OREANDA-NEWS. May 19, 2010. At a regular meeting of the Sovcomflot Board of Directors, held on 12 May 2010, the 2009 annual report of the Company and its subsidiaries, prepared by the Executive Board, was presented to Board members for consideration.

Year 2009 Highlights:

Total fleet size increased to 144 vessels with total deadweight in excess of 10 million tonnes
First Russian LNG shipments from the Sakhalin 2 project in the Russian Far East
Entry into offshore supply services segment
Entry into LR2 product tankers segment
New long-term coal transportation project from Far Eastern port Vanino
First loading and maiden voyage from new crude oil terminal Kozmino on the Russian Far East
Further consolidation of ownership of Novoship (up to 86.6 per cent)
Full year 2009 net profit USD 216.8 million
EBITDA USD 550 million

Commenting on the SCF Group’s 2009 results, the Chairman of the Board of Directors, Chief of Staff of the Presidential Executive Office Sergey Naryshkin said: “While the global economy is in decline and the tanker market conditions are unfavourable, to an unprecedented extent, Sovcomflot has maintained financial stability. The Group has fulfilled the task set by its shareholders of entering new market segments, strategically important for the future development of Russia’s energy sector. These tasks include the transportation of liquefied natural gas, deploying the most advanced technologies, servicing offshore oil and gas fields and the development of tugs and port fleet services. The Board of Directors is satisfied with the results of the Group’s activities in 2009 and considers that the company has the necessary potential to fulfill the tasks defined by the Strategy for the Group’s Development 2010-2015.”

Sergey Frank, President & CEO of OAO Sovcomflot, said: “Sovcomflot demonstrated strong performance in a very challenging year for the tanker industry. In the worst conditions in a decade and with spot market freight rates down by 60% from the previous year, Sovcomflot was able to prove the resilience of its industrial shipping business model to these adverse market conditions. We not only maintained our market position but were able to grow the business further and entered into a number of new segments that are strategic for the Group’s future development as an integrated service provider to our Russian and international energy clients.”

Evgeny Ambrosov, Executive Vice President and Group COO said, “Our fleet employment structure is well balanced. The drop in conventional tanker rates was partly compensated by time-charter revenues from long-term industrial projects and specialised services such as LNG, shuttle-tanker and offshore supply operations. The share of industrial projects in the Group’s gross revenues increased twofold in 2009, contributing to the reduced volatility of the revenue stream and operational cash flows.”

“Whereas we envisage that the tanker markets will continue to remain weak throughout 2010, the Group is well positioned for sustainable growth in line with the strategy approved by the Board of Directors in December 2009”, Nikolai Kolesnikov, Executive Vice President, Chief Strategy & Financial Officer said. “Future contracted revenues amount to USD 4.5 billion. With its committed newbuilding programme fully funded, and a net debt to capital ratio unchanged from last year at 42.9 per cent the Group is in a strong financial position and has the capacity to act as and when opportunities for new business deals and acquisitions arise.”

Sergey Popravko, Managing Director of Unicom Shipmanagement Services and COO of the tanker fleet said, “During 2009 the Group took delivery of 17 vessels with a total deadweight of almost one million tonnes allowing it to maintain the favourable age profile of the tanker fleet. Our continued efforts to improve the energy efficiency of our fleet resulted in the reduction of CO2 emissions by 12.9 per cent as compared to the previous year. As of the end of last year all entities of the Group operated under a unified safety management system, and our stable financial position allowed us to continue to improve our quality standards despite the difficult market environment. The focus on quality is about our seafarers and how they are trained and managed.”