Clarksons profit jumps as shipping markets recover

Clarksons profit jumps as shipping markets recover

Ship brokers and ship owners are benefiting from stronger demand in global trade.

Clarksons’ first-half profit jumped 25 percent year over year as the world’s largest ship broker benefited from recovery in some shipping markets.

Port statistics from nearly 150 locations worldwide show that global container shipping volumes grew 6.6 percent year over year in the first half, while deep-sea and regional trade figures show similar gains, according to maritime analyst Drewry. At the same time, freight rates on the major east-west trades are up double digits from last year.

The London-based company booked a pre-tax profit of £21.9 million ($28.5 million) compared with £17.5 million a year earlier as revenue rose to £156.8 million from £147.2 million.

“As we see signs of a rebalancing across some of the shipping markets, we are optimistic in our ability to capitalize on the upturn in the market when it occurs, whilst maintaining the strength of the underlying business,” said Chief Executive Andi Case.

“Nevertheless, in the short-term, low activity in the newbuilding market and a predominance of spot over longer-term period business continues to limit forward visibility of revenues.”

The first half saw some improvement in the container sector, following the “severely pressurized” conditions of 2016, Clarksons said.

“Box freight rates appeared to have bottomed out last year, and although rates on most trades have remained volatile, they remain significantly above 2016 average levels.” For example, the most recent Asia-North Europe spot rate of $931 per TEU is up 20.8 percent year over year, while the Asia-US West Coast rate of $1,641 per FEU up 31 percent, according to Shanghai Shipping Exchange data on JOC.com’s Market Data Hub.

Charter ship rates received a boost late in the first quarter of 2017 and moved sideways in the second quarter, though there were some differences across size sectors.

The one year rate for a 2,750-TEU vessel stood at $9,000 per day at the end of June, 49 percent above the level at the end of 2016, and the charter market “basket” rate index rose by 23 percent.

Despite surplus capacity building up in recent years, sector fundamentals look set to continue to improve following a robust 2017 to date, Clarksons forecasts.

Contact Bruce Barnard at brucebarnard47@hotmail.com.