Braemar H1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
November 6, 2024

There are 6 speakers on the call.

Operator

Good morning, everyone. Thank you for joining.

Speaker 1

I know it's a big day today

Operator

out there in the press, what's going on in The U. S. Moment, but thanks for joining. Really appreciate. A couple of things first.

Operator

Chris is here as well, just your guidance in the audience here. But when it comes to Q and A, Chris will obviously be helping with those questions to answer as well. And I want to say to Grant and his finance team, well done for getting the accounts out in time. It's not early. We're definitely improving there.

Operator

So please take a big tick on that because I'm seeking better at night in the back of the fact that the accounts are coming out in time. This, you all know, the introduction of us, myself and Grant, we do. Proud today that we've got, as I said earlier, got the countdown time and the fact that we delivered what we said we'll do so far and being quite positive about the business and the outlook of the markets, etcetera. Just to go through some of the highlights here, and I sort of elaborate a bit more on that as well with the revenue and the profitability compared to profit compared to last year. You can see that our diversification story and how we built the business into more of a resilient way, especially by building our security business, which is thanks to Trist a lot there.

Operator

And making it, allowing to even when the market is moving up and down, we can take advantage of all those markets movements by having those security businesses. The underlying operating profit you can see is up from comparables to the same time last year. We've improved the revenue line as well. The net cash is slightly up there. Grant will obviously explain a bit more on that later on down the line.

Operator

The revenue per head, you can see the figures here from 81 to $2.27 on the basis from first half last year to this year. But the most important thing is that we were mentioning, we were looking at the stats that the voyages are obviously longer, which means the revenue is slightly up, but the number of fixes is slightly down. That's lots of world trade except for it. So just making sure you realize that, that where it becomes a negative on one part aspect as far as deals being done, it becomes a positive on the side of the fact that the revenue slightly goes up on the longer voyages. And obviously, with the Red Sea being a key indicator on that as well and what's going on in the world today, these are all positive aspects for shipping as it is.

Operator

Now this is a key factor as well, the forward order book. Another point that Grant was mentioning, what's dropping into the second half of the year, which is obviously very positive. And I can safely say that order books increase again where we are today comparable to the August. So that's a good news. And once again, obviously, in terms of profitability, we've been saying our progressive dividend, we maintain that.

Operator

That is just what something we're saying as well. So Brian, you can move across a bit range. Now just sort of obviously highlighting on the fact that the management team in place now since four years in January since I've took the chair. We had a strategy there and it was very key that we were going to focus on ship broking and any business that complemented ship broking. We didn't want to see it.

Operator

We didn't business I didn't understand, I didn't want to do. And I think by Skyline's business and reducing the debt and concentrating on businesses, you can see that those new business we've acquired plus additional talent and debts we've brought in have enhanced revenue compared we were four years ago. Obviously, since as you can see, shipping is in the press a lot and the weather could be driving to come out this year and the container market went back up again in the back of the Red Sea, we've always been so diversified in all the markets and all the segments. We're taking advantage of those sectors, which is obviously creating our revenue line and protecting our resilience within the business. That's one key factor I want to emphasize to everyone here that we've made the business more resilient by covering all those markets.

Operator

And even interesting insight into the container charging space that desk has gone from literally nothing in the last three or four years to really outperforming. So and then obviously, as I said, we've increased in the scale. One more office opens up in the last twelve months in Korea. We're building those offices up and we are I think we see you have a few more focuses on in the headline going forward, which we will do, in addition to potentially the M and A deals, which we discussed as well. But be careful, Bill.

Operator

Be sure that we won't be going into those M and A deals, yes, we're totally sure it complements the business. There are quite a few things coming across our desk that we just push to one side because either a massive overlap or we don't see how we can enhance the bottom line of the business. And I don't remember what Grant here, he's definitely protecting me on that and making sure we don't do that. And obviously, the dividend, obviously, a key factor here. We're obviously promoting that from where we were three or four years ago.

Operator

All right. Thank you. Grant, you take over there.

