Belships ASA : Report 1st quarter 2013


Belships revenue in Q1 2013 was USD 6,331,000 (Q1 2012: USD 6,302,000), while EBITDA amounted to USD 2,189,000 (USD 2,398,000). The company’s operating profit was USD 1,128,000 (USD -431,000), while the overall result first quarter of 2013 was USD 494,000 (USD -1,483,000).

Accounts for Q1 2013 have been prepared in accordance with IAS 34 Interim Financial Reporting and are consistent with the principles applied in the annual accounts for 2012. The interim accounts have been prepared in accordance with International Financial Reporting Standards (IFRS).



Baltic Dry Index for Supramax showed an upward trend during the 1st quarter and is now at USD 9,360 per day. Panamax index is USD 8,455 per day, while the Capesize segment is struggling with spot rates around USD 4,750/day. This is a level far below the operating costs. The index for the overall bulk market is currently 868 points. Baltic Exchange values 5 years old Supramax and Panamax at the same price: USD 19.1 million. Dry bulk ship values have risen steadily since the beginning of the year.



M/S Belnor, M/S Belstar and M/S Belocean sails on 10-year charters with Canpotex in Canada. Canpotex is the world’s largest exporter of potash, a fertilizing product that is imported in large quantities by countries like China, India and Brazil. Net T/C rate is USD 16,000 per day, which is a good rate in today’s market. M/T Belaia is fixed to J. Lauritzen AS in Denmark until March 2014 at a net rate of USD 12,840 per day. We still have purchase options and options to extend the inbound charter for 1+1+1 years, i.e. from March 2014 onwards.

All ships have sailed without significant off-hire and operating costs per 1st quarter of 2013 is close to budget. Technical management of owned tonnage is handled by Belships Management (Singapore), having full technical management of totally 16 ships.



At 31 March, the Group’s cash and cash equivalents totaled USD 10.1 million compared to USD 10.2 million as per 31 December 2012. The company’s mortgage debt was USD 51.9 million as per 31 December 2012 and was reduced by USD 1.3 million during Q1 2013. Outstanding bond to external lenders were at 31 March NOK 33.3 million. Outstanding amount will be redeemed in July 2013, as scheduled. The bond is hedged against the USD.

Impairment tests for the company’s assets are performed in accordance with IAS 36. The vessels are valued based on observable market values, and charter parties entered into. Based on these internal valuations, no adjustment has been made in the 1st quarter.

At the end of the Q1 2013, the book value per share amounted to NOK 12.51, and the equity ratio was 46.1%.



The weakening of the exchange rate has made Japanese companies more competitive and a significant number of newbuilding contracts have been signed since end of 2012. Charterers want new construction of “eco-design”, i.e. vessels with low bunker consumption and low emissions, and it is now difficult to find slots for 2015 delivery. Newbuilding prices have probably bottomed out in this cycle, and we expect a gradual tightening of rates. Growth in dry bulk fleet adjusted for scrapping is expected to be 7% for 2013 and will decline further in 2014 after several years of double-digit fleet growth. It is admittedly much hidden capacity as a result of a slow-moving fleet, but there is still cause for more cautious optimism. Continued growth in China and better prospects for the U.S. economy are positive for the demand side. Increased export capacity of iron ore and coal will lead to low commodity prices, and China, which has higher production costs than exporters, will have to rely on increased imports. It is expected that the bulk fleet capacity utilization will rise from 83% to 87% in 2014.

All Belships’ vessels are sailing on long-term charter parties to reputable counterparts, and short-term market fluctuations will not affect the company’s earnings and cash flow. Existing charter-parties represent future revenues of USD 130 million.

The focus going forward will be to continue to develop Belships ASA as a long term tonnage provider of modern bulk carriers to reputable charterers. We aim to build up a portfolio of ships and charters that will provide a steady return but also reducing the residual risk exposure through a duration spread. 


Oslo, 7 May 2013