Braemar Share Discussion Threads

[topvest] 14/3/2018 21:11

Yes, improving outlook I think.

[neilyb675] 14/3/2018 19:50

Get in there😎ԅ26;😎😎;😎

[edmundshaw] 14/3/2018 11:15

Looks like in the region of 20p EPS this year - much improved and headed towards the recovery we have been waiting for!

[mount teide] 14/3/2018 11:12

Good update - as predicted, a much stronger second half performance following a strong rise in the price of oil to which BMS's services are heavily weighted.


Decent outlook:
'Braemar believes that the outlook for the year ending 28 February 2019 is favourable and the Group will benefit from the full year impact of the recent acquisitions of Braemar-NAVES and Braemar Atlantic as well as the continuing recovery of the Technical division.'

[boonkoh] 12/3/2018 21:10

I have no technical charting ability, but does it look like the share price is either poised to fall back or surge to 300p?

[boonkoh] 12/3/2018 08:26

Clarkson results out this morning. Early signs of recovery, according to outlook commentary.

[smicker] 06/3/2018 10:59

Looks like the small buyback/ESOP is providing some support. Due to begin yesterday but not sure that it needs to be reported.

[mount teide] 05/3/2018 10:26

US Oil Exports to the Far East to boost Tanker Sector demand.


US Shale Oil And Shipping: Expect The Unexpected? - Clarksons Research 28 Feb 2018



Sometimes in shipping, as in life, things come along that nobody really expects. US shale/tight oil production, which was barely on the radar ten years ago, seems to be one of those things. The most recent news, of US crude being unloaded in the Middle East and of output passing 1970s levels, has not come entirely out of the blue. But imagine saying ten years ago that the USA could soon be a net oil exporter...

Ancien Régime

Prior to 2017, the last time US total crude oil production stood at over 10m bpd was in the early 1970s, after which output was in decline for forty years. The early 1970s also saw the Yom Kippur War, the Arab Oil Embargo and US motorists queuing to fill up at gas stations where pump prices had quadrupled in under a year. Thus the 1975 US crude export ban and the quest for energy independence that (so far) has proved elusive. In fact, a decade ago, US seaborne crude imports stood at almost 8m bpd, equal to 20% of global seaborne crude imports and 40% of US oil consumption. Only in the area of oil products was a US export sector able to develop, based on intra-Americas exports and the transatlantic arbitrage of American and European refinery slates, with the US importing gasoline and exporting gas oils from its complex Gulf Coast refineries.

The Shale Revolution Begins

Things began to change on the US crude front in the late 2000s. This was due to the shale revolution enabled by advances in “fracking” and related technologies. US tight crude output increased by 3.4m bpd from 2010 to 2014 (almost 80% of the net increase in oil production globally in that time) and was a key factor in the oil price downturn beginning in 2014.

The significant stimulus US shale has been giving to seaborne LPG and LNG trades is well documented. But for a while, shale oil production was a negative for shipping, displacing imports. In late 2015 though, the crude export ban was lifted. Small volumes of semi-processed condensate had already been exported under technicalities, but this opened the floodgates. US seaborne crude exports tripled in 2017 and are projected to hit 1.5m bpd in 2018 (4% of the global total). Given the need to blend lighter shale oil with heavy grades in US refineries, US oil imports look likely to remain a feature of seaborne trade. But talk is now all about rising US oil exports (e.g. to the Far East) creating tonne-mile demand.

The Revolution Continues?

During the downturn, shale has surprised most observers by its resilience, with oil price breakevens in many plays (notably in the Permian) falling greatly. Combined with firming oil prices, this has seen US tight oil output grow by 1.4m bpd from the Q3 2015 trough, to stand at almost 6.5m bpd - 65% of US total crude output. The consensus view is for further firm growth in 2018 and 2019 too, with a plateau not being reached until c.2025 (though shale has a history of surprising on the upside).

So while there remain uncertainties related to oil prices and resource potential, the shale revolution looks here to stay. Clearly this could have further significant implications for seaborne oil trades. And looking back a decade, it just goes to show, not even the wisest heads can see some things coming.

