Andi Case: ‘Time to look seriously at tankers’

Clarksons chief executive sees positive stories across both crude and products tankers.

Clarksons believes the crude and product tanker markets have bottomed out and now is the time for shipowners to look at the sector.

The world’s largest shipbroker today reported an upturn in profit, helped by improvements in the dry bulk and container markets and a strong showing from its finance business.

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It came amid a generally positive read of shipping markets, which were described as in the early innings of a recovery.

Andi Case, chief executive of Clarksons, told TradeWinds: “We think tankers is at its low point and we think it’s the right time to be looking very seriously at the tanker market.”

“There are lots of positive stories across products and crude oil that we see as underlying supporting a case to say we are looking at stronger tanker markets going forward.”

Clarksons this morning reported an underlying profit before tax of £50.2m ($69.63m) for 2017, beating the £44.8m seen in 2016.

Underlying profit from shipbroking reached £43.9m in 2017, passing the £40.2m of a year earlier.

Case described 2017 as a successful year for the division and extremely successful for the sale and purchase department, with revenue up across the desks.

“We are very pleased, whatever the market sector, with the teams' performance in delivering that volume into the market place,” Case said.

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Colin Smith, an analyst at Panmure Gordon, forecasts Clarksons will continue to see profit rise in the coming years.

He projects the underlying result will reach £60.1m in 2018 and touch £71.0m by 2020.

“We are starting to see much more positive economic data coming out from all areas of the world and that is the key driver for shipping,” Case said.

“The shipping industry also has a lot of regulation coming in and coming through and this is going to have its impact as well.”

While Case cautioned it was difficult to generalise given the different dynamics of the various markets, he said Clarksons was optimistic about the direction they were heading overall.

“The question always for shipping is how long and when that optimism will start to deliver? That is a little bit of a crystal ball and balances of demand and supply in each of those markets,” he said.

d8b653dbf4d193c6f90409b3c79944d9 Clarksons executive Jeff Woyda. Photo: Clarksons

Clarksons raised its dividend to 73 pence, marking the 15th year in a row that a higher payment has been made to shareholders.

Shares in the world’s largest shipbroker were trading up almost 2% at £33.55 each following the results, which Gerald Khoo of Liberum said showed encouraging progress.

Finance and operating chief Jeff Woyda told TradeWinds there appeared to be a little bit more appetite for shipping in the London finance market.

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“I think people understand shipping a little bit more than they used to and hopefully we have been helping that by going out and talking about shipping in general and how it impacts our market,” he said.

Case noted that Clarksons' investor following extends beyond the city, with a number of international shareholders, including many in the US.

“Shipping is a global business and we are a global organization,” he said.

“We don’t think of ourselves as a London company. We are often talked about in the press as the London shipbroker. We are not just a shipbroker and we are not just London."