Braemar Shipping expects lower full year revenue

Founded in 1972, the shipping service employs around 1000 people in more than 70 locations.

The firm has reported lower revenues due to a marked slowdown in tanker markets over the summer. Despite healthy demand, the firm’s overcapacity in the dry cargo market has continued to suppress freight rates to historically low levels. In response the firm has implemented a cost cutting programme in this area.

On the other handm the company’s sale, purchase and offshore desks are performing at a similar level to last year which in line with expectations. US denominated earnings will also benefit from the depreciation of the sterling post Brexit, however the effect will be delayed until the next financial year to the firm’s rolling hedging policy.

The slowdown in oil and gas exploration and new project work has impacted the firm’s surveying and engineering business particularly in relation to offshore activity. The board is responding by making a number of senior management changes in the firm’s technical division which include a cost restructuring programme, creation of regional hubs and improving the utilisation of professional staff.

The firm’s logistics division has performed in line with expectations.

As a result of the slow start to the year, revenue for the year ending 28 February 2017 is expected to be materially lower than in 2016. Despite this the board feels that the structural management changes and cost reduction measures will result in an improvement in business performance. The board also remain confident and committed to its long term strategy of organic and acquisitive investment with diversification and expansion in core markets. The company has a strong balance sheet and a substantial order book.

Share price fell 9.33% to 368.12p on Tuesday at 1107 BST.