Annual Report 2021
2
Contents
1 Letter to the shareholders
2 Highlights 2019 - 2021
3 Key financial figures
FACTS & FIGURES
4 Belships ASA — Group Figures
5 Operational structure
6 Lighthouse Navigation — Commercial operations
7 Belships Management — Ship management
10 Sustainability at Belships
16 Directors’ report 2021
20 Directors’ responsibility statement
21 Fleet list
FINANCIAL STATEMENTS CONSOLIDATED
24 Consolidated statement of income
25 Consolidated statement of financial position
26 Consolidated statement of cash flow
27 Consolidated statement of changes in equity
28 Notes to the financial statements
FINANCIAL STATEMENTS BELSHIPS ASA
52 Income statement
53 Balance sheet
54 Cash Flow statement
55 Notes to the financial statements
65 Independent auditor’s report
72 Corporate governance
81 Corporate Social Responsibility
FINANCIAL CALENDAR 2022
Annual General Meeting 6 May
Result for the 1st quarter 12 May
Result for the 2nd quarter 17 August
Result for the 3rd quarter 10 November
Letter to the shareholders
Growth and strong markets
lead to record results
We are pleased to present you with Belships’ new
annual report together with our ESG report for 2021.
It reﬂects an eventful year with continued growth and
record financial results for our companies.
As the world’s economies rebounded from the
previous year’s shutdown, dry bulk markets rallied,
and we recorded the highest rates in a decade for dry
bulk vessels. Despite the continued challenges with
the pandemic, we have been able to keep our vessels
running safely and without any material incidents.
Seafarers continued to endure difficult conditions as
travel restrictions remain a hindrance for effective and
timely crew changes. We stand together with a united
industry calling on increased awareness and action
from governments.
The needs for food, energy, materials and
produced goods are what drives the demand for
raw materials. Dry bulk shipping is at the heart of
this global trade and the world economy is highly
dependent on the efficient transportation of these
goods at sea.
Belships entered the year with a larger part
of the ﬂeet than usual in the spot market and was
therefore able to capitalise on a rising market. We
completed an equity issue early on and quickly put the
funds to work with a series of vessel acquisitions. In
total we acquired 11 new bulk carriers during the year
whilst divesting the seven oldest and non-eco vessels.
This led to a rapid and effective modernisation and we
today operate the most modern ﬂeet of eco-vessels
within our segment.
In sum these transactions inﬂuenced our cash
holdings marginally as new shares issued and cash
realised from divestments financed the growth. We
also announced a new dividend policy in 2021 with the
aim to distribute quarterly cash dividends targeting
about 50 per cent of net results. Capital discipline
remains fundamentally important to our strategy,
and with a robust contract coverage we are set up to
endure volatility in market conditions.
Over the last two years we have expanded the
Lighthouse Group and last year was the first full year
of operations for all offices which includes Bangkok,
Oslo, Singapore and Melbourne. Our operating
business is on a solid platform and delivered a record
financial result.
The environmental impact of shipping is some-
thing we take seriously, and we support initiatives
to reduce the carbon footprint from the maritime
industry. It is encouraging that we continue to make
progress and achieve results from the modernisation
of our ﬂeet. We have also initiated studies into new
vessel designs and alternative fuels which we are
hopeful can improve the sustainability of our shipping
transportation business in the future.
With the start of a new year, a new crisis dawned
on us, and the invasion in Ukraine has brought war
to Europe not seen in a generation. Though Belships
is not directly affected by the conﬂict, we are deeply
concerned about the developments and potential
consequences.
Shipping, and dry bulk in particular, displays
promising supply/demand prospects. Belships is well
positioned as a fully integrated shipowning company
stocklisted in Oslo. Together with our subsidiaries
engaged in dry bulk operating and technical manage-
ment, we specialise within the segment of geared bulk
carriers. Our owned ﬂeet now counts 27 Supramax and
Ultramax vessels with an average age of 3.7 years.
We firmly believe good corporate governance
and transparency creates a more valuable business.
Our goal is to create value out of shipowning, and to
return capital competitively over time.
We look forward to serving you and navigate
towards the next milestone
Peter Frølich Lars Christian Skarsgård
Chairman of the Board Chief Executive Officer
1
BELSHIPS Annual Report 2021
Highlights 2021 - 2022
Proven ability to execute growth strategy
11 x Vessel acquisitions
Entered into agreements to acquire
11 modern bulk carriers
Refinanced loan facility
Financing secured until Q2 2027 at L+225 bps
Fleet renewal
Divestment of the seven oldest vessels in the ﬂeet
Equity issues
25 mill shares issued including
ship-for-share transactions
Commercial platform expanded
Lighthouse Navigation now operates from Oslo,
Bangkok, Singapore and Melbourne
Ship management
Continued growth in number of ships under
technical management to 27 in total
Dividend distribution
NOK 1.85 per share
Owned ﬂeet
21 27
Market capitalisation increase
USD 170m USD 530m
BELSHIPS Annual Report 2021
22
Key financial figures
As at 31 December Consolidated
USD 1 000 Footnote 2021
OPERATING STATEMENT
Operating income 650 674 165 362
EBITDA
1 178 279 23 986
EBIT
2 160 829 -4 623
Net result before tax 142 130 -17 160
Net result for the year
BALANCE SHEET
133 422 -17 743
Non-current assets 599 673 388 802
Current assets 197 961 75 677
Total assets 797 634 464 479
Equity 272 919 150 017
Non-current liabilities 414 638 250 084
Current liabilities 110 077 64 378
Total equity and liabilities
KEY FINANCIAL FIGURES
797 634 464 479
Cash and cash equivalents 105 389 34 190
EBITDA 1 178 279 23 986
Interest expenses 15 881 13 668
Interest coverage ratio
3 10.13 -0.34
Current ratio
4 1.80 1.18
Net profit ratio
5
EQUITY
0.21 -0.11
Share capital as at 31 December 59 466 53 617
Equity ratio
6 0.34 0.32
Return on total assets %
7 19.81 -0.75
Return on equity %
8 48.89 -11.83
Consolidated
2020
KEY FIGURES SHARES
Market price as at 31 December USD 1.60 0.74
Market price as at 31 December NOK 14.10 6.30
Number of shares as at 31 December 253 136 666 228 175 404
Diluted average number of shares (excluding treasury shares) 250 609 708 227 490 765
Equity per share USD
9 1.08 0.66
Earnings per share USD 0.53 -0.08
EBITDA per share USD 0.71 0.11
Price/earnings ratio
10 3.00 -9.47
Price/book ratio
11 4.67 2.29
Price/EBITDA ratio 2.25 7.00
DEFINITION OF NON-IFRS FINANCIAL MEASURES
The Group’s financial information is prepared in accordance
accordance with IFRS. The alternative performance
with international financial reporting standards (“IFRS”) as
measures presented may be determined or calculated
adopted by the European Union. In addition, it is the
differently by other companies.
management’s intention to provide alternative perform-
The alternative performance measures are intended
ance measures that are regularly reviewed by management
to enhance comparability of the results and to give supple-
to enhance the understanding of the Group’s performance,
mental information to the users of the Group’s external
but not instead of, the financial statements prepared in
reporting.
