Braemer Shipping Interim Management Statement
Braemar Shipping Services plc issued an Interim Management Statement in relation to the period since the six months ending 31 August 2008:
“Shipping markets have experienced a significant correction over the past four months and in varying degrees dry and wet freight rates and vessel values are sharply lower, mainly in response to the slowing global economic demand and the significant contraction in the availability of bank lending. However, within our Shipbroking division chartering has remained active and to date there have been no significant cancellations within our forward order book. Our Technical Services businesses have maintained the high activity levels experienced in the first half and the Logistics and Environmental businesses are continuing to perform steadily. The Board is confident about the out-turn for the current financial year.
“In the next financial year 2009/10 we expect to see lower revenues and profits from our shipbroking activities. Although the number of chartering transactions in which we are involved is expected to be broadly unchanged from 2008/9 levels, average commissions will be lower. Furthermore second hand sale and purchase income is expected to fall and this will only be partly offset by an increase in demolition activity. The appreciation of the US dollar relative to sterling, if it remains at current levels, will also ameliorate any reduction in dollar revenue. We believe our forward order book in respect of time charter and newbuilding business to be substantially secure, because the prices at which the majority of orders were placed are well below peak levels and because of the relative strength of the owners, yards and charterers with whom we conduct business.
“While there is likely to be some effect of the global slowdown on our non-broking businesses, to date we have seen little impact, largely because the demand for their services is less dependent on the level of world trade and because of the longer term nature of the projects involved. The group is financially strong with cash reserves and no debt which should enable us to take advantage of attractive investment opportunities which may arise in current markets.”
Braemar Shipping Services plc is an international provider of broking, consultancy, technical and other services to the shipping, marine and energy industries. The business is divided into the following business segments: Shipbroking, Logistics, Technical services and Environmental services. Shipbroking services include: chartering tankers (including gas, chemicals and LNG), dry cargo, containers, offshore vessels, second hand sale and purchase, newbuilding, demolition, and sector research.
Recent Acquisitions include: Braemar Howells in 2006, a pollution response service primarily in the UK for marine and rail operations; Braemar Falconer in 2007, provides specialised marine and offshore services; Braemar Steege in 2008, a specialist loss adjuster to the oil and gas industry.