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Sovcomflot: a bet on a closed Hormuz with a 10–13% dividend

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Verdict. At RUB 80.9, Sovcomflot (MOEX: FLOT) shares are interesting as a speculative position for 9–12 months: from purchase to the payment of the 2026 dividend in summer 2027. Authors' estimate for the base case: a dividend of about RUB 10 (12–13% at the current price) and a fair price of RUB 86–97, for an expected total return of 20–30%. The idea rests on the closed Strait of Hormuz and record freight rates on Russian routes. If the strait reopens in the coming months, the price upside disappears and what remains is a dividend of about RUB 7–8 (9–10%). Buying makes sense up to ~RUB 85. Above RUB 90 the return rests on the dividend alone, and it is below the 14% key rate.

What the company is and why it is in focus

Sovcomflot is Russia's largest shipowner, 82.8% owned by the state. The fleet consists of crude and product tankers, LNG carriers and vessels serving Arctic and offshore projects (Sakhalin, Yamal, Arctic LNG 2). Revenue is in US dollars, IFRS reporting is in US dollars, dividends are paid in rubles. The free float is 15.5% and the market cap is RUB 189 bn ($2.2 bn).

Since January 2025 the company has been under blocking sanctions of the US, the EU and the UK. On 10 January 2025 the US added 69 group vessels to the SDN list, including 54 tankers. EBITDA fell from $1.57 bn in 2023 to $526 mn in 2025. For 2025 the company wrote off $550 mn as vessel impairment and posted a net loss of $648 mn.

In 2026 the picture reversed. Since March the Strait of Hormuz has been effectively closed to tankers because of the conflict around Iran. A temporary reopening in June broke down in July. Since 30 July the strait has been closed again; on 27 September one vessel passed through it against a norm of 85 a day. Global freight rates are at highs: the Aframax composite stood at $215k a day on 24 September versus about $67k in 1H2026. Sovcomflot's earnings are recovering together with the rates.

EBITDA by quarter. The bottom came in 1Q2025, right after the US sanctions. 2Q2026 – $320 mn, the level of late 2023. 3Q–4Q 2026 – authors' base case.
EBITDA by quarter. The bottom came in 1Q2025, right after the US sanctions. 2Q2026 – $320 mn, the level of late 2023. 3Q–4Q 2026 – authors' base case.

1H2026: profit is back, free cash is not

Fact (IFRS, 28.08.2026):

1H20261H2025Change
Revenue, $ mn1,026618+66%
Time-charter equivalent (TCE) revenue, $ mn809502+61%
EBITDA, $ mn547263+108%
Adjusted net profit, $ mn26619x14
Adjusted net profit, RUB bn20.11.6x13
Net debt, $ mn (as of 30.06)678–14

The second quarter was markedly stronger than the first. 2Q EBITDA was $320 mn versus $227 mn in 1Q, adjusted profit $182 mn versus $84 mn (authors' calculation from cumulative figures). At SPIEF in June CEO Igor Tonkovidov expected the half-year to be "comparable to the first quarter". The actual result was better.

Growth rests on two things. The first is long-term contracts, which grew as the fleet was expanded for industrial projects. The second is the tanker market (management view). The company has not disclosed a segment breakdown since 2023, nor fleet size or idle vessels.

Cash is going into LNG carriers. Operating cash flow for 1H was $626 mn, investments $612 mn. Net debt rose from $359 mn to $678 mn in six months, partly due to non-cash financing of new vessels. That is 0.84x trailing 12-month EBITDA, so there is no leverage problem as such. But the dividend in 2027 will most likely be partly funded with borrowed money.

Peak cash flow in 2023 covered investments 2.6 times. In 1H2026 cash flow and investments are equal, and net debt nearly doubled.
Peak cash flow in 2023 covered investments 2.6 times. In 1H2026 cash flow and investments are equal, and net debt nearly doubled.

Industry context: freight on Russian routes follows Hormuz

Shipping Russian oil now costs more than ever. According to Price Index Center (CCI) estimates, in the first week of September an Aframax voyage from Novorossiysk to West India cost $23.2 per barrel and to North China $25.7. That is an all-time high after seven consecutive weeks of growth. The reasons: drone attacks on tankers in the Black Sea, expensive insurance and a shortage of tonnage, part of which has moved to Middle Eastern routes.

Exports are growing and loadings are shifting to the Baltic. Russian seaborne crude exports have stayed above 4 mn bpd for five weeks (Bloomberg). Loadings from Novorossiysk fell by 42% in early September, while Baltic exports rose. The Urals discount at Primorsk narrowed to $22.6 per barrel, and in India and China discounts turned into premiums (Argus via Interfax). So demand for tankers carrying Russian oil is high, and buyers are willing to pay for them.

On the chart, a Baltic–India voyage repeats the news from Hormuz. March – $22–23 mn, during the temporary reopening of the strait in July – $7–8 mn, by the end of August – $13 mn.

