 

х86

Financial highlights for the nine months to 30 September 2019

USD millions

9М 2019

9М 2018       

%

Gross revenue (Freight and hire)

1,246.8 

1,106.5

+12.7 

Time charter equivalent (TCE) revenue

902.9

774.0 

+16.7 

EBITDA*

554.3 

414.6 

+33.7 

Net profit (loss)

116.9 

(57.5)

 -

* Earnings before interest, tax, depreciation and amortisation, calculated on the corrected basis.

A copy of the full nine-month and Q3 period accounts, for the period ended 30 September 2019, is available in the Investor section of the Group’s website.

Operational highlights Q3 2019

  • 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.

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

“The Board of Directors is satisfied with the company’s progress regarding implementation of its strategy for the period up to 2025. Operating results for the reporting period demonstrate that the company has outperformed and exceeded its budgetary targets for 2019. Together with freight rates being favourable for tanker owners in the fourth quarter, this allows us to maintain an optimistic outlook for the 2019 full year results.”

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.”

He added:

“Setting a standard for responsible and sustainable shipping, Sovcomflot continues to deliver on its commitment to LNG-fuelled tanker operations. In September and October 2019, three tankers of our Green Funnel series completed commercial voyages eastwards across the Northern Sea Route, using only cleaner-burning LNG fuel. Our extensive experience of operating these vessels demonstrates that using LNG as a primary fuel allows for a significant, up to 30 percent, reduction in CO2 emissions, which is crucial for vessels operating in sensitive geographies.”

Nikolay Kolesnikov, Sovcomflot’s Executive Vice President & Chief Financial Officer, said:

“During the reporting period SCF Group, in partnership with NYK Line, raised USD 176 million of new debt financing. So far this year, the Group has concluded credit facilities amounting to USD 473 million, clearly demonstrating Sovcomflot’s ability to access the global debt capital markets, notwithstanding the current volatility experienced within the tanker and finance industries respectively. In August 2019, S&P Global once again reconfirmed SCF Group’s BB+ corporate credit rating with a Stable outlook. Earlier this year, Moody’s Investors Service also reconfirmed the Group’s Ba1 rating with a Stable outlook, whilst Fitch upgraded Sovcomflot’s long-term debt rating to BB+ with a Stable outlook.”

SCF Press Service

Sovcomflot (SCF Group) 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 exploration and production. The company’s fleet includes 147 vessels with a total deadweight of over 12.8 million tonnes. More than 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; Prirazlomnoye; Novy Port; Yamal LNG, and Tangguh (Indonesia). The company is headquartered in Saint Petersburg, with offices in Moscow, Novorossiysk, Murmansk, Vladivostok, Yuzhno-Sakhalinsk, London, Limassol, and Dubai.