Report as at 30 April 1996

Date:Wed, 12.Jun 1996BelshipsCompanyLtd.Skibs

Improvement in tankers, decline in dry bulk

Results Belships' total operating income in the first four months of 1996 amounted to NOK 132.0 million, as against 127.4 million in the first four months of 1995. The operating result rose from 14.6 to 16.0 million, while result after tax was NOK 3.3 million compared to 12.6 million in the first four months of 1995. This reflects a charge against the present result of NOK 5.1 million in unrealised foreign exchange losses, whereas the previous year's figure included a corresponding gain of NOK 6.3 million.     The operating result for handymax dry bulk reached NOK 12.3 million, up on the 8.2 million reported at the same time last year. Result from our own ships amounted to NOK 7.1 million. The company's share of Western Bulk Shipping's net result was NOK 5.2 million.     Negative trends in panmax dry bulk produced an operating loss of NOK 2.8 million, compared to a result of 7.8 million in the first four months of 1995. The first four months saw advances in product tanker activities. This yielded an operating result of NOK 8.4 million as against the operating result of 0.1 million during the same period of last year.     Belships' technical management business contributed an operating result of NOK 1.3 million, compared to 1.7 million in the same period of 1995.    
A considerable decline in the dry bulk market in the first four months has brought it down to the level at which the upturn began in the summer of 1994. The reasons: increased deliveries of new tonnage, little scrapping and slower growth in demand.     Benefiting from the Western Bulk Carriers (WBC) pool's high level of contracts coverage, Belships' handymax bulk carriers achieved earnings of roughly the same order as last year.     Panmax bulk activities were disappointing in the first four months, and results were lower than expected. With activity lower all round, several contracted cargo shipments were delayed, one major contract was not renewed, besides which a declining market always leaves fewer opportunities for arbitrage. The product tanker market improved during the first four months of the year, reflected in the corresponding advances in Belships' earnings in this segment. The recent acquisitions M/T Belanja and M/T Beltrader only began operations towards the end of the period. Significant contributions from these ships will only be from next tertiary onwards.
As a natural consequence of a reorganization of Western Bulk's pool operations, Belships will be limiting its involvement in the handymax dry bulk business to holding a strategic stake in Western Bulk Shipping. The company's direct investments in handymax bulk vessels will accordingly be sold. This will enable the company to invest more in its other activities.     We expect the dry bulk market to remain weak for the rest of the year thus affecting WBC earnings.     Our panmax business is expected to generate better results in the second four-month period.     In the product tanker market we expect a relatively high growth in newbuilding deliveries for the balance of the year. On the other hand, demand is rising and there are signs of a general upturn in the tanker market. This will also benefit product tankers and we anticipate continued good results in this segment.
Belships' liquidity and financial positions are satisfactory.     As at 30 April, the company's total assets amounted to NOK 845 million, an increase of NOK 55 million since the year-end. The company's equity ratio was 41.4%.     The company's Annual General Meeting authorised the Board to issue 4 million shares of NOK 2 face value. The authority will remain in force until the next General Meeting. The same General Meeting resolved to declare a dividend of NOK 0.65 per share for 1995.
For further information, call Finance Director Jo Eric von Koss, at (+ 47) 2252 7600.
Oslo, 6 June 1996
Board of Directors of BELSHIPS ASA

Espen Grepperud Phone +47 22 52 76 00