Rev­enue from ship man­age­ment climbs to a five-year high

Financial Mirror (Cyprus) - - SHIPPING -

Rev­enue gen­er­ated by the Cyprus ship man­age­ment in­dus­try in the first half of 2018 amounted to EUR 506 mln, or 5.1% of GDP, the high­est level since 2013.

In­come in­creased by EUR 30 mln in H1 on the same pe­riod of 2017.

Ac­cord­ing to the Cen­tral Bank of Cyprus ship man­age­ment sur­vey, in ab­so­lute terms, rev­enue for the six­month pe­riod of Jan­uary – June 2018 saw an in­crease of 6.3% com­pared with H1 of 2017, and 7.3% on an an­nual ba­sis.

The new rise in rev­enue came as global ship­ping and freight mar­kets are re­cov­er­ing from the strong down­turn since the global fi­nan­cial cri­sis.

“The global ship build­ing in­dus­try is cur­rently re­cov­er­ing from the strong down­turn ex­pe­ri­enced dur­ing the fi­nan­cial cri­sis, as demon­strated by the grad­ual rise in ves­sel prices and the in­crease in or­der in­quiries,” the CBC said.

Ship man­age­ment steadily re­mains an in­ter­na­tional in­dus­try as 90% (down from 94% in H2 2017) of the rev­enue came from ships with a for­eign flag, while the share of rev­enue from Cyprus-regis­tered ships in­creased from 6% to 10%.

Ac­cord­ing to CBC data, Ger­many re­mains the in­dus­try’s big­gest mar­ket with its share ac­cel­er­at­ing to 47% in H1 2018 com­pared with 37% in H2 2017.

Rus­sia is sec­ond place with its share ris­ing by 3% to 7%, equalling Malta. Rev­enue orig­i­nat­ing from Switzer­land amounted to 6% (down from 8% in H2 2017), fol­lowed by Greece with 5%, Sin­ga­pore with 4% and Nor­way and the UK with 3%.

Ship man­age­ment ex­pen­di­ture re­mained broadly un­changed amount­ing to EUR 435 mln in the first six months, com­pared with EUR 436 mln in H2 2017, with 59% of the spend­ing directed to pre­dom­i­nantly non-EU sea­far­ers.

Ship man­age­ment ex­penses ac­counted for 21% of to­tal spend­ing while 20% was at­trib­uted to ad­min­is­tra­tion ex­penses.

“Sta­bil­i­sa­tion of ex­penses are ex­pected to im­prove the fi­nan­cial health of the com­pa­nies, in light of the un­cer­tainty that is still sur­round­ing the ship­ping sec­tor glob­ally, as re­cent sources of un­cer­tainty in­clude the rise of pro­tec­tion­ism in global trade and the ris­ing cost of oil,” the CBC said.

The Cyprus Ship­ping Cham­ber wel­comed the re­sults not­ing that they “prove once again the con­tri­bu­tion of Cyprus ship­ping, as it re­mains one of the most im­por­tant “blood donors” of the Cyprus econ­omy with tan­gi­ble prospects for fur­ther devel­op­ment.”

It added: “It is worth men­tion­ing that in very few other mar­itime na­tions does the eco­nomic con­tri­bu­tion lo­cal ship­ping in­dus­try reaches such high level.”

Cyprus ship man­age­ment is the world’s third largest hub while the mar­itime clus­ter, in­clud­ing ship own­er­ship and other mar­itime ser­vices, con­trib­utes around 7% to the is­land’s GDP. https://www.cen­tral­bank.cy/images/me­dia/pdf/SMS-2018H1AA6.pdf

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