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  • 2015 September 1

    Nikolay Kolesnikov, Chief Financial Officer of Sovcomflot: “We will build up presence in the segment of industrial shipping”

    Nikolay Kolesnikov, Chief Financial Officer of PAO Sovcomflot tells IAA PortNews about the Company’s performance in the first half of 2015, prospects of the tanker market and plans for the development.

    - Mr. Kolesnikov, how do you explain the improvement of the tanker market situation?

    - Tanker market segments where Sovcomflot is represented feature  the improvement of the tonnage demand/supply balance. Recent years has seen this balance leveling amid the growth of the global economy. Today we see that demand has caught up and even surpassed the volume of available tonnage, hence the market strengthening. Last year we saw some seasonal burst of activity while starting from the late 2014 and throughout the entire first half of 2015 the rates have been quite high in both crude and product carriers’ segments. The peak of demand usually falls on winter months with the second and the third quarters being slow. However, today we see a completely different situation in the second quarter as compared with QII’14.

    Taking into consideration that Sovcomflot is a large player in the global market we have initially had good position to get use of this favourable situation.

    - Crisis developments in global economy caused by China’s slowdown are much discussed today. What is your year-long forecast for the tanker market in this context?

    - We see the second half of 2015 with self-conscious optimism. As for the fundamental demand and supply, we expect the year of 2016 to keep the favourable situation. Even if ship owners go to the shipyards today to have new vessels built, it will take certain time. As for a demand/supply balance the influence will be felt within a year or a year and half as old vessels are decommissioned gradually. 

    The demand for our services certainly depends on the global economy but the low energy prices that we have today will encourage the consumption in short and midterm period. The growth of consumption will, in its turn, entail the higher demand for transportation. In the context of China’s economic slowdown, it is one of the factors influencing the market indeed. However, oil is transported not only to China while cheap oil stimulates the demand of refineries enjoying a top-up margin.

    - Which segments are most promising in your opinion?

    - According to our Development Strategy, we plan gradual building up of our presence in the segment of so called industrial shipping where we can be engaged in more sophisticated maritime business with higher added value and, consequently, more stable relations with our contractors.  As compared with other tanker owners we are a more diversified company. Apart from transportation of crude and oil products we also rapidly develop LNG and oil gas shipping – it is our strategic activity in view of our clients’ requirements. Over the past year we have taken into operation four new hi-tech LNG carriers. Those ice class vessels having 170,000 cbm capacity each can operate on three types of fuel. We will continue growing in this segment through entering new projects. We are also building a lead Arctic gas carrier for the Yamal project, four icebreaking supply ships for Sakhalin-II project and three Arctic class shuttle tankers for Novy Port project. 

    That is, having preserved our strategic market position in the segment of conventional tankers we will build up our presence in industrial shipping in compliance with the demands of our clients.

    - What are your forecasts on the Company’s financial performance in 2015?

    Financial results in the second half of 2015 are actually higher than in the same period of 2014 and we already see the performance exceeding the forecasts for this year.

    Interviewed by Vitaly Chernov.