Clarkson hit a 2023 record due to global disruption as shipbroker claims 20 years of consecutive dividend increases
- Clarkson has revealed its pre-tax profits jumped by £40m to £100.1m last year
- Conflict in Ukraine and high oil and gas prices have kept freight rates high
- Freight rates declined towards the end of 2022 as port disruptions eased
Clarkson posted another record annual performance and declared its 20th consecutive year of dividend growth, after the disruption in global trade kept freight rates high.
The world’s largest shipping service provider has revealed its pre-tax profits jumped by £40m to £100.1m last year, driven mainly by a strong result from its brokerage division .
Since Covid-related restrictions began to be eased around the world, freight rates have soared amid major port congestion caused by growing demand for cargo and a shortage of ships.
Lockdowns: Shipping rates have soared across the world amid major port congestion caused by growing demand for goods and a shortage of ships
Clarkson shares were 6.1%, or 200p, higher at £35.05 on Monday morning, making it the second best performer on the FTSE 250 index behind Aston Martin Lagonda.
The company’s share price has risen by about a quarter in the past two years.
Russia’s large-scale invasion of Ukraine and the resulting rise in oil and gas prices, which were already increasing due to post-Covid demand, kept the cost of transporting products down. high level.
Due to the conflict, many ships had to pick up certain dry bulk commodities like grain and coal, as well as petroleum or liquefied natural gas, from much more distant locations or make longer voyages for safety reasons. .
This led to the ClarkSea Index – a weighted daily average of vessel revenue and an important shipping metric – climbing 30% to a record high of $37,253 per day.
Although freight rates fell towards the end of 2022 as port disruptions eased and container trade came under increased pressure, Clarkson still managed to increase total revenue by more than a year. third to £603.8 million.
After paying an interim payment of 29p per share to investors in September, the group has recommended a final dividend of 64p per share, meaning it has now achieved two decades of successive dividend increases.
Amid heightened economic uncertainty, Clarkson told investors on Monday that “chronic underinvestment” and the need to decarbonize the shipping industry should further drive growth.
Chief Executive Andi Case said: “While the global geopolitical outlook for 2023 and beyond remains uncertain, the green transition is driving significant activity in our industry.
“This, coupled with a balance between supply and demand that will create significant supply-side constraints supporting the market, and our strong forward order book, gives us confidence in Clarksons’ outlook.”
Gerald Khoo, an analyst at brokerage Liberum, said the long-term decline in shipyard volumes has been exacerbated by a shortage of bank funding, contributing to the underordering of dry bulk carriers and tankers.
Capacity is further reduced by environmental legislation, leading to the early retirement of some vessels, as many financiers are unwilling to finance the retrofitting of older craft.