Clarkson : Full Year Results Announcement 2023

4 March 2024

Clarkson PLC ('Clarksons') is the world's leading provider of integrated shipping services. From offices in 24 countries on six continents, we play a vital intermediary role in the movement of the majority of commodities around the world.

Preliminary results

Clarkson PLC today announces preliminary results for the 12 months ended 31 December 2023.

Summary

• Record underlying profit before taxation* of £109.2m (2022: £100.9m), an increase of 8.2%
• Underlying earnings per share* increased 9.9% to 275.0p (2022: 250.3p)
• Full year dividend of 102p, giving rise to a 21st consecutive year of dividend growth
• Forward order book for invoicing in 2024 was US$217m (2022: US$216m)
• Strong balance sheet with free cash resources* of £175.4m (2022: £130.9m) available for future investment

	Year ended	Year ended
	31 December 2023	31 December 2022
Revenue	£639.4m	£603.8m
Underlying profit before taxation*	£109.2m	£100.9m
Reported profit before taxation	£108.8m	£100.1m
Underlying basic earnings per share*	275.0p	250.3p
Reported basic earnings per share	275.2p	247.9p
Dividend per share	102p	93p

* Classed as an Alternative Performance Measure ('APM'). See 'Other information' at the end of this announcement for further information.

Andi Case, Chief Executive Officer, commented:

"2023 was a year of disruption in the maritime markets and I am enormously proud we have achieved another record year.

"The business today is a reflection of two decades' investment in our strategy, and we are confident in our outstanding team, our breadth of market-leading services, our technologies and our geographic reach to meet the growing needs of our clients in a world which is ever more complex.

"We are optimistic for Clarksons in the near, medium and long-term future."

Enquiries:

Clarkson PLC:	020 7334 0000
Andi Case, Chief Executive Officer
Jeff Woyda, Chief Financial Officer & Chief Operating Officer
Camarco:	020 3757 4983 / 4994
Billy Clegg
Jennifer Renwick

Alternative performance measures ('APMs')

Clarksons uses APMs as key financial indicators to assess the underlying performance of the Group. Management considers the APMs used by the Group to better reflect business performance and provide useful information. Our APMs include underlying profit before taxation and underlying earnings per share. An explanation and reconciliation of the term 'underlying' and related calculations are included within the 'Other information' section at the end of this announcement. All APMs used within this announcement are denoted by an asterisk (*).

About Clarkson PLC

Clarkson PLC is the world's leading provider of integrated services and investment banking capabilities to the shipping and offshore markets, facilitating global trade.

Founded in 1852, Clarksons offers its diverse and growing client base an unrivalled range of shipbroking services, sector research, on-hand logistical support and full investment banking capabilities in all key shipping and offshore sectors. Clarksons continues to drive innovation across its business, developing digital solutions which underpin the Group's unrivalled expertise and knowledge with leading technology.

The Group employs over 2,000 people in over 60 different offices across its four divisions and is number one or two in all its market segments.

The Company has delivered 21 years of consecutive dividend growth. The highly cash-generative nature of the business, supported by a strong balance sheet, has enabled Clarksons to continue to invest to position the business to capitalise on opportunities in its markets.

Clarksons is listed on the main market of the London Stock Exchange under the ticker CKN and is a member of the FTSE 250 Index.

For more information, visit www.clarksons.com

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018, as amended (together, 'MAR'). Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Chair's review

Overview

As the Chair of Clarkson PLC, I am privileged to report another set of record results. As I reflect on the drivers of this performance, despite all the disruptions to shipping faced throughout the year, I believe it comes down to a number of key factors, the seeds of which were planted many years ago. For a number of years, Clarksons has consistently invested in line with its strategy to build breadth and depth of services to its clients with leading positions in each segment. As a result, it has created a truly global company with local teams across all the key shipping geographies which are intrinsically connected to those localities.

