Συνέντευξη του Κώστα Κωνσταντίνου στο περιοδικό ELNAVI
Shipping companies are now utilizing a number of alternative shipfinance services and solutions, such as bank debt, leasing, institutional investors, private equity, refinancing, restructuring, stock exchange listings and more – as auditors of 1,000 vessel-owning companies organized in various-sized groups, which ones do you see being utilized more often and how can a professional service firm like yours help?
In the past few years we have seen a large shift – especially in private shipping finance – with large traditional shipping providers exiting the offshore shipping sector, while Greek banks, now recapitalized and having recovered the turbulent times of the last decade, are coming back. The Hellenic Stock Exchange has completed a few bond issues in the shipping sector and there is interest by the Luxemburg Stock Exchange, especially for bonds financing green projects. For nearly all options, projects have to go through the Compliance function which – among other factors – considers the existence of audited financial statements and the availability of sustainability-related information. Different finance providers have different needs. Understanding the needs of the financiers, as stakeholders and primary users of financial and sustainability-related information is crucial for shipping companies, in designing how they can compete for funding and this is an area where we can help with our expertise as Global Maritime Leaders of the Moore Global Network, a network associated with shipping for 100 years. Our services are tailored for maritime and can range from helping a small sized company build credible financial and non-financial reporting for their lender-bank all the way to an IPO, in collaboration with our Moore network in the specific jurisdiction.
ESG and emission reduction measures have increased the complexity of disclosures that shipping companies need to make. In your opinion, will this affect shipping finance providers and what – if anything - can shipping companies do to safeguard the availability of funds?
Indeed, the reporting landscape has changed dramatically, even for private shipping companies, in that more data and transparency is required by their finance providers, being primarily Greek and European banking institutions. The pressure comes from the banking regulators and so financiers have no option but to respond to this pressure by incorporating ESG in their new credit assessment process. The most common way they have done this so far is by sending lengthy questionnaires to the shipping companies, requesting various information in relation to ESG. Some banks, particularly those who have signed up to the Poseidon Principles, have also incorporated clauses in their loans that relate to the environment. But irrespective of the means by which the requirement is implemented by each financier, the result is the same: more reliable information is required to secure the funds, this time on areas other than financial performance. Sustainability-related information can be prepared and presented in a credible way, since there are now relevant standards and frameworks. This process resembles the transition from no generally accepted accounting policies, to the IFRS and USGAAP, many years ago. Furthermore, to further add credibility, external assurance can be provided for sustainability-related information, again following sustainability assurance standards, a process that resembles the audit of the financial statements. Both sustainability reporting and sustainability assurance are areas that we, accountants and auditors, as a profession, have claimed after investing significantly in building the skills required for these services and it is exactly these services that shipping companies need to ensure they remain eligible for funding by their financiers.
What is your organisation strategy in regards to ESG? How are you contributing to the transition of the shipping industry to a more sustainable future?
Our association to the shipping industry has been long and strong and, even though we are a service provider, there are in fact many areas where we contribute to the sustainable future of the shipping industry. Though the use of technology, we have introduced remote work and most of our teams have conducted many partially or entirely remote audits, assurance and other work in the past few years. This resulted in a reduction of business travel and therefore a reduction in CO2 emissions relating to business travel. In addition, with the help of many of our clients who are no longer requiring hard copies of our reports, we are reducing paper and energy in printing. In addition, from 2022, all Moore network firms committed to our Social Ambition promise, measured against five themes which are in line with the 17 Sustainability Development Goals set out by the United Nations. These five themes are: (a) Quality & Supply Chain (b) Our Natural World (c) Equity, Diversity & Inclusion (d) Community Care and (e) Education, People & Development. It is through these initiatives that we are reducing our environmental impact and making a difference to our clients and our community, hence contributing to our sustainable future.
Describe the role of the human factor in the professional services sector. What is your training strategy for your company’s personnel and how does this translate to added value for your clients?
As accountants, auditors and advisers in the maritime sector, it is all about our people and the relationships they build with our clients, as we provide our services. As you know we have been working with the Greek shipping community for the past sixty years. Over this time, our profession has changed drastically to respond to the changes faced by our clients, our regulator and other factors such as technology, the society, the environment etc. We rely on our people to do a great job every day. This means that we hire excellent professionals, who are mostly qualified auditors or accountants. In addition, we train our people with various in person and online courses that are relevant to their area of expertise to ensure that they stay abreast of the technical developments of our profession in accounting, reporting, tax, ESG etc. Most importantly, we coach and develop our people’s skills in our teams on an ongoing basis and through that training and they are introduced to our values and client servicing experience. Our clients benefit greatly from the knowledge and experiences of our professionals, from partners to associates, who understand shipping, who most of the times stay on the same client service teams for many years and who are respectful and collaborative.
Can you refer to the main findings of Moore Maritime Index during the years 2022-2023?
As you know the Moore Maritime Index draws its observations from a pool of data that feed from financial statements which are audited in their majority. The latest report draws from the 2022 data.
In dry bulk carriers, the total operating expenses increased in a range from 5% to 9% across the various vessel categories, with the largest increase of 9% being reported by the Handysize vessels. In particular, increase was reported in insurance expenses, lubricants, stores, spare parts, repairs and maintenance. Crew and administrative costs remained close to the same levels as in 2021. In terms of revenues, the rates appeared to improve in 2022, with the exception of large Capesizes which declined but remained at satisfactory levels overall.
Tankers also reported an increase in their total operating expenses, in a range from 3% to 7%. All tankers’ categories presented high costs for lubricants and spare parts costs, while repair and maintenance expenses were higher for vessels between 20,000 dwt and 120,000 dwt. Crew costs remained unchanged compared to the previous year, while insurance expenses increased across most tanker categories. In terms of revenue, the rates appeared much improved, with the largest increase being recorded in the Suezmax category.
Describe your Form’s plans in adapting to the ever changing landscape of maritime and responding to the rapidly changing needs of your demanding clients.
Indeed, the landscape in maritime is ever-changing and requirements are piling up, whether they come from Maritime’s ‘natural Regulator, the IMO, or from growing pressure of key players in the maritime supply chain. Moore Greece focuses on financial and – now- non-reporting. This is our area of expertise and this has always been the case since our incorporation in 1963. Our sixtieth anniversary this year finds us in a position to say that we are the most relevant and reliable partner for all maritime reporting needs.
On the financial reporting side we have tailored EPICOR ERP for Maritime and have created a solution, called Maritime Accounting Software (or MAS) that completely resolves the need for timely, reliable, consistently prepared and readily available financial reporting embedded within a world class accounting software, that incorporates all maritime accounting essentials such as intercompany accounts and voyage accounting. MAS, along with our Financial Reporting Masterclasses which are e-learning courses, and Moore Maritime Index as a budgeting and analysis tool, aim to provide support to the maritime accounting departments, finance professionals and CFOs.
On the non-financial reporting side, we have developed an approach for ESG that is focused on maritime and are now advising a number of clients on this area. Also, we have recently been appointed by the Hellenic Chamber of Shipping to develop guidelines for their members to help them on their ESG journey and we expect that – once these are published in a few weeks’ time – they will be the reference document for the entire private maritime sector when starting with ESG.
Our plan is to focus on these areas and work with our clients, in Greece and abroad, helping them enhance their financial and non-financial reporting which will add credibility and further establish rapport with their stakeholders, helping them succeed.