[solooiler] 04/3/2018 21:54

The worry I have here is that the acquisitions are masking the group and making is very tricky to work out how it's performing. I long thought this was a quality management team, but are they acquiring now to be able to point out topline growth in the future?

Worry that this could further decline as a result of exceptional costs etc all hitting later years

[shalder] 12/2/2018 10:35

I remember for many years that "peak oil" was more or less permanently 15/20 years in the future. The first time I came across this was a Pelican book from c1957 discussing the future for world energy supply/demand: this forecast peak oil at c1975. It amuses me that when we got the first oil crisis in 1973/4 the authors must have taken that as proof they were right all along... Part of the problem was the definition of Proved Reserves which always looked to be in the region of 15 years, but this was a function of oil company economics not a statement of geological reality.

btw you will be allowed a garden in Corbynistan, however you will not own it, you will be the temporary caretaker of a Peoples Garden Facility. This arrangement will be irreversible and cost free (allegedly).

[edmundshaw] 10/2/2018 12:30

The carbon economy still powering ahead in spite of 23 United Nations Climate Change conferences (so far). Oil production up, oil use robust, Coal use in China and India massive, growth projected in Asia and the Pacific for decades to come and the global peak in coal use currently expected in perhaps a decade or two. There again, peak oil was supposed to have occurred in 1995 (that was Hubbert in 1974; in 1919 they were predicting peak oil in 1921).

Current predictions for peak oil are "about now" - conventional oil peaked a decade ago, but unconventional oil has exended that and we will be using more than that conventional peak for another 10 years. I expect to be growing pineapples and bananas (if they still exist) in my garden by then... no more need for container ships from the far east for staple fruits needed... always assuming we are permitted to have gardens under Corbyn.

[mount teide] 10/2/2018 09:54

Clarkson's research offers some supply side optimism in 2018 for BMS with its heavy tanker sector weighting.


Shake-Up On The Supply Side? The Crude Exports Outlook - Clarkson's Research 26 Jan 2016


In 2017, global crude trade is estimated to have grown by 2.6%, reaching 40.1m bpd. Looking to 2018, as always there are a wide range of factors shaping the outlook. Whilst there do exist some risks on the demand side, this year there appear to be particularly prominent and numerous supply-side factors that have the potential to notably alter crude trade patterns. So, what are the factors to look out for?

How Low Will They Go?

Firstly, there are risks to the outlook for Venezuelan exports. Venezuela’s crude exports are estimated to have fallen almost 10% to 1.4m bpd in 2017 as their worsening financial situation led to state-owned PDVSA unable to pay debts and fund operations. The ongoing difficulties the country faces fuel the current expectation that Venezuelan crude exports will again fall notably, by over 20%, in 2018. However, the possibility remains of the country entering into full default, and exports dropping even more significantly.

Unrest In Africa?

There is also uncertainty in the outlook for exports from Nigeria and Libya. In 2017, these countries helped to boost global crude trade growth, with their combined exports rising by 26% to 2.4m bpd as Nigeria recovered from attacks in late 2016 and Libya bounced back from disruption following the outbreak of civil war. Current expectations are for another year of growth, with the two countries’ combined crude exports expected to expand by 6% in 2018. In Libya, if there is less disruption than currently anticipated, exports could grow by more than predicted. However, with militant groups historically targeting oil infrastructure in both Libya and Nigeria, a return to more significant violence in either country could result in a more negative outlook.

Cuts And Compliance

Thirdly, there is uncertainty over the timing and execution of the exit strategy from OPEC’s deal to cut production. OPEC crude exports (excluding Venezuela, Nigeria and Libya) are currently projected to rise by 2% yoy in 2018 to reach 20.3m bpd, on the back of rising Iraqi and Iranian exports, after falling 3% in 2017. However, there is upside risk if compliance wanes or the pact ends early.

