Clarksons: Tentative Signs of Market Recovery

Case said the company has grown despite a challenging market

Shipping services group Clarkson PLC (Clarksons) says the shipping landscape improved in 2013, and interest in acquisitions of secondhand and efficient newbuilds is on the rise.

"Although volatile, the second half of 2013 did indeed bring with it some tentative signs of … recovery," the firm said.

"The year ended with the ClarkSea index up 79% (from an all-time low) and seaborne trade, growing by a healthy 3.8%, close to the 50-year average."

Clarksons notes that the market remains oversupplied with tonnage but says fuels costs are still pushing owners toward more investment in ships.

"The necessity to address bunker consumption has been a real driver and in many cases orders were placed at prices below the cost of building," it said.

"As new more fuel efficient designs start to deliver they will begin to put pressure on older tonnage."

Clarksons' revenues rose 12 percent year-over year to 198.0 million pounds ($329 million), while its profits before taxes were up 26 percent to 25.1 million pounds ($42 million).

"Despite a turbulent market backdrop, Clarksons has been consistently profitable and cash generative," said Chief Executive Andi Case.

"This has enabled us to continue to invest in the business during these challenging times, thus ensuring that we are positioned for growth as activity in our markets resumes."

Case said the firm's employee count grew to more than 1,000 in 2013 and it now has 42 office locations.

"One area of particular focus in 2013 was to continue the progress within Clarkson Capital Markets," he said.

John Denholm, president of the Baltic and International Marine Council (BIMCO), said in January that demand for efficient ships, driven by high bunker prices, is resulting in a "worrying amount of ordering."