Belships’ operating income in Q3 amounted to USD 22,569,000 (Q3 2007: USD 15,323,000). The company’s operating result amounted to USD 7,459,000 (USD 2,720,000). The increase in operating income is related to Elkem Chartering’s handysize operations and includes recognition of USD 3.5 million in income received in connection with the cancellation of a charter party.

The result after tax for Q3 amounted to USD 5,024,000 (USD 2,060,000).

The result after tax for the first three quarters of the year amounted to USD 13,366,000 (USD 11,996,000).

The accounts for the period 1 January to 30 September have been prepared in accordance with IAS 34 Interim Financial Reporting. The information in the interim report provides a correct picture of the company’s and the group’s assets, liabilities, financial position and result as a whole, and provides a corrective overview of the information listed in the Norwegian Securities Trading Act, section 5-6, subsection four.


Rates in the dry cargo market fell significantly through the whole quarter. Many actors believed this was a temporary phenomenon linked to the holding of the summer Olympic Games in China. However, the increasingly expanding financial crisis combined with the delivery of a large number of newbuildings and converted tankers have revealed a structural imbalance in the market.

The handysize operations in Elkem Chartering delivered good results. The supramax vessels M/S Pax Phoenix and M/S Legend Phoenix continued their charter parties without any significant operational interruptions.

The vessels managed by Belships itself, M/T Belaia and M/S Belisland, also worked on their respective charter parties. M/S Belisland was off hire for about a week due to a periodic dry-docking.


As per 30 September the group’s liquidity holdings amounted to USD 47.0 million compared with USD 50.7 million as per 30 June. A new instalment of USD 8.1 million was paid in July for the company’s newbuildings. USD 47.3 million of the total contract obligation of USD 195.8 million has now been paid.

At the close of Q3 the company had USD 20.0 million in liabilities relating to bridging finance for the newbuildings. Belships also had bond loan of NOK 100 million (USD 17.0 million). The loan is subject to currency hedging and had an unrealised hedging gain amounting to USD 1.3 million as per 30 September. The amount is recognised in the balance sheet under other fixed assets.

Belships’ liquidity situation allows it to fully finance the vessel that will be delivered in 2009 with equity. The company will hold back on the long-term financing of the newbuildings until conditions in the credit market have normalised.

At the close of Q3 the booked value per share was NOK 13.67, while the booked equity ratio was 52.3%.


After 5 years of record earnings in the dry cargo market it now appears that the so-called super cycle has come to an end. This was expected given the large order book for newbuildings, but the financial crisis has accelerated the fall in rates. The rates have also continued to fall strongly in Q4 as a result of the major financing problems in world trade and a likely recession.

The handysize operations in Elkem Chartering will also be affected by the market’s fall and the results for Q4 will be weaker, among other things as a result of the fact that Pax Phoenix’s charter party has been extended until the middle of 2009 at a reduced rate.

Oslo, 30 October 2008