Revenue from the ship management industry in Cyprus recorded a 2.4% rise in the second half of 2023 despite the challenges facing the shipping sector such as rising freight costs and geopolitical tensions and obstruction to free shipping by the Houthi in the Red Sea.

According to the bi-annual Ship Management Survey conducted by the Central Bank of Cyprus (CBC) revenue from ship management (in turnover terms) in the second half of 2023 rose to €639 million from €623 in the previous quarter and corresponded to 4.1% of Cyprus six-month GDP. For the full year of 2023 revenue from ship management amounted to €1.26 billion which represented 4.23% of the country’s annual GDP.

“Despite a number of challenges for the shipping sector globally, such as the rising cost of transport, the ship management industry remains a robust performer for the Cyprus economy,” the CBC said.

According to the survey, Germany remains the main partner of the ship management industry in Cyprus, as 40% of the revenue in the second half of 2023, remaining stable compared with the first half of the year. Greece followed with 17% of the revenue, Switzerland with 10% and Malta with 5%, while contributions from the USA and Norway recorded decreases compared with the previous quarter.

Furthermore, 31% of the companies have generated revenues between €2 and €30 million each, while 27% of the companies showed revenues in excess of €30 million each. Moreover, 19% of the companies generated revenues between €30 million and €100 million. A share of 15% generated revenues up to €300,0000 while a smaller share amounting to 8% were larger companies generating revenue in excess of €100 million.

According to the survey, the revenue structure remained broadly stable since the first half of 2022, while compared with the previous period the crew management services rose to 51.1% of total revenue, whereas full ship management share dropped to 46% from 48.6% in the first half of 2023.

Furthermore, according to the CBC, ship management expenditure declined to €546 million in the second half of 2023, contrary to the increase recorded in the second half of 2022, with the sector showing a traditionally stable cost structure.

The majority of the ship management costs concerned crew expenses, which accounted for 65% of the total amount in the second half of 2023, while most of these payments were directed to non-EU seafarers with a share of 45% of total payments.

Administration expenses increased to 7% and ship management expenses (e.g. spare parts, lubricants, dry-docking, etc.) to 28% of the total amount in the second half of 2023, the CBC said.