Sovcomflot profit falls as tankers soften

Russian owner says "strong" results come during a period in which the industry has been "severely tested".

A weaker tanker market has led Sovcomflot to report a reduced full-year profit.

The Russian shipowner saw its bottom line slip to $206.8m in 2016, down from $354.5m in the previous 12 months.

Sergey Frank, chief executive of Sovcomflot, said the company had delivered solid results in a volatile market that had severely tested the industry.

“As growth in oil refinery throughput and up-front demand ran ahead of end-consumption underpinning tanker rates in 2015, so 2016 witnessed a material softening in demand that impacted negatively spot tanker freight rates, albeit with some respite in the final quarter,” Frank said in a statement.

Ebitda reduced from $780.1m to $706.5m year-on-year with Frank noting the company’s diverse fleet had assisted its performance. 

Revenue from both its crude and product tankers slipped during 2016, while its offshore and gas businesses both recorded an increase in top line income.

The lower profit came during an active year for the shipowner, which bought a fleet of nine tankers from Prisco and continued to grow its offshore and LNG businesses.

Sovcomflot, also known as SCF Group, secured $1.26bn in capital, including $750m from a bond issue in a year that finished with $8.1bn of contracted revenue secured.

The company, which is the subject of persistent privatisation talk, has 146 owned and chartered vessels on its books.



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