Murmansk Fish Port at crossroads

April 24, 2007 16:20

OAO Murmansk Fish Port (plc) fully owned by the government as represented by the Russian Federal Property Agency Rosimuschestvo, seems to be recovering after a period of financial troubles as the balance sheet profit through the first three months of the current year 2007 reached the break even point versus the loss of RUR24.6 million through the same period last year. The financial result from principal activity amounted to plus RUR2.1 million compared to minus RUR23.6 million in January-March 2006, port's director Vladimir Sokolov told a press-conference in Murmansk on 18 April.

In January 2007 Murmansk Fish Port handled a mere 7000 metric tons of fish products and in February the volume rose to 8700 tonnes. By contrast, in March the port's seafood turnover exceeded 26,000 tonnes. The above volumes could be regarded record high for recent years. As per 18 April 2007, the company's coldstores were filled nearly at 100%.

At present the number of employees working for Murmansk Fish Port amounts to 1434 people. The average wages of port employees in the first quarter 2007 amounted to ca.RUR15,000 per month and the average wages of mechanized docker were RUR27,500. For comparison, in the first quarter 2006 the average wages were on a par, while the dockers earned no more than RUR17,000. As per mid-April 2007, the port still had wage arrears, though they were getting smaller and the payment delay was less than one month.

According to the company's director Vladimir Sokolov, the above mentioned positive changes have been achieved thanks to support from the local shipowners.

In order to maintain the first quarter success through the whole year 2007 Murmansk Fish Port should handle 390,000 tonnes of fish products. However, the volume as great as above seems unpractical for the company and now the port is searching for alternative cargoes, such as gravel, cement, etc. In order to attract extra seafood cargoes Murmansk Fish Port made contracts with OOO Robinzon (ltd) and OAO Murmansk Trawl Fleet (plc).

Vladimir Sokolov says, that in the future it is important to restore the port's first cargo area, however the project will need large investments. Now the first cargo area of the fish port has got worn-out berths which should be completely rebuilt. A similar challenge for the port will be to reanimate its coal base.

Another way to improve the company's financial situation is to lease its empty premises with the total earnings estimated at RUR18 million. Along with the above, the port is negotiating a review of the agreement for lease of the oil terminal towards increasing the rent.

At the same time, the port's leaders realize that they will hardly end the current year with positive financial results. Therefore, the company's general director has set the goal of finishing the year with a minimal loss of RUR30 million. This is rather a challenge because as per mid-April the port had large debts. Through the previous year 2006 the firm's debts amounted to nearly RUR170 million. Vladimir Sokolov admitted that Murmansk Fish Port has fallen into the deepest economic hole as compared to other ports in Russia and the main goal for its leaders is to bring it out of crisis.

Privatization

Sokolov says that Fish Port should not be sold to private owners in the next couple of years. Meanwhile, the Russian government rejected the law on sale of the port's shares which was scheduled for the year 2007. Vladimir Sokolov thinks that the port should remain the province's property, because that would let the city retain the port and its seafood profile.

New director

Vladimir Sokolov was appointed general director of Murmansk Fish Port by Rosimuschetsvo on 12 April 2007 for a period of 3 years. The Board of Directors elected Yuri Medvedev, deputy head of the Federal Property Agency, Chairman of the Board.

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