Braemar Plc · LSE:BMS
Braemar — Braemar Shipping Services — H1 2020/21 Earnings Presentation
26 slides from Braemar's earnings presentation, November 2020
Slide 1: Braemar Shipping Services plc Interim Results Presentation
Braemar Shipping Services plc Interim Results Presentation November 2020 Ronald Series, Chairman E: [email protected] T: +44 (0) 20 3142 4100 ‘Strong Shipbroking James Gundy, CEO Shipbroking Division performance in Group CEO Designate volatile markets’ E: [email protected] T: +44 (0) 2
Slide 2: Overview
OVERVIEW “Shipbroking drives stronger performance” ▪ Strong first half trading especially from Shipbroking in the first quarter ▪ Underlying Operating Profit increased by 33% to £5.6m (2019: £4.2m) ▪ Strong margin growth in Shipbroking, partially due to lower costs ▪ Higher success fees for Financia
Slide 3: Summary Results
Summary Results £m H1 2020/21 H1 2019/20 FY 2019/20 Revenue 56.3 (2%) 57.6 117.7 Underlying Operating Profit 5.6 33% 4.2 11.0 Underlying Profit before tax 5.7 59% 3.6 9.4 Reported Profit/(loss) before tax 3.7 (0.8) 6.3 Underlying EPS 16.3p 46% 11.2p 29.5p Dividend per share 0.0p 5.0p 5.0p Net Operat
Slide 4: Segmental Underlying Results
Segmental Underlying Results - from continuing operations H1 2020/21 H1 2019/20 FY 2019/20 Revenue Profit Margin Revenue Profit Margin Revenue Profit Margin £m £m % £m £m % £m £m % Shipbroking 39.3 6.1 16% 38.7 4.9 13% 82.4 11.8 14.% Financial 3.5 0.7 20% 3.3 0.9 27% 5.9 1.1 19% Logistics 13.5 0.6 4
Slide 5: Shipping Market Commentary
Shipping Market Commentary Baltic Dirty Tanker Index All sectors impacted by Covid-19 • China has rebounded strongly • Demand recovery in other regions is slow, and faltering Strong tanker market weakens ▪ OPEC+ has cut exports in response to demand slump. Other producers like Iran, Venezuela and Li
Slide 6: Shipbroking Division
Shipbroking Division “Our expertise and market intelligence provides charterers, shipowners and lenders with a comprehensive service to manage their risk, across the globe’’ H1 2020/21 H1 2019/20 FY 2019/20 Revenue £39.3m £38.7m £82.4m Underlying Operating Profit £6.1m £4.9m £11.8m Margin 15.5% 12.7
Slide 7: Shipbroking – Revenue Analysis
Shipbroking – Revenue Analysis ‘’Our expertise and market intelligence provide charterers, shipowners and lenders a comprehensive service to manage their risk, across the globe’’ Revenue & Revenue Per Head (GBP'm) H1 2020/21 Revenue £39.3m H1 2019/20 Revenue £38.7m 90.0 0.30 Securities, 80.0 11% 0.2
Slide 8: Shipbroking Division
Shipbroking Division ‘’Our expertise and market intelligence provide charterers, shipowners and lenders a comprehensive service to manage their risk, across the globe’’ ▪ Resilient performance in volatile markets ▪ New build contracts added to forward order book despite lower activity levels ▪ Succe
Slide 9: Financial Division
Financial Division “Developing innovative financial solutions for our clients” H1 2020/21 H1 2019/20 FY 2019/20 Revenue £3.5 £3.3 £5.9m Underlying Operating Profit £0.7 £0.9 £1.1m Operating Margin 20.0% 27.3% 18.6% #Oct 20 #Oct19 Retainer only 4 20 ▪ Higher success fees Retainer + success 11 1 fee ▪
Slide 10: Financial Division
Financial Division “Developing innovative financial solutions for our clients” ▪ Provision of maritime related corporate finance advice ▪ Advisory services ▪ Restructuring ▪ M&A and asset brokerage ▪ Successful conclusion of restructuring mandates in the period ▪ Difficult environment for traditiona
Slide 11: Logistics Division
Logistics Division “Cory Brothers has extensive experience and a worldwide reputation for delivering on customers’ requirements” Port Agency H1 2020/21 H1 2019/20 FY 2019/20 Revenue £4.0m £4.2m £8.4m Underlying Operating Profit £0.5m £0.4m £0.8m Operating Margin 12.5% 9.5% 9.5% Freight Forwarding H1
Slide 12: Logistics Division
Logistics Division “Cory Brothers has extensive experience and a worldwide reputation for delivering on customers’ requirements” ▪ Creditable trading in challenging markets ▪ Port Agency and Hub revenues held up well ▪ Improved agency margin ▪ Overseas operations now profitable ▪ Freight forwarding
Slide 13: Engineering Division
Engineering Division “Founded in 1993 Braemar Wavespec provides expertise, engineering, and solutions to the gas processing, liquefied gas, and marine industries” H1 2020/21 H1 2019/20 FY 2019/20 Revenue £1.3m £1.9m £3.1m Underlying Operating Profit / (loss) (£0.5m) (£0.5m) (£1.4m) ▪ Strategic revie
