Oslo, 24 October 2013, The Board of BELSHIPS ASA: Norwegian ship operator, owner Belships' operating income for 3rd quarter of 2013 amounted to USD 6,565,000 (Q3 2012: USD 6,449,000), while EBITDA amounted to USD 2,390,000 (USD 2,192,000).
The company's operating profit was USD -1,402,000 (USD 1,074,000), after impairment value adjustment of USD 2.7 million.
Total result of 3rd quarter of 2013 was USD -2,019,000 (USD 283,000).
Capesize market improved sharply in the third quarter and is now around USD 24,000 per day. Panamax and Supramax indices have also had a significant increase and now stands at USD 16,000 per day and USD 13,000 per day respectively. The index for the overall bulk market is currently approx. 1800 points. Baltic Exchange values 5 year old Supramax and Panamax USD 21.9 million and USD 22.5 million respectively. Ship values have risen steadily since the beginning of the year.
In June Belships signed a contract with Imabari Shipbuilding in Japan for the construction of 2 x 61,000 dwt eco-design Supramax bulk carriers for delivery the second half of 2015 and first half of 2016. One of the newbuildings will be swapped for the remaining charter period for either M/S Belnor or M/S Belocean at a net rate of USD 17,300 per day.
Belships conducted in July a successful rights issue of NOK 90 million. The company has received offers of financing of the newbuildings and has dialogue with several potential lenders in that regard.
The newbuilding prices for bulk carriers have tightened, both in Japan and China, and the earliest delivery in Japan is around second half of 2016 or early part of 2017.
Growth in dry bulk fleet adjusted for scrapping believed to be about 5-6% in 2013 after several years of double-digit fleet growth. It is expected zero fleet growth in 2014. It is admittedly much hidden capacity as a result of a slow-steaming, but there is still cause for more optimism.
Continued growth in China and better prospects for the U.S. economy are positive for the demand side. Increased export capacity of iron ore may lead to lower commodity prices and China, which has higher production costs than the exporters, will normally have to rely on increased imports. It is expected that the bulk fleet capacity will rise from 83 % to 87 % in 2014.
Belships' vessels are sailing on long-term charter parties to a reputable counterpart, and short-term market fluctuations will not affect the company's earnings and cash flow. Existing charter parties represent future nominal revenues of USD 120 million.