1) EBITDA — is the earnings before interest, taxes, depreciation and amortizations
2) EBIT — is the earnings before interest and taxes. It can be calculated by the result before tax added by the interest
3) Interest coverage ratio — is equal to earnings before interest and taxes (EBIT), divided by interest expenses
4) Current ratio — is defined as total current assets, divided by total current liabilities
5) Net profit ratio — is defined as result after taxes, divided by operating income
6) Equity ratio — is equal to shareholders’ equity including non-controlling interest, divided by total assets
7) Return on total assets — is defined as result before taxes adjusted for interest expenses, divided by total capital
8) Return on equity — is defined as net result for the year, divided by equity
9) Equity per share — is defined as total equity, divided by number of issued shares at end of period
10) Price/earnings ratio — is defined as market price of share, divided by earnings per share
11) Price/book ratio — is defined as market price of share, divided by equity per share
Time charter equivalent (TCE) – is defined as freight revenues less voyage expenses divided by the number of available on-hire days.
33
Belships ASA
Group Figures 2021
Belships ASA is a fully integrated ship owner and operator with low costs and competitive
financing.The company is listed on the Oslo exchange main list.We have a modern ﬂeet of
geared bulk carriers in the Supramax and Ultramax segment.All services and key functions are
in-house and run by a management team with proven operational track record.
Operating income
650.7
mUSD
EBITDA
178.3
mUSD
Net result
133.4
mUSD
Cash break-even
2021 about
10 500
USD per shipday
Financial highlights
Consolidated balance sheet as per December 31, 2021 ($ million)
Assets
Cash 105.2
Other assets 87.8
Ships 604.6
Equity and liabilities
Other liabilities 87.4
Interest bearing debt 437.3
Equity 272.9
Employees
Commercial operator
& agency 91
Ship management 57
Administration 10
Seafarers 504
Sailed distance
1 060 000
Nautical miles
Total 797.6
Total 797.6
49
Number of shipdays
8 000
662
Average ﬂeet age
3.7years
BELSHIPS Annual Report 2021
44
Operational structure
SHIPOWNING TECHNICAL & CREWING COMMERCIAL OPERATIONS
27x Supra/Ultramax bulk carriers
Head office in Oslo
Founded in 1918, stock listed since 1937
Offices
Commercial management and operating
business through Lighthouse Navigation
(50.01%)
Lighthouse engages in cargo trading,
liner services and agency
Founded in 2009
Belships Management (Singapore)
performs complete technical and crew
management
Founded in 1983
HQ
—
Oslo
Commercial operations
Technical management
—
Bangkok, Oslo, Singapore, Melbourne
—
Singapore, Shanghai
Crewing
—
Tianjin (PRC), Myanmar, Philippines
5
Lighthouse Navigation
Commercial operations
Lighthouse Navigation is the commercial arm of Belships ASA providing chartering and operations
with a long track record of positive results.The commercial operations and operating activities
have expanded and is now present in Bangkok, Oslo, Singapore and Melbourne.
90
81
142
478.8
73
17 18 19 20 21
Profit before tax mUSD
62
60
6
4
3.1
2.4
3.4
3.7
17 18 19 20 21
Lighthouse Navigation has its roots and experience tracing back
to the 1990s and the senior management founded the company
together with Mr. Frode Teigen in 2009. Following the merger
with Belships ASA in 2018 the company has since been the
integrated commercial platform of the group.
Lighthouse Naviation works with a wide range of inter-
national charterers, exporters/importers, and traders who
engage in the freight markets for dry cargo. We offer freight back-
ing for cargo tenders and provide logistical advice to trading
houses and industrial groups. The annual volume carried is
about 10 million tonnes, and the annual turnover exceeded USD
140 million. The company is represented in Bangkok, Oslo,
Singapore and Melbourne and serves customers on a world-wide
basis. Lighthouse Navigation provides commercial management
for the vessels owned by Belships ASA, but also for clients
Revenue and profit
Strong financial development and a profitable track record
Revenue mUSD
500
400
300
200
100
0
64.9
2
0
outside the group. As a subsidiary of Lighthouse since 2010,
Orient Asia Lines BV (OAL) manages a liner operation offering a
regular service from South East Asia to the Middle East and the
Eastern Mediterranean. OAL specialise in the carriage of forestry
products, such as sawn timber, wood pulp and paper, plywood
and medium density fibreboard (MDF). Orient Asia Lines also
carries project cargoes, steels and machineries. Siam Thara
Agency Co., Ltd established in January 2014, is also controlled by
Lighthouse Navigation. Siam Thara Agency offers comprehensive
advice on ports, logistics and commodities both on the export
and import fronts in Thailand and is considered leading a leading
agent. Lighthouse Navigation is a dynamic organisation which
aims to continue growing in order to develop new business and
operations for parcel and commodity trades.
EBITDA 2021 Employees
91
64.1
mUSD
Average number of vessels
operated, 2021
87
External vessels
Belships vessels
22
65
BELSHIPS Annual Report 2021
666
Belships Management
Ship management
Belships Management has provided crewing and technical management from its head office in Singapore
since its inception in 1983. Our ship management services create a competitive advantage for its clients
through competency, cost control and quality of vessel maintenance standards. Belships Management has
Belships ASA, Ultrabulk and Sumisho Marine, a subsidiary of the Sumitomo Group, as clients.
Belships Management sources qualified seafarers mainly from
offer our experience in other services that include newbuilding
China, Myanmar and the Philippines. The high retention rate
supervision, sale and purchase inspection and project work
amongst our officers and crew allows us to train and develop
which recently has involved in retrofitting new equipment
our seafarers and knowledge pool to provide consistency and
to existing vessels. The company also provides agency and
quality for vessels under management.
husbandry services for ships calling the port of Singapore.
Building on more than 35 years of history since
foundation Belships Management has experience in
management of most ship types including bulk carriers, oil/
product tankers, container vessels and car carriers. We also
Development
Incorporated under the name Northsouth
1983
Shipmanagement
First company in Singapore with SEP and
1993
ISO 9002 certification by DNV GL
Opening office in Shanghai (PRC)
2001
Opening offices in the Philippines
2006
Attained Document of Compliance for NIS ﬂag to manage
2018
the nine Lighthouse ships joining the Belships ﬂeet.
Technical ships
30
Crewing ships
31
Crew retention
82%
35
+
yrs.