Speaker 2

Thanks, James. So if we start with the income statement. Revenue at million was 1% ahead of previous period. Investment advisory performed well. That was up 19% to million, driven by strong performance from our sale and purchase desk.

Speaker 2

Risk advisory, our securities business continued its growth trajectory up 16% to million, and that was really driven by our dry FFA, desk board freight agreements and natural gas desks. Offsetting this chartering was 5% lower, primarily due to lower performance in tankers, although the acquisitions that we made in FY 2022 continued to perform well. Operating costs were up just 1% and we can see the operational leverage coming through with underlying operating profit before acquisition related items up 5% to million. With a lower level of exceptional items in this period, statutory profit before tax at million is million or 89% above the same period last year. Underlying earnings per share of 14.55p is 2.88p lower than the prior period and that's because of a higher tax charge in the six months compared to last year.

Speaker 2

And in line with our progressive dividend policy, as James mentioned, interim dividend 4.5p, up from 4p last year. As we saw in the FY twenty four full year results, the strategy of diversifying across ship broking and security is building a more diversified business, which is delivering sustainable revenue and profits. For the first half, the revenue mix has remained well balanced and geographically, we can see that we've broadly maintained the mix that we saw last year. On this particular slide, we can see the benefits of that has grown by 1% to million from last year, but with a very different mix.

Operator

We saw weaker chartering performance, as

Speaker 2

I said, primarily driven by tankers, where we've seen, as James already mentioned, an increasing average commission, but lower fixture numbers and that resulted in a 5% decrease in those revenues overall. But that was offset by an improved performance in investment advisory. Sale and purchase revenues grew by 25% and that was driven by increased activity across all areas secondhand and newbuilds, while corporate finance remained subdued in the first half, although there are a number of mandates that we expect to complete in the second half. Risk advisory continues to grow up 16% from the prior period and now contributing 15% of overall group revenues at million. That's double the revenues that the securities business achieved in the first half of twenty twenty two.

Speaker 2

Since the strategy was implemented to focus on ship broking and securities in FY 'twenty two, revenues have increased from million to million this half, and that's an increase of 60% since the strategy was introduced. As I've said, operating costs remain well controlled, up just 1% from the prior year period. Overall staff costs are up 2% as we continue to invest in headcount. Traveling and entertaining is lower in this period, whilst professional fees are up million, and that's as we expected as we work with our advisors to establish our organized trading facilities in Europe and The UK, which will complement our securities business going forward. Moving on to liquidity.

Speaker 2

The group has maintained a positive cash position, slightly up on the previous year with overall borrowings reduced by 2,300,000.0 sorry, £3,200,000 from the previous period. Finally, on KPIs. As I said, revenue up 1% to million. Revenue per head continues to be strong, but in U. S.

Speaker 2

Dollars, that's GBP 227,000 and it was GBP 228,000 last year, so broadly unchanged. Operating profit before acquisition related items GBP 7,900,000.0, up 5% from the previous period. And we've improved operating profit margin slightly. It's 10.5% against 10.1% in the first six months of last year. As James has mentioned, the forward order book remains strong.

Speaker 2

At the August, it's $80,900,000 up 20% from a year earlier. This goes out to 2,039 and is broadly split fifty-fifty between S and P and chartering. And importantly, dollars 28,000,000 of that forward order book is going to land in the second half of this year. Positive cash maintained, borrowings reduced and entering dividend of 4.5p. I will now pass back to James.

Operator

Thanks, Graeme. Now obviously, the market rates going forward, we're, for sure, Brainmaster are very bullish about the outlook going forward next, and I'd say that next five years. It just feels like the results going to geophysical situation, plus as you can see on the newbuilding order book, you can see where it was and where it is today. Yards are still filled to probably late 'twenty seven. And the mix, I believe, the mix from 02/2008 super cycle then compared to where it is now is more diverse.

Operator

It seems more equilibrium between the various different fleets. So we're not seeing one necessarily, one fleet overbuilding, so we could feel that the rates will sustain. And we know the fact in the long term time charter book and the futures market, which obviously involved in all those markets, is very positive going forward. So now we're going to get some ups and downs, but that creates positive, that creates volatility in the markets, which we have other markets, which we can lead back onto. So as I say, as I keep saying in the first message was that we've been diversified allows us to be far more resilient in what we're trying to achieve.

