Belships ASA Reports Impressive Q2 2024 Financial Results
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Belships ASA Reports Strong Financial Results for Q2 2024
Steady Course – Solid Results and Continued Dividend
Highlights
- EBITDA of USD 29.3 million, including USD 2.9 million from operational business
- Net result of USD 18.9 million
- Declared dividend of NOK 0.55 per share
- Sold two debt-free Supramax vessels for a total of USD 56.6 million
- Declared purchase option for BELMAR for USD 25.5 million
- Acquired a 2024-built Ultramax bulk carrier for USD 41 million, to be delivered in Q1 2025
- Expanded newbuilding program with two leased vessels planned for 2027 and 2028
- Extended bank financing on improved terms, maturing Q2 2029
- TCE of USD 16,982 gross per day for the owned fleet
- 83% of ship days in Q3 2024 fixed at USD 16,800 gross per day
- 41% of ship days fixed over 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 consisting of 41 Ultramax vessels, including 12 newbuilds to be delivered between 2024 and 2028
Financial Results Commentary
Belships reports a net result of USD 18.9 million for the quarter, an increase from USD 15.7 million in the prior quarter, attributed mainly to a realized book gain following the reorganization of the operating business.
Time charter equivalent earnings (TCE) reached 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 period.
Ship operating expenses decreased to USD 5,148 per vessel per day compared to USD 5,512 in the previous quarter, helped by lower-than-normal maintenance expenditures and timing differences.
Recent Transactions
Belships finalized agreements to sell Supramax vessels BELFRIEND and BELTIDE, realizing USD 28.3 million per vessel, leading to a total cash inflow of USD 56.6 million.
The declared purchase option for vessel BELMAR has an expected closing in Q4 2024. The acquisition price is set at USD 25.5 million, significantly lower than the current market value, and will be funded from the company’s cash reserves.
Additionally, Belships has agreed to purchase a 64,000 dwt Japanese-built Ultramax slated for delivery in Q1 2025. The purchase price is USD 41 million, with financing covering 60% through an Accordian Tranche, while the remainder will be drawn from available cash.
The newbuilding program has also expanded with two 64,000 dwt Ultramax bulk carriers slated for delivery in 2027 and 2028, with no down payments required.
Following the company's recent reorganization, Belships anticipates receiving an additional cash consideration of USD 4 million by Q2 2025.
Fleet Status and Operational Updates
In May, a collision involving one of the vessels 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.
The current fleet has performed consistently, achieving 2,673 on-hire vessel days during the quarter without significant delays. Belships vessels have not transited the Red Sea recently, with no incidents reported.
Belships has 11 vessels chartered under floating index-linked contracts, yielding an average premium of 117% over the Baltic Supramax Index (BSI-58). The cash breakeven point for 2024 reflects at USD 10,900 per vessel per day, encompassing all expenses related to operating and maintenance.
Newbuildings and Sustainability Initiatives
Belships is committed to enhancing its fleet with 12 Japanese-designed 64,000 dwt Ultramax bulk carriers, each offering low fuel consumption and high quality.
All new vessels are leased with time charters spanning 7 to 10 years, featuring purchase options aligned with current market conditions. This initiative will not impact the company’s cash flow or dividend capacity during the construction phase.
Belships published its annual sustainability report, reaffirming its dedication to transparency and sustainability, a focus echoed by their top ranking in a recent ESG Scorecard.
Financial and Corporate Matters
As of the end of Q2 2024, cash and cash equivalents totaled USD 92.2 million, with interest-bearing bank debt at USD 89.2 million. Leasing liabilities stood at USD 447.4 million, with all leased vessels grouped under the assumption that purchase options will be exercised.
The book value per share was calculated at NOK 11.9 (USD 1.12), reflecting a book equity ratio of 33%, while value-adjusted equity is substantially more favorable.
Dividend Policy and Payment
Belships aims to distribute approximately 50% of its net result as dividends, with the recent Board declaration of NOK 0.55 per share amounting to USD 13.2 million, corresponding 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 continued their upward trend, with estimates indicating some of the highest shipment volumes to date.
Belships has secured significant contract coverage and 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.
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