Belships ASA: Report 3rd quarter 2023



  • EBITDA of USD 33.0m
  • Net result of USD 15.3m
  • Declared dividend of NOK 0.45 per share
  • TCE of USD 17 905 gross per day for owned fleet – 78 per cent outperformance of market
  • Added 2x Ultramax newbuildings with delivery 2026-27, zero cash invested
  • Prepaid USD 13.2m of bank debt – two debt free vessels in the fleet
  • 87 per cent of ship days in Q4 2023 are fixed at USD 17 800 gross per day
  • 42 per cent of ship days in the next four quarters are fixed at USD 17 800 gross per day
  • Cash breakeven for 2024 is expected to remain unchanged at USD 10 900 per day
  • The newest Supra/Ultramax fleet with 38 ships including eight newbuildings

Financial results commentary
Belships reports a net result of USD 15.3m for Q3 2023. Profitable contract coverage and a positive contribution from Lighthouse Navigation ensured a strong result in a weak market.

Time charter equivalent earnings (TCE) in the quarter was USD 17 905 gross per vessel per day. In comparison, the Baltic Supramax Index (BSI-58) averaged USD 10 028 gross per day. The strong outperformance is due to a high number of fixed period time charter contracts at levels significantly above current market rates.

Ship operating expenses amounted to USD 5 102 per vessel per day in Q3 2023 compared to USD 5 300 per vessel per day as guided in the estimated cash breakeven for 2023. Despite inflationary pressures, the reduction has been achieved through strong operational performance and no serious incidents in the quarter.

Fleet status
One vessel was drydocked in the quarter. The remaining fleet sailed without significant off-hire with a total of 2 759 on-hire vessel days in Q3 2023.

Contract coverage   Q4 2023 Q1 2024 Q2 2024 Q3 2024
Fixed-rate contracts   87% 50% 17% 13%
Average fixed-rate (USD/day)   17 800 17 800 17 600 17 300
Index-linked contracts   10% 17% 13% 3%
Open   3% 33% 70% 84%
    100% 100% 100% 100%

Belships currently has five vessels chartered out on floating index-linked contracts on varying durations, at an average premium of 116 per cent to 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.

Cash breakeven for 2024 is expected to remain unchanged at USD 10 900 per day.

In August, BELVEDERE was delivered to its new owner. Net cash after repayment of outstanding loan was USD 10.0m and the book gain was USD 0.3m, in accordance with the previously announced sale of the vessel.

In September, Belships entered into agreement for two Ultramax bulk carriers for delivery 2H 2026 and Q2-Q3 2027, bringing the total number of newbuildings to eight. The vessels are leased on similar terms as previously announced transactions, and Belships is not required to make any down payments for these vessels.

64 000 dwt Ultramax bulk carriers under construction at Japanese shipyards:

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 H2 2026 (new)
NEWBUILD 7 expected delivery H1 2027
NEWBUILD 8 expected delivery Q2-Q3 2027 (new)

The vessels are leased on time charter for a period of 7 to 10 years from date of delivery with purchase options around current market levels during the charter. Belships is not required to make any downpayment for these transactions. Therefore, this will not impact cash and dividend capacity during construction. Cash breakeven for the vessels upon delivery is about USD 14 200 per day on average.

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.

Lighthouse Navigation
Lighthouse Navigation recorded an EBITDA of USD 2.6m for the quarter and contributed to Belships dividend capacity despite weak market conditions. The dry bulk operating business continues to demonstrate good risk management with limited forward exposure.

The average EBITDA per quarter in the last five years has been USD 7.7m.

Belships aims for high standards in corporate governance and is well placed to deliver emission cuts in line with industry ambitions for 2030. Belships publishes a sustainability report on an annual basis (ESG Report) reflecting our commitment to transparency and efforts to meet investor and stakeholder expectations.

In July, Belships was ranked in the top quartile in the Webber Research Report: 2023 ESG Scorecard, which aims to identify where each company ranks against its listed peers within the shipping industry.

