Belships ASA : Report 2nd quarter 2018

HIGHLIGHTS
· Operating income of USD 8.3 m (Q1: USD 8.2 m)
· EBITDA of USD 3.5 m (USD 3.3 m)
· No impairment/impairment reversal (USD 1.3 m)
· Net result of USD 0.9 m (USD 2.1 m)
· All ships operating normally - modern fleet - average age 5.0 years
· Contract coverage 100% for delivered ships - around USD 40 million fixed
charter
· Conclusion of strategic process - contemplated merger between subsidiaries of
Kontrari and subsidiaries of Belships with consideration in Belships shares.

2nd quarter 2018 results
Belships operating income in 2nd quarter 2018 was USD 8.3 million (Q1: USD 8.2
million), while EBITDA amounted to USD 3.5 million (USD 3.3 million). The
Group's operating result amounted to USD 2.1 million (USD 3.1 million), while
net result for 2nd quarter 2018 was USD 0.9 million (USD 2.1 million). The
figures for the first quarter includes impairment reversal of USD 1.3 million.

Fleet status
Belships concentrates on the dry bulk market, with 6 modern Supramax/Ultramax in
service.
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 Belforest, M/S Belocean and M/S Belnippon are all
on time charter to Cargill. M/S Belocean and M/S Belforest will become open in
October-November, whereas M/S Belnippon will be open in January 2019.

All ships have sailed without significant off-hire. Technical management is
handled by Belships Management (Singapore), with a total fleet of 11 ships under
technical management.

Newbuilding program
Belships' remaining newbuilding program with Imabari Shipbuilding in Japan
consists of one 63 000 dwt eco-design Ultramax bulk carrier on a long-term T/C-
in agreement incl. purchase option for delivery within first half 2020.

Financial and corporate matters
As per 30 June the Group's cash totaled USD 5.4 million, which is unchanged from
31 March.

The mortgage debt as per 30 June was USD 25.75 million. Net lease obligation as
at 30 June was USD 41.8 million. 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 1.65 million
in the 2nd quarter.

Hedging the Group's interest exposure on bank loan is considered on an ongoing
basis. The hedging level of interest rate exposure is currently around 60%.

At the end of the 2nd quarter of 2018, the book value per share amounted to NOK
4.97 (USD 0.61), while the equity ratio was 28.7 %. Added value related to the
long-term charter party for M/S Belisland is not reflected in the balance sheet.

Market highlights
The Capesize-index ended the 2nd quarter at USD 18 110 per day, whereas the
Kamsarmax-index ended at USD 12 056 per day. The Supramax-index ended the
quarter at USD 11 288 per day. As per today the Cape index stands at USD 25 054
per day, Kamsarmax-index at USD 13 772 per day and Supramax-index at USD 11 939
per day. Baltic S&P Assessment's valuation of a 5-year old Supramax is currently
USD 18.5 million.

Outlook
The current period activity for Supramax with Pacific delivery reflects a rate
level for short duration around USD 11 000 per day, whereas Ultramaxes are
valued around high USD 12 000 to low
USD 13 000 per day.

Belships' vessels are fully covered until October 2018 when M/S Belocean becomes
open, followed by M/S Belforest in November and M/S Belnippon in January 2019.
The company is well positioned for a dry bulk market that we believe will be
strengthening in 2018-19.

Belships' vessels are chartered out on fixed rates to reputable counterparts,
representing a future nominal gross hire of around USD 40 million.

Focus remains to continue developing Belships as an owner and operator of modern
bulk carriers to reputable counterparts, building a portfolio of quality ships
and robust charter parties that will generate distributable cash flows.

As per the stock exchange announcement on 6 July, Sonata AS has accepted an
offer from Kontrari AS and Kontrazi AS (together "Kontrari") relating to a
contemplated sale of 14,285,714 shares (30.2%) in the company from Sonata to
Kontrari and a subsequent merger between Kontrari's subsidiaries and
subsidiaries of Belships with consideration in Belships shares. Sonata AS has in
this respect entered into a process agreement governing the necessary steps in
order to complete the transaction. The Board of Directors believes the
Transaction will be in the best interest of all the shareholders and the
company.

The further steps include a satisfactory due diligence process, regulatory and
third party approvals, negotiating a merger plan to be finalized and distributed
to the shareholders. The transaction is subject to approval by the General
meeting.

Following this transaction the combined entity will control a fleet of 16 dry
bulk carriers and enhance its flexibility and create opportunities to expand its
charter contract portfolio. The company will concentrate on the dry bulk market
and will benefit from a fully integrated commercial and technical management.

23 August 2018
THE BOARD OF BELSHIPS ASA

This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.