Results in 4th quarter 2007 |
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RESULTS Belships` operating income in the 4th quarter of 2007 was USD 19,444,000 (4th quarter 2006: USD 14,003,000). The company`s operating result was USD 24,865,000 (USD 1,960,000). The operating result for the 4th quarter was strongly influenced by the sale of the M/S Belnor, which produced a gain of USD 22.6 million. The increase in operating income is essentially connected with Elkem Chartering`s handysize operations. Profit after tax in the 4th quarter was USD 18,829,000 (USD 939,000). The report for the 4th quarter was submitted in compliance with IAS (International Accounting Standard) 34, and consistent accounting principles were applied in relation to the accounts submitted at 31.12.2006. OPERATIONS Rates on the dry-bulk market reached a peak in the 4th quarter, when spot-market rates for capesize vessels were close to USD 200,000 per day. Towards the end of the quarter, problems in Brazilian exporting ports for iron ore led to a drop in demand and lower rates. Increasing disturbances on financial markets may also have had a negative impact on the market. The results of Elkem Chartering handysize operations developed satisfactorily. In the course of the quarter, the most important contract of affreightment were renewed on substantially better terms. Belships` own tonnage, the M/S Belisland and the M/T Belaia, as well as Elkem Chartering`s handymax vessels, continued on their respective time charters without any material interruptions. FINANCIAL POSITION AND OTHER MATTERS The company`s solidity and financial position were considerably strengthened in the course of the 4th quarter. At 31 December, the Group`s cash position was USD 49.2 million, against USD 22.2 million at 30 September. Through the sale of the M/S Belnor, the company`s liquidity was strengthened by USD 26 million, following settlement of the vessel`s mortgage debt of USD 10.3 million. At the end of the 4th quarter, the company`s mortgage debt amounted to USD 20.0 million. In addition to this, Belships has a debenture loan of NOK 100 million (USD 18.3 million). This loan is has been hedged against currency risks, and the unrealised gain from this amounted to USD 2.6 million at 31 December. This amount has been booked under Other fixed assets. In the 4th quarter, USD 4.3 million was allocated to deferred tax relating to the transitional rules for accumulated liabilities under the previous shipping tax regime. This amount includes estimated tax on environmental allocations. However, taking into account the deferred tax from operations outside the shipping tax regime, the Group`s net tax liability is small and estimated tax payable for 2007 amounts to approximately USD 1.4 million. The Board of Directors will propose to the General Meeting declaring a dividend of NOK 1.00 per share. In January 2008, the company acquired 50,000 own shares at an average cost of NOK 16.92 and owns as per today 710,000 own shares at an average cost of NOK 9.89. At the end of the 4th quarter, book value per share amounted to NOK 10.80, while the book equity ratio was 47.2%. Charter parties for chartered in tonnage have substantial values that are not reflected in the company`s balance sheet. OUTLOOK The rates have continued to fall in the 1st quarter of 2008. In addition to the problems in Brazil`s iron ore ports, Australia`s coal exports have been affected by flood damage. These circumstances will gradually be normalised, and then we may see a new market upswing. The disturbances on the US housing market will probably lead to a financial setback in the USA. To what extent this will affect the freight market, is a subject of disagreement, but it is hardly likely to be positive. In the 1st quarter, Elkem Chartering increased its cargo portfolio further and has good coverage in relation to its access to tonnage. We expect higher earnings in the company`s handysize operations in 2008. Oslo, February 14, 2008 The Board of BELSHIPS ASA |
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4th Quarter 2007 |
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