Belships ASA: Report 4th quarter 2022



  • Operating income of USD 155.4m (USD 228.6m)
  • EBITDA of USD 56.1m (USD 70.4m) including USD 18.0m from Lighthouse Navigation
  • Net result of USD 34.2m (USD 59.2m)
  • Declared dividend of NOK 0.75 per share
  • TCE of USD 22 359 gross per day for owned fleet
  • 95 per cent of ship days in Q1 2023 are fixed at USD 20 300 gross per day
  • 67 per cent of ship days in the next four quarters are fixed at USD 19 800 gross per day
  • Modern fleet of 31 vessels with an average age of four years and daily cash breakeven for 2023 of about USD 10 900 per vessel

Subsequent events
BELMONDO, an Ultramax newbuilding of 64 000 dwt was delivered in January 2023 from Imabari Shipyard in Japan.

Financial results commentary
Belships reports a net result of USD 34.2m for Q4 2022, compared to a net result of USD 59.2m for Q4 2021. The reduction is mainly caused by a lower freight market in Q4 2022, and significant realised gains on the sale of BELFRI, BELCARGO and BELNOR in Q4 2021.

Net freight revenue for owned vessels was USD 55.7m in Q4 2022 compared to USD 64.7m in Q4 2021. The reduction in net freight revenue is driven by a reduction in TCE from USD 30 489 in Q4 2021 to USD 22 359 in Q4 2022, partially offset by an increase in the number of on-hire vessel days due to fleet growth.

Ship operating expenses amounted to USD 16.0m in Q4 2022 unchanged from USD 16.0m in Q4 2021. Increased vessel days in Q4 2022 due to fleet growth is offset by non-recurring vessel costs incurred in Q4 2021.  

Fleet status
Time charter equivalent (TCE) earnings per ship in the quarter was recorded at USD 22 359 gross per day. BELFORTE, BELRAY and BELFUJI were drydocked in the quarter. The remaining fleet sailed without significant off-hire with a total of 2 663 on-hire vessel days in Q4 2022.

The Baltic Supramax Index (BSI) averaged USD 14 800 gross per day in the fourth quarter. Relative performance versus spot indices is affected by a high number of fixed period time charter contracts that contribute to our coverage for 2023 at levels far above current market rates.

During the quarter Belships continued to add new period time charter contracts increasing contract coverage for 2023 to 67 per cent at USD 19 800 gross per day.

    Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024
Contract coverage   95% 71% 57% 47% 25% 5%
TCE rate (USD/day)   20 300 19 700 19 400 19 200 19 700 21 100

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

BELYAMATO, an Ultramax newbuilding of 64 000 dwt was delivered in November 2022 from Imabari Shipyard in Japan.

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 delivered another strong quarter with EBITDA of USD 18.0m. The result includes a reversal of provisions for potential loss-making contracts of USD 7.9m.

This brings the annual EBITDA for 2022 to USD 60.0m and average EBITDA in the last 12 quarters to USD 10.8m.

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 2022 (ESG Report) in April 2023 reflecting our ongoing commitment to transparency and meeting investor and stakeholder expectations.

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

The new Norwegian Transparency Act entered into force 1 July 2022 and Belships has taken the necessary steps to be compliant.

Financial and corporate matters
At the end of the quarter, cash and cash equivalents totalled USD 139.9m, whilst interest bearing bank debt amounted to USD 141.8m.
Leasing liabilities at the end of the quarter amounted to USD 463.4m. Leasing liabilities have been calculated with the assumption that all purchase options to acquire Ultramax bulk carriers on bareboat and time-charter agreements will be exercised except BELFUJI. Belships have no contractual obligations to acquire any of the leased vessels.

All lease agreements have fixed interest rates for the entire duration of the contracts.

At the end of the quarter, book value per share amounted to NOK 11.51 (USD 1.17), corresponding to a book equity ratio of 30 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 2022 the Board declared a dividend payment of NOK 0.75 per share (USD 18.5m) equivalent to about 70 per cent of net result adjusted for net minority interests.

This brings the total dividends paid out since the inception of the dividend policy in Q2 2021 to NOK 6.35 per share (USD 168.3m).