Operator

But as far as the new building order book is not in our favor, we will start to see some removal from that fleet as it starts moving from it was what you would call, we just talked about 15 years of age. That was what we used to say some ten years ago, but it feels it moves more 20. But as you can see, the fleet is aging and aging near as that twenty year mark. So you'll have to start seeing some. And within the Western Hemisphere, it's really more age restrictive in the Western Hemisphere compared to the East.

Operator

But even that, we see a case of moving away. So we will start to see some recycling within the market in the next couple of years, which by the way, we have a very strong recycling department as well, so we're on top of that sector as well. Now if we go into Brammer Index, you can see where we were in the situation, obviously, when sadly when Ukraine was invaded by Russia, so that markets took off everywhere, but we've come back, but still above where the average were in the last three or four years. So we still believe the outlook is very strong from where we are and what we're seeing and where our analysts are looking at the market. So yes, you can move forward, please, Grant.

Operator

Now look, from us, I think from where we're sitting here, I think you can say we're pleased with the results where we are and we feel confident for the whole year. It's a good revenue. And as I said before, the way the business is structured now, we're creating that resilience and the diversification story is definitely working for us. And we will continue to build that. We have that platform to build on all those various desks across the globe to increase those probabilities.

Operator

I mentioned that the average commissions are offsetting by weaker fixed numbers, but I said earlier the fact that those are longer voyages, so revenues higher per voyage as opposed to the fixed numbers are down because they're less short voyages. Maintain that cash position. We've obviously been emphasizing our progressive dividend, which we'll maintain. So it's up from 4.5%, it's up 13%. I've discussed about the Alluka shipping.

Operator

We feel confident about that and positive in that business. We feel we're well Braemar is a great brand within the shipping industry. And on top of that, we've definitely put ourselves on the front foot as far as our desks across the globe and being involved in those markets. And I can assure you that those desks talk to each other all day long to enhance more deals in the back of information. So it's critical.

Operator

And on top of that, the fact is the business is becoming more compliant. I can say that. We're not quite regulatory ship broking, but we have regulated size of our business. So we are so for a public company, being held in that side of the regulation and compliant and being a public as I said, being a public company, it's important and it's why we're seeing consolidation because the smaller shops are finding it more difficult to maintain or use as far as adding extra costs into their own business is becoming expensive. So you're seeing a shift from smaller shops into the bigger shops.

Operator

That's why we feel that, as I said earlier, it's about grants. So we're being very careful what we pick. We're not going to certainly come out there and start doing deals. We're very careful. But what we have proven is the fact the deals we have done have been massively enhancing to our bottom line and our revenue stream from where we were in the last four years.

Operator

Strong forward order book, Grant mentioned that. And as I said, we're up again in the last month, so that's a positive thing. And obviously, it's nice to come out as a business. So a shipwrecking business, you come out on the day one of a new financial year knowing you've got a large amount of money coming into the book. That doesn't happen in many businesses there.

Operator

So that makes sense. There's a lot of confidence we can start the year with a little money coming in. As I said, all the pipeline deals we've done have been complementary and enhancing, so we've positive that. And I think as we said in our papers today, we're obviously in line with where our numbers are. So as far as that, we've been kind of confident.

Speaker 2

All right, but thank you

Operator

very much. Obviously, there'll be some questions, I'm sure. And Chris will be in for those questions as well. So please shoot ahead.

Speaker 3

Robin Biese from Zoos Capital. Thanks, guys. Three, please. Just on fleet age, can you talk a bit about the implication of energy transition and how you see that playing out? Secondly, just on the Ford order book, you said I think fiftyfifty chartering and S and P.

Speaker 3

Can you just give us a bit more color by segments? I mean, how tankers heavy is that, for example? Apologies. Number three, revenue per head. Again, can you give a bit more color on the split by division?

