Belships ASA: Report 2nd quarter 2023



  • EBITDA of USD 40.5m including USD 6.8m from Lighthouse Navigation
  • Net result of USD 25.8m
  • Declared dividend of NOK 0.60 per share
  • TCE of USD 19 099 gross per day for owned fleet – 77 per cent outperformance of market
  • Strategic partnership with V.Group and divestment of technical management business, realised book gain of USD 8.5m
  • Sold 2015-built BELVEDERE, net cash of USD 10m after debt repayment
  • Added 2x Ultramax newbuildings with delivery 2026-2027, zero cash invested
  • 91 per cent of ship days in Q3 2023 are fixed at USD 18 100 gross per day
  • 58 per cent of ship days in the next four quarters are fixed at USD 18 100 gross per day
  • Cash breakeven for 2023 of about USD 10 900 per vessel per day
  • The newest Supra/Ultramax fleet with 36 ships including newbuildings

Subsequent events
Belships has expanded its newbuilding program with 2x 64 000 dwt Ultramax bulk carriers which will be delivered in 2H 2026 and 1H 2027. Belships now has a total of six newbuildings under construction at Japanese shipyards with delivery between 2024 and 2027. All six vessels are leased on time charter for a period of 7 to 10 years, with purchase options around current market levels during the charter. There is no obligation to purchase any of the vessels. Cash breakeven for the vessels upon delivery is about USD 14 100 per day on average. Belships is not required to make any down payments for these transactions. Therefore, this newbuilding program will not have any impact on cash and dividend capacity during the construction period.

Financial results commentary
Belships reports a net result of USD 25.8m for Q2 2023, compared to a net result of USD 31.6m for Q2 2022. Despite challenging market conditions, the strong result in Q2 2023 is due to profitable contract coverage and the realised gain from divesting the technical management company.

Despite lower market rates, net freight revenue for the Belships fleet was USD 49.4m, largely unchanged from USD 55.5m in Q2 2022. This is due to fleet growth in the period and significant contract coverage securing stable earnings.

Ship operating expenses amounted to USD 5 065 per vessel per day in Q2 2023 compared to USD 5 642 in Q2 2022. Despite inflationary pressures, the reduction has been achieved as a result of strong operational performance and continued improvement in fleet quality.

Fleet status
Time charter equivalent earnings (TCE) per ship in the quarter was recorded at USD 19 099 gross per day. The Baltic Supramax Index (BSI-58) averaged USD 10 763 gross per day in Q2 2023. The strong outperformance is due to a high number of fixed period time charter contracts at levels significantly above current market rates.

One vessel was drydocked in the quarter. The remaining fleet sailed without significant off-hire with a total of 2 778 on-hire vessel days in Q2 2023.

Summary of current fixed-rate contract coverage:

    Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024
Contract coverage   91% 74% 47% 17% 13% 10%
TCE rate (USD/day)   18 100 18 200 18 000 17 600 17 300 16 100

Separately, Belships currently has four vessels chartered-out on floating index-linked time charter for a period of about one year, at a premium above the Baltic Supramax Index (BSI-58). Belships has the option to convert any part of the remaining period to a fixed rate based on the prevailing FFA curve from time to time.

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

Belships entered into an agreement for the sale of BELVEDERE, an Ultramax bulk carrier built in 2015. Net cash was about USD 10.0m after repayment of outstanding loan and the net sales price was about the same as book value. The ship was delivered to its new owner in August.

Delivery schedule for newbuilding program:

NEWBUILD 1 expected delivery Q4 2024
NEWBUILD 2 expected delivery Q4 2025
NEWBUILD 3 expected delivery Q4 2025/Q1 2026
NEWBUILD 4 expected delivery Q1 2026
NEWBUILD 5 expected delivery H2 2026
NEWBUILD 6 expected delivery H1 2027

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 further reduce Belships’ carbon emissions on an intensity-basis.

Belships Management (Singapore)
Belships agreed to divest its 100 per cent shareholding in Belships Management (Singapore) Pte Ltd., the technical and crew management company which manages dry bulk vessels for Belships ASA and other international clients. Closing of the transaction was completed on 30th June 2023, and a book gain of USD 8.5m was recorded in Q2 2023.

Furthermore, Belships entered into a strategic partnership with V.Group for technical and crew management for the Belships fleet. V.Group is a leading ship management and marine solutions provider, serving more than 3 500 ships globally. This will ensure our fleet will continue to be maintained to the highest standards and will also accelerate the digitalisation of our fleet and operations.

Lighthouse Navigation
Lighthouse Navigation delivered another good quarter with an EBITDA of USD 6.8m. Despite unfavourable market conditions, the dry bulk operating business continues to demonstrate good execution and risk management.

