Belships ASA Reports Impressive Financial Results for Q2 2024
Steady Course – Strong Results and Ongoing Dividend
Key Highlights
- EBITDA reached USD 29.3 million, which includes USD 2.9 million from operational activities
- Net profit of USD 18.9 million
- Dividend declared at NOK 0.55 per share
- Successfully sold two debt-free Supramax vessels for a combined total of USD 56.6 million
- Declared purchase option for BELMAR at USD 25.5 million
- Acquired a 2024-built Ultramax bulk carrier for USD 41 million, expected to be delivered in Q1 2025
- Expanded the newbuilding program with plans for two leased vessels in 2027 and 2028
- Extended bank financing on better terms, maturing in Q2 2029
- Time charter equivalent (TCE) earnings of USD 16,982 gross per day for the owned fleet
- 83% of ship days in Q3 2024 secured at USD 16,800 gross per day
- 41% of ship days fixed for the next four quarters at USD 16,650 gross per day
- Cash breakeven for 2024 is approximately USD 10,900 per day per vessel
- Uniform fleet comprising 41 Ultramax vessels, including 12 newbuilds scheduled for delivery between 2024 and 2028
Commentary on Financial Results
Belships reported a net profit of USD 18.9 million for the quarter, an increase from USD 15.7 million in the previous quarter. This growth is primarily attributed to a realized book gain following the reorganization of the operating business.
Time charter equivalent earnings (TCE) stood at USD 16,982 gross per vessel per day, outperforming the Baltic Supramax Index (BSI-58), which averaged USD 15,005 gross per day during the same timeframe.
Ship operating expenses decreased to USD 5,148 per vessel per day, down from USD 5,512 in the prior quarter, aided by lower-than-expected maintenance costs and timing variations.
Recent Transactions
Belships successfully completed the sale of two Supramax vessels, BELFRIEND and BELTIDE, each generating USD 28.3 million, resulting in a total cash inflow of USD 56.6 million.
The purchase option for vessel BELMAR is expected to close in Q4 2024, with the acquisition price set at USD 25.5 million, significantly below the current market value. This will be financed using the company’s cash reserves.
Furthermore, Belships has agreed to acquire a 64,000 dwt Japanese-built Ultramax, which is scheduled for delivery in Q1 2025. The purchase price is USD 41 million, with financing covering 60% through an Accordion Tranche, while the remainder will be funded from available cash.
The newbuilding program has also expanded, with plans for two 64,000 dwt Ultramax bulk carriers to be delivered in 2027 and 2028, requiring no down payments.
Following the recent reorganization, Belships expects an additional cash consideration of USD 4 million by Q2 2025.
Fleet Status and Operational Updates
In May, one of the vessels was involved in a collision that resulted in a 50-day off-hire period. Fortunately, there were no injuries, and the vessel has since been repaired and returned to service, incurring minimal financial loss due to insurance coverage.
The current fleet has maintained consistent performance, achieving 2,673 on-hire vessel days during the quarter without significant delays. Belships vessels have not transited the Red Sea recently, and no incidents have been reported.
Belships operates 11 vessels under floating index-linked contracts, yielding an average premium of 117% over the Baltic Supramax Index (BSI-58). The cash breakeven point for 2024 is set at USD 10,900 per vessel per day, covering all operating and maintenance expenses.
Newbuildings and Sustainability Initiatives
Belships is dedicated to enhancing its fleet with 12 Japanese-designed 64,000 dwt Ultramax bulk carriers, each designed for low fuel consumption and high quality.
All new vessels are leased with time charters ranging from 7 to 10 years, featuring purchase options that align with current market conditions. This initiative will not impact the company’s cash flow or dividend capacity during the construction phase.
Belships has released its annual sustainability report, reaffirming its commitment to transparency and sustainability, a focus that has been highlighted by their top ranking in a recent ESG Scorecard.
Financial and Corporate Matters
At the close of Q2 2024, cash and cash equivalents totaled USD 92.2 million, with interest-bearing bank debt at USD 89.2 million. Leasing liabilities amounted to USD 447.4 million, with all leased vessels assumed to have purchase options exercised.
The book value per share was calculated at NOK 11.9 (USD 1.12), reflecting a book equity ratio of 33%, while the value-adjusted equity is notably more favorable.
Dividend Policy and Payment
Belships aims to distribute around 50% of its net result as dividends. The recent Board declaration of NOK 0.55 per share amounts to USD 13.2 million, which corresponds to 70% of the net profit for Q2 2024.
Market Highlights and Outlook
The Baltic Supramax Index (BSI-58) averaged USD 15,005 per day in Q2 2024, while the Baltic Ultramax Index (BSI-63) averaged USD 17,065. Asset values have continued to rise, with estimates suggesting some of the highest shipment volumes recorded to date.
Belships has secured substantial contract coverage and maintains a fixed cash breakeven of USD 10,900 per day. With newbuildings enhancing its position as supply growth approaches record lows, the company remains focused on returning capital to shareholders through strategic financial management and consistent dividend payments.
22 August 2024
The Board of Belships ASA
Contact Information:
Lars Christian Skarsgård, Belships CEO
Phone: +47 977 68 061
Email: LCS@belships.no
Frequently Asked Questions
What financial highlights did Belships ASA achieve in Q2 2024?
Belships reported an EBITDA of USD 29.3 million and a net result of USD 18.9 million, along with a declared dividend of NOK 0.55 per share.
What vessels did Belships sell recently?
Belships sold two Supramax vessels, BELFRIEND and BELTIDE, for a total of USD 56.6 million.
When does Belships expect the new Ultramax carrier to be delivered?
The Ultramax bulk carrier acquired is anticipated to be delivered in Q1 2025.
What is the company's approach to sustainability?
Belships publishes an annual sustainability report and is committed to reducing emissions in line with industry standards.
How does Belships intend to manage dividends moving forward?
Belships aims to distribute about 50% of its net result as dividends, focusing on sustainable returns to shareholders.