Over this time, Clarksons has also built a large market data and intelligence capability and a technology platform, providing best-in-sector tools for trade so our outstanding colleagues can offer clients the best, most informed advice. We have strategically invested in the trends which drive our industry, whether it be the financing of the industry or, more recently, in shipping's green transition. With global trade continuing to grow in both volume and complexity, these strategic pillars of Clarksons are providing our clients with sector-leading advice, market intelligence and capabilities.

Results

The results for 2023 reflect the strength and diversity of our business model, as well as our ability to adapt to changing market conditions. Revenue increased by 5.9% to £639.4m, driven by strong growth in our Broking, Support and Research divisions, as well as responsible treasury management. Underlying profit before taxation* increased by 8.2% to £109.2m. We have maintained a strong balance sheet, with net assets of £456.6m (2022: £413.2m) and free cash resources* of £175.4m as at 31 December 2023 (2022: £130.9m).

Dividend

In line with our progressive dividend policy, the Board has recommended a final dividend of 72p per share, bringing the total dividend for 2023 to 102p per share, an increase of 10% compared to 2022. This reflects our confidence in the future prospects of the Group and our commitment to continued delivery of shareholder returns. We are proud of our dividend growth track record, 2023 being our 21st year of consecutive dividend increases.

People

Our people are unquestionably our most important and valuable asset and the key to our success. We have a talented, diverse and dedicated team of over 2,000 employees across more than 60 offices in 24 countries, who share our vision and values. We continue to invest in their development, wellbeing and engagement, as well as in attracting and retaining the best talent in the industry. Our specialist teams are deeply embedded in their markets, enabling us to retain our market- leading positions across each market segment. I would like to take this opportunity to thank all my colleagues for their hard work, commitment and dedication to both Clarksons and to our clients.

Giving back

We are proud of our long-standing tradition of contributing to the communities where we operate and the causes we care about. In 2023, through The Clarkson Foundation, we made donations to various charitable initiatives, both at home and around the world. We have also supported many of our employees' volunteering efforts throughout the year.

We are also leading positive change by continuing to invest in the growth of our Green Transition team, which is importantly helping our clients to reduce the impact of shipping on the environment.

Board

I am grateful to my fellow Board members, whose strengths and diversity of experience bring a range of skills and perspectives to the boardroom table. In February 2024, Birger Nergaard had served nine years on the Clarksons Board. He has agreed to stay on the Board until our AGM in May 2024 where he will not be standing for re-election. A search for a new non-executive director has commenced and we will make a further announcement when appropriate. We thank Birger for his important contribution to the development and governance of the Group and wish him well for the future.

Outlook

We are optimistic about the route ahead of us. Sector trends remain favourable, global trade continues to grow in both scale and complexity, and the green transition in shipping is moving ahead apace. We believe that Clarksons is well-positioned to capitalise on these trends and opportunities, with a consistent and clear strategy, and a strong market position serving a loyal client base which is having to navigate more challenges. Sustained investment in our strategy has given us a competitive edge. With a record forward order book of secured 2024 revenues of US$217m, the Board looks to the future with confidence. I would like to take this opportunity to thank my colleagues, our clients and our shareholders for their support as Clarksons continues to play a critical role in powering, feeding and connecting the world, regardless of the unexpected challenges the trading world presents. Clarksons is an outstanding business.

Laurence Hollingworth

Chair

1 March 2024

Chief Executive Officer's review

2023 was a year of disruption in the maritime markets and I am enormously proud of, and grateful to, my colleagues across the business, who have together achieved another record year. Seaborne trade has continued to grow, and the increase in shipping demand has been exacerbated by tonne-mile impact arising from a variety of disruptions, be they climate or geopolitical -related. Our results reflect our resilience, agility, and market leadership as we provide integrated advice, intelligence and services to clients, helping them make better decisions in increasingly complex times.

We have highlighted the impact of supply and demand dynamics in the shipping industry for the past few years, and the supply side remains tight in most sectors. Shipbuilding capacity is limited, the cost of building new vessels has risen with increased input costs, and financing is expensive. The green transition and the need for alternate-fuelled ships has exacerbated the squeeze, with owners being hesitant to commit to newbuilds while uncertainty remains about which fuelling technology to move forward with. As a result, the average age of the global fleet is increasing. The global fleet grew by just 3% during the year, and the global orderbook, which is still only 12% of the fleet, is highly skewed towards container and gas in the near term, which is likely to result in constraints for other markets.

