Clarkson, the world’s largest ship broker, has no concerns about the trade war despite the reports on profit decline in this buzzy market conditions.
Only in greater good
The FTSE 250 company, which helps shipping companies buy tankers and container ships and secure freight contracts, saw pre-tax profits slump 18pc in the first half of the year to £18m but still trading had improved towards the end of the period and was positive on its longer-term prospects.
Jeff Woyda, chief financial officer, said Clarkson had so far seen no negative impacts as a result of escalating trade tensions between the US and much of the rest of the world, which have led to tariffs on a wide variety of commodities and manufactured goods.
Declining but not yet
Clarkson’s chief executive Andi Case admitted the row remained a risk but said “the impact of tariffs currently in force or proposed is estimated to be relatively limited”, adding that overall global shipping volumes were “expected to remain healthy”.
Revenues also dipped 2.5pc to £153m, in contrast the Clarkson’s broking and financial services arms outweighed growth in its research and support services divisions.
The profit slide did not come as a surprise to investors, however, after Clarkson warned in April that it was likely to suffer amid tough market conditions and a slump in the value of the dollar, the currency that it does most of its business in.
The other way around
Although the warning knocked around 20pc off its market value, it had a 12pc surge in its share price to £29.05 on Monday that reversed most of the declines.
Colin Smith, an analyst at Panmure Gordon, said: “Against a background of strong growth in seaborne trade the underlying health of shipping markets is improving.”
The ClarkSea Index, a measure of earnings across the industry, was up around 9pc on average across the period “and after a wobble early in the year is now pushing higher with signs that capital markets activity is also picking up”, he added.
Adapt to the change
Shipping companies are scrambling to prepare for a new cap on sulphur emissions set to come into effect in 2020.
Mr Woyda said Clarkson stood to benefit from the changes as its clients would need advice and support on how many or what steps they would need to take, including those to either buy new engines or adopt alternative fuels.
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Source: Telegraph