Cost of an Aframax voyage Primorsk – India according to industry sources. The July dip came a month after the temporary reopening of the strait: this is what the downside scenario for 4Q looks like.
Cost of an Aframax voyage Primorsk – India according to industry sources. The July dip came a month after the temporary reopening of the strait: this is what the downside scenario for 4Q looks like.

An important caveat: this is a market indicator, not the company's revenue. India does not accept cargoes on sanctioned vessels (management view, SPIEF 05.06), and Sovcomflot's main route is China. About half of its income comes from long-term fixed-rate contracts. So the company's earnings move in the same direction as freight, but with a smaller amplitude.

2026 forecast: EBITDA of about $1.1–1.2 bn

Base case (authors' estimate): 3Q EBITDA $290 mn, 4Q $330 mn, full year $1,167 mn.

Scenario3Q / 4Q EBITDA, $ mnEBITDA 2026FAdj. profit 2026FEV / EBITDA 2026FDividend at 50%, RUBYield
Weak: the strait reopens in 4Q250 / 2201,0174562.9x7.69%
Base: the strait stays closed until year-end290 / 3301,1676062.5x10.313%
Strong: record freight reaches the company310 / 4201,2777162.3x12.315%

Conversion into rubles uses the average CBR rate for 3Q (RUB 82.0 per dollar) and RUB 87 in 4Q. The divisor is 2,375 mn issued shares, as in the company's EPS. For comparison, Financial One estimates 2026 EBITDA at about $950 mn and the dividend at RUB 7.5–7.8. That is closer to the weak scenario.

The 2026 dividend is the main argument, but not a guarantee

Under its policy the company pays at least 50% of adjusted profit in rubles (confirmed in the 1Q and 1H2026 reports). For 1H, RUB 4.24 per share has already accrued: 50% of adjusted EPS of RUB 8.48. The decision on the 2026 payout is expected in June 2027, with the record date in July.

The payout history is uneven. The company paid no dividends for 2021 and 2024, citing sanctions, capital expenditure and debt obligations in 2024. For 2025, despite the loss, it paid RUB 4.87 out of prior years' profit. The state, as an 83% shareholder, needs dividends, so a full cancellation is unlikely (authors' assumption). The formal minimum in the dividend regulation is 25% of IFRS net profit. At that level the base case gives about RUB 5.

Dividend by fiscal year. The 2026 forecast is 50% of adjusted profit in rubles, yield at a price of RUB 80.9.
Dividend by fiscal year. The 2026 forecast is 50% of adjusted profit in rubles, yield at a price of RUB 80.9.

A weak ruble helps, but for 2026 the effect is already small. Every +RUB 5 to the dollar rate in 4Q adds about RUB 0.2 to the dividend: half of the profit has already been earned at a rate of RUB 76. A weak ruble matters more for 2027: by the end of 2027 the authors expect RUB 95–100 per dollar.

Valuation: fair price of RUB 86–97

The valuation uses three methods, without comparison with other companies.

On trailing EBITDA (3.6x) the share looks more expensive than its median: the weak 3Q and 4Q 2025 are included. On the EBITDA expected for 2026 it is cheaper than the median. The gap between these two numbers is the bet on freight staying high.
On trailing EBITDA (3.6x) the share looks more expensive than its median: the weak 3Q and 4Q 2025 are included. On the EBITDA expected for 2026 it is cheaper than the median. The gap between these two numbers is the bet on freight staying high.

Entry threshold (authors' estimate):

Purchase priceUpside to mid valuation (RUB 91)+ dividend RUB 10.3Total
RUB 76+20%+14%+33%
RUB 81 (current)+12%+13%+25%
RUB 85+7%+12%+19%
RUB 90+1%+11%+13% – below the key rate

Risks: the strait, sanctions and the size of the payout

Taxes and courts. No major tax disputes were found in open sources. The last significant litigation – the London claim against the Skarga group – ended around 2018. Open Federal Tax Service data on the company were not separately checked for this review.

What to track

MetricBase caseWhen
3Q EBITDA (from the 9M report)$290 mnlate November 2026
Status of the Strait of Hormuzclosed until year-endongoing
Aframax voyage Primorsk – Indianot below $12–13 mnweekly
Net debtup to $0.8 bn9M report
Board recommendation on the 2026 dividend50% of adj. profit, ~RUB 10May – June 2027

For reference: what we wrote earlier and what has changed. The preview to the 1H report came out on 26 August ([Telegraph](https://telegra.ph/Sovcomflot-2Q2026-Preview-08-26)). At a price of RUB 74.1 the guide then was EV/EBITDA 2026F of about 2.4x and a dividend of RUB 7–8 (about 10%), with the conclusion "a speculative buy". Since then:

Sources:

Open the company's financial profile FLOT →

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