Belships ASA Achieves Strong Results Despite Market Challenges

Belships ASA Achieves Strong Results in a Challenging Market

SOLID PERFORMANCE AND DIVIDEND DECLARATION

Belships ASA has reported a robust outcome for the third quarter of 2024 amidst market uncertainties. The company recorded an impressive EBITDA of USD 27.0 million, with USD 1.5 million coming from its subsidiary Norwegian Bulk Carriers. The net result stood at USD 19.3 million, showcasing resilience in a fluctuating market.

In recognition of its performance, Belships declared a dividend of NOK 0.50 per share. This is in addition to an extraordinary dividend of NOK 1.00 per share that was announced in October. Furthermore, the company has successfully sold two debt-free Supramax vessels, built in 2016, at a total price of USD 56.6 million, yielding a book gain of USD 6.5 million.

Delivery of New Vessel

In a significant development, the first newbuilding, the BELGRACE, was delivered in September and is under contract for approximately 18 months at a rate of USD 16,500 gross per day. The Time Charter Equivalent (TCE) for owned vessels averaged USD 16,724 gross per day, with 80 percent of the ship days in Q4 of 2024 already fixed at USD 16,200 gross per day.

Financial Insight and Key Transactions

Belships has reported a calculated cash breakeven of approximately USD 10,900 per day for each vessel in 2024. The fleet currently consists of 42 Ultramax vessels, which include 12 newbuildings. Recently, the company has enhanced its newbuilding program by ordering an additional 64,000 DWT Ultramax bulk carrier slated for delivery in the latter half of 2027. Importantly, no down payments are required for this vessel under the leasing agreement.

Belships demonstrated its commitment to reducing debt by voluntarily repaying USD 8.3 million in bank loans in November, which brought its outstanding bank debt down to USD 81.0 million, with no installments due until 2026.

Performance Comparison

When comparing financial results, the net profit of USD 19.3 million in this quarter shows an increase over the previous quarter's USD 18.9 million. Both quarters experienced extraordinary book gains around USD 6 million, resulting from the sale of BELTIDE and BELFRIEND.

Efficient Fleet Management

Belships successfully delivered BELFRIEND and BELTIDE to new ownerships in July and August, resulting in a realized gain of USD 6.5 million. With these sales, Belships’ fleet now comprises only modern Ultramax bulk carriers. The company operates with a focus on maintaining low operating expenses, which were recorded at USD 5,514 per vessel per day against USD 5,391 per vessel year-to-date, largely due to an increased frequency of crew changes.

Overall, the fleet achieved a total of 2,613 on-hire vessel days during the last quarter, with no major off-hires or incidents affecting their operations.

Contract Coverage and Market Analysis

As for contract coverage, 80% of Q4 2024's ship days are already secured at a fixed rate, with a further breakdown of future contracts showing stable income projections. Belships also leases out 10 vessels under index-linked contracts, averaging a premium of 103% to the relevant Baltic index.

The Baltic Index for Ultramax vessels averaged USD 16,591 per day, witnessing a slight decline compared to previous quarters. The recent decline in shipment volumes was notable, with a total of 283 million tonnes for Q3 2024, down from the all-time high of 289 million tonnes in Q2 2024. Despite the drop, Belships remains well-positioned owing to its operational efficiencies and cost structures.

The Outlook Ahead

Looking ahead, the average spot market for Ultramax vessels currently sits at around USD 13,000, reflecting a bearish trend for October and November. The Forward Freight Agreements (FFA) suggest market stabilization around USD 14,000 for the coming year.

Belships has secured financing for the foreseeable future, with a significant amount of debt maintained at fixed interest rates well below current market levels. The company’s strategic approach lies in taking delivery of 12 newbuildings expected from 2025 to 2028 while ensuring that it remains agile in fleet management—either harnessing the newbuildings for expansion or to replace older vessels, thereby optimizing capital allocation.

Ultimately, Belships ASA remains committed to delivering shareholder value through effective financial discipline, focusing on share value appreciation and consistent dividend payments.

Frequently Asked Questions

What were Belships ASA's EBITDA and net result for Q3 2024?

Belships ASA reported an EBITDA of USD 27.0 million and a net result of USD 19.3 million for Q3 2024.

How much dividend did Belships declare for Q3 2024?

Belships declared a dividend of NOK 0.50 per share in addition to an extraordinary dividend of NOK 1.00 per share paid out in October.

What recent sales did Belships execute?

Belships sold two Supramax vessels for a total of USD 56.6 million with a book gain of USD 6.5 million.

What strategies does Belships employ for fleet expansion?

The company has expanded its newbuilding program and has secured additional vessels for future delivery, focusing on quality and efficiency.

What is Belships’ approach to sustainability?

Belships aims to meet high standards in corporate governance and is committed to reducing emissions in line with industry goals for 2030.

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