Shortage of ships puts Braemar on course for surge in profits

THE shipping broker Braemar is cashing in on a ship shortage and predicts a surge in profits this year as demand soars.

Shares leapt 16pc yesterday as Braemar said a lack of new vessels will help it deliver £20m in profit this year, twice as much as last year and well ahead of its previous forecast of £12m.

Shipping prices for dry goods and containers have calmed after months of volatility with prices spiking late last year in the wake of Covid-induced port closures, blocked shipping lanes and other bottlenecks.

But higher demand for oil is likely to lead to more tanker activity which will aid the company’s results, it said, while a strong dollar and a shortage of new vessels will add to profits.

Many shipbuilding yards are booked until 2025, which is driving customers towards second-hand ships, pushing up prices, which has helped Braemar’s shipping sales business, it said, as a few yards have left the market and not returned.

The company said: “Over the next couple of years, these factors are likely to prove positive for our chartering desks too, as reduced ability to replace retiring ships is expected to constrict vessel supply and consequently create a higher floor on future charter rates.”

Planned strikes at ports such as Felixstowe could force higher wait times for ships, although as long as other ports are available, the disruption should not be too costly, the company added.

Earlier this month, Maersk, the world’s biggest shipping company, warned that disruption in global supply chains will continue for several more months, helping swell its own profits. The Danish company said it expected a “gradual normalisation” in the market in the last three months of the year.