Shipping group Clarkson hails record year as freight rates swell on soaring demand for consumer goods and limited supply of ships
- The FTSE 250 firm has decided to raise its dividend for the 19th successive year
- Earnings from chartered containerships reached their highest levels ever in 2021
- Clarkson’s tankers arm was negatively affected by a fall in oil supply and demand
Shipbroking firm Clarkson boasted its strongest year ever in 2021 as the global economic recovery and shortage of ships combined to cause a surge in freight rates.
The FTSE 250 business has raised its dividend for the 19th successive year on the back of annual revenues and underlying pre-tax profits climbing to their highest amount in history last year.
Container freight rates and earnings from chartered containerships reached their best levels ever last year, thanks to significant port congestion and a rise in the volume of products transported by global containers.
Boom: Clarkson has decided to raise its dividend for the 19th successive year on the back of annual revenues and underlying pre-tax profits climbing to their highest amount in history
Clarkson attributed this increase in trade to economic stimulus measures by governments across the world, the release of pent-up demand and consumers desiring goods more than services.
Buoyant trade also helped dry bulk rates hit their highest levels in 13 years as expanding hauls of iron ore and coal, combined with lockdowns in many Southeast Asian countries, sent the cost of shipping goods soaring.
There was even a rare growth in freight rates during the first quarter as a result of China’s economy bouncing back, while delays at the country’s ports were intensified by harsh rules on changing crew and quarantining.
Revenue from Clarkson’s broking division, which forms around three-quarters of its total sales, rose by about a fifth for the year and profits rose by around one-third to £73.6million.
This helped offset a much weaker performance by its tankers division caused by Covid-19 restrictions reducing oil supply as demand for petroleum recovered.
Nonetheless, Clarkson is forecasting an enduring resurgence of oil demand and supply this year, alongside further growth in its research, support and sea divisions, and a persistently strong performance by its broking arm.
In optimistic remarks, company chairman Laurence Hollingworth said: ‘In 2022, we expect the favourable supply/demand dynamics to continue.
‘The supply of new ships continues to be affected by the structural reduction in shipbuilding capacity compared to 2008 whilst the economic recovery from the COVID-19-induced pandemic has strengthened the demand side.
‘We have a very strong forward order book, and the outlook for freight rates remains positive.’
Hollingworth added: ‘We remain conscious of the current geopolitical uncertainty, which could impact sanctions, exchange rates and commodity supply, alongside the global backdrop of inflationary pressures and rising interest rates.
‘The team is therefore extremely focused on intelligence, analysis and relationships to ensure that we are well placed to support our clients as the market continues to evolve.
Clarksons shares shot up 7.7 per cent to £33.55 on Monday, making it the sixth-highest riser on the FTSE 350 today, although the value of its shares is around 20 per cent lower than it where was six months ago.