Falling Oil Prices Help Boost Braemar Revenues
Braemar Shipping Services said its ship broking division saw an improvement in its performance during the last quarter. The merger in July with smaller rival ACM Shipping also came in as shot in the arm.
A strong dollar and weak oil prices are good for business, too, and freight rates, a key driver of revenue, are up in a number of sectors.
In an interim management statement the company says that as anticipated, its ship broking division's performance has improved significantly compared with the first half, reflecting the inclusion of ACM and the cost reduction actions taken as it successfully continued to integrate the businesses.
“We are encouraged by the progress of the enlarged division,” the company said. “While the oil price has continued to weaken, the freight rates, which drive our revenue stream, have risen in a number of sectors including VLCCs (Very Large Crude Carriers).” Demand for oil tankers has risen sharply, most likely as speculators hire huge ships to store cheap oil until prices increase again. That's good news for both rates and Braemar's revenue.
Elsewhere, Braemar's Logistics and Technical divisions are trading as expected. The freight forwarding side of Logistics and Braemar Engineering have done particularly well.