|Belships ASA : Report 3rd quarter 2012
Belships operating income was in 3rd quarter 2012 USD 6,449,000 (Q3 2011: USD 7,039,000), while EBITDA amounted to USD 2,192,000 (USD 2,445,000). The company's operating result was USD 1,074,000 (USD 1,064,000), while total result for 3rd quarter of 2012 was USD 283,000 (USD 272,000).
Accounts for 3rd quarter of 2012 has 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 accordance with International Financial Reporting Standards (IFRS).
Baltic Dry Index for capesize and panamax has lately shown a rising trend and the indices are currently respectively USD 17,848 per day and USD 6,589 per day. Supramax has also strengthened and is now at USD 7,443 per day. For the bulk market in total the index is 1,088 points, which is well above the minimum point from the beginning of February on 647 points. The Capesize and Panamax indices were in a period far below vessel operating costs. Baltic's assessment of a 5 year old panamax is USD 20.1 million, whilst a similar supramax is valued at USD 19.4 million.
M/S Belnor, M/S Belstar and M/S Belocean are all fixed on 10-year charters to Canpotex of Canada. Canpotex is the world's largest exporter of potash, fertilizers a product that is imported in large quantities such as of China, India and Brazil. Net T/C rate is USD 16,000 per day, which is a good rate in today's market. M/T Belaia is chartered to J. Lauritzen AS in Denmark until March 2014 at a net rate of USD 12,840 per day. We still have call option and option to extend the inbound charter for 1+1+1 years, i.e. from March 2014 onwards.
All ships have sailed without significant downtime and operating costs per 3rd quarter of 2012 are around budget levels. Technical management of owned tonnage is handled by Belships Management (Singapore), which has full technical management of 19 vessels.
FINANCIAL AND OTHER MATTERS
As per 30 September, the Group's liquidity reserves totaled USD 10.4 million compared to USD 14.7 million as per 30 June. The company's debt was USD 54.3 million as per 30 September and was reduced by USD 1.3 million during 3rd quarter.
Belships ASA owns 22% of its own bond loan. Outstanding bond loan to external lenders were as per 30 September NOK 37.7 million. NOK 25 million was repaid of the loan at the beginning of July and explains the decrease in the Group's cash and cash equivalents in the 3rd quarter. The remaining amount is due in July 2013. The bond loan is hedged against the USD.
Impairment tests for the company's assets are performed in accordance with IAS 36. The vessels are valued based on observable market values, and charter parties entered into. Based on these valuations, there is no need to write down the company's ship investments as per 30 September 2012.
At the end of the 3rd quarter of 2012, book value per shares was NOK 12.20, while the equity ratio was 44.5%.
The shipbuilding industry in China and Korea are struggling with lack of new orders, and in Japan there is also a growing pressure on newbuilding prices. Charterers want new buildings with "eco-design", i.e. vessels with low fuel consumption and low emissions, but are seemingly less willing to pay anything extra for this. There is also an increasing focus on "dual fuel", i.e. newbuildings that can use both LNG and heavy oil as fuel.
The supply side exceeds demand and utilization rate for bulk carriers has fallen below 90%, which means pressure on freight rates. Most analysts do not see any improvement in the bulk market before the end of 2013 or beginning of 2014.
Belships' vessels are sailing on long-term charters to a very reputable counterpart, and short-term market fluctuations will not affect the company's earnings and cash flow. Existing charters represent future gross revenues of USD 140 million.
The focus going forward will be to develop Belships ASA as tonnage provider of modern bulk carriers to good counterparts. The aim is to build up a portfolio of ships and charters that will provide a steady return but also reducing the residual risk exposure through a duration spread. There will be many opportunities ahead to acquire quality tonnage, and we are actively working to develop new projects. A growing challenge is the banks' lack of willingness / ability to fund healthy projects..
Oslo, 25 October 2012
Board of BELSHIPS ASA
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
Report 3rd quarter 2012
Presentation 3rd quarter 2012