Speaker 3

So who's doing better? Who's doing not so well?

Operator

Thank you. So I'll start the first one with a question about the alternative fuels. That's a question that if you talk to the average ship owner who's probably runs his business on the back of older ships and looking basically for return of the ships, he won't necessarily be bought into the fact that he wants to go down the alternative fuel because there's a serious impact of cost. At the moment, we're not necessarily seeing the day to day chartering, for example, paying that additional cost for a ship that's running on methanol or LNG, for example. So now unless the market swings, LNG becomes cheaper than low sulfur fuel oil, for example, it's only going to be a case of the charter to take the best ship in the best position for whatever it takes.

Operator

So that hasn't totally gone to be. Obviously, with the EUA situation, that's starting to lean and they're starting to put pressure on these Chip owners to sort of take in or reordering the next generation ships. But we're not seeing any singular, I say that, we're seeing a dual fuel ships being ordered. We're not seeing a singular, like a singular LNG fuel chip or a singular methanol chip. So that hasn't quite moved across yet.

Operator

But of course, the pressure on is still out there. And you're seeing in container space more, yes, because the movement of goods, for example, like maybe Amazon or Ikea or Nike is saying they want their ships, their goods move net zero, and that creates it. But we're not seeing it necessarily on the main day to day charting where they're insisting on they're moving freight at the best cheapest price, and that's how it moves across. I think I'll just add a little bit to that

Speaker 1

and what James is saying. You're definitely seeing a shift, as he said, in the container market, but some of the big operators like Maersk and Hapag Lloyd are already committing on LNG, methanol and ammonia fueled carriers, whether they're in service now or new build orders that they're placing. And certainly, some of the larger owners in tankers are making those commitments as well on dual fuel chips. But I think it's all kind of adding up to the same fact that we have right now is that because they're not making those commitments and because we have this slow delivery time that you're seeing an already existing fleet age even further and that transition hasn't happened yet, but it's just creating a pinch point at some point in the future.

Speaker 2

So just to come back

Speaker 3

on that, do you think Maersk ordering the fleet of methanol container ships, is that a pull through from their customers?

Operator

Correct.

Speaker 2

That's

Operator

the difference we're seeing like in that the container space is ahead of the curve as far as like the tanker space, for example, or dry bulk space because the customers aren't insisting on it. They're looking for the cheapest freight. That's a fact. There's no point doing that. And so if someone's going to have disadvantage, for example, on the VLCC, there's been $20,000,000 extra on having a dual fuel, but ex oil company won't pay more where is it coming through apart from less LNG stuff become more of a competitive fuel, which then you're hedging on the back of where LNG is as a price factor for bunkers as opposed to HSFO with a scrubber or loads of fuel on your own.

Operator

Does that make sense?

Speaker 2

Good. So I'll take the point on the board order book. So if you think about the forward order book split, if you look in the appendices on Slide 20, you'll see a split between chartering and S and P. So we don't disclose it specifically by chartering and desperate. Broadly, if you look at the charter and split down from a revenue percentage, you can probably apply that to the full order book and

Speaker 1

we get very similar split by desk.

Speaker 2

In terms of revenue per hedge, obviously, it moves around. And if you think our chartering division is by far the largest, about two fifty people in the chartering division, about 50 in S and P. So S and P is fewer, but bigger ticket items. So you will see that revenue per head is stronger in S and P in this period and slightly weaker in chartering. The securities business revenue per head has continued to grow as that business becomes more and more successful.

Speaker 2

So I'd say securities and S and P are broadly similar, chartering a little bit lower as we've seen some drop off in some of the rates in this period. But they all mix around, so it runs up, runs down, but that's the benefits of the diversification within the business.

Operator

So is the average

Speaker 3

for securities per head higher than the group average? Yes.

Speaker 2

As per class? Yes, exactly.

Speaker 4

Good morning. Caroline Gallagher from Exchee Development. You've got a very helpful slide here on the various opportunities on, I think, Page 21. And you talked about being very selective in potential M and A opportunities. And I just wondered if you could talk a bit more about financial criteria or what specifically you're looking at with regards to acquisition opportunities?

