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Revenue for ship management at €914 million in 2020

29/04/2021 09:40

Revenue from ship management declined by an annual 26% in the second half of 2020 with the sector and particularly the cruise ship industry negatively affected by the COVID pandemic.

According to the H2 ship management survey compiled by the Central Bank of Cyprus (CBC), revenue from ship management in the second half of 2020 declined to €430 million, marking a reduction of 11% compared with the H1 2020 and 26% compared with the H2 of 2019. Revenue from ship management for 2020 amounted to €914 million compared with €1.1 billion in 2019.

According to the CBC, the drop in revenue came “as a result of the transport/travel restrictions triggered by the COVID-19 pandemic and the associated decline in economic activity.”

“These changes represent almost exclusively a decline in the passenger ships segment of the industry,” the CBC added, noting that in the merchant ships segment, such as dry bulk carriers, tankers, containers, LNG carriers, the impact was “significantly smaller.”

The CBC noted that “the gradual recovery in economic activity that is currently taking place since the beginning of 2021, as well as, the global rebound in international seaborne trade should be expected to also benefit the ship management sector in subsequent periods.”

Despite the downturn, Cyprus’ ship management industry remained mainly international in reach as 97% of the revenue came from the management of ships with a foreign flag and only 3% from Cypriot-flagged ships, the survey said.

Furthermore, 42% as opposed to 47% in H1, of the revenue came from Germany, Greece’s share rose to 12% in H2 from 9% in H1 while Singapore followed third with 9% of the revenue.

According to the CBC, the share of full management services revenue dropped slightly to 50% of the total revenue in 2020 H2, while crew-management services rose to 47%. “Nevertheless, these contributions are close to the levels observed in previous periods,” the CBC added.

The industry’s expenses in the second half of 2020 amounted to €416 million compared with €423 million in H1 2020, marking a reduction of 1.65% compared with H1 and a decline of 2.6% compared with H2 2019.

Historically, the industry exhibits a relatively stable structure of expenses, the CBC said, with the majority of spending associated with crew expenses, which accounted for 58% of the total amount in H2 2020.

Most of these payments were directed to non-EU seafarers with 41%, while administration expenses accounted for 14% and ship management expenses such as spare parts, lubricants, dry-docking amounted to 28% of the total spending, the CBC added.