Home World Sovcomflot’s Board of Directors acknowledges Group’s performance in 2019

Sovcomflot’s Board of Directors acknowledges Group’s performance in 2019

At a meeting held on 7 April 2020, the Board of Directors of PAO Sovcomflot (“SCF Group”) reviewed the results of the Group’s operations in 2019.

The Board gave provisional approval to the Group’s 2019 annual report and consolidated financial statements under IFRS.

The Board noted that in 2019, the Group was operating against the backdrop of a recovery in conventional tanker freight rates, after nearly three years of depressed tanker markets (2016-2018). At the same time, the Group continued to focus on longer term projects and consolidated its positions within industrial shipping business segments.

As a result, SCF Group significantly improved its key performance indicators in 2019: time charter equivalent revenue increased by 17.8 per cent to exceed USD 1.27 billion, EBITDA increased by 41.7 per cent to USD 823 million, while net profit exceeded USD 225 million.

In light of the results, the Board of Directors recommended to allocate RUB 7.18 billion in dividend payments for the year ending 31 December 2019.

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

“In May 2019, the Board of Directors approved the Group’s development strategy for 2019-2025, which aims to ensure a steady and sustainable increase in Sovcomflot’s shareholder value through further expansion of its industrial portfolio, with a focus on large-scale energy projects. The Board notes with satisfaction that in the first year of implementing the Strategy-2025, the Group has achieved all the key performance indicators set for 2019, whilst outperforming on several.”

Igor Tonkovidov, the President and CEO of PAO Sovcomflot, said:

“The positive 2019 results owe much to our constant efforts aimed at increasing the efficiency and quality of our fleet operations, and steady fleet renewal, with a special emphasis on introducing and adopting cutting-edge engineering solutions. SCF’s fleet remains among the most technically advanced in the global energy shipping.

“We are pleased that the large-scale cooperation between Sovcomflot and Russia’s leading energy companies is facilitating domestic construction of state-of-the-art LNG carriers and LNG-fuelled Aframax and MR tankers. The total value of shipbuilding orders placed by SCF Group at the Russian yards has already exceeded USD 1.5 billion. It is important that this fleet will operate under long-term industrial contracts, which will be conducive to reaching the goals set by SCF’s Strategy-2025 and contribute to increasing the stability of our revenues, offsetting the volatility inherent within the conventional tanker market.”

David Moorhouse, the member of the Board of Directors, said:

“The Green Charter is one of the key elements of SCF’s Strategy-2025. When we couple this with the Company’s knowledge and experience of working safely in harsh environments, we are clearly travelling in the right direction. SCF’s Green Agenda has been and remains truly positive for the Group and has reinforced its credentials. Our major customers such as Shell consider Sovcomflot as an industry leader and innovator.”

During the meeting, Igor Tonkovidov informed the Board of Directors of the preliminary results from the first quarter ended 31 March 2020. Indicative performance data shows that the Group has exceeded the targets planned for first quarter of this year, as well as for the Q1 2019 results.

The President and CEO of Sovcomflot also informed the Board of the measures taken by the Company to ensure the integrity and stability of its operations, both at sea and ashore, during the coronavirus infection outbreak and measures to protect the safety of its personnel. The Company makes all possible and necessary efforts to fully meet its obligations to employees, customers, and shareholders, while upholding the highest standards of safety, environmental protection and quality of services.