The Russian largest shipping company Sovcomflot posted net profit of 11.7 billion rubles (equals to about 180 million USD) in H1 2016, representing a decrease of 5.6% yoy. The gross revenues from freight and leasing vessels during the reporting period decreased by 16.5% yoy to 47.2 billion rubles, while EBITDA dropped by 1.9% to 24.95 billion rubles. The company highlighted successful issue of seven-year term unsecured Eurobonds for 750 million USD with 5.375% coupon, as well as long-term loan agreement with VTB Bank worth 250 million USD. Sovcomflot launched five new vessels and proceed with operations over contracts for Yamal LNG project and Sakhalin-2 project.
“From January to July, there was a notable downswing in the global tanker market, with spot rates in certain market segments dropping by one third year-on-year, which has affected the financial performance of the entire industry”, said the CEO of Sovcomflot, Sergey Frank. “Analysts foresaw this downturn, so, as part of its Development Strategy, Sovcomflot has focused its efforts on diversifying its business by beefing up its portfolio of long-term industrial projects with a fixed high rate of return. Participation in projects such as Sakhalin-1, Sakhalin-2, Varandey, Prirazlomnoye, Novy Port, and Yamal LNG will guarantee a reliable source of constant income for Sovcomflot even in times of market uncertainty and ensure the stable employment of a significant proportion of our fleet”, added he.
Sovkomflot is the largest Russian maritime shipping company specializing in petroleum and LNG shipping. The state-owned company was found in 1995 and has more than 5,200 employees.