Central Bank of Cyprus ship management survey

Cyprus, and particularly Limassol, is one of the world’s most important third-party ship management centres. The Central Bank of Cyprus has recently published the results of its latest survey of the ship management sector, which covers transactions between resident ship management companies and non- resident owners or shipping related entities in the second half of 2016. The survey has been carried out every six months since 2009 and provides useful insights into the evolution of the sector.

Despite the overcapacity and weak demand conditions that continue to characterise most shipping markets, the Cyprus ship management sector remains robust. Revenues from ship management for the second half of 2016 amounted to €458 million, an increase of 4% over the corresponding period of 2015, representing 5% of Cyprus’s GDP. Germany remains the main source of revenues for the industry, accounting for 39%. Greece, Malta, Russia, Singapore, Switzerland and USA account for between 5% and 7% each, and the balance of 22% is made up of revenues from other countries.

In numerical terms, smaller companies predominate, with two-thirds of companies generating revenues of less than €7 million in the half year. Only 16% of the companies generated revenues in excess of €30 million in the period and a similar proportion fell in the €7 million – €30 million band.

Full management services accounted for 57% of revenues in the period, with crewing services alone accounting for a further 36% and technical management services a further 7%. The move towards full management services continues a trend observed over the past two years.

The survey also includes a breakdown of revenues based on the flag registration of the ships managed. Flags associated with open registries provide ship owners with considerable advantages in terms of the legal and regulatory framework surrounding ship operations such as crew recruitment, crew training, safety of the seafarers and environmental protection policies, and have a considerable impact on costs. Following a reduction during the first half of 2016, the provision of services to ships carrying the Cyprus flag increased to 27% of the total revenues during the second half of 2016.