Compliance
The Belships Management System is in
compliance with the requirements of
ISM Code
ISO9001:2015
ISO 14001:2018
OHSAS 18001:2007
MLC 2006
DOC for Norwegian Flag vessels
We are certified by Class NK
7
BELSHIPS Annual Report 2021
8
9
Sustainability at Belships
At Belships, we strive for
a sustainable and resilient
business
Our approach to Environmental, Social and Governance (ESG) is to ensure
that our business practices and investments are sustainable
OUR SUSTAINABILITY POLICY AND PRIORITIES
We work proactively to ensure that ESG factors are considered in everything we do, and we
have established policies and procedures to ensure consistent ESG management and risk
mitigation. Our sustainability policy sets out our ESG approach, priorities, and ambitions.The
policy has been approved by the Board of Directors. Belships has assessed ESG topics that are
most material to our industry and the company, and our priorities are linked to:
Environment
• Reducing emissions
• Energy efficiency
Social
• Health and safety
• Covid-19
• Human rights and
labour rights
• Diversity
• Training and development
Governance
• Anti-corruption
• Data security and privacy
• Sustainable procurement
10
BELSHIPS Annual Report 2021
MEETING INTERNATIONALLY RECOGNIZED
SUSTAINABILITY REPORTING STANDARDS
Belships produces an annual sustainability report
1
that can be read in conjunction with this ESG sum-
mary. The Belships’ Sustainability Report meets the
disclosure requirements of the Sustainability Account-
ing Standards Board (SASB) Marine Transportation
Standard (2018) and the Norwegian Shipowners Asso-
ciation’s (Norges Rederiforbund) Guidelines for ESG
Reporting in the Shipping and Offshore Industries.
Environment
Belships is committed to continuously improving
energy efficiency, meeting its GHG reduction obliga-
tions and satisfying all other requirements related
to the environment. Investments in new vessels,
low average ﬂeet age and deployment of technology
means we have best in class efficiency and environ-
mental performance. Belships’ ﬂeet will be compli-
ant with IMO EEXI regulation coming into force 2023
without major CAPEX requirement. Belships’ environ-
mental management system is independently certified
to the international standard ISO 14001 and is imple-
mented in conjunction with the international quality
standard ISO 9001:2000.
GHG EMISSIONS
Growing awareness, increasing customer expectations,
and increasing regulations concerning climate change
make our response to this issue a fundamental prior-
ity. Belships’ ﬂeet is modern with an average age of
3.7 years. Over the last three years, Belships has com-
pletely modernized its ﬂeet and we have phased out
all ‘non-eco’ design vessels. Carbon intensity indices
have been calculated for each vessel in our ﬂeet. Bel-
ships’ ﬂeet will be compliant with IMO EEXI coming
into force in 2023 without major CAPEX spending nor
speed reductions.
EMISSIONS PERFORMANCE
In 2021, our scope 1 GHG emission were 309 000 metric
tonnes carbon dioxide equivalents (CO2e), measured
using a financial control approach (2020: 280 000). The
10 per cent increase in emissions in 2021 was primarily
a result of our ﬂeet growth and increased distance
travelled. Despite increases in overall CO2e emissions,
Belships continues to see a positive development in
energy efficiency, and the AER decreased by 5 per cent
in 2021. Belships’ ﬂeet is burning IMO 2020 compliant
fuels and we have no scrubbers in operation.
All emissions data is verified by DNV.
2021 2020
EMISSIONS
GHG emissions (tonnes CO
2
e) 309 000 280 000
SO
x
(tonnes) 738 847
NO
x
(tonnes) 6 319 6 981
PM (tonnes) 359 503
EMISSION INDICES
2
EEOI (g CO
2
e / tonne-nm) 9.6 8.46
EEDI (g CO
2
e / tonne-nm) 4.1 3.94
EEXI (g CO
2
e / tonne-nm) 5.1
AER (g CO
2
e / dwt-nm) 5.1 4.89
1) See www.belships.com
2) EEOI — Energy Efficiency Operating Index, EEDI — Energy Efficiency Design Index (for newly acquired ships), EEXI — Energy Efficiency Design
Index (for existing ships), AER — Annual Efficiency Ratio. See www.imo.org for further information.
11
CLIMATE RISK
Belships acknowledges the importance of climate risk
and its impact on the future of the shipping industry.
We assess our divestment/investment strategy on a
regular basis, taking into consideration the ﬂeets emis-
sion profile and how the company may be impacted
by stricter regulations, technological development,
market demand and physical climate risks. Decarboni-
sation of the ﬂeet is part of our strategy.
ZERO OIL SPILLS
Belships’ ﬂeet is fully fitted with Ballast Water
Treatment Systems. Belships recorded no discharge
of untreated ballast water or oil spills to sea in 2021
(2020:0). There were no reported waste disposal
issues in 2021.
COMMITED TO RESPONSIBLE SHIP RECYCLING
Belships is committed to the sustainable and socially
responsible recycling of ships. Any future vessel
recycling will be executed in accordance with EU
regulations and the Hong Kong Convention, and would
only take place at approved yards.
Social
Belships is committed to safe, healthy and rewarding
work environments. Our focus on building a strong
culture is complemented by the high degree of long
serving employees within our organisation.
Our focus is on creating favourable employment
conditions which in turn lead to the attraction and
retention of the right employees. A key component
to our approach is the investment we make in the
training and development of our personnel. In 2021, we
saw a slight decrease in retention rates partly due to
Covid-19. Still, our rates remain high with 83 per cent
and 80 per cent for officers and ratings, respectively
(2020: 94% and 92%). We expect the retention rates to
revert to the historical average in Belships of above 90
per cent.
2021 2020 2019
RETENTION RATES
Shore based personnel
(Belships Administration) 90% 88% 100%
Officers 83% 94% 94%
Ratings 80% 92% 84%
HEALTH AND SAFETY
Our approach to health and safety is documented in
Belships’ Health and Safety Policy. In 2021, our lost
time injury rate (LTIR) was 1.0 (2020: 0.35). In 2021,
Belships was able to uphold our track record of no
serious injuries or work-related fatalities (using IMO
definitions). This is a track record we aim to maintain.
2021 2020 2019
INJURY RATES
LTIF 1 0.35 4.23
Serious injuries 0 0 0
Fatalities 0 0 0
COVID-19
The Covid-19 pandemic continued to have an impact
on our personnel throughout 2021, in particular for
our crew onboard our vessels. The welfare of our
employees, and others for whom we are responsible
in our operations, is of the utmost priority. In line with
the Neptune Declaration, that we signed last year, we
have focused our efforts on ensuring all seafarers are
vaccinated. At year end, 78 per cent of our seafarers
were vaccinated.
FOSTERING DIVERSITY
We embrace the diversity of our team members,
stakeholders and customers, including their unique
backgrounds, experiences, ideas and abilities. We
have made diversity and inclusion an important part
of our hiring and retention efforts. However, gender
diversity amongst shipboard personnel remains an
ongoing challenge for the industry.
2021 2020 2019
DIVERSITY
Shore based personnel
Board (% female) 43% 43% 43%
Employees (% female) 40% 38% 38%
Shipboard personnel
Gender (% male) 100% 100%
Age range
<30 20% 27%
30-50 68% 67%
>50 12% 6%
Nationalities 5 9
12
BELSHIPS Annual Report 2021
Governance
The Belships Board of Directors and Board commit-
tees have responsibility for strategic oversight of all
company activity, including sustainability. The Board
are guided by Belships’ Corporate Governance Policy,
which is publicly available on our website. Our gov-
ernance procedures and related control
mechanisms are essential to minimize ESG risks
and to guide the implementation of ethical business
practices.
NO REPORTED CORRUPTION INCIDENTS IN 2021
Belships has a zero-tolerance policy for corruption in
any form. Regular anti-corruption training is provided
to relevant employees throughout the year. There were
no reported ethics or corruption incidents in 2021.
