F O R W A R D C O N T R A C T S

Mitigate Currency Risk and Minimise Costs

C O N S U L T  O U R  E X P E R T S

The Importance of Planning Ahead

Over the last few years, we have experienced increased market volatility due to a variety of global factors. The pandemic, political uncertainty, and ongoing conflicts have caused periods of rising inflation and higher interest rates globally. All of this has contributed to staggering currency market fluctuations of more than 20%. This level of volatility and uncertainty creates enormous risk for anyone with international cashflows, as even the smallest change in the exchange rate can have a significant impact on your currency costs.

As a result, it is now more important than ever to be aware of currency fluctuations and, wherever possible, plan ahead.

Consider these scenarios...

Y A C H T R E F I T S O R A C Q U I S I T I O N S

Yacht refits and acquisitions typically require a significant investment. Yet if your budget is in a different currency to the shipyard or seller's currency, dealing with the associated foreign exchange can be both risky and expensive.

The true costs cannot be forecasted until the associated FX rates can be determined. Yet, with payments typically spread over months and years, it's impossible to accurately predict these rates and what their potential impact might be.

This creates enormous risk and could end up costing you more than planned.

W A T C H  E X A M P L E

O P E R A T I O N A L Y A C H T M A N A G E M E N T

The cost of a superyacht does not stop at the purchase price. A plethora of operational expenses are incurred every month - from fueling to mooring and docking fees, tax, maintenance, repairs, cleaning services, insurance, and many more.

These costs typically amount to 10% of the yacht's purchase price, annually. So for a £50m yacht, they could be as high as £5,000,000.

If your operational budget is in a different currency, foreign exchange is a serious concern. With payments spread across the year, it's impossible to accurately predict your final costs, which could end up a lot more than you anticipated.

S E E  I T  I N  A C T I O N

Eliminate Your Currency Risk

One method of reducing your exposure to currency risk and minimising cost, is to lock-in a favourable rate for your future requirements. You can do this by booking a flexible forward contract with Centtrip.

Forward Contracts

WHAT ARE THEY & HOW DO THEY WORK?

A forward contract is an agreement to purchase currency at a guaranteed (or fixed) exchange rate, up to 24 months in advance. By securing a favourable rate for your future requirements, you are protected from any adverse moves in the rate, which might otherwise increase your costs.

Whether you're taking advantage of a market opportunity, or securing funds for an investment, forward contracts can be aligned to your schedule. Take partial funds as and when payments are due, or settle in full on your future chosen date.

You will only be required to pay a small initial deposit, and this is deducted from the total cost of your currency.

S P E A K  T O  O U R  E X P E R T S


S E E I T I N A C T I O N

Forward Contract Examples

Y A C H T R E F I T S & R E F U R B I S H M E N T S

O P E R A T I O N A L Y A C H T M A N A G E M E N T

Watch our quick video featuring a hypothetical refit of yacht Lily-Maria and discover how the Captain manages to save over £200,000 on the cost of their currency.

In this example, our hypotehtical Swiss Single Family office maximises their operational budget for yacht Sea Serenity, and manages to save 5% with a forward contract.

D I S C U S S  Y O U R  R E Q U I R E M E N T S 

Key Benefits

E L I M I N A T E R I S K

Gain protection from market volatility and adverse moves in the rate for your currency pair.

R E D U C E C U R R E N C Y C O S T S

Protect yourself from adverse rate moves which would have increased your currency costs.

B U Y N O W , P A Y L A T E R
Buy or sell currency now for a period of up to two years and pay when it's right for you.

A L I G N T O Y O U R S C H E D U L E
Pay in full on a chosen future date, or draw currency as and when payments are due.

F O R E C A S T A C C U R A T E L Y

Budgets will not be affected by FX volatility, enabling you to forecast more accurately.

B U D G E T C O N F I D E N T L Y

Enjoy a greater degree of certainty and risk mitigation in a volatile market.

M A X I M U M F L E X I B I L I T Y

Secure a contract for anything from just 30 days up to two years, and enjoy the flexibility to extend if needed.

F R E E U P C A S H F L O W S
Secure your currency for only a small initial deposit, which is deducted from the total cost.

S E I Z E O P P O R T U N I T I E S
Take advantage of favourable moves in the exchange rate, by buying currency in bulk.

"It's great to have a financial partner like Centtrip, that is not only trustworthy and competent, but that also has an in-depth understanding of the luxury yachting space."

MANAGEMENT DIRECTOR, BLUEWATER YACHTING

Is a forward contract right for you?

A D V A N T A G E S

D I S A D V A N T A G E S

  • Allows you to lock-in a favourable foreign exchange rate for a future transaction.
  • Enables management of cashflows without worrying about FX volatility.
  • Enables you to forecast more accurately.
  • Contributes to a greater degree of certainty and risk mitigation, to protect your budgeted FX rate.
  • The rate could move in a way that renders the contract loss-making. However, we can help you develop a strategy incorporating spot FX, so you can still take advantage of market opportunities.
  • A deposit will be required. At Centtrip, this is deducted from the total cost.

Why Choose Centtrip?

INDUSTRY SPECIALISTS

Our market professionals have over a decade of experience supporting clients in your core sector, so we understand your unique challenges and requirements.

VOLUME COST-SAVINGS

We buy and sell large amounts of currency for clients across a multitude of sectors, every day. This scale provides us with significant cost efficiencies which we can pass on to you.

INFORMED DECISION MAKING

Our experts monitor a variety of data sources and market factors on a daily basis, and distill this into actionable insights. We'll reach out as and when market changes that could affect you occur.

MARKET-LEADING PRICING

As an intermediary between the foreign exchange market and the banking network, we are in a strong position to negotiate the best possible rates, which we can then pass on to you.

EXTENSION OF YOUR TEAM

We work with you to develop smart solutions that match your specific requirements, whether you are looking at an ad hoc transaction or a hedging strategy to mitigate risk on future payments.

UNPARALLELED SERVICE

We pride ourselves on providing exceptional customer support and are only ever a phone call or an email away, whether you have a currency market question or want to discuss your strategy.

T A L K  T O  U S

Your Foreign Exchange Team

Julian Justice

Head Of Dealing

E M A I L  J U L I A N

Ross Hammond

Senior VP - FX

 E M A I L  R O S S 

Stephen Hubble

Head of Strategic FX

E M A I L  S T E V E

Talk To Us

We can help you develop smart foreign exchange strategies that mitigate risk and reduce cost. Use the form to submit a query, book a call in our diary, or contact us directly using the details below.

  • +44 (0)20 3735 1735