Belships ASA: Report 1st quarter 2023



  • Operating income of USD 112.8m
  • EBITDA of USD 43.7m including USD 8.2m from Lighthouse Navigation
  • Net result of USD 27.8m
  • Declared dividend of NOK 0.70 per share
  • TCE of USD 20 559 gross per day for owned fleet – 100 per cent outperformance of market
  • Acquisition of 4x Ultramax newbuildings 2024-2026
  • 98 per cent of ship days in Q2 2023 are fixed at USD 19 000 gross per day
  • 72 per cent of ship days in the next four quarters are fixed at USD 18 600 gross per day
  • Modern fleet of 35 vessels, including newbuildings, with cash breakeven for 2023 of about USD 10 900 per vessel per day

Financial results commentary
Belships reports a net result of USD 27.8m for Q1 2023, compared to a net result of USD 59.5m for Q1 2022. The extraordinary result in Q1 2022 was mainly caused by higher market rates and significant realised gains on the sale of two vessels.

Despite lower market rates, net freight revenue was USD 51.4m, largely unchanged from USD 54.3m in Q1 2022. This is due to fleet growth in the period and significant contract coverage securing stable earnings.

Ship operating expenses amounted to USD 14.3m in Q1 2023 compared to USD 13.4m in Q1 2022. Although operating a larger fleet, the amount of non-recurring costs was lower in Q1 2023 compared to Q1 2022.

Fleet status
Time charter equivalent earnings (TCE) per ship in the quarter was recorded at USD 20 559 gross per day. The Baltic Supramax Index (BSI) averaged USD 10 170 gross per day in Q1 2023. The strong outperformance is due to a high number of fixed period time charter contracts at levels above current market rates.

Four vessels were drydocked in the quarter. The remaining fleet sailed without significant off-hire with a total of 2 678 on-hire vessel days in Q1 2023.

Belships has continued to add new period time charter contracts increasing the coverage for 2023 and 2024.

    Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024
Contract coverage   98% 81% 69% 43% 15% 13%
TCE rate (USD/day)   19 000 18 600 18 400 18 100 17 700 17 300

Estimated cash breakeven for 2023 is USD 10 900 per vessel per day. This includes OPEX of USD 5 300, interest and instalments of USD 4 850, G&A of USD 450 and drydocking expenses of USD 300 per vessel per day.

BELMONDO, an Ultramax newbuilding of 64 000 dwt was delivered in January 2023 from Imabari Shipyard in Japan.

Belships entered into agreements for the acquisition of four new 64 000 Ultramax bulk carriers which are being constructed at Japanese shipyards. Delivery of the vessels will be in 2024-2026. The vessels are fully financed through time charter lease agreements, each for a period of 7 up to 10 years, with purchase options at current market levels during the charter. There is no obligation to purchase the vessels and Belships is not required to make any down payment for these transactions. Cash breakeven for the vessels upon delivery will be about USD 14000 per day.

The Japanese-designed bulk carriers entering the fleet represent the highest quality and lowest fuel consumption available in the market today and will contribute to reducing Belships carbon emissions on an intensity-basis.

Lighthouse Navigation
Lighthouse Navigation delivered another good quarter with EBITDA of USD 8.2m bringing the average EBITDA in the last 12 quarters to USD 11.4m.

Belships aims for the highest standards in corporate governance and is well placed to deliver emission cuts in line with industry ambitions for 2030. Belships published a comprehensive sustainability report for 2022 (ESG Report) in April 2023 reflecting our commitment to transparency and efforts to meet investor and stakeholder expectations.

Belships is compliant with the emission regulations from IMO in 2023 (EEXI) without additional CAPEX signalling the competitive advantage of Belships modern fleet.

Financial and corporate matters
At the end of the quarter, cash and cash equivalents totalled USD 127.7m, whilst interest bearing bank debt amounted to USD 145.0m. Belships voluntarily prepaid USD 13.4m on outstanding bank debt during the quarter.

Leasing liabilities at the end of the quarter amounted to USD 465.1m. These liabilities have been calculated with the assumption that all purchase options to acquire Ultramax bulk carriers on bareboat and time-charter lease agreements will be exercised except BELFUJI. Belships has no contractual obligation to acquire any of the leased vessels.

All lease agreements have fixed interest rates for the entire duration of the contracts and all purchase options are denominated in USD.

At the end of the quarter, book value per share amounted to NOK 12.23 (USD 1.17), corresponding to a book equity ratio of 30 per cent. Value-adjusted equity is significantly higher.

Dividend policy
Belships ASA aims to distribute quarterly cash dividends targeting about 50 per cent of net result adjusted for non-recurring items. Other surplus cash flow may be used for accelerated amortisation of debt, share buy-backs or vessel acquisitions considered to be accretive to shareholders’ value.

