Belships ASA – Report 4th quarter 2020



  •  Operating income of USD 59.9 million (Q4 2019: USD 38.9m)
  •  BITDA of USD 11.3m (USD 8.5m)
  •  Net result of USD 0.9m (USD 2.1m)
  •  Net TCE per ship of USD 10 502 per day versus BSI index of USD 10 211 net per day
  •  33 per cent of available ship days in 2021 are booked at USD 11 716 net per day
  •  Positioned to take advantage of improved market with 80 per cent open days in Q2-Q4 2021
  •  BELFORT and BELORIENT sold with delivery in Q2 2021 as part of fleet modernising with two newbuildings delivering in 2021
  •  Record EBITDA of USD 5.6m from management companies after rebound and expansion
  •  Modern fleet of 23 vessels with an average age of 5 years 

Fleet status 
Time charter earnings per ship in the quarter were recorded at USD 10 502 net per day versus BSI index of USD 10 211 net per day for the same period. Average net TCE per ship in the last two years amounted to USD 9 992 versus BSI index of USD 8 612 net per day for the same period, representing an outperformance of the BSI index of 16 per cent. 

Our long-term outperformance of the BSI index is due to the portfolio of period charter coverage and outsized spot earnings earned by our subsidiary Lighthouse Navigation. The inherent lag in our business means that when the spot markets fall, our outperformance will tend to be higher. Conversely, when the markets rise rapidly our performance will tend to lag on a short-term basis. 

Approximately 30 per cent of available days in 2021 are booked at about USD 11 700 net per day. About 90 per cent of available days in Q1 2021 have been booked at about USD 12 200 net per day.

BELMONT and BELOCEAN were drydocked in the quarter. The remaining fleet sailed without significant off-hire in the quarter. 

BELFORT and BELORIENT have been sold and deliveries are expected within the second quarter of 2021. Net cash flow upon delivery will be approximately USD 1.0m after repayment of outstanding loans.

BELFAST, an Ultramax newbuilding of 64 000 dwt was delivered in January 2021 from Imabari Shipyard in Japan.

BELMAR, an Ultramax newbuilding of 64 000 dwt is expected to be delivered by the end of Q3 2021. 

Belships’ fleet continues to increase and improve with only modest cash investments, signalling the competitive advantage Belships has in sourcing ship finance. Taking into consideration nine acquisitions and four divested vessels the net cash effect amounts to about USD 1.5m. The Japanese-designed Ultramax bulk carriers entering the fleet represent the highest quality and lowest fuel consumption available in the market today.

Commercial platform 
Lighthouse Navigation expanded its commercial platform in 2020 and now have offices in Bangkok, Oslo, Singapore and Melbourne. The aim of this expansion is to further enhance the vessels earning capability and to generate profits around cargo trading opportunities in the market. We are already seeing the impact of this with a record EBITDA in the quarter from the commercial platform.  

Belships is regarded as a market leader in corporate governance and is well placed to deliver emission cuts in line with industry ambitions for 2030. A new carbon footprint study and review has been initiated with leading classification society DNV with the aim to monitor performance and identify areas for improvement. This will be included in a separate ESG report for 2020. 
Covid-19 has greatly impacted seafarers, and we have signed the Neptune declaration on Seafarer Wellbeing and Crew Change to join forces with more than 600 shipping companies to influence governments and policy makers to adopt relief measures for our essential workers. 

Financial and corporate matters 
At the end of the quarter, cash and cash equivalents was USD 34.0m, while mortgage debt was USD 141.7m. The group’s mortgage debt comprises two loan facilities, both with a margin of 275 basis points above LIBOR and maturity in Q2 2024.

Net leasing obligation at the end of the quarter was USD 139.7m. Leasing liabilities have been calculated under the assumption that Belships will exercise its options to acquire all seven Ultramax bulk carriers on bareboat charter, whereas we have assumed that the company will not exercise the purchase options on time-chartered vessels BELNIPPON and BELFUJI. Belships has no contractual obligation to acquire any of its leased vessels.

At the end of the quarter, book value per share amounted to NOK 5.63 (USD 0.66), corresponding to an equity ratio of 32 per cent.

Market highlights
In the fourth quarter we observed a gradual improvement in the spot rates with the Baltic Supramax 58 index averaging USD 10 211 net per day. This is compared to an average of USD 9 435 net per day in the third quarter evidencing a more normalised market since the outbreak of COVID-19.
Total Supramax shipment volumes came in at 264.1 million metric tons for the quarter, which marked a 1.8 per cent increase from Q3. Of the main commodity groups, coal and steel products made the strongest growth, increasing by about 17 and 12 per cent respectively. Following records in Q3, iron ore and grains declined by around 10 per cent during the last quarter of the year. 

According to Fearnleys, new vessel deliveries dropped to 26 in Q4 from 28 in the previous quarter (43 is Q2 2020), which are very low numbers. The orderbook delivery schedule for 2021 predict deliveries will be 20 per cent lower than 2020, with 115 vessels scheduled for 2021 against 143 vessels delivered in 2020. In 2022, just 45 vessels are currently scheduled for delivery, which would be the lowest number of deliveries since 2000. In relative terms, we are heading towards the lowest rate of supply growth in almost 30 years. 

The publicly quoted orderbook indicates fleet growth will drop towards 2 per cent this year and in 2022 it may drop to less than 1 per cent. There will be changes to this outlook for fleet growth as the amount of newbuilding orders being placed over the next 12 months are uncertain and it is also normal that 10-20 per cent of the orderbook ends up being cancelled, deferred or simply incorrect. However, we expect very few newbuilding orders as lack of conviction for fuel and propulsion systems will restrain ordering activity in the near term. Importantly, current prices for modern secondhand bulk carriers continue to represent a considerable discount to newbuilding prices, therefore a repricing of secondhand tonnage has begun.

The Baltic exchange Supramax index YTD 2021 has averaged USD 12 350 net per day. There has been a remarkable development over the past few weeks. Freight Forward Agreements (FFA) currently indicate a market for Supramax and Ultramax of about USD 14 500 and 16 000 per day for the remaining part of the year. A cold winter season has sparked energy demand, coupled with a wider rally in commodity markets resulting in increased cargo volumes in all regions. Usual seasonal weakness vanished in a very short amount of time and Chinese New Year marked the start of the year of the Ox. The Baltic index during March is currently expected to surpass USD 19 000 per day. A market like this, during this time of year, has not been experienced in over a decade. 

As we mentioned in previous reports, the supply side has passed the peak of deliveries and the publicly quoted orderbook for our segment now stands below 5 per cent – which is historically low.
Even with increased bunker prices the average sailing speed has increased confirming an improved rate of vessel utilisation. We remain optimistic in terms of market prospects, and with the worst of the pandemic likely behind us we are seeing signs of solid demand fundamentals which could lead to a very strong dry cargo market. At the time of writing Belships has most of the fleet open for the remaining part of 2021 and onwards. We are actively pursuing opportunities for further growth. 

We do not intend to propose a dividend for the financial year ended 31st Dec 2020. We expect that the company’s growth initiatives will lead to increased profitability. A competitive return is to be obtained through growth in the value of the company’s shares and the payment of competitive dividends, as measured by the total return. 

Belships has a uniform and modern fleet of 23 Supramax/Ultramax bulk carriers well positioned to capitalise on a potential recovery towards historical averages for vessel values. We are focused on maintaining a solid balance sheet and liquidity position. Our strategy is to continue developing Belships as an owner and operator of geared bulk carriers, through quality of operations and accretive growth opportunities.  

24 February 2021

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