London-headquartered shipbroker Affinity (Shipping) has logged lower profit for 2023 in weaker shipping markets.
The private company continued its expansion in 2023, with new businesses starting in the US and South America, partnership secretary Christopher Chasty said in a report filed with the UK’s Companies House.
Net profit last year was down at £6.8m ($8.8m), against £11.8m in 2022.
Chasty called 2023 a “satisfactory year”, although he noted revenue was 9.5% lower at £56m and pre-tax profit fell 34.6% to £9.3m, reflecting softer market conditions.
Affinity, founded in 2014, said the average number of its members rose to 16 from 14 last year, with average profit per member at £868,000, down from £1.4m.
Chief executive Richard Fulford-Smith received a total package of £1.17m, up from $1.08m in 2022. He was the highest paid member.
Fulford-Smith told TradeWinds: “We had a tough year in 2023 in giving up on sanctioned business about which I have been very vocal.”
“Our profitability was significantly affected by our withdrawal from all tanker broking activity on sanctioned trades and our refusal to participate in ‘dark fleet’ sales. This accounted for a significant drop-off in our turnover in 2023, estimated at more than $20m across the two divisions affected, tanker chartering and sale and purchase,” the broker explained.
The CEO said: “We’ve got to stop this tanker trade, which is fuelling it all. And the more people that talk about it, the better.”
Fulford-Smith added he is calling for more regulation in the broking industry.
Earlier this year, the brokerage added former Braemar sale-and-purchase specialist Sebastian Davenport-Thomas and bought Vortex Shipbroking, a company set up by clean product broker Mike Rudd in May 2018.
Rudd and his son, Max, joined together with Simon Hammond on operations.
The accounts reveal Affinity paid £3.5m in cash for Vortex, plus a non-cash consideration of £500,000 and £1.5m deferred over three years based on performance targets.
The broker comprises tanker, dry cargo, LNG and sale-and-purchase divisions.
Affinity said the outlook for 2024 remains uncertain given the war in Ukraine and sanctions on Russia causing disruptions to international trade.
But the brokerage added it has sufficient financial resources to withstand the economic impact and to “take advantage of opportunities that will arise as new trading patterns emerge and the global economy continues its recovery”.