WHISTLEBLOWING
Employees who observe or become aware of a situation
that they believe to be a violation of the Code of Busi-
ness Conduct and Ethics are to report on such inci-
dents. An independently operated helpline is also pro-
vided for employees and others to use, if required. There
were no whistleblowing reports made in 2021 (2020:0).
DATA PRIVACY AND SECURITY
Protecting employee, customer and company data
held at Belships is critically important to us. We com-
ply with all applicable data privacy and protection
requirements in the countries in which we operate,
including the EU’s General Data Protection Regula-
tion (GDPR). There were no reports of data privacy or
security breaches in 2021 (2020:0).
SUSTAINABLE PROCUREMENT
Belships requires its suppliers to comply with all rel-
evant legal requirements, environmental standards,
fair employment practices and prohibiting any form of
child, forced or compulsory labour. We are guided by
principles such as those in the United Nations Guiding
Principles on Business and Human Rights, the United
Nations Universal Declaration of Human Rights, and
the International Labour Organization Core Conven-
tions regarding child labour, forced labour, freedom
of association, the right to organize and bargain col-
lectively, equal pay, and non-discrimination in the
workforce. There were no reported supplier violations
of these principles or conventions in 2021.
13
14
BELSHIPS Annual Report 2021
15
16
Directors’ report 2021
Growth and profitability
THE DRY BULK MARKET 2021
Supramaxes entered the year just shy of USD
11 000, and from there it was almost a straight line
appreciation to peak levels in October of around
USD 40 000 per day. 2021 represented the highest
year-on-year percentage increase in earning
ever, underpinning the year as forceful rebound
and recovery after the outbreak of the COVID-19
pandemic.
With average Supramax rates of USD 27 406 per
day for 2021, the company recorded the best year in a
decade.
There were large variations in demand growth
between commodities. The highest growth was for
steel products, which increased by 43 per cent from
2020 levels. Breakbulk commodities grew by 16 per
cent, whereas other minor bulks increased by 4 per
cent. Grain volumes were modestly positive, whereas
shipments of both coal and iron ore declined, by 9
and 20 per cent, respectively. The drop in ore volumes
were primarily due to political intervention in steel
markets by the Chinese government, as they curbed
steel production to below 2020 levels due to emission
considerations. China’s steel production ended 2 per
cent lower than 2020 – the first drop in the country’s
steel production since 2015.
Overall dry bulk demand grew by 5 per cent in
terms of volume, however, the effects in ton-miles were
higher as increased trades from the Atlantic Basin
to Asia added to sailing distances. Port congestion
persisted throughout 2021, as each ship spent on
average 2 days extra in port compared to 2020.
According to Fearnleys, for the full year, 103
vessels were delivered, down from 143 in 2020.
At the time of writing, 21 Supra/Ultramax bulk
carriers have been delivered so far in 2022 according
to Clarksons Research. Only 87 vessels are scheduled
to be delivered for the remaining part of the year.
However, it might be even lower, as some registered
orders usually are cancelled, deferred or simply
incorrect.
Relatively low newbuilding activity continued
as the lack of conviction and alternatives for fuel and
propulsion systems appear to restrain demand for
ordering. Equally important, the demand for new-
buildings in other segments than dry cargo is absorb-
ing most of the shipbuilding capacity for 2022-2023.
Therefore, despite the low orderbook within dry bulk,
newbulding prices increased on the back of limited
shipbuilding capacity and increased steel prices.
Prices for modern secondhand vessels
increased in 2021, however, not as much as the freight
market, and current values appear historically low in
comparison with earnings
FINANCIAL AND CORPORATE MATTERS
The Group’s solvency and financial position is strong.
At the end of 2021, the book equity per share was USD
1.08 (USD 0.66), corresponding to an equity ratio of 34
per cent. Total book value of ships was USD 604.6m,
while the consolidated cash balance was USD 105.2m.
Net cash ﬂow from operating activities amount to USD
149.4m (USD 13.7m) compared to an EBITDA of USD
178.3m (USD 24.0m). The difference between net cash
ﬂow from operating activities and EBITDA primarily
relates to interest expenses included in net cash ﬂow
from operating activities, changes in net working
capital, depreciation charges and gain on sale of ships.
Total interest bearing debt amounted to USD 437.3m.
In 2021, the Group raised USD 20.3m of equity. In 2021,
the loan agreement related to the vessel BELLIGHT (ex
SOFIE VICTORY) was repaid in full. At the end of each
reporting period, the Group assesses whether there
are any impairment indicators present. The company
has concluded that no impairment indicators related
to ships were present at the end of the year. At the
end of 2021, Belships held 371 800 treasury shares
at an average cost of NOK 10.70 per share. The CEO
held 5 000 000 options while remaining employees
held 49 300 options at year-end. The Group’s market
risk exposure mainly relates to changes in freight
rates, interest rates and fuel prices. Belships aims to
minimize counterpart risk and time charter contracts
are entered into with reputable charterers. The
Group had no research and development costs in
2021. All ships are owned by Norwegian companies
and substantially all of the companys Norwegian
operations are within Norwegian tonnage tax regime
as of year end. The Group had tax losses carried
forward of USD 66.4 million as at 31 December 2021.
No deferred tax benefits were recognized in the
balance sheet.
OPERATIONS
Belships has a modern ﬂeet of 27 Supra/Ultramax bulk
carriers with an average age of 3.7 years and all ships
operated satisfactorily without significant off-hire.
The operating expenses continued at a competitive
level.
Ship transactions during the year include
delivery of the 7 newbuildings BELFAST, BELMAR,
BELGUARDIAN, BELTRADER, BELKNIGHT, BELFORCE
and BELTOKYO, delivery of the 4 secondhand vessels
BELTIGER, BELHAWK, BELFRIEND and BELTIDE and
sale of the 7 oldest vessels BELFORT, BELORIENT,
BELFRI, BELCARGO, BELSTAR, BELNOR and
BELOCEAN. Belships also entered into agreements
16
BELSHIPS Annual Report 2021
for the acquisition of the 2 newbuilding resales
BELYAMATO and BELMONDO with expected delivery
in November 2022 and January 2023 respectively.
Approximately 70% of Belships period time
charters during the year have been with Cargill,
COFCO, Viterra and Bunge, leaders within agricultural
services. The remaining period time charters have
been chartered to various parties during 2021. The
remaining ﬂeet have been operated in the spot market
by Belships’ subsidiary Lighthouse Navigation. Net
earnings in 2021 per ship for the entire ﬂeet amount
to USD 21 226 versus BSI index of USD 25 431 net per
day. The inherent lag in our business means that when
the spot markets fall, our outperformance will tend
to be higher. Conversely, when the market rises, our
performance will tend to lag on a short-term basis.
It is also affected by a certain number of period time
charter contracts which contribute to our contract
coverage for 2022-2023.
In addition, Lighthouse Navigation on average
operated 65 ships on short-term charter during 2021.
Belships Management (Singapore) Pte. Ltd. expanded
its number of ships under technical management
during 2021 from 22 to 27 ships.
