Belships ASA reports its 3Q18 results

Fleet status

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

M/V Belstar, M/V Belnor and M/V 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/V Belforest, M/V Belocean and M/V Belnippon are all on time charter to Cargill. In September the c/p's with Cargill for M/V Belforest and M/V Belocean were extended until August and October 2019 at US$13 500 and US$12 000 daily respectively. Next open position will then be M/V Belnippon in February 2019.

All ships have sailed without significant off-hire. Technical management is handled by Belships Management (Singapore), with a total fleet of 10 ships under technical management.

Newbuilding programme

Belships' remaining newbuilding program with Imabari Shipbuilding in Japan consists of one 63 000 dwt eco-design ultramax bulk carrier on a long-term T/C-in agreement including purchase option for delivery within the first half of 2020.

Financial and corporate matters

As per 30 September the Group's cash totaled US$5.3 million, which is unchanged from 30 June.

The mortgage debt as per 30 September was US$24.5 million. Net lease obligation as at 30 June was US$41.2 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 the third 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 60%.

At the end of the third quarter of 2018, the book value per share amounted to NOK 5.07 (US$0.62), while the equity ratio was 29.6%. 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 3rd quarter at US$18 350/day, whereas the kamsarmax-index ended at US$15 351/day. The supramax-index ended the quarter at USD 13 273 per day. Currently, the Cape index stands at US$18 683 per day, kamsarmax-index at US$16 110/day and supramax-index at US$ 13 319/day. Baltic S&P Assessment's valuation of a 5 year old supramax is currently US$18.5 million.

Outlook

After a slow start due to Chinese holidays, the supramax market has risen slightly in October. There is more interest for period deals and for Far East delivery fixtures around US$13 000 - 14 000/day have been reported.

Belships' ships are fully covered until February 2019 when M/V Belnippon becomes open. The company is well positioned for a dry bulk market that we believe will be strengthening in 2019-20.

Belships' ships are chartered out on fixed rates to reputable counterparts, representing a future nominal gross hire of around US$38 million.

Focus remains to continue developing Belships as an owner and operator of modern bulk carriers to reputable counterparts, building a portfolio of quality ships and robust charter parties that will generate distributable cash flows.

In the 28 October Extraordinary General Meeting the merger with Lighthouse is expected to be approved. The Board of Directors believes this transaction will be in the best interest of all the shareholders and the company.

Following this transaction the combined entity will control a fleet of 16 dry bulk carriers and enhance its earnings potential with a combination of charter backlog and spot exposure. Complementing management activities create a complete in-house operational structure, ideally positioning Belships as a platform for further growth. The company will concentrate on the dry bulk market and expect to benefit from a fully in-house commercial and technical management.

Read the article online at: https://www.drybulkmagazine.com/shipping/30102018/belships-asa-reports-its-3q18-results/