Sovcomflot Exits Dry Bulk Segment

Russian shipping giant Sovcomflot has sold its last two remaining bulkers and exited the dry bulk segment, the company said in a quarterly earnings report released Thursday.

As a part of a fleet modernization program, Sovcomflot disposed of ten aging vessels since the beginning of the year. These included two MR product tankers, two Panamax product tankers, two Aframax tankers, two Suezmax tankers and two Panamax bulkers. By selling the bulkers, Sovcomflot said, it has completed its exit from the "non-core" dry bulk segment. 

The total proceeds came to about $112 million. According to Sovcomflot, the funds will be used to finance the firm's new projects, which are more technologically-sophisticated and capital-intensive.

Among other lines of business, Sovcomflot is the operator of the world's only icebreaking LNG carrier fleet, which it manages on behalf of Russian oil and gas company Novatek. To export natural gas from the Yamal LNG facility in the Russian Arctic, Novatek and Sovcomflot commissioned 15 Arc7-class icebreaking LNG carriers, which have made it possible to make deliveries to European and Asian ports via the Northern Sea Route for a large part of the year. 

To satisfy Novatek's transport needs for a second LNG plant, Sovcomflot has 15 more of the specialized vessels on order at Zvezda Shipyard, a refubished Soviet-era facility in the Russian Far East. Top LNG carrier builder Samsung Heavy Industries has joined the project as a technology partner, and it has reportedly secured a $2.5 billion contract - its largest ever - to produce blocks and equipment for the new ships. 

In October 2020, Sovcomflot debuted as a publicly-traded company with an IPO on the Moscow Exchange. The firm is profitable, with net income of $60 million (and EBITDA of nearly $340 million) in the first half of 2021.