RESULTS
The Group had an operating income of USD 650.7m in
2021 (USD 165.4m), giving an EBITDA of USD 178.3m
(USD 24.0m) and a consolidated operating result of
USD 160.8m (USD -4.6m). Result before tax was USD
142.1m (USD -17.2m), while net result for the Group
was USD 133.4m (USD -17.7m). The parent company’s
net result for the year was USD 163.3m (USD 0.0m).
The Board proposes the result for the year allocated
as follows:
Transfer to other retained earnings 163.3m
Total allocations 163.3m
GOING CONCERN
The annual accounts are presented on a going concern
basis in accordance with § 3 – 3 of the Norwegian
Accounting Act. The Group’s liquidity reserves are
considered robust. Current activity is expected to
generate sufficient liquidity to cover current debt and
operating expenses throughout 2022. Based on this,
the Board considers that the conditions for a going
concern are in place. In the opinion of the Board, the
consolidated accounts have been prepared in accord-
ance with International Financial Reporting Standards
(IFRS) as adopted by the EU. The information in the
accounts gives a true and accurate representation of
the company’s and the Group’s assets, liabilities,
financial position and results. The annual accounts
give a fair view of the development, profit and overall
financial position of Belships ASA and describe the
most significant risks and uncertainties facing the
Group and the parent company.
SAFETY AND THE ENVIRONMENT
Belships aims to minimize environmental impact from
its activities, and strives to improve safety. Measures
are taken to prevent and minimise the impact on the
environment. Belships works consciously to improve
standards, both on board and ashore. Pollution from
ship operations is governed by several national
and international environmental standards and
certifications. Belships meets official requirements
in terms of safety and the environment. All of our
ships are equipped to meet regulatory standards
and requirements and the modern ﬂeet of Belships
represents lower emissions and energy consumption
compared to industry averages.
ORGANISATION
Belships is headquartered in Oslo, from where
it conducts financial, strategic development
and investor relations together with the overall
management of the Group’s activities. Chartering is
handled from our commercial operations in Oslo,
Bangkok, Singapore and Melbourne. Insurance is
handled from Bangkok and technical management
including crewing is organised from Singapore.
Commercial operations increased significantly in 2021
despite the Covid-19 pandemic after the opening of
new offices in Oslo, Singapore and Melbourne. The
Group employed 158 office staff at the end of 2021.
Ships under technical management employed 502
officers and crewmembers. Sick leave was less than
2 per cent in 2021. The Group was not subject to any
serious accidents in 2021. Belships treats women
and men equally. No discrimination on the grounds
of gender is tolerated. Of the Group’s office staff, 40
per cent are women. The working environment in the
companies within the Group is considered to be good.
Belships ASA has taken out liability insurance
that covers potential liabilities up to NOK 100m for the
board of directors and CEO of the company.
17
1818
BELSHIPS Annual Report 2021
CORPORATE GOVERNANCE
Belships’ goals and strategy are based on sound prin-
ciples of corporate governance. The Company has
been listed on the Oslo Stock Exchange since 1937, and
is subject to the Norwegian Accounting Act, the Securi-
ties Trading Act and the Public Limited Company Act.
Belships follows the Norwegian code of good corpo-
rate governance of 17 October 2018. Please see the sep-
arate statement of corporate governance that appears
as a section of the annual report in its own right.
CORPORATE SOCIAL RESPONSIBILITY
Belships is a shipping company with global reach
and a hundred years of history. The Board is well
aware of the direct and indirect impact Belships’
activities have on the outside world as well as the
company’s shareholders. Belships is determined
to create long-term shareholder values and at the
same time act as a responsible participant in the
society. The most important issues for our business
and our shareholders in respect of Corporate Social
Responsibility (CSR) are:
•
Environment
•
Human and labor rights
•
Anti-corruption
It is our policy to follow the standards, laws and regu-
lations set by the national and international maritime
regulatory authorities, but also the moral and ethical
behaviour as set by our culture. Belships reports on
safety and environment in the annual report. Belships
does not tolerate any corrupt practices with our sup-
pliers, customers or government entities affecting
our business. Belships do pay attention to the work-
ing conditions and safety within our own operations.
Please see the separate statement of corporate social
responsibility that appears as a section of the annual
report in its own right.
OUTLOOK
When most parts of the world were expecting to see
the end of the pandemic, a new crisis appeared. The
conﬂict in Ukraine has brought war to Europe in a
manner not seen in a generation. Geopolitical risks,
energy shortages and inﬂationary pressures have
accelerated, and a humanitarian crisis is unfolding
with devastating consequences.
High commodity prices are expected to be
coupled with demand for restocking of all major raw
materials for energy, food and industrial production.
The Baltic Exchange Supramax index YTD
2022 has averaged about USD 25 000 per day with
Ultramaxes earning an additional premium.
The sentiment in the market is firm, and strong
bulk markets are expected in the near term. Freight
Forward Agreements (FFA) for Supramax currently
indicate a market average of about USD 27 000 for the
rest of the year.
As we mentioned in previous reports, the supply
side as observed from the number of deliveries and
the publicly quoted orderbook for our segment is
historically low. We therefore remain positive to the
prospects for the dry bulk market.
We are focused on capital discipline and
returning capital to shareholders. A competitive
return for our shareholders is to be obtained through
increase in the value of the company’s shares and the
payment of dividends, as measured by the total return.
Lighthouse Navigation has had a strong
start to 2022. Based on Belships’ current contract
coverage, we expect to generate significant free cash
ﬂow and continue to pay quarterly dividends as
announced with our dividend policy. Additionally, an
extraordinary dividend payment is planned for Q1
2022.
Belships has a modern ﬂeet of 27 Supra/
Ultramax bulk carriers with an average age of 3.7 years
and daily cash breakeven for 2022 of about USD 10 000
per vessel.
Oslo, 11 April 2022 Peter Frølich Jorunn Seglem Birthe Cecilie Lepsøe Marianne Møgster
Chairman of the Board Board member Board member Board member
Carl Erik Steen Frode Teigen Sverre J. Tidemand Lars Christian Skarsgård
Board member Board member Board member Chief Executive Officer
19
Directors’ responsibility statement
The Board and Chief Executive Officer have today
considered and approved the annual report and
financial statements for the Belships group and its
parent company Belships ASA for 2021.
The Board has based this declaration on
reports and statements from the Group’s chairman
and CEO, on the results of the group’s activities and
on other information that is essential to assess the
Group’s position, provided to the Board of the parent
company under obligation by the Group’s administra-
tion and subsidiaries.
To the best of our knowledge:
• the 2021 financial statements for the Group and
parent company have been prepared in accord-
ance with all applicable accounting standards
• the information provided in the financial
statements gives a true and fair representation of
the Group and parent company’s assets, liabilities,
profit and overall financial position as of 31
December 2021
• the annual report provides a true and fair overview
of:
– the development, profit and financial position
of the Group and parent company
– the most significant risks and uncertainties
facing the Group and the parent company
20
Oslo, 11 April 2022 Peter Frølich Jorunn Seglem Birthe Cecilie Lepsøe Marianne Møgster
Chairman of the Board Board member Board member Board member
Carl Erik Steen
Board member
Frode Teigen Sverre J. Tidemand Lars Christian Skarsgård
Board member Board member Chief Executive Officer
20
BELSHIPS Annual Report 2021
Modern ﬂeet with average age of 3.7 years
Supramax and Ultramax bulk carriers are very versatile, equipped with cranes (“geared”) in order
to load and discharge a mulitude of cargoes, and can enter most ports of the world.All of our ships are of
eco-design combining high cargo capacity with lower fuel / energy consumption.
