OREANDA-NEWS. May 23, 2011. The Sovcomflot Board of Directors met in Moscow on 19 May 2011 to consider the company’s 2010 results.

Matters relating to the Annual General Shareholders’ Meeting were also considered by the Board, and the SCF Annual Report and Annual Financial Statements for 2010 were approved. In accordance with the current dividend policy of the company and with guidance from the Government of the Russian Federation, the Board of Directors recommended to the Annual General Shareholders’ Meeting that a dividend payment of RUB 1.0 billion be made to shareholders in respect of 2010. In 2009 the dividend payment amounted to RUB 920.5 million.

 Sergey Naryshkin, Chairman of SCF’s Board, commented that: “Faced by an unfavourable situation in the tanker industry’s freight market, Sovcomflot strengthened its leading position in the sphere of seaborne energy transportation. The company finished the year with its profit above forecast and demonstrated steady growth, confirming that the choice of an industrial business model was the right one. Such a model envisages the maintenance of high quality results from the company’s fixed assets, i.e. its fleet; the implementation of a well-balanced freight policy with a priority put on long-term projects, and the application of most advanced technical and technological solutions.”

According to Sergey Frank, SCF President and CEO, “In far from straightforward market conditions, Sovcomflot continued to develop steadily. The programme of fleet renewal and expansion continued. For the first time in the company’s history, its owned fleet exceeded 10 million tonnes (dwt). The range of services for energy transportation and servicing Russia’s offshore oil and gas fields has been significantly widened to accommodate the needs of customers to the full. Liquid Natural Gas (LNG) transportation and shuttle shipments of oil in the harsh climatic conditions of the Arctic and the Sub-Arctic seas were developed successfully. The Group’s activities remain focused on offering high quality transportation services; safe navigation; environmental protection; reduction of environmental risks; investing in the company’s human capital, in the ongoing training and development of personnel.”

2010 Highlights (IFRS audited accounts)

• As at 31 December 2010 SCF owned and operated 147 vessels of an aggregate 10.7 million tonnes (dwt) (+ 8.1 per cent)
 • Average age of the fleet was 7.01 years (-2.3 per cent)
 • Gross revenue grew to USD 1,312.9 million (+ 7.4 per cent)
 • 2010 EBITDA amounted to USD 533.3 million (- 3 per cent)
 • Net profit - USD 164.28 million (-11.3 per cent)
 • Net assets reached USD 3.12 billion (+ 3.7 per cent)
 • 13 vessels, comprising 4 Suezmax tankers, 3 Aframax tankers, 2 Arctic shuttle Panamax type tankers, ice-breaking supply and other vessels were delivered during 2010, increasing the owned fleet to 10.4 million tonnes DWT
 • Leadership was consolidated in Arctic/Sub-Arctic and ultra harsh environment hydrocarbon shipping, and further expansion was made into higher value-added services on the basis of long-term relations with core customers
 • A strategic long-term cooperation agreement was signed with a major Chinese oil company in November 2010, marking an entry into another market sector - VLCC tankers (320,000 tonnes dwt)
 • In 2010 a joint venture with a major international commodities trader was set up with a view to operate five LR1 tankers. The first vessel of the series – SCF Alpine – was delivered in November, marking a step into a new market segment
 • Additional expansion into offshore supply services, in ice conditions, followed the acquisition of one and tender award for two further IBSVs (Ice Breaking Supply Vessels), to serve the Sakhalin-1 project
 • SCF Baltica, an Aframax ice class 1A Super tanker, loaded with a cargo of gas condensate successfully performed a unique voyage across the Northern Sea Route (NSR) to China in August 2010, a new commercially viable route to the markets of Asia Pacific. The voyage proved that it is technically possible and economically viable to ship hydrocarbons along the NSR
 • October 2010 – the company completed its first unsecured debt capital markets transaction – a USD 800 million 7-Year Eurobond. High demand for the securities of SCF allowed the issue volume to be increased, and the lowest coupon in market history for a Russian issuer of 7-Year Eurobonds.