Demand-supply dynamics have supported various growth drivers including global seaborne trade, increased complexity in the energy supply chain, global economic growth and rising global energy consumption. Climate, environmental issues and the green transition have played a part here too. Vessels are being run at reduced speeds to lower emissions as corporates and consumers intensify their scrutiny on carbon emissions, and reduced water levels in the Panama Canal have slowed the passage of ships through the waterway and forced many to take alternative, longer routes. The inclusion of shipping in the EU's Emissions Trading System has created even greater demand for vessels, both now and for the future, which meet the requirements of both customers, who are demanding more carbon-efficient journeys, and the regulators.

The shipping markets have also had little respite from geo-political challenges since the turn of the decade. Disruptions to trade routes in any form pose challenges that reach far beyond the world of shipping. The need for the movement and surety of food, energy and goods is paramount to keeping both businesses and countries moving globally. It is in times such as these that the shipping industry has to adapt to meet new challenges. Clarksons' data and intelligence, market coverage, flexibility and depth of connectivity ensures that our clients have the tools and information to make the best decisions and maintain trade flows as efficiently as possible.

Broking

The Broking division had another successful year. Energy shipping led the way, with gas, tankers, specialised products, offshore and car carriers all experiencing strong conditions and dry bulk and containers freight rates rallying later in the year.

As global trends evolve, Clarksons' strategy to invest in all areas of shipbroking has ensured that we are able to support our clients across both mainstream and more niche markets, in every vertical. Within the car carrier market, electric vehicle manufacturers and their customers are increasingly requiring carbon-neutral delivery of both components and end products, and Clarksons' expertise in the green transition has enabled us to assist our clients' investment into this important market.

The offshore sector has seen a recovery this year as global disruption to energy supplies has created a buoyant market in which increased utilisation rates have led to a supportive rate environment. When Clarksons acquired RS Platou in 2015, we became the world's largest offshore broker with a team of unrivalled scale and expertise in the marketplace. This market- leading position now optimally positions us to capitalise on the sector recovery in 2024 and beyond as long-term targets for energy security, offshore supply and renewable energy are becoming increasingly important.

The sale and purchase team had another very successful year as demand for secondhand vessels was high, and we delivered strong newbuilding activity within the Group. Clarksons' market-leading global teams and analysts have again assisted our clients with their strategy and execution.

Segmental profit before taxation from Broking was £121.2m, up £3.6m over the year, with a margin of 23.5%.

Financial

The Financial division had a more challenging year as the real estate sector and global capital markets remained quiet. Many clients in shipping have taken advantage of the markets to pay down debt, however the team has been involved in most of the sizeable transactions in the shipping industry and continues to develop and evolve its offering to meet clients' needs. The Financial division plays a critical role in Clarksons' integrated offering for clients and secures Clarksons' position as the only full service provider in the sector. The Financial division produced a segmental profit before taxation of £6.6m in 2023 compared, with £7.8m in 2022.

Support

The Support division in the UK, EU and Egypt had an excellent 12 months as its agency, customs clearance, canal transit and Gibb Group, its PPE and safety & survival supplier, all performed very well. Clarksons Port Services acquired DHSS early in 2023. This business is now fully integrated and has exceeded management's expectations at the time of the acquisition. Investment in office and warehouse facilities in Aberdeen has introduced new technology and capacity, enabling us to serve more clients and work more efficiently.

The Support division produced a segmental profit before taxation of £6.4m and a 11.3% margin in 2023 (2022: £5.0m and 12.8%).

Research

Clarksons Research is renowned as the standard bearer across the industry, with the division delivering proprietary data to both our teams and our clients to enable better decision-making. The quality of the team's unparalleled analysis and understanding of global megatrends and trade complexities, including the green transition, energy transition and fleet evolution, has resulted in recurring revenues in excess of 85% as clients seek consistently high-quality data and commentary to manage their business decisions.

