Clarksons, the world’s biggest shipbroker, has enjoyed a record year for earnings, boosting its investment firepower.
The London-listed company said underlying profit before tax was its best ever at £100.9m ($121.5m) in 2022, up from £69.4m a year ago.
Net earnings were £79.6m, compared to £54.4m in 2021.
There was a particularly strong performance in the shipbroking division, which delivered a pre-tax profit of £117.6m, up £44m over the year.
The dividend rose to 93 pence, a 20th consecutive year of growth, and the forward orderbook for 2023 was $216m, up 30.9% from the year before.
Clarksons now has free cash resources of £130.9m available for future investment, up from £92.3m at the end of 2021.
Revenue grew to £603.8m from £443.3m year on year.
Chief executive Andi Case said: “Whilst the global geopolitical outlook for 2023 and beyond remains uncertain, the green transition is driving significant activity in our industry.
“This, coupled with a supply and demand balance that will create meaningful supply-side constraints supporting the market, and our strong forward orderbook, gives us confidence in the outlook for Clarksons.”
Limited financing
Case believes supply and demand are in constant motion, with fleet profiles the oldest for more than a decade.
“Financing availability is tight, and interest rate rises together with inflation are impacting on the cost of building,” he said. “It is clear to see there are still significant constraints on the scale of shipbuilding.
Case added that the need of clients to predict, record and analyse emissions data to reduce their footprint on an ongoing basis has never been higher, which means the group’s services in broking, research and technology are in big demand.
Case said the S&P team had a very successful year as demand for vessels was high.
This was despite there being a significant volume of transactions involving the “shadow fleet" of tankers carrying out sanctioned trades.
Rogue tanker deals off-limits
Case said the business was “off-limits” to Clarksons’ teams.
He added that the group has invested in know your client (KYC) operations following the start of the war in Ukraine.
“Our clients want to understand the implications of dealing with all parties within their entire network, and their recognition that wilful ignorance is not acceptable means that they value Clarksons’ market-leading systems and commitment to transparency,” Case said.
The number of secondhand deals was second only to 2021, with more than 134m dwt of vessels worth $57bn changing hands globally.
Tanker sales hit a record $18bn involving more than 700 ships, or over 10% of the fleet capacity.
Recent S&P trends among the major shipowning countries continued, with Greek owners still the biggest buyers and sellers of tonnage in 2022, although Clarksons said Chinese entities were also active in acquiring vessels.
Major newbuilding transactions
On the newbuilding side, Clarksons pointed to “significant market-leading transactions”, particularly for car carriers arranged by the Oslo desk.
There were also major industrial-backed projects in tankers and gas carriers.
Clarksons said the financial division faced tougher conditions in 2022, with an adverse macroeconomic and geopolitical environment leading to a pause in capital raising.
Several transactions, which were due to be completed in the second half of 2022, are now expected to close in the first half of this year.
The division produced a pre-tax profit of £7.8m in 2022, versus £13.3m in 2021.
Clarksons Research produced earnings of 14.8% to £7m, up nearly 15%.