Vessel Type Built DWT Yard Flag
Newbuild TBN BELMONDO Ultramax 2023 64 000 Imabari Norwegian
Newbuild TBN BELYAMATO Ultramax 2022 64 000 Imabari Norwegian
BELTOKYO Ultramax 2021 64 000 Imabari Panama
BELFORCE Ultramax 2021 61 000 Dacks Norwegian
BELKNIGHT Ultramax 2021 61 000 Dacks Norwegian
BELTRADER Ultramax 2021 61 000 Dacks Norwegian
BELGUARDIAN Ultramax 2021 61 000 Dacks Norwegian
BELMAR Ultramax 2021 64 000 Imabari Norwegian
BELFAST Ultramax 2021 64 000 Imabari Panama
BELAJA Ultramax 2020 61 000 Shin Kurushima Panama
BELMOIRA Ultramax 2020 61 000 Shin Kurushima Panama
BELFUJI Ultramax 2020 63 000 Imabari Panama
BELRAY Ultramax 2019 61 000 Shin Kurushima Panama
BELNIPPON Ultramax 2018 63 000 Imabari Panama
BELHAVEN Ultramax 2017 63 000 Imabari Norwegian
BELTIGER Ultramax 2017 63 000 New Times Norwegian
BELISLAND Ultramax 2016 61 000 Imabari Norwegian
BELINDA Ultramax 2016 63 000 Hantong Norwegian
BELMONT Ultramax 2016 63 000 Hantong Norwegian
BELATLANTIC Ultramax 2016 63 000 Hantong Norwegian
BELLIGHT Ultramax 2016 63 000 New Times Norwegian
BELFRIEND Supramax 2016 58 000 Tsuneishi Norwegian
BELTIDE Supramax 2016 58 000 Tsuneishi Norwegian
BELFOREST Ultramax 2015 61 000 Imabari Norwegian
BELHAWK Ultramax 2015 61 000 Imabari Norwegian
BELPAREIL Ultramax 2015 63 000 Hantong Norwegian
BELSOUTH Ultramax 2015 63 000 Hantong Norwegian
Total Average age DWT
27 Vessels 3.7 Years 1.68 million
2121
BELSHIPS Annual Report 2021
2222
BELSHIPS Annual Report 2021
2323
Consolidated statement of income
1 January - 31 December Consolidated
USD 1 000 Note 2021 2020
Consolidated statement of comprehensive income
1 January-31 December Consolidated
USD 1 000 Note 2021 2020
OPERATING INCOME
Gross freight income
Voyage expenses
808 237
-164 929
220 332
-61 065
Net freight income
Management fees
643 308
7 366
159 267
6 095
Total operating income
4,5 650 674 165 362
OPERATING EXPENSES
Share of result from joint venture and associated companies
11 14 323 3 052
T/C hire expenses
7 -400 710 -90 401
Ship operating expenses
20 -50 457 -38 675
Operating expenses ship management
20 -30 756 -11 861
Payroll expenses
14 -2 691 -2 072
Other general administrative expenses
15 -2 104 -1 419
Total operating expenses -472 395 -141 376
EBITDA 178 279 23 986
Depreciations and amortisation
6 -28 735 -27 286
Impairment
6 0 -4 957
Gain on sale of ships
6 15 333 2 469
Other gains/(losses) -4 048 1 165
Operating result (EBIT)
FINANCIAL INCOME AND EXPENSES
160 829 -4 623
Interest income 815 985
Interest expenses
7 -15 881 -13 668
Other financial items -2 308 -729
Currency exchange gain/(loss) -1 325 875
Net financial items
Net result before tax
Tax 19
-18 699
142 130
-8 708
-12 537
-17 160
-583
Net result for the year 133 422 -17 743
Hereof majority interests 103 983 -19 898
Hereof non-controlling interests
11 29 439 2 155
Earnings per share (USD)
13 0.54 -0.08
Diluted earnings per share (USD)
13 0.53 -0.08
Net result for the year
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
Actuarial gain/(loss) on defined benefit plan
17
Items that may be subsequently reclassified to profit or (loss):
Exchange differences
133 422
3
-74
-17 743
-10
63
Total comprehensive income 133 351 -17 690
Hereof majority interests 103 912 -19 761
Hereof non-controlling interests 29 439 2 071
24
BELSHIPS Annual Report 2021
Consolidated statement of financial position
As at 31 December Consolidated
USD 1 000 Note 2021
NON-CURRENT ASSETS
Intangible assets
Contracts
Tangible fixed assets
0 1 770
Ships 6 580 628 371 637
Prepayment of ships 0 3 000
Property, Plant and Equipment
6 4 227 4 878
Total fixed assets
Financial fixed assets
584 855 379 515
Investments in j/v and associated companies
11 13 997 2 123
Cash and cash equivalents (restricted)
8 185 205
Other non-current receivables 636 5 189
Total financial assets 14 818 7 517
Total non-current assets
CURRENT ASSETS
599 673 388 802
Ships held for sale
6 23 933 5 917
Bunker inventory 16 492 5 344
Trade debtors 19 086 11 574
Other receivables
10 33 246 18 857
Cash and cash equivalents (restricted)
8 200 188
Cash and cash equivalents
8 105 004 33 797
Total current assets 197 961 75 677
Total assets
EQUITY
797 634 464 479
Paid-in capital 158 802 137 962
Retained earnings 82 739 5 956
Non-controlling interests 31 378 6 099
Total equity
LIABILITIES
Provision for liabilities
12 272 919 150 017
Pension obligations
Other non-current liabilities
17 842 760
Long term interest bearing debt
7 412 881 247 315
Other non-current liabilities 915 2 009
Total other non-current liabilities
Current liabilities
413 796 249 324
Current portion of interest bearing debt
7 24 467 34 162
Tax payable
19 8 620 745
Public taxes and duties payable 657 600
Trade creditors 6 813 12 511
Other current liabilities
10 69 520 16 360
Total current liabilities 110 077 64 378
Total liabilities 524 715 314 462
Total equity and liabilities 797 634 464 479
Consolidated
2020
Peter Frølich Jorunn Seglem Birthe Cecilie Lepsøe Marianne Møgster
Chairman of the Board Board member Board member Board member
Carl Erik Steen Frode Teigen Sverre J. Tidemand Lars Christian Skarsgård
Board member Board member Chief Executive Officer
Oslo, 11 April 2022
Board member
25
BELSHIPS Annual Report 2021
Consolidated statement of cash ﬂow
1 January - 31 December Consolidated
USD 1 000 Note 2021 2020
CASH FLOW FROM OPERATIONS
Net result before tax
Adjustments to reconcile result before tax to net cash ﬂows:
142 130 -17 160
Depreciations/impairment on fixed assets
6 28 735 32 243
Gain on sale of ships
6 -15 333 -2 469
Share-based compensation expense
16 500 545
Difference between pension expenses and paid pension premium
17 -19 -66
Share of result from joint venture and associated companies
11 -14 323 -3 052
Net finance costs
Working capital adjustments:
18 699 12 537
Change in trade debtors and trade creditors -13 210 506
Change in other current items 19 462 4 422
Interest received 815 985
Interest paid
7 -15 881 -13 668
Financing costs -1 276 0
Income tax paid
19 -852 -1 119
Net cash ﬂow from operating activities 149 447 13 704
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of ships
6 62 541 0
Payment of ships
6 -90 454 -15 250
Received instalments from sale of ships 12 661 2 615
Payment of other investments -5 022 -5 672
Net cash ﬂow from investing activities
CASH FLOW FROM FINANCING ACTIVITIES
-20 274 -18 307
Proceeds from non-current debt
7,18 52 360 14 700
Paid-in capital (net) 15952 0
Repayment of non-current debt
7,18 -95 015 -20 101
Sold treasury shares 129 0
Dividend paid -31380 -439
Net cash ﬂow from financing activities
Net change in cash and cash equivalents during the period
Cash and cash equivalents at 1 January
-57 954
71 219
33 985
-5 840
-10 443
44 428
Cash and cash equivalents at 31 December *
*) Includes restricted cash. See note 8 for further details.
