Oil tanker broker ACM Shipping Group is looking at growing its ship broking business and may expand into the dry bulk market amid tougher conditions in the seaborne industry, its chief executive said on Tuesday.
The global economic downturn has hit the shipping sector hard with weak demand for oil putting pressure on tanker rates.
Johnny Plumbe, one of the co-founders of ACM which was set up in 1982, said tanker rates for Very Large Crude Carriers were expected to average around $30,000 a day in 2009, down from $95,000 a day last year — a peak for the market.
“The general economic sentiment has driven everybody to a pessimistic way of thinking,” he said.
“The tanker market is pretty well in negative territory for the owners,” he told Reuters in an interview.
Despite this, Plumbe said the volume of ACM’s spot tanker market brokerage business had risen 10 percent year-on-year.
“We have a very good broking team in place on the market we are focusing on,” he said. “The important thing is to increase the volume of spot market business we are doing.”
The London-headquartered group listed on London’s AIM in 2006 and has sought to expand its global oil tanker broking operations via offices in Singapore, Shanghai, Mumbai and New York. It has a sale and purchase unit handling ship transactions as well as setting up a gas tanker desk.
Plumbe said ACM was looking at broking dry commodities which include grains, iron ore and coal.
“Dry cargo probably has to be the area where we should get into,” Plumbe said, adding that it would need to “get our timing right”.
“One thing we would be definitely be cautious of is to grow for the sake of it,” he said.
ACM’s shares were up 5 percent at 205 pence by 1509 GMT.
Plumbe said there was a change in sentiment towards the world economy with optimism over growth prospects in Asia, adding that oil consumption in the west would remain “relatively stable.” “The future is quite positive,” he said.
Plumbe said the phasing out of single hull oil tanker vessels from 2010 would help address over supply in the sector.
“We believe there will be a considerable number of ships exiting the trading market in the next year or 18 months,” he said.
Plumbe said there was still a lot of oil in storage both on crude and clean petroleum products.
Alex Magni, analyst with Noble said ACM had always made profits since 1982, which was an “incredible track record”.
“Perceived weaknesses would come from the state of its end markets,” he said.
“To the extent that its end markets fall into recession, you get depressed prices on sale and purchase of ships as well as on spot brokerage rates — those are headwinds the company has to got face.”
ACM recorded a profit before amortisation and tax of 8.7 million pounds ($14.21 million) in the year to end March 2009. Four analysts on average forecast a profit before amortisation and tax of around 6 million pounds for 2009/10.
“We are comfortable with what the market expectations are,” finance director Ian Hartley told Reuters. “We are continuing to do well and making decent money in what is a very poor market.”
Source: Reuters edited by Peter Blackburn
