If you are managing the operational costs of a yacht located overseas, fluctuations in currency can appear like the waves on the high seas – endless and always prone to unexpected change!
The on-going outlay for salaries, berthing fees, fuel, maintenance etc., all go with the territory of yacht ownership and management – but when cross-border transactions come into play, exchange rates can have a huge bearing as to how much money arrives at the receiving end.
Thanks to currency fluctuations, operating a yacht can easily become a whole lot more expensive than it might necessarily need to be.
Effective currency risk management and structured strategies to mitigate potential risks should, therefore, be a central priority for all yacht operators engaged in international payments.
Currencies influence costs and profitability
Without doubt, the behaviour of the foreign exchange markets – and the relative values of GBP, EUR and USD – the heavyweight currencies that tend to dominate the yachting sector - are always going to have a big influence on costs and profitability.
In particular, the EUR/USD exchange rate has fluctuated over the past 12 months, with periods of appreciation and depreciation, which has impacted the operating costs of superyacht crew salaries, fuel and maintenance paid in different currencies.
That’s why it makes sense for yacht owners and operators to engage the services of specialist FX providers with an intimate knowledge of the international currency markets. They can use tailored financial strategies to manage currency risk. As examples, forward contracts and currency hedging can play an effective role in providing stability to operating overheads.
If currency risk is not effectively managed or overlooked altogether, it can result in substantial financial disadvantage. Leaving your foreign exchange transactions to chance or relying on a mainstream bank with no specialist FX knowledge can, indeed, be a risky strategy.
MFX’s close association with yacht operators
MFX is a long-established Isle of Man-based foreign exchange brokerage, which works closely with the yacht industry in areas of international and cross-border financial transactions.
We assist owners and operators with payment provision, encompassing all stages of a vessel’s lifecycle - including yacht purchase, maintenance and refits, charter management and on-going operational costs. We regularly assist corporate service providers on the Island, who are tasked with the management of yachting portfolios.
MFX is partnered with world class international payment providers, who are best-placed to assist with your cross-border currency exchange requirements.
If you have concerns as to whether you are achieving the best returns on your foreign exchange transactions – and suspect that you aren’t - we are here to assist. It may be to simply provide a second opinion regarding your current FX arrangements. You’d be surprised how often seeking an alternative view can yield way better exchange rates than you are currently achieving.
For a non-obligatory discussion about your foreign exchange requirements, call MFX on 01624 694731 or email us at enquiries@mfx.im and we will get straight back in touch with you.
MFX Ltd is a wholly owned subsidiary of the AIM-listed Manx Financial Group. Bank and a sister company of Conister Bank.