Operator

I think I'll start on that one first. First of all, I'm obviously looking for the fact that where I grant to go some of that question, but for me, it's about making sure that we don't see an overlap. When the you take a lot of that experience, for example, from when we did the Braemar ACM merch. Now there was a lot of overlap, which created a lot of problems. And on top of that, there was a, I would say, different culture.

Operator

And that's not been too harsh, it was different culture in Braemar and ACM. ACM is a very aggressive shop. And I'm not saying Bremar wasn't in that respect, but it's still too much overlap, which creates a little wastage. So what can we take that lesson out of that and we say, right, we need to look at M and A deals that potentially enhance with not so much overlap. So that makes it slightly easier to sort of segment out.

Operator

We're not going to buy business and wait half of it down the road. We're going to buy business that where we can save costs on obviously offices because we're not in the same location, etcetera, making sure we can support with the backups, what we're doing backup staff, support staff and making sure that the business, the revenue makers coming in are complementing our present revenue makers. Those are the key things for us. I think I made it very clear, and I believe, and I'm pretty sure that Clarkson has to say the same thing, that the business is more is consolidating more and more. So because of the many reasons to that compliance, other aspects as well, and the client actually wanting now to be able to have a company that can service on every sector.

Operator

They don't want one over here, one over there. Boutique shop days from the '90s has sort of moved on a lot then. So what we're saying is that the business we targeted, for example, for lack of that being Madrid or The U. S. Or building our securities business, where they were targeted M and A deals, which we obviously self funded with our own debt and financing.

Operator

So and they have been hard. So now we can see and say, you know what, we've done those ourselves. We've proven that adding to the bottom line and to revenue. And I can safely say those businesses enhance their own earnings. I mean, the stakes probably enhanced by 38% on the back of having larger group information and able to break into new markets.

Operator

They couldn't fix it, they didn't have the information. So the so out of that, we take that. And that's why the next if we ever come to the market to do deals, big M and A deals, we'll be focusing on deals that definitely complement us.

Speaker 2

Yes. I mean, I'll just add a couple of bits to that. So you can see here, you look at these pie charts, there's lots of opportunities there. So first of all, does it start to fill in one of those gaps? As James has said, is it complementary?

Speaker 2

Is there limited overlap? Are we confident that one on one is going to equal three? And importantly, given the platform that we've built within the business from an infrastructure standpoint, can we bring that business on board, make it more efficient, improve the margin, and of course, that will drive operational leverage in the business going forward.

Speaker 1

I think I'd just add to that. For what we've done so far, once we've established a footprint in something, whether it's a product or a geography, we see the natural effects of the business growing once it's there. And a good example of that is obviously in The States with the Southport acquisition. Essentially, we were buying a tanker operation in North America, but we're moving our products now that we're shortly opening an office in Connecticut. We've already got a presence on the West Coast now.

Speaker 1

And it has just sort of once the footprint is there, it's very easy to expand it. And the same thing with obviously securities in that we initially started with drive of ADESK, Golvest moving into natural gas, got interest moving to other products here within Europe. Part of that seems going to move to Madrid when we get the OTF license now that we have the office in Madrid. Likewise, with Korea, Korea was opened as an extension of our S and P and newbuild business. But at the same time, we've got a container theme in there now.

Speaker 1

So

Speaker 3

it's complementing things once you

Speaker 1

have that footprint. It's not easy, but it's easier.

Speaker 4

Thank you. Very comprehensive. And just one follow-up question well, not follow-up, but just a different question. Working capital has moved around quite a bit over the last couple of years. Do you have an outlook for the second half on working capital?

Speaker 2

Probably, I think it has moved around from working capital perspective, the cycle is that you build up surplus working capital, pay bonuses at the interim, build it up, pay bonuses in the second half of the year. So it has moved around a little bit, but I think it will be more normalized going forward.

