StockMarketWire.com
Clarkson has warned that profits for 2016 will be materially lower than last time.

The group says that since the annual general meeting, the Clarksea index has fallen a further 10%, so that its average level for the first six months of 2016 was 30% lower than for the first half of 2015.

The Baltic Dry Index has similarly fallen sharply year on year, testing all-time lows during the first quarter of 2016.

This deterioration in freight rates reflects the increase in global economic uncertainty and the continuing imbalance between supply and demand in shipping and offshore.

Clarksons says the recent recovery in the oil price has driven the return of some activity within offshore broking, however the offshore industry remains depressed and will require this recovery to be sustained for some time before confidence returns and meaningful volumes start to come through. Overall transaction volumes within the broking division have continued to grow, but the fall in freight rates and asset values has both impacted revenues and driven the market to be spot focussed with little newbuilding activity. This combined with quiet capital markets and weak investor confidence has reduced activity within the financial division.

Whilst recent strengthening of the US dollar against sterling, if sustained, will offer some limited enhancement to reported profits, the Board nevertheless now anticipates that profits for 2016 will be materially lower than the full year 2015.

The Clarksons business does however remain highly robust, evidenced by the significant growth in volumes within broking, sales growth in research, an encouraging mandate pipeline within the financial division and a strong balance sheet.

The group will release its interim results for the six months ending 30 June on 15 August.

StockMarketWire.com
Clarkson warned on Monday that profits for both the first half and the full year were expected to be materially lower, amid a challenging environment in shipping and offshore capital markets.

'The challenging environment in shipping and offshore capital markets has led to transactions being pushed back within the financial segment and has compounded a quiet period in sale and purchase activity for the group across shipping and offshore,' the firm said.

The firm cited lower freight rates within the tanker market and a fall in the value of the US Dollar as additional headwinds expected to weigh on performance.