Belships ASA : Report 2nd quarter 2013


Belships revenue in 2nd quarter of 2013 was USD 6,397,000 (Q2 2012: USD 6,481,000), while EBITDA amounted to USD 2,411,000 (USD 2,345,000). The company’s operating profit was USD 1,342,000 (USD 1,219,000), while the overall result of 2nd quarter of 2013 was USD 675,000 (USD 226,000).

Accounts for Q2 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).



Capesize market improved sharply in the second quarter was approximately $ 15,000 per day in June / July. Since midyear has Capesize rates fell back and the index is now around USD 12,900 per day. Panamax Index has remained more stable at around USD 7,500 per day, while Supramax index is around USD 9,500 per day. The index for the overall bulk market is currently approx. 1000 points. According to Fearnleys, rates for Capesize and Panamax are approx. 70% below the historical average for the past 10 years. Baltic Exchange values 5 year old Supramax and Panamax USD 21 million and USD 21.2 million respectively. Ship values have risen steadily since the beginning of the year.



M/S Belnor, M/S Belstar and M/S Belocean sails on the long term 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.

Belships signed in June a contract with Imabari Shipbuilding in Japan for the construction of 2 x 61,000 dwt eco-design Supramax bulk carriers for delivery the second half of 2015 and first half of 2016. One of the newbuildings will be swapped for the remaining charter period for either M/S Belnor or M/S Belocean at a net rate of USD 17,300 per day.

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 2nd 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 30 June, the Group’s cash and cash equivalents totaled USD 11.3 million compared to USD 10.1 million as per 31 March 2013. The company’s mortgage debt was USD 50.5 million as per 30 June 2013 and was reduced by USD 1.3 million during Q2 2013. Belships paid at signing of agreement with Imabari Shipbuilding in the beginning of June, 10% of the agreed contract amount.

Outstanding bond was at 30 June NOK 33.5 million, and was repaid on due date early July. The payment was funded through a short-term loan of NOK 40 million from the main shareholder. The loan has now been repaid.

The company completed in July a successful rights issue of NOK 90 million, where about 200 shareholders subscribed. The Group’s bank deposits after completion of the above transactions is USD 14 million.

In a judgment of the Appeal Court on 2 July, Belships was given unanimous support for its claim for a tax reassessment for 2004. The verdict means that the Group’s tax losses to be carried forward increase by NOK 108 million. Belships was also awarded costs totaling NOK 681 391. The appeal deadline expires in mid-September and it is uncertain whether the counterparty will appeal the verdict to the Supreme Court.

Impairment tests for the company’s assets are performed in accordance with IAS 36. The vessels and charter parties are valued based on observable market values. Based on these internal valuations, no adjustment has been made in the 2nd quarter.

At the end of the 2nd quarter of 2013, book value per share amounted to NOK 13.10, and the equity ratio was 44.3%. Taking into account the rights issue in July, the book value per share amounts to NOK 8.70 and equity ratio 50.2%.



Japanese shipyards have become more competitive by weakening of the yen and have secured a significant number of newbuilding contracts since the beginning of year. There is little availability left and the newbuilding prices have begun to tighten. China still has a fair amount of available capacity, especially among the smaller privately owned shipyards, but many customers will probably be reluctant with regard to counterparty risk. Growth in dry bulk fleet adjusted for scrapping is assumed to be 7% in 2013 and will decline further in 2014 after several years of double-digit fleet growth. It is admittedly much hidden capacity in a slow-moving fleet, but there is still cause for more 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 may lead to low commodity prices and China, with its higher production costs than the exporters, will normally have to rely on increased imports. It is expected that the bulk fleet capacity 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 120 million.

The focus going forward will be to further 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, 15 August 2013


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