RESULT

Belships' operating income in the 4th quarter of 2009 was USD 11,368,000 (4th quarter 2008: USD 15,135,000). The company's operating profit totalled USD 5,161,000 (USD -11,580,000).

This reduction in operating income is primarily due to reduced activity in Elkem Chartering's handysize operations. The operating result for the 4th quarter 2009 includes a profit of USD 10 million from the sale of the M/S Belisland. An impairment charge of USD 3.8 million was made in connection with the sale of 2 newbuilding contracts in the first half of 2009.

The operating result for the 4th quarter 2008 includes a loss on the sale of two newbuilding contracts of USD 11.7 million.

The company's total profit for the 4th quarter was USD 6,106,000 (USD -14,183,000). An anticipated tax refund of USD 1 million was taken to income in the period.

The 2009 total profit amounted to USD 8,277,000 (USD -818,000).

The accounts for the 4th quarter 2009 have been prepared in accordance with IAS 34, Interim Financial Reporting. A statement on the accounts policies applied by the group in preparing the accounts appears in the 2008 annual accounts, with the exception of the capitalisation of building loan interest expenses pursuant to IAS 23 (revised). The annual and interim accounts have been prepared in conformity with the International Financial Reporting Standards (IFRS).

OPERATIONS

China caused the demand for large bulk carriers to continue rising, and in spite of deliveries of newbuildings, the rates gained strength during the 4th quarter. As a result, rates for smaller vessels also moved upwards.

The second-hand values of bulk carriers have dropped by around 50% from their peak in 2008, but robust rates boosted second-hand values during the period, even though this development is checked by declining newbuilding prices.

Both the cargo and vessel portfolios of Elkem Chartering ran out to a great extent in the 4th quarter, and work on building up a new portfolio has begun. Due to the volatile markets, this work will be characterised by prudence, which will in turn slow down the build-up pace.

The M/S Belstar continued on its long-term charter. Some technical challenges emerged, for example relating to the vessel's cranes. Work is being done to find permanent solutions.

The M/T Belaia continued on its charter without any significant interruptions.

As announced previously, the M/S Belisland was delivered to its buyers in October.

FINANCIAL POSITION AND OTHER MATTERS

At 31 December, the group's liquid reserves totalled USD 19.6 million against USD 17.5 million at 30 September 2009.

Of the total contractual liability of USD 77.6 million on the two remaining newbuildings, USD 31.4 million has been paid and USD 44 million has been secured through long-term debt financing. Belships has a bond loan of NOK 101.4 million (USD 17.1 million). The loan is hedged against USD.

The company has carried out impairment tests on its assets in conformity with IAS 36. The M/S Belstar and the remaining newbuilding contracts were assessed on the basis of observable market values and time charters concluded, which, based on a discretionary assessment of counterparty risk, were discounted by 12%. Based on these internal valuations, there is no need for impairment as per today.

At the end of the 4th quarter, book value per share amounted to NOK 12.18, while the book equity ratio was 51.05%.

OUTLOOK

Rates in the bulk market have remained vigorous so far in 2010. The pace of delivery of newbuildings will be even higher in 2010 than in 2009 and is expected to exert pressure on the rates.

China's demand, in particular for iron ore, has caused astonishment in the last few years, and the whole logistics chain from mine to factory is marked by bottlenecks. If bulk rates are to remain at a historically high level, the demand must continue to increase and the logistics chain must be able to cope with it.

Oslo, 18 February 2010

The Board of BELSHIPS ASA