Earnings 3rd quarter 2010


Belships achieved an operating income in the 3rd quarter of USD 13,075,000 (3rd quarter 2009: USD 14,643,000). The company’s operating profit was USD 1,246,000 (USD 1,056,000).

The reduction in operating income is due to reduced activity in Elkem Chartering’s handysize operations.

The overall result for the 3rd quarter of 2010 amounted to USD 1,571,000 (USD 387,000). The result for the three first quarters of the year totalled USD 2,782,000 (USD 2,121, 00).

The accounts for the 3rd quarter of 2010 have been prepared in accordance with IAS 34, Interim Financial Reporting, and are consistent with the principles applied in the annual accounts. The interim accounts have been prepared in conformity with the International Financial Reporting Standards (IFRS).



The dry-bulk market was volatile in the 3rd quarter. This was reflected in slightly smaller shipments of iron ore to China, while the demand for ore, coal and grain increased in the rest of the world. A record number of newbuildings were delivered, although around 25% of expected deliveries have either been cancelled or delayed.

Activity in Elkem Chartering is still marked by caution due to the uncertain market situation. The results were positive, but moderate.

Belships’ own ships, M/S Belnor, M/S Belstar and the chartered M/S Belaia, continued on their respective charters without significant interruptions.


Financial position and other matters

At 30 September, the Group’s liquid reserves totalled 21.0 million, against USD 20.2 million at 30 June 2010.

Of the total contractual obligation of USD 38.1 million for the newbuilding, with anticipated delivery in the 1st quarter of 2011, USD 15.2 million has been paid and USD 22.0 million has been secured by long-term loan financing. Belships has a bond loan of NOK 106.3 million (USD 18.2 million). This loan has been hedged against USD and falls due in the period from 2011 to 2013.

The company has carried out impairment tests for its assets in conformity with IAS 36. The vessels and the remaining newbuilding contract were assessed on the basis of observable market values and the charters concluded. Based on these internal valuations, there is currently no need for any impairment.

At the end of the 3rd quarter, book value per share amounted to NOK 13.0, while the book equity ratio was 44.2%.



The international economic situation is still uncertain, and the rate of delivery of newbuildings is very high. As a result of strong growth in Asia, in particular China, the market has so far absorbed the vessels delivered, without any dramatic effects on rates.

Elkem Chartering is expected to continue showing caution in taking large positions in the market this year and will therefore deliver results around break-even.

Belships’ own-controlled tonnage will continue on their charters and will therefore not be affected by short-term fluctuations in the chartering market.


Oslo, 26 October, 2010