105 204 33 985
26
BELSHIPS Annual Report 2021
Consolidated statement of changes in equity
Majority interest
Paid-in Retained
Non-
Share Treasury Share Other Other controlling Total
USD 1 000 capital shares premium equity equity interest equity
2021
Equity as at 31 December 2020 53 617 -166 47 775 36 736 5 956 6 099 150 017
Share issue 5 849 0 14 453 0 0 0 20 302
Sale of treasury shares 0 38 0 0 91 0 129
Share-based payment expense 0 0 0 500 0 0 500
Dividend paid 0 0 0 0 -27220 -4 160 -31 380
Net result for the year 0 0 0 0 103 983 29 439 133 422
Other comprehensive income 0 0 0 0 -71 0 -71
Total comprehensive income 0 0 0 0 103 912 29 439 133 351
Equity as at 31 December 2021 59 466 -128 62 228 37 236 82 739 31 378 272 919
2020
Equity as at 31 December 2019 50 403 -166 39 499 36 191 25 717 4 471 156 115
Share issue 3 214 0 8 276 0 0 0 11 490
Share-based payment expense 0 0 0 545 0 0 545
NCI transactions 0 0 0 0 0 -443 -443
Net result for the year 0 0 0 0 -19 898 2 155 -17 743
Other comprehensive income 0 0 0 0 137 -84 53
Total comprehensive income 0 0 0 0 -19 761 2 071 -17 690
Equity as at 31 December 2020 53 617 -166 47 775 36 736 5 956 6 099 150 017
Consolidated
27
BELSHIPS Annual Report 2021
Notes to the consolidated accounts
All amounts in the notes are in USD 1 000 unless otherwise stated
NOTE 1 GENERAL INFORMATION
Belships ASA is a fully integrated owner and operator
of dry bulk ships. Belships ASA is a public limited liability
company that is incorporated and domiciled in Norway
and listed on the Oslo Stock Exchange. The head office is
located in Lilleakerveien 6D in Oslo, Norway. Copies of the
consolidated financial statements may be downloaded
from www.belships.com, or by inquiry to the company’s
head office. The consolidated financial statements
have been approved by the Board on 11 April 2022.
Belships has obained approval from Oslo Stock Exchange
and Norwegian tax authorities to publish its financial
statements only in English.
NOTE 2 SUMMARY OF THE MOST IMPORTANT ACCOUNTING PRINCIPLES USED
A) BASIS OF PREPARATION
The consolidated financial statements of Belships ASA (the
“Parent Company”), and all its subsidiaries (the “Group”),
have been prepared in accordance with International
Financial Reporting Standards as adopted by the European
Union (IFRS). The Group accounts have been prepared on a
historical cost basis, except for derivatives and shares held
for trading, which are measured at fair value.
The Group accounts are presented with uniform
accounting principles for identical transactions and events
under otherwise identical conditions.
The annual accounts are presented on a going
concern basis.
The Board considers that the conditions for a going
concern are in place.
B) CONSOLIDATION PRINCIPLES
Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through
its power over the investee.
Consolidation of a subsidiary begins when the
Group obtains control over the subsidiary and ceases when
the Group loses control of the subsidiary.
Unrealised gains from transactions with affiliated
companies are eliminated with the Group’s share of the
company/enterprise.
Unrealised losses are likewise eliminated, but only
to the degree that there is no indication of loss of value on
the asset being sold internally.
C) CURRENCY TRANSACTIONS
Functional currency and reporting currency
Accounting transactions undertaken by respective Group
companies use the currency ordinarily used by the financial
environment in which they operate (functional currency).
The Group accounts are presented in USD.
The accounts for the units in the Group which have
a functional currency different from the Group’s reporting
currency, convert their accounts into the reporting
currency according to the following guidelines:
• Assets and debts are converted according to conversion
rates on the balance sheet date
• Income and costs are converted according to yearly
average conversion rates
Transactions in foreign currency
Transactions in foreign currency are converted to the
functional currency at the rate at time of the transaction.
Monetary items in foreign currency are converted into
functional currency using the rate at the balance sheet
date. Non-monetary items which are measured at historical
cost expressed in foreign currency, are converted into
functional currency using the currency rate at the time of
the transaction.
Non-monetary items, which are measured at fair
value expressed in foreign currency, are converted at the
currency rate on the date of measurement. Currency rate
changes are recognised continuously against profit and
loss during the accounting period. Currency rates at year
end was NOK 0.1134 (2020: NOK 0.1172) and SGD 0.7385
(2020: SGD 0.7566).
D) ACCOUNTS RECEIVABLE
Trade and other receivables are measured at transaction
price upon initial recognition and subsequently measured
at amortized costs.
E) TANGIBLE FIXED ASSETS
Tangible fixed assets are measured at acquisition cost,
net of accumulated depreciation and impairments losses.
When assets are sold or divested, the carrying amount is
deducted and any gains or losses are recognised in the
profit and loss account. Acquisition cost for tangible fixed
assets is the purchase price, including taxes and charges
and expenses directly related to preparing the asset for
use. Expenses incurred after the asset has been put to use,
are recognised in the profit and loss account, whereas
other expenses which are expected to create future
financial gains are capitalised. An estimated docking
element is recognised as a separate component of the
ship for depreciation purposes on the first occasion a ship
is booked in the accounts. The amount corresponds to
the estimated docking costs for the period. The docking
component is depreciated on a straight-line basis over
the period to the next planned drydocking. Residual
value has been taken into account, and this is estimated
based on steel value of the ship at the balance sheet date
less estimated cost to demolish the ship. Book value is
compared to market value and value in use to assess the
need for any further impairment compared to the ordinary
depreciation plan. At the end of each reporting period,
every fixed asset is assessed for impairment indicators
as described under section O) Impairment of assets. The
28
BELSHIPS Annual Report 2021
depreciation period and method are assessed annually
and are based on the management’s estimates of the ships’
future useful life. The same applies to residual value.
