Report 3rd Quarter 2005

Belships recorded operating income of USD 16,194,000 (2004: USD 15,444,000) and an operating result of USD 1,263,000 (USD 3,697,000) in the third quarter. The decrease in profit was due to a reduced contribution from Elkem Chartering. The result for the period after taxes was USD 663,000 (USD 2,657,000).
This report has been prepared in accordance with IAS 34.
During the first few weeks of the period the dry bulk market continued the decline seen in the previous quarter, but demand picked up sufficiently in August to turn the market around, and rates were higher at the end of the period than at its start.
As several of the relatively cheap T/C vessels that Elkem Chartering (EC) has been using to service its older contractual obligations have been redelivered, they have had to be replaced with new, more expensive tonnage. As previously announced, this has had a negative impact on the results of the Handysize operation.
EC's other tonnage -M/S Anangel Express, M/S Pax Phoenix, M/S Pax Legend and M/S Belpareil - continued on their respective charters without any notable off-hire.
As regards Belships' own vessels, M/S Belisland continued on her charter without any significant operational problems, while M/S Belnor was returned from her Korean charterers at the end of August and was then drydocked for periodic maintenance prior to delivery to her new, Canadian charterers.
The company's equity and financial position are sound.
The group had cash of USD 13.6 million at the end of the period, and the company had mortgage debt of USD 14.8 million. Shareholders' equity was equivalent to NOK 4.25 per share and 39.4% of assets at the end of the period.
Since the last interim report the company has acquired a further 50,000 of its own shares to make a total of 200,000 purchased under the authority to buy back 250,000 shares issued by the annual general meeting in April this year.
The market value of M/S Belnor is substantially higher than her book value.
We expect the dry bulk market to remain volatile in the immediate future. The steady influx of newbuildings is expected to cause the market to drop back to lower levels in the longer term.
EC's Handysize operation will probably generate fourth-quarter earnings on a par with those for the third quarter. M/S Anangel Express is about to be returned to EC, which has an option to retain the vessel for a further two to three months, and the vessel has been fixed for the rest of the year on satisfactory terms. EC's Handymax vessels will generate earnings on a par with those for the third quarter.
M/S Belisland is due to be drydocked in November and can be expected to be off-hire for about two weeks. M/S Belnor is expected to generate fourth-quarter earnings around USD 1 million higher than those for the third quarter.

3rd Quarter 2005