The division increased segmental profit before taxation by 20.0% to £8.4m (2022: £7.0m).

Sea

We are very pleased with the progress the Sea platform has made this year as regulation, risk requirements and increasing trade complexities have led clients to seek improved governance and efficiencies in their contract management. Our investment in Sea has created an opportunity from this market trend. Revenue, both one-off and recurring, has increased, and the volume of contracts fixed on the platform continues to rise. We acquired MarDocs and brought Recap Manager back into the business over the period, further accelerating Sea's progress in digitising and managing chartering workflows from pre-fixture negotiation to at-fixture documentation.

Outlook

The business today is a reflection of two decades' investment in our strategy, and we are confident in our outstanding team, our breadth of market-leading services, our technologies and our geographic reach to meet the growing needs of our clients in a world which is ever-more complex. We nurture long-term relationships with clients and we have built a business which helps support them with their decision-making.

These investments have set the foundations for the business into the future and we are optimistic in the outlook for Clarksons in the near, medium and long term. We are unwavering in our commitment to growth and our strong forward order book for delivery in 2024 only, which stands at US$217m, together with our much larger forward orderbook which stretches further into the future, gives us growing forward visibility and the confidence to continue to invest in our capabilities across the business. Our strategy of investing in market-leading positions, pioneering technology, top teams, and continually increasing the breadth and depth of our advisory capabilities has optimally positioned us to capture future opportunities in the global shipping markets. We will continue all elements of this investment strategy and seek further opportunities for M&A.

Supply and demand dynamics and the impact of the green transition, which is still in its early stages, ongoing trade disruptions and other geo-political, economic and environmental challenges will require more insights, experience, advice and connectivity than ever before. Clarksons is uniquely positioned to help guide its clients through this challenging and ever-evolving environment.

Andi Case

Chief Executive Officer

1 March 2024

Financial review

Revenue: £639.4m (2022: £603.8m)

Underlying profit before taxation*: £109.2m (2022: £100.9m)

Reported profit before taxation: £108.8m (2022: £100.1m)

Dividend per share: 102p (2022: 93p)

Introduction

The Group delivered another excellent financial performance in 2023, with revenue of £639.4m (£2022: £603.8m) and

underlying profit before taxation* of £109.2m (2022: £100.9m), both ahead of the comparative period. Underlying basic

earnings per share* grew 9.9% to 275.0p (2022: 250.3p).

Reported profit before tax and basic earnings per share were £108.8m (2022: £100.1m) and 275.2p (2022: 247.9p) respectively. In line with the progressive dividend policy, the recommended full year dividend of 102p, as described in more detail below, represents the 21st consecutive year of growth.

Free cash resources* increased to £175.4m (2022: £130.9m); the Group's strong cash-generative position enables us to continue investing in the best people, market intelligence and technology to support and advise our clients. The Group also actively pursues M&A activity where this is complementary to the broader strategy.

2023 performance overview

The Broking division performed strongly, with revenues of £516.8m (2022: £495.5m) representing an increase of 4.3%. The division enhanced its market-leading position across every segment of shipping and remains well placed to advise clients in the face of ongoing trade disruptions, environmental concerns and geopolitical changes affecting the industry. The division generated a segmental profit of £121.2m (2022: £117.6m) at a margin of 23.5% (2022: 23.7%).

Energy-related markets performed strongly in 2023, including gas, tankers and specialised products. Offshore markets also performed well, supported by concerns around energy security and a focus on renewable alternatives. The environment was more challenging for freight rates in dry cargo and containers, although these remain above historical levels and saw improvement into 2024 following disruption to Red Sea trade routes.

Increased scale and complexity of global trade, higher asset utilisation and environmental concerns created the backdrop for strong asset pricing and another successful year for the sale and purchase team. We continue to support clients with their asset investment strategies for both new and secondhand vessels, aligned to the wider industry focus on the green transition.