Slide 14: AqualisBraemar
AqualisBraemar “High end consultancy services to the global energy, shipping and insurance industries” H1 2020 H1 2019 Revenue $39.0m $18.1m EBIT $2.9m $(0.5)m Operating Margin 7.4% (2.8)% ▪ Strong turn around since 2019 divestment ▪ Braemar has 27% ownership ▪ Transaction completed in June 2019, 20
Slide 15: Future Strategy
Future Strategy STRATEGIC DIRECTION CENTRED ON SHIPBROKING Continue diversification of broking activities ▪ Widen and enhance geographic coverage ▪ Enhance securities capability to compliment physical broking ▪ Further investment in technology and use of data ▪ Develop offshore renewables market Cus
Slide 16: Summary and Outlook
Summary and Outlook Summary ▪ COVID-19 disruption diminished as period progressed but uncertainty still persists ▪ Strong performance in Shipbroking, especially Tankers ▪ Financial revenue timing variable but increased success fees ▪ Steady trading for Logistics with benefits of costs savings eviden
Slide 17: Ronald Series, Chairman
Ronald Series, Chairman E: [email protected] T: +44 (0) 20 3142 4100 James Gundy, CEO Shipbroking Division Group CEO Designate E: [email protected] T: +44 (0) 20 3142 4100 Nick Stone, Chief Operating Officer & Finance Director E: [email protected] T: +44 (0) 20 3142 4100 17
Slide 18: Group Balance Sheet
Group Balance Sheet H1 2020/21 H1 2019/20 FY 2019/20 £m £m Goodwill and other intangibles 85.8 86.2 86.2 Non-Current Assets 18.9 22.1 20.0 Investment in AqualisBraemar 7.3 8.9 8.5 Current assets* 36.2 44.3 39.5 Current liabilities* (45.3) (51.6) (50.1) Convertible loan notes and deferred considerati
Slide 19: Group cash flow
Group cash flow H1 2020/21 H1 2019/20 FY 2019/20 £m £m £m Opening Cash 28.8 28.0 28.0 Cashflow from continuing trading operations 8.4 0.5 13.1 Discontinued operations & specifics (0.3) (0.4) (2.5) Movement on borrowings and liabilities (24.0) 5.1 2.7 Net interest payment (0.6) (0.8) (1.5) Net capita
Slide 20: Group Specific Items
Group Specific Items H1 2020/21 H1 2019/20 FY 2019/20 £m £m £m Restructuring Costs - (1.5) (1.4) Share of associate profit 0.2 0.8 0.7 Acquisition related items: • Braemar ACM (0.1) (0.1) (0.1) • Braemar Naves (0.7) (2.7) (1.2) • Atlantic (0.2) (0.6) (1.1) • Attributed Interest (0.2) (0.3) (0.4) • R
Slide 21: Discontinued Operations
Discontinued Operations Disposal of Braemar Technical Services/Wavespec H1 2020/21 H1 2019/20 FY 2019/20 £m £m £m Post Tax trading (loss)/profit (0.5) (0.8) (0.8) Restructuring cost & interest (0.1) Write down of intangible assets Estimated impairment (1.5) Profit on disposal of BTS 0.1 Total report
Slide 22: Braemar at a glance
Braemar at a glance Four wholly owned divisions and one associate • Chartering • Transactions advisory • Sale & purchase • Financing advisory & capital raising • Freight derivatives • Restructuring & insolvency advisory • Valuations • Asset & loan management • Research • Port agency • Associate - 27
Slide 23: Shipbroking – how we make our money
Shipbroking – how we make our money Chartering ▪ Single voyage (spot) charter - commission from shipowner on gross freight ($/tonne) - revenue increases as voyage costs rise thanks to voyage delays, higher bunker bills, stronger market ▪ Term (time-charter) - commission from shipowner on $/day chart
Slide 24: NAVES consideration breakdown
NAVES consideration breakdown TRANCHE DATE €'000 €'000 COLLATERAL Management sellers Initial consideration 26-Sep-2017 7,400 cash represented 69.9% of the 26-Sep-2017 7,400 convertible loan notes (all sellers) total sellers (non- 26-Sep-2017 1,505 shares (non-management sellers) 16,305 management =
Slide 25: AqualisBraemar
AqualisBraemar “High end consultancy services to the global energy, shipping and insurance industries” Offshore Marine Adjusting Renewables Specialist offshore Worldwide emergency Serving the international Independent services to the engineering and consultancy casualty, accident or incident insuran
Slide 26: Disclaimer
Disclaimer This presentation (this "presentation") is for general information only and is the property of Braemar Shipping Services Plc ("Braemar"). Making this presentation available in no circumstances whatsoever implies the existence of a commitment or contract by or with Braemar, or any of its a
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