The world of shipping is more complicated today than it has ever been, but UK shipbroking giant Clarksons sees opportunity in helping clients to understand it, according to its chief executive.
The London-listed broker on Monday reported positive results for the first half of the year, after which its shares hit an all-time high of £34.55 ($47.92) during intra-day trading.
Clarksons' core shipbroking business recorded £900,000 more net income in the first half of this year than in early 2020.
But Clarksons' bottom line has also been aided by its expanded consultancy services in helping clients understand, plan for and comply with changing environmental requirements, Case said.
Its dedicated "green transition team", as Case calls it, has been around for a while but has been enlarged over the past six months.
"We've been operating green projects for about three to four years, [but] they've been much more bespoke around specific clients and a specific client needs," he explained.
The service has since been broadened and offered across all Clarksons' markets, not just because of the monumental challenge of decarbonising shipping but because of the specific macroeconomic backdrop.
"You're in a very interesting moment in history," Case said.
"We're actually, suddenly short shipping supply. We've been calling now for the last two years that we were heading into this short shipping supply. And you've now had rapid inflation in commodity prices," he explained.
Add to that the green transition.
"All of that needs very careful navigation, so we do a lot of consultancy and then look at the execution at the back end of that," he said.
"Shipping is not the root cause of global warming. But everybody in the world has to step up and take their responsibility, and we're working to help companies to deliver that."
Shipping's environmental transition "touches every part of our business", whether it be Clarksons' research activities, green financing projects or new business opportunities coming from the renewables sector, added chief financial officer Jeff Woyda.
Rebound from a loss
Clarksons' positive first-half result follows a difficult 2020, which ended with Clarksons booking an annual loss as a result of an $84m pandemic-related impairment on its securities and offshore business.
Clarksons has had a strong start to the year, with profit for the first six months up by around 30% compared with the same period in 2020.
The London-listed broker booked profit before tax of £27.3m ($37.8m), compared with £20.9m in the first half of last year.
Earnings per share rose to 63.5 pence, compared to 50.6 pence in early 2020.
The result has allowed Clarksons to declare an interim dividend of 27 pence per share, two pence more than in the first half of last year.
But chief executive Case told TradeWinds that 2021 has been a different story.
"Last year, when we gave our interim results, we were definitely buoyed by the tanker market and this first half is almost the complete opposite," he explained.
"The oil and oil-related sectors have been the ones that are more challenged, and the dry bulk and the container [markets] being the ones that are actually showing the greatest strength."
Clarksons is now in its 19th consecutive year of paying out more and more in dividends, something of which the company is very proud, Case said.
Case said he hopes that the second half of the year will enable the firm to pay out more in shareholder distributions, after paying out £8.2m in dividends — or 27 pence per share — for the first half of the year.
"But obviously, the company is looking at numerous opportunities and ways to invest and grow," he added, without elaborating.
Good advice
Maritime is 'more complex' than ever
What keeps Case awake at night? Phone calls from clients in the middle of the night, he joked, as "people are still looking to do the right deals".
Case pointed out that the firm has set out a strategy and is focused on executing that plan.
"We've navigated the company through the world financial crash, we've navigated the company through Covid, a global pandemic, and those are two massive market moments, where the company's still managed to produce real results," he explained.
Case said Clarksons has long been viewed as a "moderniser" in its space and the firm wants to continue raising the bar.
"But it's also about meeting the needs of the market, and that's what a service provider's job is — you really have to understand the markets," he said.
"I think at this point in time that the maritime world is more complex than it's ever been.
"I think the challenge [shipping] is looking at and the solutions it's looking for are not easy decisions."
