BEL – Earnings per 30 June 2004

Financial performance
Belships generated operating income of USD 15,777,000 (2003: USD 10,500,000) and an operating result of USD 4,010,000 (USD 726,000) in the second quarter, and an operating result of USD 8,712,000 (USD 1,067,000) for the first half of the year.
The major improvement in the group’s operating result is due mainly to a strong dry bulk market and the elimination of the negative impact of the former gas tanker business on the 2003 accounts.
The group recorded a post-tax result of USD 2,887,000 (USD -241,000) in the second quarter, and USD 6,452,000 (USD 166,000) for the first half.
Segmental results
The dry bulk business generated an operating result of USD 4,443,000 (USD 1,043,000) in the second quarter, and USD 8,859,000 (USD 1,529,000) for the first half.
Following the sale of the M/T Belgrace during the first quarter, Belships has had no significant activity in the product tanker segment, which generated an operating result of USD 383,000 for the first half.
Rates in the dry bulk market fell throughout the quarter. This was due mainly to the efficiency of the bulk fleet being improved substantially, with congestion in ports being virtually eliminated, and to the Chinese scaling down their stocks of iron ore. Growth in China remains extremely high, so the underlying trend in demand for transport services is robust.
The M/S Belnor and M/S Belisland continued on their charters.
The Capesize co-operation with Bocimar contributed USD 455,000 to the group’s result during the second quarter.
Elkem Chartering continued work on strengthening its cargo portfolio in the Handysize segment, combined with a cautious increase in the time charter fleet.
The Handymax vessels M/S Belpareil, M/S Pax Phoenix and M/S Legend Phoenix and the Panmax bulker M/S Anangel Express continued on their charters.
The commercial management contracts for the M/S Belguardian and M/S Belgreeting expired on 30 June 2004.
Financial position and other information
Thanks to this good performance, Belships continued to strengthen its capital and financial position during the second quarter.
The group had cash of USD 22.2 million at the end of the period, against USD 17.4 million on 31 March, while its mortgage debt was unchanged during the quarter at USD 17.0 million. Shareholder’s equity was equivalent to NOK 7.37 per share and 51.4% of assets at the end of the period.
The market value of the M/S Belnor is substantially higher than her book value.
The dry bulk market rallied again strongly in July as the Chinese stock reduction came to an end. It is unclear whether growth in China will continue at the same rate as previously. Our vessels outside the Handysize segment are all on time charters and so unaffected by market developments in the immediate future.
We expect Elkem Chartering’s Handysize operation to continue to post good results this year.

Oslo, 19th August 2004