The shipping company said it had “a very strong forward order book” and the outlook for freight rates remains positive.
Clarkson PLC (LSE:CKN) unveiled record results for 2021 with a 55% increase in underlying profits as shipping markets began to recover from the COVID-19 pandemic.
The shipping services company reported underlying pre-tax profits of £69.4 million for the year to December 31, 2021, compared to £44.7 million the previous year, on revenue up £443.3m from £358.2m.
“2021 has seen the start of a recovery in the shipping markets, with improved rates and rising asset values across many verticals, resulting from a better supply/demand balance, low backlog market orders and congestion resulting from COVID-19 and supply chain challenges,” said Clarkson President Laurence Hollingworth.
The brokerage and finance businesses showed a particularly strong performance last year, with brokerage pre-tax profits up £18.2m to £73.6m and finance profits up 13 £.3m vs. £2.5m.
Clarkson said its 2022 billing backlog totaled $165 million, a 42.2% increase from a year earlier.
It proposed a final dividend of 57p, taking its full-year payout to 84p, from 79p in 2020.
Commenting on the outlook for 2022, Hollingworth said Clarkson expects favorable supply and demand momentum to continue.
“The supply of new vessels continues to be affected by the structural reduction in shipbuilding capacity compared to 2008, while the economic recovery from the COVID-19-induced pandemic has bolstered demand. We have a backlog solid forward order growth and the outlook for freight rates remains positive,” he said.
Hollingworth noted that the current geopolitical uncertainty caused by Russia’s invasion of Ukraine could have an impact on sanctions, exchange rates and the supply of raw materials, which would be in the context of global pressures inflation and rising interest rates.
The company ended the year with free cash resources of £92.3m, up from £81.1m a year earlier.
The shares climbed 5.55% to 3,287.98p.