Clarksons broking division performs 'well' in Q1; H1 to be impacted by Covid

Shipping services provider Clarksons said on Tuesday that its broking division performed well in the first quarter, but the financial business was "very quiet" and the support division was hit by a downturn in oil and gas related activities.

The company, which continues to expect its first half to be affected by the coronavirus pandemic, said the broking division had seen an increase in new business executed compared to the same period last year. All sectors made a valuable contribution, but the tanker sector and wet futures were particularly strong, with rates and volumes benefiting from the recent volatility of oil markets.

As expected, the financial division had a very quiet three months to the end of March, with almost all activity in the capital markets having ground to a halt. As a result, securities revenue, including that from advising on primary transactions, has been "extremely limited", Clarksons said.

A small restructuring, which was planned late last year, has been put in place to reduce ongoing overheads.

In the support division, there was an inevitable downturn from oil and gas related activities, but renewables, short sea broking and port agency remain active, while overall the business is profitable.

"The impact from Covid-19 on both demand and supply has varied locally and by market. Ultimately, the effect on shipping of the anticipated reduction in global GDP will depend on both the time to, and speed of, recovery," the company said.

"The ongoing nature of this uncertainty is particularly negatively impacting the financial markets. We therefore continue to believe, as highlighted in the company’s full year 2019 results issued on 9 March 2020, that the company's performance will be impacted in the first half of 2020."

Clarksons said it was too early to quantify the potential effects on its full-year financial performance but that it remains "confident" in its medium-term prospects.