Last checked at 30 Aug 2016 07:00
BRAEMAR SHIPPING SERVICES PLC
("Braemar", "the Company" or "the Group")
30 August 2016
Trading Update
Braemar Shipping Services plc provides the following trading update, further to our AGM Trading Update on 30 June 2016:
Shipbroking
Over the summer, the tanker markets have seen both lower activity levels and freight rates which is resulting in reduced revenues. While we expected the tanker market to soften after the high levels experienced during 2015 there has been a marked slowdown. In the dry cargo markets, despite healthy demand and good transaction volumes, overcapacity continues to suppress freight rates to historically low levels. Accordingly, we have put in place a programme to reduce our costs in this area and ensure we are appropriately structured. Our sale and purchase and offshore desks continue to perform in line with our expectations, with similar levels of activity to the previous year. In addition, our US dollar denominated earnings will benefit from the weakness of sterling if the exchange rate is sustained at current levels; however the full beneficial impact from weaker sterling will be felt in the next financial year due to our rolling hedging policy.
Technical
As previously reported, the slowdown in oil and gas exploration and new project work is impacting our surveying and engineering businesses, particularly in relation to offshore activity. To respond to these tough market conditions, we have already made a number of senior management changes in the Braemar Technical division. The new leadership team have implemented a restructuring programme to reduce costs, create regional hubs with responsibility for division wide service delivery and improve the utilisation of our professional staff. This has particularly focused on engineering services and Asia related energy businesses which are the most exposed to reduced industry activity.
Logistics
Our Logistics division is performing well and in line with our expectations.
Outlook
Braemar is well financed with a strong balance sheet and substantial forward order book. We remain confident in and committed to our long term strategy of organic and acquisitive investment together with diversification and expansion in our core markets. However, while the results for the year ending 28 February 2017 will be materially lower than 2016, the structural management changes and cost reduction measures we have put in place (the costs of which will substantially fall in the first half of the current year) will result in an improvement in business performance.
The Group will release its interim results for the six months ending 31 August 2016 on Tuesday 25 October 2016.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014
For further information, contact:
Braemar Shipping Services | |
James Kidwell, Chief Executive | Tel +44 (0) 20 3142 4100 |
Louise Evans, Finance Director | Tel +44 (0) 20 3142 4100 |
Stockdale Securities | |
Robert Finlay / Antonio Bossi / Henry Willcocks | Tel +44 (0) 20 7601 6100 |
Buchanan | |
Charles Ryland / Victoria Hayns / Stephanie Watson
| Tel +44 (0) 20 7466 5100
|
Notes to Editors:
About Braemar Shipping Services plc
Braemar Shipping Services plc is a leading international provider of knowledge and skill-based services to the shipping, marine, energy, offshore and insurance industries. Founded in 1972, Braemar employs approximately 1,000 people in more than 70 locations worldwide across its Shipbroking, Technical and Logistics divisions.
Braemar joined the Official List of the London Stock Exchange in November 1997 and trades under the symbol BMS.
For more information, visit www.braemar.com.