Speaker 5

Damian Brewer, Canaccord. Two questions, please. First of

Speaker 3

all, could you expand a

Speaker 5

bit more on what your customers are telling you about why they're ordering so far ahead and effectively what is expanding the forward order book? What's driving them to commit earlier for longer, I could put it that way? Well,

Operator

first answer is really they have no choice when it comes to the date of the ship we delivered because the yard capacity was cut by 20% after February, 'nine crash. So the fact is it's about ability to build a ship and that's why you're given burst place and there's nothing earlier. So you can't really get around that. So they believe in the markets. Obviously, there's still one big driving factor is on the newbuildings sector is the fact that the yards are looking for the highest return on what ship to build.

Operator

And for example, like a large container ship with a 24,000 TEU or LNG carriers at higher probability. The LNG market is probably built they're bordering for forward because of what's coming on stream down the line. And that's where their belief in the forward market is huge, not necessarily the prompt market. As you may know, the LNG market is quite weak. But the full projection and what's holding the secondhand prices and new building prices up is that the belief was the net coming of the Mozambique projects, all these very big LNG projects.

Operator

So I guess that's the main reason for the where the deliveries are.

Speaker 5

Thank you. That makes sense. Yes, absolutely. Okay. And then second question.

Speaker 5

The RCF is now, I think, extended through to November 27. Yes. You're generating cash now. The one off items potentially start to reduce over the next two years quite considerably, so that cash generation could accelerate sharply. You've lifted the dividend.

Speaker 5

How broadly, without going into any particular metrics do you think about the way you're going to allocate the cash you're going to generate in future? Because it's got dividends, investments in people, expansion, maybe enhancing M and A. There's lots of opportunities there. Have with the board, how do you think about that?

Speaker 2

Is you about to pull that down? Difficulties sometimes.

Operator

To be honest, I'm obviously very much about the growth of the business. I think it's important to grow the business and there's opportunities and there's timing factors. I think as far as I'm concerned, we've maintained that we're talking about progressive dividend, which is we understand what progressive means. But for us, it's about putting those spaces in that growth chart, and that's a key factor. And I think we've proved that that's important for us.

Operator

So yes, so growth is happening.

Speaker 2

Yes, I think the way we would be, we want to continue to do. Yes. That gives us

Operator

the firepower if we

Speaker 2

want to increase our debt profile to make acquisitions. We sort of run a 50% maximum EBITDA in terms of the overall net prepaid services and that's been improving over time. But there is headroom there for us to go and do it. So it's really initially, let's reduce the RCF as we go forward and give ourselves the firepower then to make investments in people or M and A whilst maintaining that progressive dividend policy as well.

Operator

I mean just to add to that, I think, yes, just to say, I mean, look at the graph up here, look where the business was four years ago, where the debt was. I'm not going to try to sort of be negative on the past up until my Chairman don't look back, but you had to deal with what the cards you laid. And for me, at the time was like, I don't like debt personally, I don't like debt in the business. Let's just get rid of the debt and sell those business with non core, reduce the debt, put us up in a better position and grow the business. I think we've proved that.

Operator

The strategy has been correct from what we've done there. And also, it's important to, I believe, to run a business you understand, to evolve business we don't necessarily understand. It just made no sense personally to me. James Fletcher from Berenberg. Just on S and P, can you give a bit more color on the secondhand market?

Operator

You had a nice graph on the newbuild. I was just wondering the relative buoyancy of the secondhand market. Yes. I mean, anytime it goes a little bit quiet where markets either come off and people are believing that the rate of the price is going to come lower, there's also an influence point. But because there's so many different sectors and the rates are different markets, are different moving different times.

Operator

It could be one month we're focusing on tankers. Next month, we're focused on dry cargo or containers or LPG. So the reality is we're still doing our numbers on the second hand, of course, we are. But it can move around. But the good thing is I think you can see from the business is the fact that probably over the last twelve months, there's been a lot of focus on the new building because there was a real demand at the yards.

