28 October 2008 11:05 [Source: ICIS news]
LONDON (ICIS news)--The financial crisis has introduced a greater degree of uncertainty in shipping and some of the newbuilding orders in the market may be cancelled, UK shipbrokers Braemar said in its half-yearly results on Tuesday.
Freight rates for the dry bulk and container markets had fallen significantly, it said.
Braemar reported group revenues up 48% to £69.1m ($108.2m, €87m) in the six months ended 31 August from £46.7m for the same period last year and pre-tax profits up 38% to £9.8m from £7.1m.
“The unprecedented events occurring in the international financial and commodity markets over the last month have introduced a much greater degree of uncertainty in shipping,” said chairman Graham Hearne.
"Vessel values have come under pressure because of the contraction of available finance and perceived falls in the demand for bulk commodities,” he added.
He said that this had resulted in reduced sale and purchase activity which was likely to remain low until confidence returned.
“Some reduction of newbuilding deliveries is likely and will be welcome by serving to reduce the potential for excess shipping capacity,” Hearne said.
The scrapping of older ships was also beginning to occur, and this was expected to moderate the supply of tonnage.
Norwegian shiiping group Odfjell, which reported a 78% year on year rise in third-quarter net profits on Monday, also said it was expecting to see a decline in demand for parcel tanker services due to the global financial and economic crisis.
($1 = £0.64/€1 = £0.80)
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