|Belships ASA : Report 3rd quarter 2017
· Operating income of USD 6.7 m (Q2: USD 6.4 m)
· EBITDA of USD 3.5 m (USD 3.0 m)
· Net result of USD 1.7 m (USD 0.7 m)
· All ships operating normally - modern fleet - average age 5.1 years
· Contract coverage 100% for delivered ships - around USD 51 million fixed charter
Third quarter 2017 results
Belships operating income in 3rd quarter 2017 was USD 6.7 million (Q2: USD 6.4 million), while EBITDA amounted to USD 3.5 million (USD 3.0 million). The Group's operating result amounted to USD 2.9 million (USD 2.1 million), while net result for 3rd quarter 2017 was USD 1.7 million (USD 0.7 million). The figures for third quarter includes impairment reversal of USD 0.5 million.
Belships concentrates on the dry bulk market, with 5 x modern Supramax/Ultramax in service.
M/S Belstar, M/S Belnor and M/S 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/S Belforest and M/S Belocean are both on time charter to Cargill. M/S Belforest was extended to Cargill for 11-13 months effective from 1st October, whereas M/S Belocean will be open in January. All ships have sailed without significant off-hire. Technical management is handled by Belships Management (Singapore), with a total fleet of 12 ships under technical management.
Belships' remaining newbuilding program with Imabari Shipbuilding in Japan includes one 63 000 dwt eco-design Ultramax bulk carrier on a long-term T/C-in agreement incl. purchase option for delivery in January 2018 and another sister vessel on a similar scheme within first half 2020.
Financial and corporate matters
As per 30 September the Group's cash totaled USD 7.9 million compared to USD 7.4 million as per 30 June.
The mortgage debt as per 30 September was USD 32.5 million. Net lease obligation as at 30 September was USD 43.2 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 USD 1.7 million in 3rd 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 70%.
At the end of the 3rd quarter of 2017, the book value per share amounted to NOK 3.90 (USD 0.49), while the equity ratio was 22.4%. Added value related to the long-term charter party for M/S Belisland is not reflected in the balance sheet.
The Capesize-index ended the 3rd quarter at USD 18 725 per day, whereas the Panamax-index ended at USD 10 509 per day. The Supramax-index ended the quarter at USD 11 430 per day. As per today the Cape index stands at USD 22 145 per day, Panamax-index at USD 13 223 per day and Supramax-index at USD 12 550 per day. Baltic S&P Assessment's valuation of a 5-year old Supramax is currently USD 16.9 million.
China's iron ore imports surged 11% y/y in September to 103 million tonnes. YTD figures are currently up 7.1% to 817 million tonnes according to Fearnleys, implying that last year's record of 1.02 billion tonnes is within reach at the current pace.
In addition to the increasing Chinese demand for overseas high-grade iron ore and coal, the grain market has contributed significantly with increased demand for corn and soy crop from US Gulf and East Coast South America.
In January the company will take delivery of a 63 000 dwt eco-design newbuilding from Imabari Shipbuilding and intend to find cover for this open position within November-December. Belships also have M/S Belocean coming open around year end and the company will be in a beneficial position if the market, as traditionally, continues to strengthen in Q4.
Belships' vessels are chartered out on fixed rates to reputable counterparts, representing a future nominal gross hire of around USD 51 million.
Focus will be to further develop Belships as an owner and operator of modern bulk carriers to reputable counterparts. Our ambition is to build a portfolio of quality ships and robust charter parties that will generate distributable cash flows.
Oslo, 26 October 2017
THE BOARD OF BELSHIPS ASA
Please contact CEO Ulrich Müller at phone +47 22 52 76 15 if any questions.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
Report 3rd quarter 2017