First quarter results 2010


Belships’ operating income in the 1st quarter of 2010 was USD 18,311,000 (1st quarter 2009: USD 13,268,000). The company’s operating profit was USD 3,351,000 (USD 1,248,000). This increase in operating income is primarily due to higher rates in Elkem Chartering’s handysize operations.

In connection with the sale of two newbuilding contracts in 2009, Belships retained the right to some of the vessels’ future earnings. These rights were sold in the first quarter for USD 3.2 million. This amount was taken to income in the quarter.

Profit after tax in the 1st quarter of 2010 was USD 2,340,000 (1,452,000).

The accounts for the 1st 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 relatively stable in the 1st quarter, but rates for the largest vessels decreased in spite of the vigorous demand from China. This reflects a significant level of newbuilding deliveries, which seems to be approximately 40% higher than in the preceding quarter.

Elkem Chartering continued to experience moderate growth in activity, as in the last quarter, making a positive contribution to the result.

The MS Belstar continued on its long-term charter. There were some technical challenges, for example relating to the ship’s cranes, but they now seem to be under control.

The MT Belaia continued on its charter without any significant interruptions.



At 31 March, the Group’s liquid reserves totalled USD 25.1 million, against USD 19.6 million at 31 December 2009. Of the total contractual obligation of USD 77.6 million on the two remaining newbuildings, USD 39.3 million has been paid and USD 29.4 million has been secured by long-term loan financing. Belships has a bond loan of NOK 104.2 million (USD 17.4 million). This loan has been hedged against USD.

The company has carried out impairment tests for its assets in conformity with IAS 36. The M/S Belstar and the remaining newbuilding contracts were assessed on the basis of observable market values and the time charters concluded, which, based on a discretionary assessment of counterparty risk, were discounted by 12%. Based on these internal valuations, there is currently no need for any further impairment.

At the end of the 1st quarter, book value per share amounted to NOK 13.18, while the book equity ratio was 46.68%.



We expect the dry-bulk market to weaken in the course of the year in step with the high number of newbuildings being delivered and the low level of scrapping of older ships. Elkem Chartering’s handysize operations are expected to produce modest, but positive contributions in the coming quarters. Belships’ own-controlled tonnage are not influenced by short-term fluctuations in the freightmarket.     



Oslo, 22 April 2010