The Financial division reported revenues of £44.1m (2022: £49.8m). A challenging economic backdrop and increase in interest rates reduced revenue and profitability from real estate and project finance business. This reduction was partially offset by growth in banking where, despite more challenging capital markets, the division increased revenue, focused in M&A advisory. The offshore energy services team also had a strong year, executing a range of transactions for clients following increasing investor confidence. The division generated a segmental profit of £6.6m (2022: £7.8m) for the year.

In Support, both revenue and segmental profit increased compared to the previous year at £56.6m (2022: £39.0m) and

£6.4m (2022: £5.0m) respectively. The division's core agency business performed well in both the UK and Egypt, the latter benefiting from strategic partnerships with major clients. Gibb Group also performed very strongly, investing in new facilities and people to meet strong client demand for specialist tools and safety equipment for the offshore industry. The division benefited from new business opportunities following the acquisition of DHSS, which contributed £10.8m of revenue during the year.

The Research division reported revenue of £21.9m (2022: £19.5m) and a segmental profit of £8.4m (2022: £7.0m) following continued investment in market intelligence, expanding both the breadth and depth of coverage and insight into evolving market trends. In particular, the division's strategy to provide leading data and insights around the green transition evolved in 2023, meeting strong client appetite to understand the maritime sector's decarbonisation pathway. As a market leader in its sector, the division remains well placed to provide high-quality information and analysis to clients, enabling them to make the best decisions for their business.

Administrative expenses

The Group incurred underlying administrative expenses* of £508.8m (2022: £481.2m), representing an increase of 5.7%. The main driver of this increase was variable compensation, aligned to the improvement in underlying profitability. In addition, the Group continued to invest in new people and teams, in training and developing our existing talent, in expanding our product footprint and in developing market-leading tools and intelligence. We remain committed to investing in all areas of the business to ensure that we can service the growing needs of our clients globally.

Acquisitions

At the beginning of the year, the Group completed the acquisition of DHSS, a renewables-focused port services business based in the Netherlands for an initial consideration of £4.1m. DHSS (now rebranded to Clarkson Port Services B.V.) has had a successful year, exceeding management's first year expectations and making a meaningful contribution to the Support division's segmental performance. The business increases the breadth of our offering in the offshore renewables sector, as part of our wider investment and focus on the green transition across the business.

The Group also invested in Sea during the year, adding the MarDocs digital platform for consideration of £1.2m. In addition, the commercial management of Recap Manager was brought back into the Group following an agreement with the London Tanker Broker Panel. Both transactions complement the Setapp and Chinsay acquisitions made in 2022 and leave the Group strongly positioned for growth in this area.

In November 2023, the Group expanded its global coverage in dry cargo broking with the acquisition of a new team in Rio de Janeiro to complement the existing offshore and specialised product expertise locally.

Acquisition-related costs of £2.6m (2022: £0.8m), which include the above transactions, have been disclosed separately in the consolidated income statement, and relate to the amortisation of intangibles and variable remuneration recognised over the employee service periods. We estimate acquisition-related costs for 2024 to be £2.1m assuming no further acquisitions are made.

Dividend

The Board is recommending a final dividend in respect of 2023 of 72p (2022: 64p) which, subject to shareholder approval, will be paid on 24 May 2024 to shareholders on the register at the close of business on 10 May 2024.

Together with the interim dividend in respect of 2023 of 30p (2022: 29p), this would give a total dividend of 102p for 2023,

an increase of 10% on 2022 (2022: 93p) and representing the 21st consecutive year the Group has increased returns to shareholders. In reaching its decision, the Board took into consideration the Group's 2023 performance, balance sheet strength, ability to generate cash and forward order book.

Exceptional items

In December 2023, the Group completed the sale of an industrial unit that it had owned for several years. The property's favourable location as part of a wider site redevelopment meant a sale in excess of market value was achieved, which resulted in an exceptional gain of £3.5m after transaction fees and costs. The Group donated £1.3m of the proceeds to The Clarkson Foundation for use in charitable projects. An exceptional net gain of £2.5m including tax credits of £0.3m has been disclosed separately in the consolidated income statement.

