Belships ASA - Report 1st quarter 2020

Commercial outperformance in challenging times

HIGHLIGHTS
• Operating income of USD 33.6 million (Q1 2019: USD 31.1m)
• EBITDA of USD 4.9m (USD 10.1m)
• Net result of USD 0.2m (USD 2.5m)
• Net TCE earnings per ship of USD 8 636 per day versus BSI index of USD 6 232 net per day
• Outperformance of Baltic Supramax market index of 39 per cent
• 40 per cent of remaining ship days in 2020 are booked at USD 8 500 net per day
• 1 215 days, equivalent to 20 per cent of remaining ship days in 2020, have been hedged with FFA at USD 9 900 per day
• Average cash breakeven per vessel about USD 9 500 per day for next 12 months
• Commercial platform set to expand with establishment of Oslo office
• Taken delivery of newbuilds BELFUJI, BELMOIRA and BELAJA
• Modern fleet of 23 vessels with an average age of 5 years including newbuildings

Fleet status
Time charter earnings per ship in the quarter were recorded at USD 8 636 net per day versus BSI index of USD 6 232 net per day for the same period, representing a 39 per cent premium to market indices. Outperformance of the BSI index is due to the optimised portfolio of period charter coverage and outsized spot earnings achieved by our subsidiary Lighthouse Navigation.

Belships took delivery of two Ultramax newbuildings from Shin Kurushima shipyard during the quarter. The vessels were delivered in January and February and named BELMOIRA and BELAJA, respectively. The vessels are chartered in on bareboat charter for seven years with purchase options after the fourth year.

In January, the Company took delivery of Ultramax newbuilding BELFUJI from Imabari shipyard. The vessel is chartered in on time charter for eight years with purchase options after the fourth year.

PACIFIC LIGHT delivered in March to its charterer for the agreed bareboat and subsequent sale and a book gain of USD 2.5m was recorded in the quarter.

BELPAREIL was drydocked in February. The remaining fleet sailed without significant off-hire in the quarter.

Vessel transactions
As announced in December, Belships agreed to acquire a modern secondhand Ultramax bulk carrier from Japanese Owners for a price of USD 24.5m. The 63 000 dwt vessel was built in 2017 by Imabari shipyard and will be named BELHAVEN. Delivery is expected during the end of May, having passed its intermediate drydocking survey. The payment for the vessel will be settled by issuing new shares equivalent to 50 per cent of the purchase price at a subscription price of NOK 7.15 per share (USD/NOK 9.31), and the remaining in cash upon delivery. The vessel will utilise 60 per cent financing of the purchase price, hence, the transaction will have a positive cash effect of about USD 2.45 million.