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

Financial and corporate matters
At the end of the quarter, cash and cash equivalents totalled USD 138.9m, whilst interest bearing bank debt amounted to USD 115.5m. Belships prepaid USD 13.2m of outstanding bank debt in the quarter and now have two unencumbered vessels in the fleet.

Leasing liabilities at the end of the quarter amounted to USD 449.9m. 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 12.5 (USD 1.18), corresponding to a book equity ratio of 32 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 Q3 2023 the Board declared a dividend payment of NOK 0.45 per share (USD 10.3m in total) equivalent to about 68 per cent of the net result adjusted for minority interests.

This brings the total dividends paid out since Q2 2021 to NOK 8.10 per share, which is 123 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 209.8m.

Market highlights
In the third quarter, the Baltic Supramax Index (BSI-58) averaged USD 10 028 per day – slightly down from USD 10 763 in the preceding quarter. The market development was rather volatile as rates recovered from very low levels of USD 7 500 in June and peaked at above USD 14 000 end of quarter. Ultramax vessels typically earn a premium of about 15 per cent to the standard Baltic Supramax Index (BSI-58).

Asset values were stable during the quarter, however, in September values started to increase again and this trend continued into the fourth quarter. Still, asset values are lower now compared to the start of the year. New and modern vessels continue to be markedly higher in demand than less economical older ships.

According to Fearnleys, preliminary estimates for Q3 2023 shipment volumes were 282 million tonnes, an all-time high again, after 275 million tonnes in the preceding quarter. The highest growth (quarter-on-quarter) was seen in minor bulks (7 per cent), coal (7 per cent) and grains (4 per cent).  Iron Ore (-15 per cent), breakbulk cargoes (-11 per cent) and steel products (-7 per cent) contributed negatively. Fertilizer shipments were up slightly in volume, by two per cent. Importantly, overall volumes continue to grow and show that the demand side is stable and resilient despite the turmoil in financial markets and concerns over inflation and interest rates.

Port congestion, as measured by the average waiting time in port for ships to discharge, continued to reduce during the third quarter. Coupled with shorter, albeit marginal, average voyage durations – this contributed to slightly less favourable supply-side fundamentals. Average sailing speeds remain relatively unchanged. Current levels of port congestion are now 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.

39 Supra/Ultramax vessels were delivered in Q3 2023, compared to 33 vessels in the previous quarter, according to Fearnleys. In October, only seven vessels were delivered, and 19 remain on schedule to be delivered before year-end.

Year-on-year, the fleet grew by 3.5 per cent in the third quarter, about the same rate as in the second quarter. According to Fearnleys, fleet growth is likely to remain around this level for the next year. The number of ships delivered per quarter compares to an existing fleet of Supra/Ultramax vessels on the water today of about 4 100 in total. With an orderbook-to-fleet of about 7-8 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 orders. Higher input costs as well as full orderbooks and continued high demand 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 Baltic Exchange Supramax index is currently about USD 12 000, with Ultramax bulk carriers earning an additional premium of about 15 per cent.

Lighthouse Navigation continues to deliver good results. They have reduced positions ahead of an expected slower end-of-year period in the markets. We expect continued profitability contributing to Belships’ dividend capacity.

Belships has contract coverage ensuring significantly higher profitability than current market levels with a majority of the fleet on fixed-rate period time charter contracts with varying durations. 87 per cent of ship days in Q4 2023 are covered at about USD 17 800 per day, and 50 per cent of ship days in Q1 2024 covered at about USD 17 800 per day.

Furthermore, we have five vessels chartered out on floating index-rate contracts. This is because we believe the rates and market sentiment has a good probability of improving during the next year, and Belships has the right to convert to fixed rate during the charter period. 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 significantly below current market levels. Belships is therefore able to retain a very low cash breakeven and we expect it to remain unchanged in 2024.

With eight 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 own and operate 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 free cash flow and continue to pay quarterly dividends.

9 November 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