Results 3rd quarter 2007

Belships operating income in the 3rd quarter of 2007 was USD 15,323,000 (3rd quarter 2006: USD 13,748,000). The company’s operating result was USD 2,720,000 (USD 2,384,000). This increase in operating income and the positive profit performance are primarily related to Elkem Chartering’s Handysize operations.
Profit after tax in the 3rd quarter was USD 2,060,000 (USD 1,238,000).
The report for the 3rd quarter was submitted in conformity with IAS (International Accounting Standard) 34, and consistent accounting principles were applied in relation to the accounts submitted at 31 December 2006.
The dry bulk market went from record to record during the 3rd quarter. The upswing in rates was particularly pronounced for large vessels, while the volatility for the Handysize vessels was slighter, as usual. The strong growth in China continued to drive the market and, in addition, grain exports from the USA increased substantially.
Elkem Chartering continues developing its operations in the Far East. The strong market makes it a challenge to manage the cargo/ship portfolio optimally. The M/S Belisland, the M/T Belaia and Elkem Chartering’s two Handymax vessels continued on their respective time charters without any material interruptions.
In the budget, the Norwegian Government presented a proposal for a new shipping tax system. There is some uncertainty as to the final outcome of this, as the Norwegian Parliament is currently examining the proposal, but for Belships’ part, tax payable due to the transitional rules will be very limited. The company will come to a final decision on the choice of fiscal regime in the course of the 1st quarter of 2008.
The company’s solidity and financial position were strengthened in the course of the 3rd quarter.
At 30 September, the Group’s liquid reserves were USD 22.2 million, against USD 20.4 million at 30 June. The company’s mortgage debt was USD 30.3 million at the end of the 3rd quarter. In addition, the company has a bond loan of NOK 100 million (USD 18.2 million). This loan has been hedged against currency risk, and the unrealised gain from this amounted to USD 2.6 million at 30 September. The amount has been booked under other fixed assets.
At the end of the 3rd quarter, book value per share amounted to NOK 6.73, while the book equity ratio was 33.3%.
The market value of the of the company’s fixed assets is substantially higher than their book value.
The M/S Belnor was delivered to new owners in the beginning of October. The sale produced a profit of USD 22.5 million, which will be taken to income in the 4th quarter. Through this sale, the company’s liquidity was strengthened by approximately USD 36 million.
There is little reason to expect a weakening of the market in the near future, though it cannot be ruled out that disturbances in the financial market and the development in the energy-prices may bring about a financial setback.
Elkem Chartering is expected to produce results on a line with the previous quarter also during the last quarter of the year. The same applies to Belships own-controlled tonnage.
Oslo, November 8, 2007