Finance income and costs

The Group reported finance income of £10.5m (2022: £1.9m), benefiting from active treasury management, a high interest

rate environment and strong underlying cash generation from the business. Finance costs remained at £2.2m (2022: £2.2m) and are mainly comprised of interest expenses on lease liabilities from the Group's application of IFRS16.

Taxation

The Group reported an underlying effective tax rate* of 21.4% (2022: 20.4%). The Group's underlying tax rate remains stable, with the lower rate reported in 2022 including a one-off US tax credit. The effective tax rate is reflective of the broad international operations of the Group. The Group's reported effective tax rate was 21.1% (2022: 20.5%).

Foreign exchange

The average sterling exchange rate during 2023 was US$1.25 (2022: US$1.23). At 31 December 2023, the spot rate was

US$1.27 (2022: US$1.21).

Free cashflow

The Group ended the year with cash balances of £398.9m (2022: £384.4m) and a further £39.9m (2022: £3.1m) held in short-term deposit accounts and government bonds, classified as current investments on the balance sheet.

Net cash and available funds*, being cash balances after the deduction of the total cost of accrued bonuses, at 31 December 2023 were £201.1m (2022: £161.7m). The Board uses this figure as a better representation of the net cash available to the business since bonuses are typically paid after the year-end, hence an element of the year-end cash balance is earmarked for this purpose. It should be noted that accrued bonuses include amounts relating to the current year and amounts held back from previous years which will be payable in the future.

A further measure used by the Board in taking decisions over capital allocation is free cash resources*, which deducts monies held by regulated entities from the net cash and available funds* figure. Free cash resources* at 31 December 2023 were £175.4m (2022: £130.9m).

In addition to these free cash resources*, the Group has a strong balance sheet and has consistently generated an underlying operating profit and good cash inflow. Management has stress tested a range of scenarios, modelling different assumptions with respect to the Group's cash resources and, as a result, continues to adopt the going concern basis in preparing the financial statements.

Balance sheet

Net assets at 31 December 2023 were £456.6m (2022: £413.2m). The balance sheet remains strong, with net current assets and investments exceeding non-current liabilities (excluding pension assets and lease liabilities as accounted for under IFRS 16 'Leases') by £206.5m (2022: £163.6m). The Group's pension schemes had a combined surplus before deferred tax of £13.4m (2022: £15.4m).

Forward order book ('FOB')

The Group earns some of its commissions on contracts where the duration extends beyond the current year. Where this is the case, amounts that can be invoiced during the current financial year are recognised as revenue accordingly. Those amounts which are not yet invoiced, and therefore not recognised as revenue, are held in the FOB. In challenging markets, such amounts may be cancelled or deferred into later periods.

The Directors review the FOB at the year-end and only publish the FOB items which will, in their view, be invoiced in the following 12 months. At 31 December 2023, this estimate was US$217m (31 December 2022: US$216m).

Subsequent Events

In February 2024, the Group completed the acquisition of Trauma & Resuscitation Services Limited. The investment increases our service offering to the oil and gas, marine and renewable energy sectors through the provision of market- leading advanced first aid training for the offshore wind sector.

Alternative Performance Measures ('APMs')

Clarksons uses APMs as key financial indicators to assess the underlying performance of the Group. Management considers the APMs used by the Group to better reflect business performance and provide useful information. Our APMs include underlying profit before taxation, underlying earnings per share, net funds and free cash resources.

