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BUSINESS NEWS CONFIDENCE REMAINS AT HIGH LEVEL Shipping confidence held steady at its highest rating in the past three-and-a-half years in the three months to end-November 2017, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens. The average confidence level expressed by respondents was unchanged at the level of 6.2 out of 10.0 recorded in the previous survey in August 2017. Confidence on the part of charterers was significantly up, from 4.7 to 7.7, the highest rating recorded for this category of respondent since the survey was launched in May 2008 with an overall rating of 6.8. Managers (up from 5.8 to 6.1) were also more optimistic, while brokers’ confidence was unchanged at 6.3. The rating for owners, however, fell from 6.5 to 6.4. Confidence levels were down in Asia, from 6.4 to 5.7, and unchanged in Europe and North America, at 6.3 and 5.8 respectively. The likelihood of respondents making a major investment or significant development over the next 12 months was down from 5.4 to 5.3 out of 10.0. Charterers’ confidence, however, was up from 4.0 to 6.2. Expectations on the part of owners and brokers were up from 5.8 to 5.9 and from 4.4 to 5.3 respectively, but down from 5.4 to 5.3 for managers. Asian respondents (down from 5.9 to 5.0) were less confident in this regard, but in North America the rating was up from 4.9 to 5.4. In Europe, expectations held steady at 5.2. Although overall expectations of making major investments over the next 12 months were marginally down on the three-year high recorded in the previous survey, several respondents saw encouraging signs of recovery, and potential for further improvement, particularly in the dry bulk sector. One respondent said: “Undeniably, things are a little better, but there is not such a significant improvement that we can break out the champagne and celebrate a recovery.” 59% of respondents expected finance costs to increase over the coming year, up from 50% last time to equal the highest figure since October 2008. Owners’ expectations were up from 48% to 54%, while the increase for charterers was from 67% to 83%, and for brokers from 42% to 60%. Managers, meanwhile, recorded a fall from 62% to 61%. Despite a fall from 27% to 23%, demand trends continued to be the factor expected to influence performance most significantly over the coming 12 months followed by competition and finance costs. One respondent said: “Shipping continues to be volatile and unstable, with an oversupply of tonnage, and new finance continuing to pour in, while geopolitical issues and new regulations are causing disruption.” The number of respondents expecting higher freight rates over the next 12 months in the tanker market was down by 1% on the previous survey to 44%, while there was a one percentage-point fall, to 13%, in those anticipating lower rates. There was a six percentage-point fall, to 50%, in the numbers expecting higher rates in the dry bulk sector, and a five percentage-point increase to 12% in the numbers anticipating lower rates. In the container ship sector, the numbers expecting higher rates dropped by four percentage points to 36%, while there was a two percentage-point fall, to 15%, in those anticipating lower container ship rates. Net sentiment was positive in all the main tonnage categories. It was unchanged in the tanker market at +31, but down in the dry bulk market from +49 to +38, and in the container ship sector from +23 to +21. Richard Greiner (pictured), Moore Stephens partner, Shipping & Transport, says, “Confidence is at its highest level for three-and-a-half years, testament to the industry’s remarkable durability. Not all our respondents were upbeat and uncertainty persists, for example, over how and when to comply with the Ballast Water Management Convention and the true extent of cyber-crime. A slowdown in newbuilding activity has started to redress the imbalance in supply and demand, and that should be reflected in improved freight rates. There is an appetite for investment, and finance is available.” 20
RENK ACQUIRES DAMEN SCHELDE GEARS Marine gear manufacturer Renk has acquired a 100% stake in Damen Schelde Gears B.V. The December 2017 acquisition of the Netherlands-based company will see the company rebranded as Schelde Gears B.V. (SG). The new Dutch facility is able to draw on many years of experience in gear design, calculations as well as inspections and overhaul of marine gears. MACGREGOR ACQUIRES WINCH MANUFACTURER MacGregor, part of Cargotec, has signed an agreement to acquire Rapp Marine Group (RMG) in order to strengthen its offering for the fishery and research vessel segment. MacGregor's existing portfolio includes already various deck handling equipment, such as cranes and booms, but with RMG, MacGregor is able to offer complete solutions with advanced winches and related control systems. The enterprise value of the acquisition was approximately €16 million. "We are happy to join forces with MacGregor and be part of the company. The agreement will benefit the niche customer base, which will be now offered a wider portfolio of safe and efficient equipment from one provider to their specific vessels," says Terje Arnesen, CEO of RMG. "I am happy to see that Rapp Marine Group, under our five years of ownership, has developed to become a global leader in providing winches and related equipment to fishery and research vessels. Many of these projects have been developed and delivered in close cooperation with MacGregor Triplex, and as such I am convinced that the positive development in RMG will continue under Macgregor's new ownership," says Bjørn Hesthamar, managing partner in Nord Kapitalforvaltning, the PE-company now selling RMG. "MacGregor has a strategic interest in widening services for customers within fishery and research segment. Products needed for these demanding vessel types have to be safe, robust and reliable with a good after sales network," says Michel van Roozendaal, President, MacGregor. "This is exactly what our combined offering is able to provide, be it fishery segment that operates in harsh conditions, or solutions needed for research vessels to handle sophisticated tools and equipment". "With MacGregor's Triplex deck handling portfolio we already today have a very strong position in the fishery and research segment and with this investment as part of our growth strategy we are able to further strengthen our position," states Høye Høyesen, Vice President, Advance Offshore Solutions, MacGregor. The results of RMG business will be consolidated in MacGregor business area results once the transaction has been completed which is expected during the first quarter of 2018. RMG employs about 120 people with main locations in Norway, the USA and United Kingdom. The sales in 2017 is estimated to be approximately €40 million, of which approximately 30% is related to service. RMG's profitability (EBIT-margin) is on the same level as MacGregor's current profitability. 21
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