Belships ASA: Report 4th quarter 2023



  • EBITDA of USD 40.8m including USD 9.6m from Lighthouse Navigation
  • Net result of USD 22.6m
  • Declared dividend of NOK 0.60 per share
  • TCE of USD 18 449 gross per day for owned fleet – 30 per cent outperformance of BSI58
  • Prepaid USD 13.2m of bank debt – increasing the number of debt free vessels
  • 81 per cent of ship days in Q1 2024 are fixed at USD 17 000 gross per day
  • 42 per cent of ship days in the next four quarters are fixed at USD 16 700 gross per day
  • Cash breakeven for 2024 of about USD 10 900 per day per vessel
  • The newest Supra/Ultramax fleet with 38 ships including eight newbuildings

Subsequent events
In January, Belships made a further debt repayment of USD 13.5m, increasing the number of unencumbered vessels to four.

Belships has entered into agreements to charter out three Ultramax vessels on index-linked contracts for periods of minimum one year each. The vessels will earn a premium of between 116-120 per cent of the Baltic Supramax Index. The vessels will be delivered in February-March, after they have completed existing fixed-rate contracts. This brings the total number of vessels on floating index-linked contracts to nine and is considered attractive due to an improved market outlook.

Financial results commentary
Belships reports a net result of USD 22.6m for Q4 2023 compared to USD 15.3m in Q3 2023. The improved net result is caused by strong contract coverage, and increased contributions from the vessels on index-linked contracts. Lighthouse Navigation delivered another solid quarter with an EBITDA contribution of USD 9.6m.

Time charter equivalent earnings (TCE) in the quarter was USD 18 449 gross per vessel per day. In comparison, the Baltic Supramax Index (BSI-58) averaged USD 14 159 gross per day. The outperformance is due to a high number of fixed period time charter contracts at levels above current market rates.

Ship operating expenses amounted to USD 5 403 per vessel per day in Q4 2023 in line with USD 5 300 per vessel per day guided in estimated cash breakeven for 2023. Full year operating expenses amounted to USD 5 239 per vessel per day.

Fleet status
The fleet sailed without significant off-hire with a total of 2 743 on-hire vessel days in Q4 2023.

Since December, Belships vessels have not transited the Red Sea, and none of our vessels have been involved in any related incidents.

Contract coverage   Q1 2024 Q2 2024 Q3 2024 Q4 2024
Fixed-rate contracts   81% 42% 28% 21%
Average fixed-rate (USD/day)   17 000 16 300 16 500 16 000
Open/Index-linked contracts   19% 58% 72% 79%
    100% 100% 100% 100%

Belships currently has nine 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.

Cash breakeven for 2024 is expected to be about 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.

8x Ultramax bulk carriers under construction at Japanese shipyards:

BELGRACE         expected delivery Q4 2024
BELFORTUNE    expected delivery Q4 2025
BELFOX               expected delivery Q4 2025-Q1 2026
BELFUTURE       expected delivery Q1 2026
BELAVANTI         expected delivery H2 2026
BELROSSO         expected delivery H2 2026
BELTEMPO         expected delivery H1 2027
BELVICTORY      expected delivery Q2-Q3 2027

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.

Belships has no obligation to acquire any of the leased vessels.

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 9.6m for the quarter and continues to contribute to Belships profitability and dividend capacity.  Lighthouse Navigation demonstrated good risk management with limited forward exposure and was able to take advantage of the improved market conditions observed in the quarter.

The average EBITDA per quarter in the last five years has been USD 8.2m.

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.

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 128.3m, whilst interest bearing bank debt amounted to USD 103.4m, after having prepaid USD 13.2m in Q4.

An additional amount of USD 13.5m was prepaid in January. Belships now has four unencumbered vessels.

Leasing liabilities at the end of the quarter amounted to USD 461.0m.

The lease liability calculation for BELFUJI was changed to reflect the assumption that the purchase option will be exercised during the lease. All leased vessels have now been calculated with the assumption that purchase options to acquire the vessels will be exercised.

