Clarksons Port is posting its highest profits and earnings ever as a shipbroker due to congestion and heavy energy demands
- Revenue from the world’s largest ship broker rose 40% to £266.7 million in the first half. done
- The heavy congestion in the ports helped the group’s brokerage division in particular
- Clarkson had increased the interim dividend payout to 29 pence per share from 27 pence
Clarksons shipping company posted record revenue and profits as it benefited from rising freight rates amid ship shortages and strong oil and gas demand.
Revenue for the world’s largest shipping broker rose 40 percent to £266.7 million in the first six months of 2022, thanks to strong performance across its businesses.
Heavy congestion in the ports helped the group’s brokerage business in particular, as did rising oil and gas prices.
Windfall: The global shipping industry has raked in tens of billions of pounds in profits during the COVID-19 pandemic as companies have increased sea container freight rates
The war in Ukraine has prompted many companies and governments to seek essential commodities such as corn and wheat in far-flung places, causing dry bulk prices to hit their highest levels in the second quarter in 14 years.
In addition, Clarkson said that its product tanker earnings from the war were “significantly strengthened” due to increased refining margins and refining outputs, as well as longer voyages by ships transporting oil.
This helped boost the FTSE 250 company’s pre-tax profit by more than £42m and allowed it to increase its interim dividend payout from 27p to 29p per share – the 20th consecutive year it has increased the dividend .
The global shipping industry experienced a boost in profits during the COVID-19 pandemic as companies increased sea container freight rates.
Last October, the Baltic Dry Index – a measure of the cost of transporting commodities such as coal and iron ore – hit over 5,700, the highest level since the 2007-08 global financial crisis.
Lockdowns around the world, particularly in China, in many of the world’s busiest ports, such as Shanghai and Shenzhen, are partly behind this phenomenon.
But it has also been caused by a shortage of staff on ships and docks, leading to delays in the delivery of products, while some shipping companies have accused price fixing.
Andy Case, Clarkson’s chief executive officer, said the company had been sounding the alarm for several years about the impact of yard closures, weak orders for new container ships and tight ship financing on supply chain problems.
He expects the business to continue to benefit from the current situation for some time to come, with continued strong freight rates and assets and further gains from the switch to renewable energy.
Case said: ‘The business outlook remains strong due to structural supply constraints in the global shipping fleet and we continue to benefit from our international footprint, our leading market position, our diversified offering and our deep understanding of the energy transition.’
Despite the strong results, shares of Clarkson fell 3.9 per cent to £34.15 on Monday afternoon, even though its value has risen nearly 70 per cent over the past two years.
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