Does anyone know what is going on at Braemar Seascope, dropped 20p today!

Cantor Fitzgerald today initiates coverage of Braemar Shipping Services PLC (LON:BMS) with a buy investment rating and price target of 520p.

StockMarketWire.com
Braemar Shipping Services has put a cost reduction program in place to counter the fall in revenues following lower activity levels and freight rates.

The group says that over the summer, the tanker markets have seen both lower activity levels and freight rates which is resulting in reduced revenues.

Braemar says that while it 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.

It says: "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."

Anyone else feel that Shipping is in for a difficult time. Or a good time to get in?

Totally undecided.

Share price doing well to avoid tumbling on these results. So far.

StockMarketWire.com
Braemar Shipping Services' first half revenues of £70.2 million were down from £79.6 million a year ago.

Underlying operating profit for the six months to the end of August fell to £1.4 million from £7.1 million after charging one-off restructuring costs of £1.8 million (interim 2015/16: nil).

Underlying basic EPS was 3.9p (interim 2015/16: 18.6p). The interim dividend remains unchanged at 9.0p per share.

Chairman David Moorhouse said: "Braemar's divisions have worked hard in the challenging markets that we face and our senior management teams are taking difficult actions where needed to restructure our businesses to address this economic climate.

"The Board is confident in our long term strategy to grow the business through both organic and acquisitive business development. The Board expects the underlying financial performance, excluding restructuring costs of the Group, for the full year to be in line with current market expectations following the actions we are taking to make structural changes within the Group."

StockMarketWire.com
Braemar Shipping Services has lowered its forecast for underlying operating profit before interest, acquisition related costs and tax for the year ended 28 February to £3.0m-£3.5m.

This excludes a one off gain before tax from disposal of its interest in The Baltic Exchange of £1.7m and one off costs associated with restructuring of approximately £2.7m.

It aid this lower forecast was largely attributable to the Technical division and, to a much lesser extent, the freight forwarding element of its Logistics business.

It said the Shipbroking division, which is the largest part of the group generating over 40% of expected Group revenue, traded well, met its objectives and was on track to meet expectations for the year. 4

A trading update said: "However, the Technical division has continued to underperform.

"The previously outlined weakness in the oil and gas sectors has worsened further than the Board originally anticipated, impacting the division in several ways not least a marked deterioration in replacement work.

"Accordingly, we have significantly expanded the management actions originally announced in August 2016 to realign the business.

"This wide ranging restructuring programme to significantly change the management and operating structure of the division is now substantially complete and has resulted in significant reductions in its ongoing cost base.

"It is expected that the annualised cost savings will be in excess of £6m for the next financial year.

"Within the smaller Logistics division, the port agency business continued to perform strongly, although the freight forwarding business was affected by a reduction in market activity. Overall, the Logistics division's performance has fallen but this will only have a small impact on the overall Group results."

Cantor comment today:
"Operating profit for the full year will be in the range of £3m to £3.5m versus our forecasts for £9m (which is also consensus). The final dividend will also be cut sharply. The Group has reportedly made good progress in restructuring this division but clearly a recovery in earnings is delayed. Pending a discussion with management on the detail of the statement we place our recommendation and TP Under Review.

Braemar issued a profit warning in late August citing weaker tanker and dry bulk broking activity, and no pick-up in project work in oil & gas technical services. Today the Group issued a further warning stating that operating profit before interest, acquisition related costs and tax for the year ended 28 February 2017 (FY17) will now be in the range of £3m to £3.5m. This is against our forecast for £9m. This excludes a one off gain before tax from disposal of Braemar’s interest in The Baltic Exchange of £1.7m and one off costs associated with restructuring of c.£2.7m. This lower forecast is largely attributed to the Technical division and in part the freight forwarding element of the Logistics business. The Shipbroking division, which is the largest part of the Group, generating over 40% of total revenue, has reportedly traded well, met its objectives and is on track to meet management expectations for the year. The Group will also cut the dividend, with a final of 5p bringing the total for the year to 14p. This is versus our forecast for a total of 23p.

Weakness in the Technical division - This division has continued to underperform. The previously outlined weakness in the oil & gas sectors has worsened further with a “marked” deterioration in replacement work. Braemar has significantly expanded actions to “realign” the business. This appears to be progressing well and in time will lead to an annualised cost savings in excess of £6m. Within the smaller Logistics division, the port agency business continued to perform strongly but the freight forwarding business was affected by a reduction in market activity. Overall, the Logistics division’s performance has fallen but this will reportedly only have a small impact on overall Group results. The Group still maintains a strong balance sheet, including a net cash position at 31 December 2016 of £1.7m and an unused Group debt facility of £30m.

· Risks and target price – We view the principal risks as demand for global maritime shipbroking and technical services, acquisition execution and currency fluctuation. Our TP is derived using a 10 year DCF of net cash, this is placed Under Review from 400p.

StockMarketWire.com
Braemar Shipping Services' underlying operating profits fell to £3.5m in the year to the end of February - down from £13.8m last time.

Revenue fell to £139.8m from £159.1m but the group said that after a challenging year, the overall results were ahead of revised market expectations.

The directors have recommended a final dividend of 5p per share which would take the total for the year to 14.0p - down from 26.0p last time.

Chairman David Moorhouse said: "As previously announced, Braemar experienced a challenging year and all of our divisional teams worked hard to deliver business performance for the group.

"Tough action was taken in the Technical division to restructure our businesses and address the cost base in this economic climate.

"Despite this we have maintained our core skills and capabilities and, as a result, are well placed for the future.

"The current financial year has started in line with the Board's expectations and we remain confident in our long term strategy to grow the business through both organic and acquisitive business development."

StockMarketWire.com
Braemar Shipping Services has announced the conditional acquisition of NAVES Corporate Finance GmbH, a corporate finance advisory business focused on the maritime industry.

The consideration payable for the acquisition is €24.00 million (subject to a customary adjustment based on target working capital) rising to a maximum of €35.00 million should earn-out payment terms and conditions be satisfied.

NAVES is led by managing partners Mark Kuchenbecker and Axel Siepmann who have over 40 years of combined professional experience in corporate finance and the maritime industry.

Braemar said the acquisition would result in the creation of a new financial division in which Kuchenbecker and Siepmann would take leadership roles.

StockMarketWire.com
Braemar Shipping Services said Monday it had delivered the 180,000m liquid natural gas vessel 'LNG Schneeweisschen' from DSME, South Korea, as part of its ongoing project with Uniper Global Commodities SE.

The vessel had been built for Japan based owners, MOL, and may be provided to Uniper under a 20 year transportation agreement, Braemar Shipping Services said.

Braemar's role was to identify and negotiate with the shipyards and shipowners to deliver the most cost effective and efficient shipping solution under the requirements of its client, Uniper.

StockMarketWire.com
Braemar Shipping Services plc said it had completed the sale of its incident response business, Braemar Response, to Grupo Ambipar for £0.774m.

The Response business was part of Braemar's Technical division and was an environmental consultancy, contracting and training service provider in the marine, oil & gas, road and rail industries. The business was sold as the company believed that it would benefit from having an alternative owner.

'We are delighted to have found an excellent home for Braemar Response in Grupo Ambipar. The disposal allows Braemar to focus on delivering its strategy for its core consultancy and professional services,' said James Kidwell, CEO of Braemar.