RESULTS
Belships' operating revenues in the first quarter of 2011 amounted to USD 11 505 000 (first quarter of 2010: USD 14 810 000). The company's operating result was USD 872 000 (USD 3 351 000). The lower operating revenues are due to less activity in Elkem Chartering's handysize operations.
The operating result for the first quarter of 2010 includes a sales gain of USD 3.2 million.
The total result for the first quarter of 2011 was a loss of USD 495 000 (profit of USD 2 340 000).
The accounts for the first quarter 2011 have been prepared in accordance with IAS 34 Interim 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).

OPERATIONS
The market for large dry bulk ships was very weak in the first quarter with rates that barely covered operating costs. For smaller ships, the rates were considerably better, but the tendency is weaker as a result of a large number of newbuildings expected for delivery.
Elkem Chartering has started a cautious rebuilding of the portfolio, but the results are still only marginally positive.
Belships received its last newbuilding from the Dayang shipyard in China in March. The ship was named M/S Belocean and was delivered on its long-term charter party to Canpotex. On its journey from the shipyard, the ship was involved in a minor collision. The collision did not cause any personal injuries or pollution, but resulted in some off-hire.
M/S Belnor, M/S Belstar and M/T Belaia all continued their respective charter parties without any off-hire worth mentioning.

FINANCIAL AND OTHER MATTERS
As of 31 March, the Group's cash and cash equivalents amounted to USD 21.2 million, compared with USD 20.4 million at 31 December 2010.
All of the company's newbuildings have now been delivered and long-term financing secured.  The company's mortgage debt was USD 62 million as of 31 March 2011. In addition, Belships has a bond loan of NOK 104 million (USD 18.9 million). The loan is hedged against USD and falls due during the period 2011 to 2013. 40 per cent of the borrowed amount is due for payment in July this year.
The company has carried out impairment tests for the company's assets in accordance with IAS 36. The ships and the remaining newbuilding contract have been evaluated on the basis of observable market values and charter parties entered into. Based on these internal evaluations, there is currently no need for write-downs.
At the end of the first quarter of 2011, the recorded value per share was NOK 12.08, while the recorded equity-to-assets ratio was 37.22%.

OUTLOOK
Due to many deliveries of newbuildings, the rate development for dry bulk ships is expected to remain weak. As all of Belships' dry bulk ships sail on long-term charter parties, short-term market fluctuations will not affect earnings.
There are several indications that the market value for product tankers such as M/T Belaia will have a positive development in the near future.

Oslo, 6 May 2011

The Board of BELSHIPS ASA