Market highlights  
In the fourth quarter, the Baltic Supramax Index (BSI-58) averaged USD 14 800 per day – down from USD 19 400 in the third quarter. As a result of falling spot market earnings, asset values corrected as well. According to Fearnleys, second hand values in general dropped by about 20 per cent from June to December. Values for modern vessels appear to hold better than those of older vintages.

According to Fearnleys, total Supra/Ultramax shipment volumes ended at 264 million tons, up from 250 million tons in the previous quarter.  Volumes shipped during Q4 2022 were the highest for the year, and just shy of the record 266 million tons shipped during Q2 2021. 

Demand improved probably due to the early signs of a recovery in China as well as a general rebound in global economic growth after an overall weak 2022. Shipments of breakbulk cargoes declined slightly due to the correction in the container markets. Coal shipments increased to the highest level of the year and was the biggest contributor to the general shipment volume increase in Q4 2022. Other commodity groups like grains, fertilizers and steels were unchanged from the third quarter.

Port congestion reversed to around pre-Covid normalised levels. Even though bunker prices were lower, the average sailing speed also reduced somewhat. As we have highlighted before, changes in both congestion and speed can significantly affect the overall vessel efficiency in the dry bulk market. Congestion may again increase, however, it could be offset by a slight increase in sailing speed, hence on the balance this should be neutral in 2023.

China continued to fight the pandemic with severe lockdowns in major cities. During Q4 2022 it became clear that a change in policy was underway and is now unfolding in 2023. The war in Ukraine reduced usual volumes of wheat, corn, fertilizers and steel products in 2022, and volumes from the Black Sea are expected to rise this year.

According to Clarksons, 29 Supra/Ultramax vessels at a total of 1.8m deadweight were delivered during the fourth quarter, about the same volume as in the previous quarter. On a year-on-year basis, Supra/Ultramax fleet growth was below three per cent through all of 2022, which is the lowest rate seen in the last 20 years. The number of new deliveries is expected to be slightly higher in Q1 2023 and then taper off thru the year, before dropping towards 1.5 per cent in 2024.

The number of ships delivered each quarter compares to an existing fleet of Supra/Ultramax vessels today of about 3 900. With a total orderbook of around 7 per cent, we are soon approaching the lowest rate of supply growth in 30 years.

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 container and gas vessels dictate the position with shipyards. Available delivery positions with shipyards remain distant, at least two years ahead.

The sentiment in dry bulk markets continued to soften in January, and the Baltic Exchange Supramax spot index is currently about USD 9 000. Even though spot market rates have fallen drastically, both FFA and period rates are holding steady and indicating that we have passed the bottom of the market. The Forward Freight Agreements (FFA) currently indicate a market average of about USD 14 500 for the remaining part of the year, with Ultramax bulk carriers earning an additional premium of about 15 per cent.

Belships has contract coverage ensuring higher profitability than current market levels. 95 per cent of ship days in Q1 2023 are covered at about USD 20 300 per day, and 67 per cent of ship days in the next four quarters are fixed at about USD 19 800 per day. 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 secured with fixed interest rates.

Lighthouse Navigation continues to deliver very good results. We expect lower activity in Q1 2023 in line with seasonality in the dry bulk market. However, we continue to see very good profitability and Lighthouse is expected to continue contributing to Belships’ dividend capacity.

With normal seasonality, it is likely that spot market rates will increase from Q2 onwards, and towards second half of this year we expect a positive market development based on increased activity from China reopening and some pent-up demand effects after last year. However, the pace of this recovery is uncertain, and we are comfortably positioned with highly profitable contract coverage for the meantime.

Looking further ahead, the supply side as observed from the number of deliveries and the publicly quoted orderbook for dry bulk is historically low. We therefore remain more optimistic in terms of medium to long term market prospects.

We are focused on capital discipline and returning capital to 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. Since we announced a new dividend policy in Q2 2021, we have returned a total of NOK 6.35 per share (USD 168.3m) to shareholders and at the same time we have continued to deliver profitable growth and fleet expansion.

Belships owns a modern fleet of 31 Supra/Ultramax bulk carriers with an average age of about four years and daily cash breakeven for 2023 of about USD 10 900 per vessel. 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.

22 February 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