Belships has no 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 12.3 (USD 1.21), corresponding to a book equity ratio of 33 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 Q4 2023 the Board declared a dividend payment of NOK 0.60 per share (USD 14.5m in total) equivalent to about 80 per cent of the net result adjusted for minority interests.

This brings the total dividends paid out since Q2 2021 to NOK 8.70 per share, which is 132 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 224.3m.

Market highlights
In the fourth quarter, the Baltic Supramax Index (BSI-58) averaged USD 14 159 per day – significantly up from USD 10 028 per day in the preceding quarter. The Baltic Ultramax Index (BSI-63) averaged USD 16 189 per day in the fourth quarter, up from USD 11 837 per day in the third quarter. The market peaked in December when the Supramax index reached USD 17 213 per day, which translated into almost USD 20 000 per day for Ultramax vessels.

Asset values followed suit and rose gradually in the fourth quarter. By the end of the year values were back to about the same levels as at the start of the year. Even though long-term interest rates rose during 2023, they receded in the fourth quarter, and we would opine that this contributed to rising ship values. Ship values have continued to rise in 2024, especially for modern vessels which continue to be markedly higher in demand than less economical older ships.

According to Fearnleys, preliminary estimates for Q4 2023 shipment volumes were 283 million tonnes, an all-time high, after the previous record of 279 million tonnes in the preceding quarter. The highest growth (quarter-on-quarter) was seen in iron ore (67 per cent), coal (9 per cent) and steel products (10.6 per cent).  Minor bulks (-11 per cent), grains (-7 per cent) and fertilizers (-3 per cent) contributed negatively. We continue to observe a variation in growth figures of each commodity type from one quarter to another, however, total shipment volumes were up 1.2 per cent quarter on quarter, and total demand appeared robust throughout 2023.

Port congestion, as measured by the average waiting time in port for ships to discharge, continued at close to the same levels as in the third quarter. However, waiting time in port for ships to load increased somewhat due to delays in South America caused by low inland water levels. Reduced capacity in the Panama Canal also reduced efficiency, causing longer sailing distances for vessel operating in and out of the Atlantic Ocean. This effect has continued into 2024, and further inefficiencies are added from vessels avoiding transits through the Red Sea and the Suez Canal. 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.

33 Supra/Ultramax vessels were delivered in Q4 2023, compared to 32 vessels in the previous quarter, according to Fearnleys. At the time of writing this report, 16 new vessels have been delivered in 2024, with about 160 scheduled for delivery this year. However, actual deliveries are likely to be slightly lower due to slippage or cancellations. Fleet growth has been around 3.5 per cent since May 2023. According to Fearnleys, this rate of fleet growth will be maintained through 2024. 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. The orderbook for dry bulk remains close to all-time lows at about 8 per cent.

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 appear increasingly distant, with some new orders being reported in 2027, and even 2028. A potential lead time of four years for a bulk carrier is unprecedented.

The Baltic Exchange Supramax index is currently about USD 12 000, with Ultramax bulk carriers earning about USD 14 000 in the spot market. The FFA market (Forward Freight Agreements) has improved and currently indicates a market average of around USD 17 000 for an Ultramax bulk carrier for Q2-Q4 2024. This is a significant improvement in sentiment, and if it materialises; we would expect a meaningful increase in ship values to follow.

Lighthouse Navigation continues to deliver good results, and posted consecutive profits every quarter in 2023, which displays good risk management and execution skills. Activity has been positive so far in the first quarter of 2024 and we expect continued profitability contributing to Belships’ dividend capacity.

Belships has contract coverage ensuring significantly higher profitability than the current spot market. 81 per cent of ship days in Q1 2024 are covered at about USD 17 000 per day, and 42 per cent of ship days in 2024 are covered at about USD 16 700 per day.

Furthermore, we now have nine vessels chartered out on floating rate, index-linked 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 combine meaningful leverage with a low cash breakeven of USD 10 900 per day per vessel 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 and market expectations, we expect to generate free cash flow and continue to pay quarterly dividends.

19 February 2024


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