BEL – Results 3rd Quarter 2004

Belships generated operating income of USD 15,444,000 (2003: USD 10,778,000) and an operating result of USD 3,659,000 (USD -286,000) in the third quarter, and an operating result of USD 12,371,000 (USD -8,839,000) for the first nine months of the year.
The major improvement in the group’s operating result is due mainly to a continued strong dry bulk market and the negative impact of the former gas tanker business on the 2003 accounts.
The group recorded a post-tax result of USD 2,619,000 (USD -10,202,000) in the third quarter, and USD 9,071,000 (USD -10,036,000) for the first nine months.
The dry bulk market picked up during the late summer once the destocking in China was complete. Recently rates have hit levels as high as or higher than those seen at the same time last year. There are also some signs of congestion in ports returning, and this could push rates up further.
Elkem Chartering (EC) expanded its operations during the quarter on both the cargo front and the vessel front, and also worked on more long-term solutions for tonnage renewal.
Earnings in the Handysize segment remained excellent.
The Handymax vessels M/S Belpareil, M/S Pax Phoenix and M/S Pax Legend, which are managed by EC, continued on their charters without any significant off-hire.
The Panmax vessel M/S Anangel Express went into dry dock for a periodic inspection and was therefore off-hire for about half a month, which reduced earnings.
The M/S Belnor and M/S Belisland continued on their charters.
The Capesize co-operation led by Bocimar generated a modest result during the quarter.
Due to good performance, Belships continued to strengthen its capital and financial position during the third quarter.
The group had cash of USD 24.8 million at the end of the period, against USD 22.2 million on 30 June, while its mortgage debt was reduced by USD 0.6 million during the third quarter to USD 16.4 million. Shareholders’ equity was equivalent to NOK 7.94 per share and 50.0% of assets at the end of the period.
The market value of the M/S Belnor is substantially higher than her book value.
We expect the dry bulk market to remain strong for the rest of the year. There is greater uncertainty about the outlook for 2005, but substantial newbuilding deliveries mean that continued growth in demand will be needed to keep the tonnage balance as tight.
The M/S Anangel Express spent a further three weeks off-hire in October, which will impact slightly on earnings for the fourth quarter. The Handymax vessels are all on time charters and, except for any periods spent off-hire, earnings for the fourth quarter are virtually a given. Otherwise we expect the Handysize business to continue to generate good results.
Oslo, 11 November 2004