Russia's sanctioned tanker group Sovcomflot plunges to $393 million loss

(Reuters) -Russia's leading tanker group Sovcomflot plunged to a net loss of $393 million in the first quarter, blaming the slump on new Western sanctions that have led to operational problems, lower revenues and some sanctioned vessels sitting idle. 

The United States and the European Union imposed sanctions on Sovcomflot and its fleet in 2024 to try and reduce Russia's revenue from oil sales that it can use to finance its war in Ukraine.

In January, the United States added new Sovcomflot vessels to the list of sanctioned assets and withdrew a U.S. licence, granted last year, that had allowed some vessels in its fleet to operate despite sanctions.

Sovcomflot, which reported a 49% year-on-year drop in first-quarter revenue to $278.5 million, said the January sanctions had been particularly impactful, creating additional commercial and operational difficulties.      

"The intensification of Western sanctions has made it more difficult to operate the fleet and led to lower revenues and downtime for some sanctioned vessels," Sovcomflot said in a statement.    

"In the reporting period, unprecedented sanctions restrictions were imposed on the company and its vessels, which created additional commercial and operational difficulties in operating the fleet," Sovcomflot said. 

The group's earnings before interest, tax, depreciation and amortisation (EBITDA) fell almost 69% year-on-year to $105 million. Sovcomflot considers the sanctions to be illegal. 

(Reporting by Gleb Stolyarov and Alexander Marrow; editing by David Evans and Tomasz Janowski)