Balance sheet indicators
The financial statements of Sovcomflot Group were prepared according to IFRS and disclosed online. Below is a brief overview and analysis of the key financial indicators of the Group.
The book value of non-current assets increased by 0.5 % from US$6,601.6 million at the end of 2018 to US$6,636.3 million at the end of the reporting period. Total assets of the Group amounted to US$7,335.9 million as at 31 December 2019, up 2.7 % year-on-year. Shareholders’ equity increased by 4.6 % to US$3,504.6 million.
The Group maintains a stable programme of capital investments during all phases of the shipping cycle. Investments in fleet construction and capital expenditure on fleet modernisation
The investment programme and operating activities were financed through secured bank loans (as at 31 December 2019, total debt to banks amounted to US$2,538.8 million), placement of unsecured Eurobonds amounting to US$900 million, and operating cash flow. The company also entered into lease agreements providing for the delivery of vessels in 2022-2023 for a total amount of US$1,140.6 million.
Despite the continued volatility in financial markets amid the unstable geopolitical and economic situation in the world, the Group retained access to both foreign and Russian debt capital markets.
The Group concluded two new credit facility agreements for a total amount of US$473 million. Proceeds under these agreements were used to finance the construction of new vessels and refinance existing credit liabilities. The Company also drew down funds under previously concluded credit facility agreements to finance the delivery of new vessels in the reporting year. In the reporting year, the Group’s borrowers and guarantors fully complied with all requirements and terms ("covenants") of corresponding credit facility agreements.
SCF Group carefully monitors capital structure and works on its optimisation. Sovcomflot Group’s leverage (net debt to equity ratio) at the end of 2019 was 47 %, net debt to EBITDA ratio
|Secured loans and finance lease liabilities||2,599.1||2,575.5||0.9|
|Eurobonds and other loans||900.4||902.7||–0.3|
|Less: cash and bank deposits, including restricted cash||(417.2)||(307.4)||35.7|
|Total capitalTotal capital = net debt plus total equity.||6,586.9||6,520.8||1.0|
|Net debt/equity ratio, %||46.8||48.6||- 1.8 p.p.|
|Net debt/EBITDA ratio||3.7||5.5||–31.3|
The Group’s current leverage is more favourable compared to the industry average, which is traditionally impacted by high capital intensity of investments and volatility of the freight market.