Belships ASA

Report 2nd quarter 2023

STRONG OPERATIONAL PERFORMANCE, FURTHER GROWTH IN THE PIPELINE

HIGHLIGHTS

• EBITDA of USD 40.5m including USD 6.8m from Lighthouse Navigation
• Net result of USD 25.8m
• Declared dividend of NOK 0.60 per share
• TCE of USD 19 099 gross per day for owned fleet – 77 per cent outperformance of market
• Strategic partnership with V.Group and divestment of technical management business, realised book gain of USD 8.5m
• Sold 2015-built BELVEDERE, net cash of USD 10m after debt repayment
• Added 2x Ultramax newbuildings with delivery 2026-2027, zero cash invested
• 91 per cent of ship days in Q3 2023 are fixed at USD 18 100 gross per day
• 58 per cent of ship days in the next four quarters are fixed at USD 18 100 gross per day
• Cash breakeven for 2023 of about USD 10 900 per vessel per day
• The newest Supra/Ultramax fleet with 36 ships including newbuildings

Subsequent events
Belships has expanded its newbuilding program with 2x 64 000 dwt Ultramax bulk carriers which will be delivered in 2H 2026 and 1H 2027. Belships now has a total of six newbuildings under construction at Japanese shipyards with delivery between 2024 and 2027. All six vessels are leased on time charter for a period of 7 to 10 years, with purchase options around current market levels during the charter. There is no obligation to purchase any of the vessels. Cash breakeven for the vessels upon delivery is about USD 14 100 per day on average. Belships is not required to make any down payments for these transactions. Therefore, this newbuilding program will not have any impact on cash and dividend capacity during the construction period.

Financial results commentary
Belships reports a net result of USD 25.8m for Q2 2023, compared to a net result of USD 31.6m for Q2 2022. Despite challenging market conditions, the strong result in Q2 2023 is due to profitable contract coverage and the realised gain from divesting the technical management company.

Despite lower market rates, net freight revenue for the Belships fleet was USD 49.4m, largely unchanged from USD 55.5m in Q2 2022. This is due to fleet growth in the period and significant contract coverage securing stable earnings.

Ship operating expenses amounted to USD 5 065 per vessel per day in Q2 2023 compared to USD 5 642 in Q2 2022. Despite inflationary pressures, the reduction has been achieved as a result of strong operational performance and continued improvement in fleet quality.