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Belships achieves promising 2Q17 results

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Dry Bulk,

Belships latest results show a steady financial performance.


  • Operating income of US$6.4 million (1Q: US$6.6 m).
  • EBITDA of US$3.0 m (US$3.0 m).
  • Net result of US$0.7 m (US$0.8 m).
  • All ships operating normally - modern fleet - average age 4.9 years.
  • Contract coverage 100% for delivered ships - around US$54 million fixed charter.

Second quarter 2017 results

Belships operating income in 2Q17 was US$6.4 million (1Q: US$6.6 million), while EBITDA amounted to US$3.0 million (US$3.0 million). The Group's operating result amounted to US$2.1 million (US$2.1 million), while net result for 2Q17 was US$0.8 million (US$0.8 million).

Fleet status

Belships concentrates on the dry bulk market, with 5 x modern supramax/ultramax in service.

M/S Belstar, M/S Belnor and M/S Belisland have continued the long-term contracts to Canpotex of Canada. Canpotex is one of the world's largest exporters of potash, a fertilizer product imported in large volumes by countries such as China, India and Brazil. M/S Belforest and M/S Belocean are both on time charter to Cargill. M/S Belforest will be open in September 2017, whereas M/S Belocean will be open in December. All ships have sailed without significant off-hire. Technical management is handled by Belships Management (Singapore), with a total fleet of 12 ships under technical management.

Newbuilding programme

Belships' remaining newbuilding programme with Imabari Shipbuilding in Japan includes one 63.000 DWT eco-design ultramax bulk carrier on a long-term T/C-in agreement incl. purchase option for delivery in January 2018 and another sister vessel on a similar scheme within first half 2020.

Financial and corporate matters

As per 30 June the Group's cash totalled US$7.4 million compared to US$7.9 million as per 31 March.

The mortgage debt as per 30 June was US$33.8 million. Net lease obligation as at 30 June was US$43.7 million. In addition Belships has a long-term loan facility of SGD 2 million, secured by the lease agreement for our Singapore office. Net lease obligation and mortgage debt were reduced by US$ 1.7 million in 2nd quarter.

Hedging the Group's interest exposure on bank loan is considered on an ongoing basis. The hedging level of interest rate exposure is currently around 80%.

At the end of the 2Q17, the book value per share amounted to NOK 3.88 (US$0.46), while the equity ratio was 21.0%. Added value related to the long-term charter party for M/S Belisland is not reflected in the balance sheet.


Market highlights

The capesize-index ended the 2nd quarter at US$ 8923 per day, whereas the panamax-index ended at US$8746 per day. The supramax-index ended the quarter at US$8571 per day. As per today the Cape index stands at US$18 834 per day, panamax-index at US$10 778 per day and supramax-index at US$9349 per day. Baltic S&P Assessment's valuation of a 5-year old supramax is now US$16.1 million. 

China's steel output for July reached 74.02 million t, representing a 10.3% increase y/y. Despite the ongoing environmental measures being taken in China, total output YTD stands at 5.1% compared to the same period in 2016 according to Fearnley. Continued strong infrastructure demand and capacity cuts have supported steel prices, leaving operating plants to maximise their output. China's import volume of high grade coal from Australia and Indonesia has increased substantially, giving vital support to the dry bulk market.



Iron ore import to China in 2017 is expected to grow moderately from current level of about 1 billion short t, but the imported volumes of coal may surprise on the upside. Import of grain products to China is also expected to grow. According to Marsoft the prognosis for the aggregate dry bulk market in 2017 is a growth in seaborne trade in the region of 2.0 - 2.5%.

Ordering of new ships is still very limited, but the scrapping activity has also slowed on the back of the improved market rates. The current orderbook is just 7.7% (60 million DWT) of the total existing fleet and the lowest in over 20 years. Fearnresearch believes that the net growth in tonnage supply during 2017 - 2020 will be very limited following IMO's new regulations for ballast water treatment systems and scrubbers gradually to be installed on all vessels. According to DNV GL the introduction of the new global sulfur cap in 2020 is causing a paradigm shift in marine fuel. It is a complex challenge and there is a great deal of uncertainty related to enforcement, fuel availability and technological solutions.

Belships' vessels are chartered out on fixed rates to reputable counterparts, representing a future nominal gross hire of around US$54 million.

Focus will be to further develop Belships as an owner and operator of modern bulk carriers to reputable counterparts. The company’s ambition is to build a portfolio of quality ships and robust charter parties that will generate distributable cash flows.

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