Net profit of Sovcomflot decreased by 42% in 2016

SovcomflotThe largest Russian shipping company Sovcomflot reported net profit decrease of 42% yoy to 206.8 million USD. The gross revenues of the operator decreased by 6% to 1.4 billion USD, while the revenue in the time-charter equivalent dropped by 8% yoy, amounting to 1.142 billion USD. According to Sovcomflot the revenue declined slightly even against the significant decrease in spot (more than 40%) and time-charter (up to 25%) rates in the tanker segment of the freight market. The company’s earnings before interest, tax, depreciation and amortization (EBITDA) also finished 2016 on red, decreasing by 9% to 706.5 million USD.

The revenue from transportation of crude oil and oil products of Sovcomflot declined during the reported period, but gas transportation allowed to increase revenue in this segment to 140.6 million USD (+2.2%). Also the company’s revenues from servicing of offshore facilities increased in 2016 and supported the overall financial statement.

During the reporting period, the fleet of the company was replenished with 9 new tankers. The debt financing was raised in the amount of 1.26 billion USD, including 750 million USD from the placement of unsecured Eurobonds and 512 million USD of bank loans.

“The attracted capital will be used for financing the fleet renewal program and repayment of existing debt obligations”, said Sovcomflot in statement.

Sovcomflot is the largest Russian shipping company, specializing in transportation of hydrocarbons, servicing of offshore exploration and production of oil and gas.