Clarksons Beats Expectations

London-based shipbroker Clarkson PLC (Clarksons) has exceeded market expectations for the financial year of 2014 having recorded £ 237.9 million (around USD 358 million) in revenue, a 20% increase when compared to 2013.

The group’s underlying profit before taxation increased by 35% reaching £33.8 million and underlying earnings per share increased by 37%, Clarksons said in its annual report.

“Shipping and offshore is a multi-cyclical business and once again we face extremely challenging conditions in some markets. We continue to see a flight to quality and believe that our extended tool box underpinned by our strong balance sheet ensures we are best placed for long-term growth. We are delighted to maintain our progressive dividend policy for a twelfth year and we remain focused on shareholder returns,” commented Andi Case, Clarksons Chief Executive.

“2015 looks set to be a transformational year for Clarksons, as we combine the two leading businesses of Clarksons and Platou to create a fully integrated offer across shipping and offshore, broking and banking. We have a solid forward order book and, despite heightened challenges in some of our markets, we are confident that our proven strategy and best in class service will continue to provide enhanced returns for our shareholders, “ says James Hughes-Hallett, the group’s Chairman.

On 2 February 2015, the group concluded the acquisition of RS Platou ASA for a total consideration of £281.1 million.

Clarksons’ broking business posted USD 302.0 million in revenue against USD 251.0 million in 2013. The company’s forward orderbook for 2015 is forcast to reach USD 110 milion.

With regard to the market outlook, Clarksons said that with continued new ship deliveries in dry bulk sector expected in 2015, unless counterbalanced by slippage of newbuildings or scrapping which has already started, demand growth will struggle to correct the current supply/demand imbalance.

With regard to the container shipping business in 2015, demand growth is expected to outpace capacity expansion. Together with the rapid rate of demolition, the thin order book outside the larger sizes and a likely slowdown of the ‘cascade’, this may in the medium-term lend gradual support to the earnings environment.

Looking ahead, the tanker sector seems to be on the good track. According to Clarksons, seaborne oil products trade is expected to continue its robust growth, driven by several factors including the commissioning of more new refining capacity in the Middle East and the likely closure of further capacity in Europe and Australia. Lower oil products prices may also stimulate additional demand and higher trading volumes in the tanker sector.