Sovcomflot (SCF Group) has posted a lower profit for the third quarter as tanker markets weakened.
But the Russian owner owner of tankers, LNG carriers and offshore support vessels believes the sector is well positioned for a recovery due to a low orderbook when demand rebounds.
The company logged net earnings of $23.1m to 30 September, down from $25.9m in 2019.
Revenue dipped to $347m compared to $376.5m a year ago.
Depreciation and administration costs fell, but the tax bill was higher this year.
The nine-month profit was still well ahead at $249.5m, versus $116.9m in 2019.
The third quarter result reflected a "weaker conventional tanker market" and some one-off maintenance expenses, the company said.
Market adjusting
"The market has started to adjust in the third quarter, which is seasonally the lowest quarter due to the summer decline in crude oil and oil products demand," Sovcomflot added.
The seasonal effect was more pronounced this year due to the Covid-19 pandemic impact on oil demand, the company said.
"With the newbuilding order book at historic lows, management considers the tanker sector is well positioned for a recovery and that freight rates will respond positively and quickly to any increase in the refining output of oil products, and the return of crude production and shipping to healthy levels," Sovcomflot added.
The company has added $14bn in new contracts this year, giving it a huge backlog of $24bn.
Last month, the shipowner carried out an initial public offering of its shares in Moscow.
The company said net proceeds were RUB 38bn ($480m).
The free float of shares amounts to 15.6%, with the Russian state retaining an 82.8% stake.
The proceeds of the IPO will be used for general corporate purposes, including investments in new assets, with a focus on industrial projects, decarbonisation and further deleveraging.
On track
Chief executive Igor Tonkovidov said the result over the nine months showed the company's resilience against a background of the pandemic and volatile markets.
"We are on track to achieve the budgetary targets for the full year 2020 and are well equipped to grow the business going forward, with the proceeds from the recent IPO of Sovcomflot shares, maintaining our strong focus on decarbonisation and innovations," he added.
In October, the group repaid bank loans of $137.7m with scheduled maturity in the next year.
This month the owner has refinanced loans of $67.3m with existing lenders and added a new facility of $155m to refinance two LNG carriers owned with NYK Line and Samudera that serve the Tangguh plant in Indonesia.
Sovcomflot said its policy is to pay out 50% of profit as dividends, with $225m earmarked to go to investors for 2020.
