Belships ASA : Report 3rd quarter 2013

Belships operating income for 3rd quarter of 2013 amounted to USD 6,565,000 (Q3 2012: USD 6,449,000), while EBITDA amounted to USD 2,390,000 (USD 2,192,000). The company’s operating profit was USD -1,402,000 (USD 1,074,000), after impairment value adjustment of USD 2.7 million. Total result of 3rd quarter of 2013 was USD -2,019,000 (USD 283,000).

Accounts for 3rd quarter of 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, taking into account the amendment to IAS 19 effective from 1 January 2013. The interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) , as adopted by the EU.


Capesize market improved sharply in the third quarter and is now around USD 24,000 per day. Panamax and Supramax indices have also had a significant increase and now stands at USD 16,000 per day and USD 13,000 per day respectively. The index for the overall bulk market is currently approx. 1800 points. Baltic Exchange values 5 year old Supramax and Panamax USD 21.9 million and USD 22.5 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 their long-term charters with Canpotex in Canada. Canpotex is among the world’s largest exporter of potash, a fertilizer 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.

In June Belships signed 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 option 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 as per 3rd 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 September, the Group’s cash totaled USD 13.3 million compared to USD 11.3 million at 30th June 2013. The company’s mortgage debt was USD 49.2 million per 30th September, decreased by USD 1.3 million during 3rd quarter 2013.

Belships conducted in July a successful rights issue of NOK 90 million. The company has received offers of financing of the newbuildings and has dialogue with several potential lenders in that regard.

In a judgment of the Court of Appeal on 2 July, Belships was given unanimous support for its claim for a tax reassessment for 2004. The judgment, which was not appealed by the counterparty, means that the Group’s tax losses increased by NOK 108 million.

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 the ships’ book value has been adjusted by USD 2.7 million in the 3rd quarter, in addition to ordinary depreciation of USD 1.1 million.

At the end of the 3rd quarter of 2013, book value per share amounted to NOK 8.41, and the equity ratio was 55.1%.


The newbuilding prices for bulk carriers have tightened, both in Japan and China, and the earliest delivery in Japan is around second half of 2016 or early part of 2017. Growth in dry bulk fleet adjusted for scrapping believed to be about 5-6% in 2013 after several years of double-digit fleet growth. It is expected zero fleet growth in 2014. It is admittedly much hidden capacity as a result of a slow-steaming, 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 may lead to lower commodity prices and China, which has 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.

Belships’ vessels are sailing on long-term charter parties to a reputable counterpart, and short-term market fluctuations will not affect the company’s earnings and cash flow. Existing charter parties represent future nominal 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, 24 October 2013


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