RESULTS
Belships' operating income in the 4th quarter of 2010 was USD 9,516,000 (4th quarter 2009: USD 11,368,000). The company's operating profit totalled USD 25,000 (USD 5,161,000). The operating result for 2010 came to USD 5,224,000 (USD 7,460,000)
This reduction in operating income is due to diminished activity in Elkem Chartering's handysize operations. The operating result for the 4th quarter 2009 included a profit of USD 10 million from the sale of the M/S Belisland and an write-down of USD 3.8 million on a newbuilding contract.
The total result for the 4th quarter 2010 was USD -502,000 (USD 6,106,000). The total profit for 2010 amounted to USD 2,280,000 (USD 8,227,000).
The accounts for the 4th quarter 2010 have 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 conformity with the International Financial Reporting Standards (IFRS).

OPERATIONS
Rates in the dry-bulk market suffered a pronounced drop towards the end of the 4th quarter. This was primarily the result of a large delivery of newbuildings and a low rate of scrapping of older tonnage. The fall was greatest for the large vessels in the Far East. The market for smaller ships in the US Gulf has kept up well.
Elkem Chartering's operations and results were on a level with those of the preceding quarters. This means that it made a moderate, positive contribution.
The bulk carriers M/S Belstar and M/S Belnor continued on their respective charters without significant interruptions. The same applies to the product tanker M/T Belaia.

FINANCIAL POSITION AND OTHER MATTERS
At 31 December, the group's liquid reserves totalled USD 20.4 million, against USD 21.0 million at 30 September 2010.
Of the total contractual liability of USD 38.1 million on the newbuilding, with anticipated delivery in the 1st quarter of 2011, USD 30.4 million has been paid. The remaining repayments have been secured through long-term debt financing. Belships has a bond loan of NOK 101.6 million (USD 17.3 million). The loan is hedged against USD and falls due in the period from 2011 to 2013. 40% of the loan sum falls due in July this year.
The company has carried out impairment tests on its assets in conformity with IAS 36. The vessels and the remaining newbuilding contract were assessed on the basis of observable market values and time charters concluded. 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 12.92, while the book equity ratio was 39.9%.

OUTLOOK
Heavy flooding caused a strong decrease in coal exports from Australia in January. This put further pressure on the rates. Now that the Chinese New Year celebrations are over and coal exports from Australia have started up again, we will see whether this weakening in rates will be of a long-lasting nature.
Due to the substantial programme of newbuildings for delivery, the market will probably remain under pressure.
To Elkem Chartering, a weakening of rates over time will represent new opportunities for increased and profitable activity.
As Belships' own-controlled tonnage has been fixed in on long-term charters, short-term rate fluctuations will not affect the results.

Oslo, 15 February 2011

Board of BELSHIPS ASA