Revenue from ship management climbs to a new three-and-a-half year high

Revenue from the ship management industry in the first half of 2018 amounted to Euros 506 million, or 5.1% of Cyprus’ GDP, the highest level since 2013, while marking a new three-and-a-half year high in absolute terms.

According to the Central Bank of Cyprus ship management survey, in absolute terms, revenue for the period of January � June 2018 marked an increase of 6.3% compared with the second half 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 2018 compared with 37% in H2 2017. Russia followed in 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 b Greece with 5%, Singapore with 4% and Norway and the UK with 3%.

Ship management expenditure remained broadly unchanged amounting to Euros 435 million in the first half of 2018, compared with Euros 436 million 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.

Stabilization 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 added.

In a press release the Cyprus Shipping Chamber welcomes 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 adds that “it is worth mentioning that, in a very few other maritime nations, the economic contribution of the local shipping industry reaches such high level.”

Source: Cyprus News Agency