Income statement

Key income statement indicators, (US$ million)
Indicator 2020 2019 Change, %
Revenue 1,652.5 1,665.2 –0.8
TCE revenue 1,350.6 1,265.5 6.7
Operating expenses –366.9 –356.3 3.0
Earnings from vessels’ trading 983.7 909.2 8.2
Net other operating incomeConventional segments include transportation of crude oil and oil products. 9.2 25.2 –63.4
Depreciation, amortisation and impairment –421.3 –411.8 2.3
General and administrative expenses –90.7 –108.0 –16.0
EBITDA 903.4 823.0 9.8
EBITDA margin, % 66.9 65.0 1.9
Operating profit 491.4 436.4 12.6
Operating margin, % 29.7 26.2 3.5
Financing costs –190.5 –206.2 –7.6
Profit before tax 295.5 254.4 16.1
Profit tax –28.6 –29.0 –1.4
Net profit for the period 266.9 225.4 18.4
Net margin, % 16.1 13.5 2.6

The positive situation in the tanker market in the first half of 2020 and the growing industrial portfolio had a positive impact on the Group’s operating results in 2020. In the reporting year SCF Group continued to implement consistently its industrial development strategy aimed at expanding the offshore and gas business segments.

TCE revenue in industrial segments (liquefied gas transportation and the servicing of offshore projects) for 2020 was US$681.1 million, making it possible to increase the total TCE revenue by 6.6% compared to the previous year. The share of TCE revenue from industrial segments in 2020 reached 50% of the total TCE revenue. The key factor for the growth in revenue in industrial segments was the commissioning of two new LNG carriers chartered out under long-term contracts with international oil and gas companies Total and Shell in February and September 2020, respectively.

2020 TCE revenue in conventional segments increased by 9.9% compared to 2019 and amounted to US$626.4 millionConventional segments include transportation of crude oil and oil products.. The increase in revenue was primarily due to the positive dynamics of freight rates in the first half of 2020. Beginning in the third quarter of 2020, there was a market correction due to seasonal factors and a decline in the demand for crude oil and oil products amid the COVID-19 pandemic. Despite market volatility, the Company continued to implement a balanced chartering policy that allowed it to maintain the stability of financial performance.

Structure of TCE revenue by business segments, (%)
Dynamics of revenue on a TCE basis by business segments for 2018-2020, (US$ million)Breakdown into segments is made in accordance with IFRS reporting.
Dynamics of profit from vessels operation by business segments for 2018-2020, (US$ million)Breakdown into segments is made in accordance with IFRS reporting.

The 24.5% reduction in voyage costs and commissionsTCE revenue is determined as the difference between revenue and voyage costs and commissions. (to US$301.9 million) in 2020 was due to a decline in bunker prices. In 2020 the level of operating costs increased by 3.0% to US$366.9 million, in particular due to the commissioning of new vessels.

General and administrative expenses decreased by 16% to US$90.7 million in 2020 as a result of the work done to optimize this cost item, as well as the weakening of the rouble against the US dollar during 2020.

EBITDA was up 9.8% year-on-year to US$903.4 million. EBITDA margin improved by 1.9 bps to 66.9% due to the growth of conventional segment profitability.

Financial costs decreased by 7.6% compared to 2019 and amounted to US$190.5 million. A decrease in the debt level and interest rates led to a reduction in this cost line.

Sovcomflot Group reported a net profit of US$266.9 million for 2020, representing an 18.4% growth year-on-year.

Structure of the main expense items, (%)