Russia’s largest shipping company Sovcomflot slipped to a loss for the year 2017, a year characterized as ‘one of the worst’ for the conventional tanker market.
The company reported a net loss of $113 million for the year, compared to the $206.8 million reported in 2016.
Conventional tanker freight rates fell by almost 50 percent year-on-year, reflecting an oversupply of speculative orders following the 2015 market spike, as well as the effect of sustained production cuts by OPEC and other oil producing nations and a backwardation in the oil trade, the company said.
Despite this market environment, Sovcomflot said its time charter equivalent declined by only 7.4 percent.
However, speaking of the results, Sovcomflot’s president and CEO, Sergey Frank said that the growing industrial portfolio enabled the company to remain profitable operationally.
“Our Offshore and Gas businesses saw time charter equivalent revenues increasing by 48.7 and 17.4 percent respectively year-on-year, providing a welcome relief from the difficult conditions facing our conventional tankers,” Frank said, adding that the conventional tanker freight rates dropped by almost 50 percent.
The company noted that during the last year, the first ice-breaking LNG carrier, Christophe de Margerie was delivered into long-term time-charter with Yamal LNG.
The vessel marked a year with a couple of milestones, completing its first commercial voyage, transporting LNG through the Northern Sea Route from Norway to South Korea without an icebreaker escort and it started loading from the Yamal LNG plant in December.