Sensitive Shale

Meanwhile, the extent of potential growth in US exports is also subject to debate. Rising shale production is expected to support another year of firm growth in US crude exports, currently expected to expand by 70% to 1.5m bpd in 2018 after more than doubling last year. However, the sensitivity of US shale output to the oil price, which is dependent on supply factors elsewhere, introduces uncertainty. Even with notable declines in crude exports from other suppliers, the US could help to fill the gap (especially with a sustained higher oil price) and buffer the downside risk to the global outlook.

So, whilst 2018 is currently anticipated to be another year of fairly healthy crude trade growth of c.3%, several prominent supply-side risks could affect crude trade patterns, and as ever, a myriad of currently unknown risks could also present themselves during the year. It certainly looks like all of these trends will require close monitoring in the year ahead.

[kiwihope] 09/2/2018 09:15

"We are well placed to deliver a stronger second half business performance compared with the first half of our financial year, as Braemar's improving momentum continues...

...We are in line to meet our objectives for the full year."

This from the interim results last October. Year end is February so unless we hear something in the next few weeks then the above must still be true.

[kiwihope] 09/2/2018 09:10

So no trading statement this time...?

[mount teide] 03/2/2018 23:54

edmund - one of the variables that can have a material impact on the vessel overcapacity issue is the POO.

When oil prices/bunker costs are low, tanker operators can increase the average vessel service speed as it is relatively cheap to do so - this results in fewer vessels being needed to do the same amount of work.

As the POO/bunker costs increase vessel speeds tend to decrease to reduce operating cost, particularly when vessel charter rates are still relatively low - resulting in more vessels being required thereby reducing overcapacity.

[edmundshaw] 03/2/2018 13:17

Not so sure about that optimism MT. Overcapacity I suspect is still a serious drag on tanker rates. We may need to wait awhile yet...

[mount teide] 02/2/2018 22:59

A tale of two shipbrokers!

Being heavily overweight in the oil tanker and oil service sector did BMS no favours after tanker rates weakened in mid 2016 just as a surge of new capacity hit the sector.

The comparison with sector heavyweight Clarksons more diversified shipbroking approach is stark.

Since mid 2016 the relative share price performance is astonishing considering they both operate in the same industry:

-40% BMS
+75% CKN

£1000 put in CKN is now worth £1750, while in BMS £600.

Nevertheless, I suspect the strengthening oil price from Q4/2017 onwards should now be generating a modest but very welcome recovery at BMS.

[mount teide] 02/2/2018 10:19

Hindsight suggests BMS took a wrong move by re-positioning their once well diversified shipbroking business heavily towards an oil and oil service sector weighting.

Following Clarksons into commodities broking has not been easy either - as Clarksons has a huge research budget, attract the best analysts, and generate shipping/commodity industry data that is world leading and in great demand - so high quality in fact they are able to package it and sell it on to other brokers, shipping companies, port operators, Governments etc - after first taking full commercial advantage of the information internally for their own businesses of course!

[danieldruff2] 02/2/2018 09:31

I was half expecting BMS to be acquired. Get the feeling consolidation is needed. There was no real uplift from buying ACM Group the other year. RS Platou tried to buy ACMG and were themselves bought by Clarksons some time later. If BMS new strategy doesn't work, maybe someone will buy them in time.

[boonkoh] 02/2/2018 09:17

Management must think BMS current trading is OK and outlook is stable to take a risk with an acquisition.

[danieldruff2] 02/2/2018 07:42

Hmm, corporate activity then!

[mount teide] 30/1/2018 10:48

I suspect Management were pinning their hopes on a recovery in the tanker and oil service sector in H2/2017 which did not materialise.

The longer they leave the Trading Statement the better the outlook for H1/2018, as a result of the recent surge in POO, which is generating rising tanker rates/ increased demand for vessels and, increased activity in the oil service sector albeit from a decade low point.

BMS's overweight postion in these two sectors has weighed heavily on performance since 2016, after tanker rates stopped defying gravity and started a decline which accelerated in 2017.

However, although overcapacity issues are still likely to affect the tanker sector for a while yet the worst is probably now behind the sector and BMS, particularly if the POO stays within the Saudi's preferred range of $60 to $70 through 2018.

AIMHO/DYOR