UK shipbroking giant Clarksons is celebrating its best-ever annual profit in largely booming shipping markets.
But the company says it is “conscious” of geopolitical uncertainty as 2022 progresses.
The London-listed group logged net earnings of £54.7m ($72.1m) in 2021, up from £35.2m the year before.
Revenue jumped to £443.3m, compared with £358.2m in 2020.
The company is increasing its dividend for the nineteenth consecutive year to 84 pence per share.
New chairman Laurence Hollingworth added that he expects the favourable supply/demand dynamics to continue.
“The supply of new ships continues to be affected by the structural reduction in shipbuilding capacity compared to 2008 whilst the economic recovery from the Covid-19-induced pandemic has strengthened the demand side,” he added.
But the chairman warned: “We remain conscious of the current geopolitical uncertainty, which could impact sanctions, exchange rates and commodity supply, alongside the global backdrop of inflationary pressures and rising interest rates.”
Hollingworth explained that the team is focused on intelligence, analysis and relationships to ensure it can serve clients.
Chief executive Andi Case said he was proud of his staff.
A quality team
“It has been a challenging year, but the team has again shown its quality in successfully navigating the business through this period and positioning it to thrive as more favourable market conditions return,” he added.
The sale-and-purchase desk has had a “very high-volume” year, as increasing numbers of people want to buy into the upward trend in rates, the CEO said.
The newbuilding team too has been incredibly busy, particularly in LNG and container tonnage, with berth space, as anticipated due to reduced overall capacity amongst shipyards, now full for the foreseeable future, Case added.
The projects and period charter desk made “material” profit in 2021, enabling the group to significantly build the forward orderbook, the CEO continued.
“Unlike many of our competitors, we disclose only that element of the forward orderbook we believe to be secure and due to be invoiced in the following year,” Case said.
This figure at the end of 2021 was $165m, 42.2% higher than the $116m brought forward in 2021.
Shipbroking profit soars
Pre-tax profit from shipbroking was £73.6m, up £18.2m over the year, with a margin of 21.6%. Revenue was up at £340m from £282.6m.
Case said the company is starting 2022 with a positive market backdrop.
He added: “The supply/demand dynamics in the industry continue to be positive as the supply of new ships lags behind the ever-increasing demand for vessels driven by the green transition, increasing demand for commodities and a recovery in the global economy.”
Footprint expanded
The broking division benefited from the longer-term strategy implemented in recent years to increase the global footprint.
Dry bulk and container ship markets boosted performance, offset in part by weakness in the tanker sector.
The financial division performed exceptionally well, Clarksons said, recording a profit of £13.3m, up from £2.5m in 2020.
This reflected active capital markets across shipping, metals and minerals and renewables, and strong deal flow in shipping, offshore, and real estate project finance.