Jeff Woyda

Chief Financial Officer & Chief Operating Officer

1 March 2024

Business review

Broking

Revenue: £516.8m (2022: £495.5m)

Segmental split of underlying profit before taxation: £121.2m (2022: £117.6m)

Forward order book for 2024: US$217m ^ (At 31 December 2022 for 2023: US$216m^)

^ Directors' best estimate of deliverable forward order book ('FOB')

Dry cargo

Supporting a range of important industrial sectors including construction, energy and agriculture, the dry cargo sector moved over 5.5bn tonnes of cargo in 2023 across a range of dry bulk commodities, including metals and minerals, agricultural products and some semi-processed goods. The dry bulk market in 2023 was characterised by very firm cargo volumes despite the macro-economic backdrop, a series of weak economic data points and headlines in key economies, and higher interest rates. However, continued fleet growth plus an unwinding in congestion meant that dry cargo markets were relatively subdued for much of 2023, with weighted bulkcarrier earnings averaging US$12,371/day, down 40% year on year and close to the long-term trend.

Market conditions took a sharp upward turn in the final quarter of the year, as a surge in Capesize cargoes from the Atlantic combined with a rise in congestion at Chinese discharge ports to create an upturn in Capesize earnings, peaking at approximately US$50,000 per day, their highest level since October 2021. At the same time, a firm grain export programme from Brazil plus sustained strength in Asian coal markets boosted demand for mid-size tonnage against a backdrop of growing restrictions around Panama Canal transits. Further trade flow disruption emerged at the end of the year with many owners choosing to avoid the Suez Canal due to attacks on ships in the Red Sea. This has led to increasingly significant rerouting of ships, longer voyages, vessel positioning disruption and some upside pressure on freight rates.

Looking forward to 2024, another year of moderate fleet expansion is projected, particularly in the mid-size sectors, while demand is generally expected to remain firm, even if growth may moderate from last year's strong rates. Emerging markets look likely to drive the majority of trade growth, while the outlook for Chinese seaborne demand (particularly around coal) is uncertain after record volumes in 2023.

Headline supply-demand fundamentals in the bulker sector seem fairly balanced, while there is some potential for gains to materialise through the year, especially given typical seasonal trends. Port congestion and disruption from the re-routing of trade flows towards longer distance routes may also impact vessel demand, while the accelerating environmental and regulatory agenda (including the EU ETS), alongside volatility and risks to markets from geo-political and weather events, could add additional complexity to markets in 2024. These weather events include the developing El Niño event and its influence on commodity supply.

Our dry cargo shipbroking team are market leaders and achieved strong increases in volumes across all desks in 2023, including significant increases in transactions and fixtures. We increased headcount, including an expansion into South America that created the dry cargo team's first footprint in the region. Following previous investments, we have also significantly increased our forward orderbook through increased period fixture activity. Our investments in the green transition supported a successful tender to become exclusive brokers for a green steel project in Northern Europe.

Containers

The container sector facilitates transportation of a wide range of goods, often high-value, including consumer and industrial goods, foodstuffs, chemicals and other manufactures. Container shipping markets saw a downward trend across most of 2023, after a sharp normalisation in the second half of 2022 from the previously exceptional levels, amid lower levels of port congestion, an accelerated expansion in fleet capacity and weak container trade trends. As a result, container freight rates and containership timecharter earnings faced negative pressure and declined through large parts of the year with the SCFI spot box freight index falling to a three-year low by the end of September, close to the pre-COVID-19 trend. The Clarksons charter rate index remained marginally above the pre-COVID-19 trend but also slipped to a three-year low. However, late 2023 saw major disruption to liner services due to the rapidly evolving events in the Red Sea region. This tightened the container freight market notably, including a sharp spike in Far East-Europe spot box freight rates.

Supply expansion was the key driver of container market pressure in 2023, with capacity growth of 8% and record deliveries (2.3m TEU), although some excess supply was absorbed by slower speeds (decreased by 3% to a record low). Newbuild ordering remained active in 2023 overall, with 1.6m TEU contracted, led by liner fleet renewal efforts, while 83% of capacity ordered was alternative fuel capable (mostly methanol, but also LNG). Seaborne container trade remained weak in 2023 with growth estimated at just 0.4% in TEU (1.4% in TEU-miles) amid macro-economic headwinds on key trades, though more robust volume trends were seen in exports from Asia to developing economies, and volumes globally began to stabilise in the second half.