International shipping services company Clarksons has reported a rise in revenue and hailed its “strong trading” across all areas of its business.
Speaking as the interim results were announced Andi Case, Clarksons chief executive, said he believed the firm, which has offices in both Aberdeen and Lerwick, was “well placed” to capitalise on an improving demand within the industry.
He said: “I am delighted by the performance of Clarksons over the first half of the year.
“We have built a diverse, market leading business and the strategy continues to deliver shareholder value.
“The company generated significantly increased profits in the first half of the year, aided by a robust performance in our broking division and a strong recovery from our financial division.
“We are confident in the outlook for Clarksons, which is well placed to capitalise on
an improving demand/supply dynamic within shipping, offshore and renewables and from the wider global economic recovery.”
In its business review for the half-year, the ship broker said the first half of 2021 saw “slightly improved sentiment across the offshore oil and gas sector”.
It added: “Overall, the global offshore rig count seems to have bottomed out and we currently expect a slight increase throughout the remainder of 2021.
“Several restructurings have completed with, for example, some of the drillers emerging from Chapter 11 proceedings.”
It added that its growing business servicing the offshore wind sector was also gaining pace. It said: “The offshore renewables (wind) sector continues to see high activity levels and a steady stream of new development projects being sanctioned.”
Positive for offshore renewables
It said there was good visibility on projects and timings for the offshore renewables market with the pipeline of projects until 2025-26 starting to firm up.
In the subsea and field development market contractors have continued to build backlog, albeit moderately, Clarksons said.
However, some continue to face low fleet utilisation and declining revenues and earnings due to lag-effects.
Consequently, several contractors have released chartered vessels back to the market and announced cost reduction efforts which has had an adverse impact on subsea vessel owners who have continued to struggle to secure utilisation for their vessels.
Subsea market improvement ‘limited’
There is also so far limited improvement in the market for subsea inspections, maintenance and repairs (IMR) and although it has continued strong activity in the offshore wind segment has helped, there is a warning it is far from sufficient to cover the shortfall in subsea EPC/project work and IMR.
However, following backlog-build for the major contractors, more offshore field development work is expected to be executed in 2022 and beyond and is likely to coincide with increased IMR activities within oil and gas and continued high activity in wind. Combined, this should improve prospects for fleet utilisation and day rates.
Pre-tax profit & interim dividend on the up
In the six months to the end of June 2021, its reported pre-tax profit rose to £27.3m from £20.9m in the first half a year prior, on revenue of £190.1m, up from £180.4m.
Underlying pretax profit climbed to £27.5m from £21.1m – an increase of 30.3%.
Clarksons also raised its interim dividend to 27p from 25p, keeping it on course to deliver its 19th consecutive year of dividend growth in 2021.
Sir Bill Thomas, Clarkson’s chairman, said: “The outlook for Clarksons as a group is strong and the board believes we are in the early stages of a recovery in the shipping markets after a decade of unfavourable demand/supply dynamics.”
The group employs over 1,600 people in 54 different offices across its four divisions.
Clarksons Port Services (CPS), the group’s Aberdeen-based subsidiary, moved into new, larger premises on Matthew’s Quay in March this year.
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