Belships ASA : Rapport 2. kvartal 2016

HIGHLIGHTS
· Operating income of USD 6.4 m (Q1 2016: USD 6.0 m)
· EBITDA of USD 3.0 m (USD 2.5 m)
· Net result of USD 0.4 m (USD -16.5 m)
· All vessels operating normally - modern fleet - average age 4 years
· Contract coverage 100% for delivered vessels - USD 74 million fixed charter
· Belforest c/p extended for 10-14 months to Cargill


Second quarter 2016 results
Belships operating income in 2nd quarter 2016 was USD 6.4 million (Q1 2016: USD
6.0 million), while EBITDA amounted to USD 3.0 million (USD 2.5 million). The
Group's operating result amounted to USD 2.1 million (USD -14.9 million), while
total comprehensive income for 2nd quarter 2016 was USD 0.4 million (USD -16.5
million).
Impairment tests of the company's assets were performed in accordance with IAS
36. The ships and charterparties are valued based on observable market values.
Based on these valuations and assumptions, no adjustment has been made in the
2nd quarter.

Fleet status
M/S Belstar, M/S Belnor and M/S Belisland have continued the long-term contracts
to Canpotex of Canada. Canpotex is one of the world's largest exporters of
potash, a fertilizer product imported in large volumes by countries such as
China, India and Brazil. M/S Belocean has continued the c/p to Cargill. Cargill
has extended the c/p with M/S Belforest for a 10-14 month period from 18 July at
charter rate of around USD 6,000 per day.

All ships have sailed without significant off-hire, and operating expenses for
2nd quarter 2016 are below budget. Technical management is handled by Belships
Management (Singapore), with a total fleet of 20 ships under technical
management.

Newbuilding program
Belships' remaining newbuilding program with Imabari Shipbuilding in Japan
includes one 63.000 dwt eco-design Ultramax bulk carrier on a long-term lease
agreement incl. purchase option for delivery in January 2018.

Financial and corporate matters
As per 30 June the Group's cash totaled USD 8.6 million compared to USD 11.4
million as per 31 March 2016.

The mortgage debt balance as per 30 June was USD 38.8 million. Net lease
obligation as at 30 June was USD 45.5 mill. In addition Belships has a long-term
loan facility of SGD 2 million, secured by the lease agreement for our Singapore
office. Net lease obligation and mortgage debt were reduced by USD 1.6 in 2nd
quarter.

Hedging the Group's interest exposure is considered on an ongoing basis. The
hedging level of interest rate exposure is currently around 75% (leases
excluded). The long-term interest rate is still at a historical low level.

At the end of the 2nd quarter of 2016, the book value per share amounted to NOK
3.34 (USD 0.40), while the equity ratio was 17.2%. Added value related to the
long-term charterparty for M/S Belisland in excess of USD 10 million is not
included in the balance sheet.

Market highlights
The Capesize-index ended the second quarter at USD 7,110 per day, whereas the
Panamax-index ended at USD 5,296 per day. The Supramax-index ended the quarter
at USD 6,477 per day. As per today the Cape index stands at USD 6,507 per day,
Panamax-index at USD 5,767 per day and Supramax-index at USD 6,768 per day.

The current record-low second hand values have encouraged many buyers to act,
and there is an increasing interest for modern tonnage. The second hand values
according to the Baltic S&P Assessment have therefore increased steadily last
few months, and the latest valuation of a 5-year old Supramax is USD 12.6 m.

International iron ore prices have increased to approximately USD 60/ton as a
result of the growing demand from China. It is still believed that China will be
forced to shut down loss-making domestic production and import more of its iron
ore, helping to absorb some of the tonnage overcapacity. The smaller sized
vessels like Supramax/Ultramax should benefit from a growing Chinese exports of
steel products and imports of minor bulks like bauxite, fertilizer, soya beans
and grains.

Strategy
Belships is concentrating 100% on the dry bulk market, with 5 x
Supramax/Ultramax in service. In addition we will take delivery of a 63,000 dwt
Ultramax from Imabari Shipbuilding in January 2018 for long term lease incl.
purchase option.

Outlook
Seasonally adjusted, iron ore imports to China in 2016 is expected to reach more
than 1bn tons, as first half is typically weaker due to low construction
activity. This translates into a ton-mile demand growth of approx 2%.

New vessel ordering is now down to almost zero and the high scrapping activity
continues, although, at a slower pace than during Q1. Many analysts believe the
scrapping this year will end around 40m dwt, which, if so, will almost balance
out the expected deliveries of new vessels during 2016 adjusted for slippage,
delays and cancellations.

Belships vessels are chartered out on fixed rates to reputable counterparts,
representing a future nominal gross hire of USD 74 million.

Focus will be to further develop Belships as an owner/operator of modern bulk
carriers to reputable counterparts. Our ambition is to build a portfolio of
quality vessels and robust charter parties that will generate distributable cash
flows.


Oslo, 17 August 2016
THE BOARD OF BELSHIPS ASA



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