Cyprus ship management revenue rises to 4.2% GDP

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Cyprus ship management revenues increased to €516 mln during the second half of 2021, or 4.2% of GDP (as turnover), marking a steady recovery from the pandemic and associated decline in economic activity, according to a Central Bank survey.

An increase of 15.4% from the first six months of 2021 generated €447 mln (4% GDP).

The Ship Management Survey notes that by country of payment, Germany’s contribution decreased from 45% GDP in 2021H1 to 43% in 2021H2.

An increase was recorded in the share contributions by Norway (7%), Switzerland (4%) and the UK (4%).

In contrast, a decline was recorded for Singapore, Japan, and the US.

During 2021H2, 37% of companies managed to generate revenues in the range of €1 – €20 mln each, while only 22% of generated revenues ranging from €20-€50 mln.

During the second half of 2021, the top 32% of the companies accounted for 96% of the industry’s revenues. Similarly, the respective turning point in the previous period (2020H1) was 95%.

The share of full management services dropped to 43% of the total amount of ship management revenues.

Similarly, crew-management services dropped from 49% in 2021H1 to 43% of the revenues in 2021H2.

Nevertheless, these contributions are close to the levels observed during the second half of 2019.

According to the survey, the choice of flag is a strategic decision in ship owning operations, particularly in the case of open registries that provide ship owners with considerable advantages in terms of the legal and regulatory framework surrounding operations.

Unlike the previous period, the share of revenues collected from ship management services to ships carrying a foreign flag increased to 93% of the total revenues in 2021H2 (59% in 2021H1).

Ship management expenses increased further to €457 mln in 2021H2 in line with the steady recovery in revenues.

Historically, the industry exhibits a relatively stable structure of expenses.

The majority concern crew expenses, which accounted for 63% of the total amount in 2021H2.

Most of these payments were directed to non-EU seafarers (46%), administration expenses 12% and ship management expenses (e.g. spare parts, lubricants, dry-docking, etc.) 25% of the total amount.

The survey concentrates primarily on transactions between resident ship management companies and ship owning/shipping related entities.