The average EBITDA per quarter in the last five years has been USD 7.4m.

Belships aims for high 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) during the quarter reflecting our commitment to transparency and efforts to meet investor and stakeholder expectations.

Belships’ vessels are compliant with the new emission regulations from IMO without additional investments signalling the competitive advantage of owning a very modern fleet.

Financial and corporate matters
At the end of the quarter, cash and cash equivalents totalled USD 148.2m, whilst interest bearing bank debt amounted to USD 145.0m.

Leasing liabilities at the end of the quarter amounted to USD 457.6m. 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 12.8 (USD 1.19), corresponding to a book equity ratio of 31 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 Q2 2023 the Board declared a dividend payment of NOK 0.60 per share (USD 14.3m in total) equivalent to about 60 per cent of the net result adjusted for minority interests.

This brings the total dividends paid out since Q2 2021 to NOK 7.65 per share, which is about 115 per cent of the share price from the time of the merger between Belships and the Lighthouse Group in December 2018. Total declared dividends amount to USD 199.5m.

Market highlights
In the second quarter, the Baltic Supramax Index (BSI-58) averaged USD 10 763 per day – slightly up from USD 10 171 in the preceding quarter. Asset values were stable during the quarter, however, a softening trend emerged in June as spot market rates dropped below USD 8 000 per day. In general, asset values are at about the same level as at the start of the year, with modern vessels continuing to be markedly higher in demand than less economical older ships.

According to Fearnleys, preliminary estimates for Q2 2023 shipment volumes were 275 million tonnes, an all-time high. Quarter-on-quarter, the highest growth was seen in minor bulks, steel products and fertilizer shipments, which all increased more than 10 per cent. Coal and grains shipments contributed negatively, falling by 4.5 and 3.5 per cent, respectively. Shipments of grains out of Ukrainian ports has since come to a complete stop. Further, iron ore shipments dropped by 16 per cent, and breakbulk shipments fell by a mere half per cent.

Port congestion, as measured by the average waiting time in port for ships to discharge, continued to reduce during the second quarter. Coupled with shorter, albeit marginal, average voyage durations – this contributed to less favourable supply-side fundamentals. Average sailing speeds remain relatively unchanged. Current levels of port congestion are now back at pre-Covid normalised levels. As we have highlighted before, changes in port congestion, voyage duration and/or vessel speeds affect the overall vessel efficiency in the dry bulk market on a short term basis more than a change in the number of newbuildings in the orderbook.

33 Supra/Ultramax vessels were delivered in Q2 2023, compared to 34 vessels in the previous quarter according to Fearnleys. For the remainder of 2023, less than 50 vessels are scheduled to be delivered. However, the actual number of deliveries may be lower given that some orders are delayed or incorrectly reported.

Fleet growth has increased from below 3 per cent since Q2 2022 (which was the lowest rate observed in the last 20 years), to 3.5 per cent. According to Fearnleys, fleet growth is likely to remain around this level for the remainder of this year before dropping to 2.5 per cent in 2024. The number of ships delivered per quarter compares to an existing fleet of Supra/Ultramax vessels today of about 4 000 in total. With an orderbook-to-fleet 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 and a half years ahead. For the premier Japanese shipyards, available delivery positions are even later – more than 3 years from now.

The sentiment in dry bulk markets remain muted, however, the Baltic Exchange Supramax spot index has turned up from low levels and is currently about USD 9 500. The Forward Freight Agreements (FFA) for Supramax have improved, and currently indicate a market average of about USD 12 000 for the remaining part of the year, with Ultramax bulk carriers earning an additional premium of about 15 per cent.

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

Belships has contract coverage ensuring significantly higher profitability than current market levels with most of the fleet on fixed-rate period time charter contracts with varying durations.
91 per cent of ship days in Q3 2023 are covered at about USD 18 100 per day, and 74 per cent of ship days in Q4 2023 covered at about USD 18 200 per day. 58 per cent of ship days in the next four quarters are fixed at about the same rate of USD 18 100 per day.

All period contracts are fixed with highly reputable and recognised charterers in the dry bulk market. Furthermore, Belships financing has been secured for many years ahead, and most of the debt is with fixed interest rates significantly below current market levels.

During the summer, we have chartered out four of our vessels on floating index-rate contracts. This is because we believe the rates and market sentiment have a good probability of improving in the near term.

With six Ultramax newbuildings under construction for delivery between 2024 and 2027, Belships will be taking over new vessels whilst the orderbook and the rate of supply growth approaches the lowest levels in 30 years. Since they are all leased without Belships investing any cash, this will not affect our dividend capacity before delivery. We believe the best way for Belships to approach the green shift is to secure the most efficient vessels currently available, with a financing structure which gives us unparalleled optionality and flexibility.

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.

21 August 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