Report 3rd Quarter 2003

Belships third-quarter operating income was USD 10,778,000 (third quarter 2002: USD 4,492,000). The company’s operating result before write-downs and gains on disposal of assets totalled USD -286,000 (USD
-1,260,000). The equivalent operating result for the year’s first three quarters was USD 664,000 (USD -3,122,000).
Following an reassessment of market conditions it was decided to write down Belships’ financial interests in Gibson Gas Tankers (GGT) to zero. The write-down totalled USD 9,621,000.
The post-tax result for the third quarter was USD -10,202,000 (USD -1,954,000). The equivalent result for the year’s first three quarters was USD -10,036,000 (USD -3,587,000). The minority share of the result totalled USD -5,220,000 (USD -1,636,000) and is entirely related to the stake in Gibson Gas Tankers. Belships’ share of the reported result therefore totalled USD -4,816,000 (USD -1,951,000).
The quarterly accounts are in accordance with the standard for interim reports. The same accounting principles were used as for the annual accounts for 2002.
The product carrier business generated an operating result of USD 57,000 (USD -80,000) in the third quarter.
The gas carrier business generated an operating result before write-downs of USD -1,185,000 (USD -1,084,000) and an operating result including write-downs of USD -10,806,000.
The dry bulk business generated an operating result for the third quarter of USD 1,018,000 (USD -222,000).
The ship management business generated an operating result of USD 39,000 (USD 186,000).
The market for product carriers was well balanced during the summer, but rates have since then declined. M/T Belgrace sailed in the spot market and the result was poorer than in the previous quarter.
Following a relatively quiet summer the strong growth in China’s steel consumption drove dry bulk to historic heights. M/S Belnor continued with its charter for Korean charterers and operations remained satisfactory.
In August we took delivery of M/S Belisland, a panmax ship, on a long-term charter from a Japanese shipping company. The ship was contracted out on a two year charter (the customer having an option for a further one year) and this secured satisfactory earnings for the period.
Elkem Chartering (EC) had a considerable dry bulk capacity in the spot market and the results thus improved throughout the quarter. The three handymax ships that EC have so far operated in cooperation with a French shipping company will be successively returned and operated by EC in the market.
The capesize cooperation with Bocimar, a Belgian company, gave a positive contribution, but it will take time for it to fully reflect the large increase in rates.
The market for small gas carriers remained basically unchanged in the third quarter. In the beginning of September the two 6,000 cbm carriers owned by Gibson Gas Tankers (GGT) suffered serious engine breakdowns and were therefore off-hire during September.
As at 30 September liquid assets totalled USD 8.3 million, compared with USD 7.5 million at the end of the second quarter, while mortgage debt was reduced by USD 0.8 million to USD 45.1 million. Shareholders’ equity at the end of the period was equivalent to 16.5% of assets, or NOK 2.97 per share. Not including mortgage debt in GGT (USD 25.8 million) for which Belships is not liable, shareholders’ equity was equivalent to 27.9% at the end of the quarter.
The value of the ships owned by GGT was written down to the same amount as the company’s mortgage debt. The book values of the other ships are somewhat lower than shipbrokers’ estimates.
The development in the market for M/T Belgrace is uncertain but the result for the year is expected to be satisfactory.
The dry bulk market has set new records but is dependent on high demand for capacity from China. There is limited new-build tonnage in the market and the fundamental factors therefore indicate that the market will continue to be strong. M/S Belpareil, the first of EC’s handymax carriers, has been returned and contracted out for a short period at a rate that gives a very satisfactory result. At the end of the year M/S Legend Phoenix will be returned from the pool and has been chartered out on time-charter for the remaining period at a good rate.
The results in Gibson Gas Tankers have steadily declined and in connection with the above-mentioned engine problems it was necessary to re-assess our interests in GGT. Negotiations with the mortgagee are underway regarding the partial cancellation of GGT’s debt. 
Oslo, 4th November 2003

Managing director Sverre J. Tidemand or Financial director Jo Eric von Koss are reachable on phone no. +47 22 52 76 00 for any questions regarding this press release.