Belships ASA: Report 4th quarter 2021



  • Operating income of USD 235.2m (USD 59.9m)
  • EBITDA of USD 70.4m (USD 11.3m) including USD 22.9m from Lighthouse Navigation
  • Net result of USD 59.2m (USD 0.9m)
  • Declared dividend of USD 25.6m (NOK 0.90 per share)
  • Extraordinary dividend payment planned for Q1 2022
  • Net TCE of USD 28 965 per day for owned fleet
  • Acquired three new bulk carriers
  • Sold the three oldest vessels with significant gains
  • 88 per cent of ship days in Q1 are booked at about USD 23 900 net per day. 65 per cent of ship days in the next four quarters are booked at about USD 23 000 net per day.
  • Modern fleet of 27 vessels with an average age of 3.7 years and daily cash breakeven for 2022 of about USD 10 000 per vessel

Subsequent events

  • Belships has entered into agreements to sell and lease back BELLIGHT and BELFOREST on bareboat charters for 10 and 11.5 years, respectively. The lease agreements have fixed rates for the entire period with an average cost of capital of about 4.4 per cent. Net cash effect upon delivery will be about USD 14.0m in total in Q1 2022.
  • Belships has agreed to a new USD 116m loan facility. Proceeds from the facility will be used to repay all outstanding amounts under the existing credit facility with two vessels being left unencumbered. The new loan has a reduced margin of 225 basis points and a loan-to-value ratio of 55 per cent, with the first instalment in 2023 and final maturity in 2027. Lenders for the new loan facility are DNB Bank and Sparebank 1 SR-Bank. The agreement is conditional upon certain steps to be completed by the parties involved. Conclusion is expected within Q1 2022.
  • Belships has entered into agreement to sell and lease back BELYAMATO. The bareboat charter is for 10 years. The lease agreement has a fixed rate for the entire period with an average cost of capital of 4.6 per cent. Belships will pay a sum of USD 4.0m as downpayment upon signing the agreement. The agreement is conditional upon certain steps to be completed by the parties involved. Conclusion is expected within Q1 2022.

Financial results commentary
Belships reports a net result of USD 59.2m for Q4 2021, compared to a net result of USD 0.9m for Q4 2020. The increase in net result is mainly caused by the improved freight market and Belships increased fleet. EBITDA contribution from Lighthouse Navigation was USD 22.9m in Q4 2021 compared to USD 4.8m in Q4 2020. The increase in EBITDA from Lighthouse Navigation is due to the expansion of the companies and increased margins from freight trading. Net freight revenue for owned vessels was USD 64.7m in Q4 2021 compared to USD 17.3m in Q4 2020. The increase in net freight revenue is driven by an increase in TCE on owned vessels from 10 502 in Q4 2020 to 28 965 in Q4 2021 and an increase in vessel days of about 35 per cent.
Ship operating expenses were USD 15.4m in Q4 2021 compared to USD 8.7m in Q4 2020. The increase is due to growth in active days of about 35 per cent, stemming from fleet expansion. Ship operating expenses include non-recurring takeover costs for vessels delivered in the quarter of USD 2.0m, and Covid-19 related crewing expenses of USD 1.5m.

Fleet status
Time charter equivalent (TCE) earnings per ship in the quarter was recorded at USD 28 965 net per day versus BSI index of USD 28 956 net per day for the same period. The inherent lag in our business means that when the spot markets fall, our outperformance will tend to be higher. Conversely, when the market rises, our performance will tend to lag on a short-term basis. It is also affected by a certain number of period time charter contracts which contribute to our contract coverage for 2022-2023.

    Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023
Contract coverage   88 % 62 % 53 % 43 % 34 % 24 %
Net TCE rate (USD/day)   23 900 22 400 22 300 22 200 22 000 22 100

No vessels were drydocked in the quarter and the fleet sailed without significant off-hire with a total of 2 349 on-hire vessel days.

BELHAWK, BELTIDE, BELFRIEND and BELTOKYO were delivered as scheduled during Q4 2021.

Ultramax newbuildings BELYAMATO and BELMONDO are expected to be delivered from Imabari Shipbuilding, Japan in November 2022 and January 2023.

Belships entered into agreements for the acquisition of two bulk carriers built in 2016 named BELFRIEND and BELTIDE. The vessels were delivered during the quarter. The purchase price was USD 28.0m per vessel, of which 60 per cent has been financed under a new bank loan facility.

Belships entered into agreements for the sale of BELNOR (2010) and BELSTAR (2009). The vessels were built in 2010 and 2009. Delivery to the new owners occurred in Q4 2021 and Q1 2022 respectively. Belships realised a gain of approximately USD 5.1m in Q4 2021 and USD 5.9m in Q1 2022. Total net cash flow after delivery of the vessels was approximately USD 8m in Q4 2021 and 16.5m in Q1 2022 after repayment of outstanding loans.

Belships entered into agreement for the sale of BELOCEAN (2011). Delivery to the new owner occurred in Q1 2022. Belships realised a gain of approximately USD 5.6m in Q1 2022. Total net cash flow after delivery of the vessel was approximately USD 19.1m as the debt was repaid in Q4 2021.

Belships entered into an agreement for the acquisition of a 64 000 dwt Ultramax newbuilding resale currently under construction at a Japanese shipyard. Delivery is expected January 2023. The intention is to finance the vessel on similar terms as previously acquired newbuilding resales.

Belships’ fleet has increased and improved with only modest cash investments, signalling the competitive advantage Belships has in sourcing ship finance. The Japanese-designed bulk carriers entering the fleet represent the highest quality and lowest fuel consumption available in the market today.