Operator

So the brokers will obviously concentrate on what. And sometimes for them, it's concentrating on the forward order book deals as opposed to the second handers, the second handers aren't there so much. But reality is, it just honestly, the guys are buying sometimes the brokers are selling deals, ships on the back of what they're seeing on the spot market or on the futures market. They actually can see that for the owner of the company by the MR2 tank, for example, because I can see the forward curve moving on futures in our company and the spotless is saying it's going up on the time time where it's going. So they all interlink on one floor and they need that information to make sure it collects because it does sort of feed itself from the deal.

Operator

So as I said, it's all timing aspects.

Speaker 2

Andy Murphy, Edison. Just a question. Just wondering about all the sort of geopolitical issues that were mentioned in the statement. If the world was to normalize back to a world where there aren't any sort of diversions and wars and that sort of thing?

Operator

I knew that too, though.

Speaker 2

Yes, okay. I'll cancel that question. I was wondering what impact on revenues and profits a normalized market would look like?

Operator

Well, I think if you go back to the graph on the let's go back to the fleet summary. So if your question is correct, if we start to go back and Trump resolves the world and everything goes back to a bit of a situation like normality because he claims he can do that, then this aging fleet will then start removing straight away. It was just that the old fleets will have to go to the this is a beat, as we will call it, and be recycled. Then you'll see that the fleets start to become an equilibrium, which they'll maintain that level. So I think the reasons why these older ships are getting why these older ships are sailing around the world today is because of the market so strong and that's because they're making such profit on these older units.

Operator

But once those profits come if we set example, then the rates were to come down, we'd see the fleet start to diminish, then we start to see it go back up again because we have a shrinkage of fleet and where the world trade is. It's the world trade pattern, for example, has changed hugely in the last thirty years. I mean, we used to see oil going into U. S. Gulf and now see oil coming out of The U.

Operator

S. Gulf. So it's the pattern going into China or going from Brazil. I mean, all these trade patterns have changed so hugely. It's just allowed that the freight rates have become picking up.

Operator

And of course, at the same time, the asset values on newbuildings are more. So it's obviously going to create the higher return. They need a higher return to run these ships. So I don't think we're going to and I don't think we're seeing them out this Saturday either, not in my time. But I have to I understand the question you're asking for, but that's probably the answer I can think of.

Speaker 3

Hi, Rob Sanders. Just your

Speaker 2

people business, what's the first half been like in terms of

Speaker 3

recruitment, attrition and especially rainmakers?

Operator

It's I can ask Wes. It's obviously it's a competitive business. Let me assure you that. It's been more competitive in the last five, ten years. It's broken up more on the arena as far as the focus.

Operator

We're obviously going to as we're going to especially say to people's business, there's going to be a turnover into the staff. I don't know, it's just a low percentage compared to the size of the business, very low at the same time. Look, what I can say is that how I view it is that there's a showflat on certain people that they need to move on. Also, I want to emphasize the fact that we are a public company, very exceptionally compliant with how we run a business. That doesn't always necessarily run well with everyone in the business around the globe.

Operator

But at the same time, when we if someone was to move the other company, whatever reason it was, it's quite interesting how we fill that space because of whatever that personality is. So we will be this is an evolving business and we feel that we're able to attract because of the brand. And yes, I think that's no one bigger than the company,

Speaker 2

except myself. Yes. That I mean, we've lost some people go to owners. And so in many ways, you keep getting the revenue and then move to owners. Some do go to completely The big houses will come.

Speaker 2

Yes. But importantly, what we're talking about is building that scale within the business. So as we continue to grow, you can withstand any nutrition that you get across the business. And that's

Operator

an important part of our

Speaker 2

growth strategy to continue on that.

Operator

It's quite interesting on the just to add to that point on that tanker wet FA desk, which is undoubtedly one of the strongest desk is the strongest desk in the world. We're probably at 45% of market share. Most of the head traders that are out there, we're all exiting our desk. So we lose one and we get business back because of who they are. So it's just one example of that.

Operator

So we can be a training ground sometimes, undoubtedly, other training ground at classes. So but you do see them, people move on. So but the most important thing is the headcount's up and we're growing our business and we obviously move into new sectors.

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Earnings Conference Call
Braemar H1 2025
00:00 / 00:00