RESULTS
Belships revenue was 1 quarter of 2012 USD 6,302,000 (Q1 2011: USD 5,727,000), while EBITDA was USD 2,398,000 (USD 1,845,000). The company's operating result was USD -431,000 (USD 742,000), while the total result for 1st quarter 2012 was USD -1,483,000 (USD -495,000).
Accounts for 1 quarter of 2012 has been prepared in accordance with IAS 34 Interim Financial Reporting and are consistent with the principles applied in the annual accounts. The interim accounts have been prepared in accordance with International Financial Reporting Standards (IFRS).

MARKET
Baltic Dry Index reached a low point in early February with the following indices: capesize USD 5,214/day, panamax USD 5,778/day and supramax USD 6,277/day. With the exception of capesize the spot market to date has improved significantly, and the indices now stand: capesize USD 6,500/day, panamax USD 13,500/day and supramax USD 11,500/day. Capesize rates are still moving below operation costs level. The recovery of panamax and supramax is attributed to both grain season in South America and increased coal exports from Indonesia to China. Coal exports from the United States and Australia have also picked up. Ship values remained under pressure, despite the spot market recovery. According to the Baltic S&P Index a 5 year old panamax is priced at USD 23.4 million, while a similar supramax is priced at USD 22.8 million. Especially for panamax segment the price/earning-ratio looks attractive.

BUSINESS
M/S Belnor, M/S Belstar and M/S Belocean are all chartered for 10 years to Canpotex in Canada. Canpotex is the world's largest exporter of potash, a fertilizer product that is imported in large quantities to countries like China, India and Brazil. Net T/C rate is USD 16,000/day which is a good rate in today's market. M/T Belaia is chartered to J. Lauritzen AS in Denmark until March 2014 at a net rate of USD 12,840/day. We still have a purchase option and options to extend the chartered in period for 1+1 +1 years, i.e. from March 2014 and beyond. All ships have sailed without significant offhire and operating costs per 31.03.2012 are slightly below budget. Technical management of owned tonnage is handled by Belships Management (Singapore), having full technical management of a total of 19 ships.

FINANCIAL AND OTHER MATTERS
At 31 March, the Group's cash reserves totaled USD 14.5 million vs. USD 14.7 million per 31 December 2011.
The company's mortgage debt was USD 56.9 million per 31 March and was reduced by USD 1.3 million during Q1 quarter.
Belships owns 20% of its own bonds. Outstanding bond to external lenders are USD 59.9 million and payable in 2012 and 2013. The bond is hedged against the USD.
Belships has decided to terminate its defined benefit pension plan for its employees and replace it with a defined contribution plan. The change means a significant reduction in the company's pension obligations. The estimated reduction of USD 2.5 million is recognized in administrative expenses in the 1st quarter. The amount is not included in EBITDA.
Impairment tests for the company's assets are performed in accordance with IAS 36. The vessels are valued based on observable market values, and charter parties entered into. Based on these internal valuations the ships' book value has been adjusted by USD 4 million in the 1st quarter, in addition to ordinary depreciation of USD 1.3 million.
At the end of the 1st quarter of 2012, book value per share was NOK 12.13, while the equity ratio was 42.1%.

OUTLOOK
Bunker prices are still high and the ships sailing at reduced speed. This improves the balance of the market in the short run, but the delivery of new ships is higher than the market can absorb. The pace is slowing, however, and it looks brighter from 2013 onwards. We now see that new orders for bulk carriers for delivery in 2013-14 has picked up somewhat, and we expect that these are ships with eco-design, which has a significantly lower fuel consumption.
Belships' own ships sail on long-term charter parties to reputable charterers, and short-term market fluctuations will not affect the company's earnings and cash flow. Signed charters represent future revenues of USD 150 million
The focus going forward will be to develop Belships ASA as tonnage supplier of modern bulk carriers to good counterparts. The aim is to build up a portfolio of ships and charters that will provide a steady return but also reducing the residual risk exposure. It will be many opportunities ahead to buy quality tonnage, and we are actively working to develop new projects.

Oslo, 3 May 2012

Board of BELSHIPS ASA