Dividend payment
Based on the financial result in the first quarter 2023 the Board declared a dividend payment of NOK 0.70 per share (USD 16.9m in total) equivalent to about 73 per cent of the net result adjusted for minority interests.

This brings the total dividends paid out since Q2 2021 to NOK 7.05 per share, which is more than 100 per cent of the share price from the time of the merger between Belships and the Lighthouse Group in 2018/2019. Total declared dividends amount to USD 185.2m.

Market highlights
In the first quarter, the Baltic Supramax Index (BSI-58) averaged USD 10 170 per day – down from USD 14 800 in the preceding quarter. Despite falling earnings, asset values were stable the first two months of the quarter before starting to rise in March, breaking a hiatus of almost eight months. Modern vessels continue to be in higher demand than older less economical ships. The trend in increasing ship values has accelerated in April and have increased by about 15 per cent YTD.

According to Fearnleys, preliminary estimates for Q1 2023 shipment volumes were 260 million tonnes, compared to 256 million tonnes shipped in Q4 2022. The highest growth was seen in iron ore shipments, which grew by 80 per cent mainly due to increased shipments of iron ore from India to China. Grains also contributed positively, rising 9 per cent from the previous quarter due to higher shipments from Australia and the US. Coal shipments grew by 2 per cent, driven by exports from Indonesia to China. Shipments of minor bulks and breakbulk dropped by 7 per cent due to slowing global economic growth and possibly influenced somewhat by a correction in the container market. Agreements to allow grain exports from Ukraine are running until mid-May whereafter an extension is currently uncertain.

Port congestion continues to be relatively stable at pre-Covid normalised levels. Average sailing speeds remain unchanged. As we have highlighted before, changes in both congestion and speed can affect the overall vessel efficiency in the dry bulk market.

36 Supra/Ultramax vessels were delivered in Q1 2023, up from 29 vessels the previous quarter. For the remainder of 2023, less than 100 are scheduled to be delivered. However, the actual number of deliveries may be lower given that some orders are usually delayed or incorrectly reported. Fleet growth has been at slightly below 3 per cent since Q2 2022 last year which is the lowest rate observed in the last 20 years. According to Fearnleys, fleet growth is likely to remain around this level for the remainder of this year before dropping closer to 2 per cent next year. The number of ships delivered compares to an existing fleet of Supra/Ultramax vessels today of about 4 000. With a total orderbook of around 7 per cent, we are approaching the lowest rate of supply growth in 30 years. 

Relatively low newbuilding activity for dry bulk continues as the lack of conviction and alternatives for fuel and propulsion systems appear to restrain new ordering. Higher input costs as well as full orderbooks for other vessel segments dictate the position with shipyards. Available delivery positions with reputable shipyards remain distant, at least two years ahead.  

The sentiment in dry bulk markets have improved recently, and the Baltic Exchange Supramax spot index is currently about USD 12 500. Period time charter rates are higher than current spot market levels displaying expectations for a rising market. The Forward Freight Agreements (FFA) currently indicate a market average of about USD 14 500 for the remaining part of the year, with Ultramax bulk carriers earning an additional premium of about 15 per cent. 

Belships has contract coverage ensuring higher profitability than current market levels and has maintained the entire fleet on period time charter contracts with varying durations. 98 per cent of ship days in Q2 2023 are covered at about USD 19 000 per day, and 72 per cent of ship days in the next four quarters are fixed at about USD 18 600 per day. All period contracts are fixed with highly reputable and recognised charterers in the dry bulk market. Belships financing has been secured for many years ahead, and most of the debt is with fixed interest rates below current market level.

Lighthouse Navigation continues to deliver good results. We expect continued profitability contributing to Belships’ dividend capacity.

It is reasonable to anticipate improved freight markets based on increased activity from China and that demand should continue to improve compared to last year. However, the pace of this recovery is uncertain, and we are comfortably positioned with highly profitable contract coverage for the meantime.

Looking further ahead, the supply side as observed from the number of deliveries and the publicly quoted orderbook for dry bulk is historically low. We therefore remain optimistic in terms of medium to long term market prospects.  

We are focused on financial discipline and returning capital to our shareholders. A competitive return for our shareholders is to be obtained through an increase in the value of the company’s shares and the payment of dividends, as measured by the total return.  Based on Belships’ current contract coverage, we expect to generate significant free cash flow and continue to pay quarterly dividends.

9 May 2023


For further information, please contact Lars Christian Skarsgård, Belships CEO, phone +47 977 68 061 or e-mail

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act