Results per 1st quarter 2008

Belships’ operating income in the 1st quarter of 2008 was USD 21,561,000 (1st quarter 2007: USD 18,867,000). The company’s operating profit totalled USD 3,958,000. The comparable operating profit for the 1st quarter of 2007 was USD 2.1 million. In addition to this, a realised profit of USD 6.5 million was obtained in connection with the cancellation of the M/S Belpareil charter party.
This increase in operating income is in all essentials related to Elkem Chartering’s handysize operations, which also delivered a positive profit performance.
Profit after tax in the 1st quarter was USD 3,865,000 (USD 7,949,000).
The report for the 1st quarter was submitted in compliance with IAS (International Accounting Standard) 34, and consistent accounting principles were applied in relation to the accounts submitted at 31 December 2007.
The dry-bulk market was volatile throughout the quarter, but the rate level is still very high.  A capacity utilisation rate was over 98%. The problems in iron ore and coal ports in Brazil and Australia respectively have largely been solved. The price negotiations between mining companies and the main importers, with the exception of iron ore from Australia to China, have been concluded with large increases.
Elkem Chartering’s handysize operations delivered as expected a good contribution, and the build-up of activities in Singapore is proceeding as scheduled. The handymax vessels M/S Pax Phoenix and M/S Legend Phoenix continued on their time charters.
Belships’ own tonnage, the panmax vessel M/S Belisland and the product tanker M/T Belaia, also continued on their respective charter parties without any significant interruptions. The charterer of the M/S Belisland has, in accordance with its option, extended the charter party until March 2010.
Financial position and other matters
The company’s solidity and financial position were strengthened in the course of the 1st  quarter. At 31 March, the Group’s liquid reserves totalled USD 51.0 million against USD 49.2 million at 31 December. At the  end of the 1st quarter, the company’s mortgage debt relating to bridge financing of the company’s newbuildings amounted to USD 20 million. In addition to this, Belships has a bond issue outstanding of NOK 100 million (USD 19.5 million). This loan has been hedged against currency risks, and the unrealised gain from this totalled USD 3.9 million at 31 March.  This amount has been booked under Other fixed assets.
At the end of the 1st  quarter, book value per share amounted to NOK 10.92, while the book equity ratio was of 48.9%.
Charters for chartered tonnage have substantial values that are not reflected in the company’s balance sheet.
It is expected that the dry bulker market will continue to remain volatile at a high level also in the 2nd  quarter.
It is still unclear how the financial disturbances and the ensuing economic setback will affect the demand over time.
Elkem Chartering’s handysize operations will very likely produce good results in the coming quarters.
For vessels operating on time charters, the result is virtually given for the rest of the year.
Oslo, April 25, 2008