Braemar shuns downturn ‘hype’ with hints of market optimism

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Braemar Shipping Services Plc has pointed the accusing finger at industry hype for driving down the shipping market and has given the first hint that a market recovery could be just around the corner .

Alan Marsh, CEO, revealed that “people emphasising the doom and gloom are wanting to depress the markets because they want to buy ships at lower prices. There is a recovery out there, but there is a great deal of psychological play in this game at the moment.”

Speaking at the release of the Group’s annual results which revealed a 14% jump in pre-tax profits to £17.3m from last year’s £15.2m, Mr Marsh indicated that Braemar is in fact fixing more ships than in previous months; just at lower values.

He said: “Demolition is also on the increase, and this is a very important part of the business for us, as we are one of the few brokers dealing in demolition. No owner sells because of the price for demolition, but given the option between that and lay-up, it is far more preferable.

“Much younger vessels are going for scrap , but this is all part of shipping solving its own problems. It is very good at self-correction, and the fleet is finding its correct size through scrapping and lay-ups.”

Mr Marsh indicated that a great degree of transactions on the S&P market have been cash buyers, predominantly from China and Brazil: “There is certainly no shortage of buyers – they are recognising that there is spare tonnage to buy,” he said.

Contradicting popular industry opinion, Braemar has stressed that this year will not see the expected hit that has been widely anticipated in terms of order cancellations, with the belief that very little will actually be cancelled.

As the Group revealed that it has set up offices in Singapore, it indicated that the growth in the Far East is likely to lead to an economic superpower and has its eyes set on future expansion across the globe.

As a direct response to the extortionate taxes incurred through its central office in London, Braemar Shipping Services also divulged its consideration in moving out of London and into international waters to conduct its shipbroking operations in exactly the same way, but at far less expense – even in spite of its strong financial growth.