Results 2nd quarter 2005

Belships recorded operating income of USD 16,460,000 (2004: USD 15,777,000) and an operating result of USD 2,477,000 (USD 4,048,000) in the second quarter. The decrease in profit was due largely to a reduced contribution from Elkem Chartering and to our participation in the Bocimar pool which contributing an operating result of USD 0.4 million in 2004.
The result for the period before taxes was USD 855,000 (USD 2,925,000).
This report has been prepared in accordance with IFRS.
Economic growth in China continues, but destocking and a larger number of newbuilding deliveries led to a substantial drop in dry bulk rates in the second quarter.
As measured by the Baltic Dry Index, rates fell by 50% during the quarter to their lowest level for more than two years.
Work on broadening Elkem Chartering’s cargo base continued. In the light of market developments, we believe the company’s balance between vessels and cargo to be favourable.
The M/S Anangel Express, M/S Pax Phoenix, M/S Pax Legend and M/S Belpareil continued on their charters without any notable off-hire.
As announced in June, the M/S Belpareil has been fixed on a new time charter running until the end of 2007 at a rate which is expected to contribute around USD 450,000 per quarter to Belships’ operating result.
Belships’ own vessels M/S Belnor and M/S Belisland continued on their charters without any significant operational problems or notable off-hire.
Financial position and other information
The company’s equity and financial position are sound. 
The group had cash of USD 14.2 million on 30 June, against USD 27.4 million on 31 March. The company’s cash position was reduced by USD 15.8 million through the payment of dividends at the beginning of May. The company had mortgage debt of USD 14.8 million at the end of the period. Shareholders’ equity was equivalent to NOK 4.11 per share and 37.6% of assets at the end of the period.  
Since the last interim report the company has acquired 150,000 of its own shares under the authority to buy back 250,000 shares issued by the annual general meeting in April this year.
The market value of the M/S Belnor is substantially higher than her book value.
Slightly lower newbuilding deliveries and an end to destocking in China could lead to an increase in rates during the second half of the year, but the upswing is expected to be temporary. Newbuilding deliveries are set to remain at a historic high for the next two years, so putting pressure on rates.
As mentioned above, Elkem Chartering is well placed in the light of market developments, but the contribution from the Handysize operation is expected to be somewhat weaker during the rest of the year.
Once the M/S Belnor is delivered to her new charterer after dry-docking in the third quarter, the vessel’s contribution to Belships’ operating result will rise significantly.
Oslo, 16th August 2005