Consolidation Hits Smaller Greek Shipping Companies

The Greek shipping industry shed 28 companies, or 3.9% of the total, in the last year, according to a survey by shipping research house and consultancy Petrofin.

Although the year-on-year number is not massive, it means 72 companies have ceased operation since 2011 and the number of Greek shipowners has declined by a quarter since 1998, when Petrofin began its annual profiling.

The numbers are net and do not reveal whether an even greater number of owners ceased trading last year, in which case the attrition would have been partly offset by new start-ups.

The dip in numbers leaves 690 Greek shipping companies in 2013, the lowest in the 16-year history of Petrofin’s reports on the subject, although 690 was also recorded for 2005, which prefigured four straight years of expansion in the number of active owners.

However, the brunt of the reduction came among the ranks of smaller owners and older fleets.

Economies of scale and market conditions favoured larger companies, whereas smaller ones were continuing to struggle, Petrofin reported.

There were 17 fewer companies among those with just one or two vessels, while the next category above, of fleets with three to four ships, lost 13 companies.

By contrast, the number of companies with large fleets of more than 25 vessels showed no change from a year ago. Also, medium-sized companies were strengthening in number.

Due to “massive” investment, the companies that control fleets of more than 1m dwt had increased their collective capacity from 178.5m dwt to 201.3m dwt in just two years.

The top 10% of companies had increased their collective fleet to 208m dwt, or 74.3% of all Greek-owned tonnage, said Petrofin.

Due to the confidence of banks, there were “hardly any bankruptcies” among Greek companies.

However, as the recession continued and ship finance remained absent, making decisions to enter or re-enter shipping at its lowest point was difficult.

“Taking into account the significant pressures bearing down on Greek shipping, the latest Petrofin research points to a reasonable resistance and an ability of Greek shipping to grow regardless,” concluded managing director Ted Petropoulos.

Greek shipping faced having to adapt to a harsher financial, regulatory, operational and technical environment, but had achieved this partly “by Greek owners’ ability to adapt and take advantage of change, as well as massive new capital injections”, he said.

Owners also demonstrated “a profound commitment to shipping and investment in new eco and green vessels”.

There had been “considerable diversification” into liquefied natural and petroleum gas carriers and offshore vessels.

According to Petrofin, an estimated 360 newbuildings on order for about 40 different owners will ensure further growth for Greek shipping in the years to come.

“Confidence in Greek shipping is rising and most owners believe that a recovery is only a matter of time,” said Mr Petropoulos.

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