Lighthouse Navigation
Lighthouse Navigation has delivered another strong quarter with EBITDA of USD 22.9m, bringing the full year 2021 EBITDA to USD 64.1m. The quarterly result includes provisions for potential loss-making contracts of USD 5.0m based on the forward freight market at year end.

Belships aims for the highest standards in corporate governance and is well placed to deliver emission cuts in line with industry ambitions for 2030. Belships will publish a comprehensive sustainability report for 2021 (ESG Report) reflecting our ongoing commitment to transparency and meeting investor and stakeholder expectations.

Belships is compliant with the upcoming emission regulations from IMO in 2023 (EEXI) without additional CAPEX signalling the competitive advantage of Belships modern eco-fleet.

Financial and corporate matters
At the end of the quarter, cash and cash equivalents totalled USD 105.2m, whilst mortgage debt amounted to USD 110.9m.

Total debt repayments in the quarter amounted to USD 58.5m, whereof USD 27.5m is repayment of debt on divested vessels, USD 24.5m voluntary prepayment and USD 6.5m is ordinary instalments.

Net leasing liability at the end of the quarter was USD 326.4m. Leasing liabilities have been calculated under the assumption that all purchase options to acquire Ultramax bulk carriers on bareboat charters will be exercised. Belships have no contractual obligations to acquire any of its leased vessels.

At the end of the quarter, book value per share amounted to NOK 9.51 (USD 1.08), corresponding to a book equity ratio of 34 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 the fourth quarter 2021 the Board declared a dividend payment of USD 25.6m (NOK 0.90 per share) equivalent to about 53 per cent of net result adjusted for non-controlling interests.
Furthermore, an extraordinary dividend is expected to be declared together with the Q1 2022 report.

Market highlights 
In the fourth quarter, the Baltic Supramax Index (BSI-58) averaged USD 30 480 per day, slightly down from USD 34 269 per day in Q3 2021. A very strong sentiment kicked off the quarter before peaking towards the end of October, whereafter spot markets trended downward towards year-end. Overall, 2021 averaged USD 27 406 per day for Supramaxes recording the best year in a decade.
Total Supramax shipment volumes ended at 246 million tons in Q4, slightly down from 255 million tons in Q3. October recorded an all-time high shipment of 94 million tons pairing with a booming spot market. In contrast, 79 million tons were shipped in November, which was the lowest month of the year. This was primarily caused by China’s intervention in the coal markets by capping prices and increasing domestic production significantly. This froze import demand across Asia as buyers temporised in anticipation of decreasing commodity prices. Also, curbs in steel production contributed to a lower activity in imports. These measures did seem to have a temporary and short-term nature as the underlying fundamentals continued to appear very tight.
For the full year, there were large variations in demand growth between commodities. The highest growth was for steel products, which increased by 43 per cent from 2020 levels. Breakbulk commodities grew by 16 per cent, whereas other minor bulks increased by 4 per cent. Grain volumes were modestly positive, whereas shipments of both coal and iron ore declined, by 9 and 20 per cent, respectively. Overall, demand grew by 5 per cent in terms of volume, however, the effects in ton-miles were higher as increased trades from the Atlantic Basin to Asia added to sailing distances. Port congestion persisted throughout 2021, as each ship spent on average 2 days extra in port compared to 2020.
According to Fearnleys, 21 vessels were delivered in the fourth quarter, down from 32 vessels in the third quarter. For the full year, 103 vessels were delivered, down from 143 in 2020.
At the time of writing, 18 Supra/Ultramax bulk carriers have been delivered so far in 2022 according to Clarksons Research. Only 89 vessels are scheduled to be delivered for the remaining part of the year. However, it might be even lower, as some registered orders usually are cancelled, deferred or simply incorrect.
Relatively low newbuilding activity continued as the lack of conviction and alternatives for fuel and propulsion systems appear to restrain demand for ordering. Equally important, the demand for newbuildings in other segments than dry cargo is absorbing most of the shipbuilding capacity for 2022-2023. Therefore, despite the low orderbook within dry bulk, newbulding prices increased on the back of limited shipbuilding capacity and increased steel prices.
Prices for modern secondhand vessels have been stable for the past couple of months despite the high freight market, and current values appear historically low in comparison with earnings.

The Baltic Exchange Supramax index YTD 2022 has averaged about USD 20 000 per day with Ultramaxes earning an additional premium.

Recently, the sentiment in the market significantly improved, and continued strong bulk markets is expected in the near term. Freight Forward Agreements (FFA) for Supramax currently indicate a market average of about USD 26 000 for the remaining part of the year.

As we mentioned in previous reports, the supply side as observed from the number of deliveries and the publicly quoted orderbook for our segment is historically low. On the back of stable demand, we remain optimistic in terms of market prospects.

The purpose of growth has been to increase profitability and the value and attractiveness of owning our shares. We are focused on capital discipline and returning capital to shareholders. A competitive return for our shareholders is to be obtained through increase in the value of the company’s shares and the payment of dividends, as measured by the total return.

Lighthouse Navigation has had a strong start to 2022. Based on Belships’ current contract coverage, we expect to generate significant free cash flow and continue to pay quarterly dividends as announced with our dividend policy. Additionally, an extraordinary dividend payment is planned for Q1 2022.

Belships has a modern fleet of 27 Supra/Ultramax bulk carriers with an average age of 3.7 years and daily cash breakeven for 2022 of about USD 10 000 per vessel.

21 February 2022


For further information, please contact Lars Christian Skarsgård, Belships CEO, phone +47 977 68 061 or e-mail (

This stock exchange announcement was published by Edwin Johansen, Accounting Manager in Belships ASA on 21 February 2022 at 07:00 CET.

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