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Braemar First-Half Profit Falls 32% Because of Ship Surplus

Oct. 25 (Bloomberg) -- Braemar Shipping Services Plc, the U.K.’s second-largest publicly traded shipbroker, said first-half profit fell 32 percent because of a surplus of vessels that weighed on rates.

Net income dropped to 3.56 million pounds ($5.7 million), or 17.26 pence a share, in the six months through August from 5.26 million pounds, or 25.51 pence, a year earlier, the London-based company said today in a statement. Sales slid 9 percent to 61.5 million pounds, led by a 25 percent decline for shipbroking, the main revenue generator.

Capesize vessels, the largest iron-ore carriers, on average earned $12,906 a day so far this year, down almost two-thirds from the figure for all of 2010, data compiled by Bloomberg shows. Average daily returns for the biggest crude-oil tankers plying the benchmark Saudi Arabia-to-Japan route plunged by three-quarters to $7,867.

“The delivery of new tonnage has, in most sectors, far outweighed the growth in demand and driven down freight rates,” Braemar said. Deliveries of new vessels this year will come to about 80 million metric tons, against 30 million tons scrapped, it said.

The shipbroker closed its desk for trading oil-tanker freight derivatives at the end of September, spokeswoman Debra Munford said by phone Oct. 11.

Braemar maintained its first-half dividend at 9 pence a share.

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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