Russian Sovcomflot suffered losses of almost $400 million due to sanctions

Russia’s largest shipping company, Sovcomflot, reported a net loss of $393 million in the first quarter.

The company blamed the losses on new Western sanctions that have led to operational problems, reduced revenue and the idleness of some sanctioned vessels, Reuters reported.

The United States and the European Union imposed sanctions on Sovcomflot and its vessels in 2024 to try to reduce Russia’s oil revenues, which it could use to finance its war in Ukraine.

In January, the United States added new Sovcomflot vessels to a list of sanctioned assets and revoked a U.S. license issued last year that allowed some of the fleet’s vessels to operate in defiance of sanctions.

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

“The tightening of Western sanctions has complicated fleet management and led to lower revenues and downtime of some vessels affected by the sanctions,” the company said in a statement.

The group’s earnings before interest, taxes, depreciation and amortization (EBITDA) fell by almost 69% compared to the same period last year, to $105 million. Sovcomflot considers the sanctions illegal.

USM previously reported that Gabon and Barbados have refused to register their flags with Sovcomflot vessels.