Braemar Shipping Services: Awaiting Favourable Trade Winds
Edison | May 10, 2017 06:24AM ET
FY17 proved a very challenging period for Braemar Shipping Services Plc (LON:BRMS), although both the Shipbroking and Logistics divisions proved quite resilient. The weakness in the Technical division has been decisively addressed, with a new management team implementing a restructuring programme expected to return the operation swiftly to profit in FY18. With potential for both oil and gas and shipping markets to recover, although timing and strength remain uncertain, medium-term progress seems likely. The strategy remains intact and the balance sheet supports ongoing investments to augment growth.
Main markets remained depressed
Both the depressed conditions in the shipping market and the oil and gas spending crunch sustained throughout FY17. The January trading update highlighted the issues in Technical that pushed the division into loss, as well as the reduced activity in the freight forwarding business in Logistics which offset progress in the Port Agency business. Shipbroking traded as anticipated, with robust operating margins of 12.5%. FY17 pre-tax profit of £3.2m was at the top of market expectations.
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