In accordance with IFRS, the ships have been
separated into components for depreciation purposes. The
ships excluding capitalized drydocking are depreciated
as one unit, as the value of any part of the ship with a
useful lifetime other than 25 years is considered to be
insignificant.
Depreciation is calculated on a straight-line basis
over the estimated useful life of the ships taking its
residual value into consideration. The useful life, which
is also considered as the economic life of the ships, has
been estimated to 25 years. Residual value is estimated
based on steel prices of the ships less cost to demolish and
is reassessed every year-end. Dry docking expenses are
depreciated until next planned dry docking, typically 30-60
months.
Other assets have a useful life of 3-5 years, except
for the office premises in Singapore in which the useful life
is estimated at 57 years.
F) LEASING
The liability arising from leasing agreements is recognised
at net present value of remaining lease payments,
discounted using the interest rate implicit in the lease.
Interests are charged to the statement of income over
the lease period. The associated right-of-use asset equals
the initial lease liability adjusted for payments made
before the lease commencement date and initial direct
costs. After the commencement date, the right-of-use
asset is depreciated in accordance with the requirements
in IAS 16 Property, Plant and Equipment. At the end of
each reporting period, every right of use asset is assessed
for impairment indicators as described under section O)
Impairment of assets.
The Group has chosen the option to allocate the
service component embedded in all long-term time charter
contracts to ship operation expenses.
The Group has also elected to use the recognition
exemptions for lease contracts that, at the commencement
date, have a lease term of 12 months or less and do not
contain a purchase option (short-term leases), and lease
contracts for which the underlying asset is of low value
(low-value assets).
G) FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognized
when the Company becomes party to the contractual
obligations of the relevant instrument.
The Company classifies its financial instruments in
the following categories: at fair value through profit and
loss (“FVTPL”) or at amortized cost. The Group determines
the classification of financial instruments at initial
recognition. Currently, the Group does not apply hedge
accounting
Classification and measurement
Financial instruments at fair value through profit and loss
This category comprises financial assets and liabilities
held for trading, including all derivative instruments.
Financial instruments in this category are initially recorded
at fair value, and transaction costs are expensed in the
consolidated statement of profit and loss. Realized and
unrealized gains and losses arising from changes in the fair
value are included in the consolidated statements of profit
and loss in the period in which they arise.
Financial instruments at amortized cost
Financial assets and liabilities in this category are initially
recognized at fair value, and subsequently carried at
amortized cost, using the effective interest method less any
allowance for impairment. This category includes accounts
receivable, accounts payable, loans, lease liabilities and
other borrowings.
Financial assets at Fair value
through profit and loss (“FVTPL”)
The Group currently has some minor equity investments
not considered significant (see note 11) in unlisted shares.
Financial assets at FVTPL are carried in the statements of
financial position at fair value with net changes in fair
value recognized in profit or loss.
Impairment of trade receivables and contract assets
At each reporting date, the Company measures the loss
allowance for the trade receivables and contract asset at
an amount equal to the lifetime expected credit losses.
For accounts receivables and contract assets, the Group
uses a simplified approach in calculating expected credit
losses. The Company recognizes a loss allowance using
factors including aging of accounts, historical experience,
customer concentration, customer creditworthiness and
current industry and economic trends. An impairment
loss, amounting to any difference between the carrying
amount of the loss allowance and the expected credit
losses at the reporting date, is recognized in the
consolidated statement of profit and loss. Expected credit
loss is immaterial.
Derivative financial instruments and hedging
The Group uses derivative financial instruments to reduce
its exposure related to ﬂuctuations interest rates.
Derivative instruments are recognized in the
consolidated statements of financial position at their
fair values. Realized and unrealized gains and losses
attributable to derivative instruments are recognized as
other financial items, net, as they arise.
Financial liabilities
Financial liabilities are classified at initial recognition
as financial liabilities at FVTPL, loans and borrowings or
payables.
All financial liabilities are recognized initially at fair
value and, in the case of loans/borrowings and payables
net of directly attributable transaction costs. The group’s
financial liabilities include trade and other payables and
loans.
The subsequent measurement depends on
classification. No financial liabilities have currently been
designated at FVTPL. Interest-bearing loans are after initial
recognition measured at amortized cost using the effective
interest rate method. Gains and losses are recognized in
profit or loss when the liability through the amortization
process or when derecognized.
Fair value estimation
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date,
using assumptions that market participants would use
when pricing the asset or liability.
Consolidated
29
All assets and liabilities for which fair values are
measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described as
follows, based on the lowest level input that is significant
to the fair value measurement as a whole:
• Level 1: Quoted market prices in active markets for
identical assets or liabilities.
• Level 2: Inputs other than quoted market prices included
in Level 1 are directly or indirectly observable.
• Level 3: Inputs are unobservable.
H) PROVISIONS
A provision is recognised when the company has a liability
(legal or constructive) as a result of a previous event and
where it is probable (more probable than not) that there
will be a financial settlement as a result of this liability and
that the size of the sum can be reliably determined. If the
effect is material, the provision is estimated by discounting
the expected future cash ﬂow with a discount rate before
tax which reﬂects the market’s evaluation of the time value
of money and, if relevant, risks specifically connected to
the liability.
A provision is recognised for any unavoidable net
loss arising from the contract, the unavoidable cost under
a contract reﬂect the least net cost of exiting from the
contract, i.e. the lower of the cost of fulfilling the contract;
and any compensation of penalties arising from failure to
fulfil the contract.
I) EQUITY
(i) Debt and equity
Financial instruments are classified as debt or equity
according to the underlying substance of the contractual
agreement. Interest, dividend, gains and losses related to
a financial instrument classified as debt, is presented as
income or expense.
(ii) Treasury shares
Own equity instruments that are reacquired (treasury
shares) are recognised at cost and deducted from equity.
No gain or loss is recognised in profit or loss on the
purchase, sale, issue or cancellation of the Group’s own
equity instruments. Any difference between the carrying
amount and the consideration, if reissued, is recognised
in share premium. Share options exercised during the
reporting period are fulfilled with treasury shares.
(iii) Costs related to equity transactions
Transaction costs directly related to equity transactions are
charged directly against the equity after tax deductions.
J) REVENUE RECOGNITION
Revenue recognition in the Group relates to three
different types of revenue;
• Time Charter (freight income)
• Voyage charter (freight income)
• Other revenues such as technical, crewing, port agency,
logistical and management fees.
Time Charter
The Group considers time charter contracts to contain both
lease and service components. For time charter contracts
where the Group acts as lessor and which does not transfer
substantially all risks and rewards incidental to ownership
of the ship are accounted as operational leases. Revenues
are recognised in accordance with IFRS 15 and the Group
only recognises time charter revenue when the ships are
on-hire. The contract period starts when the ships is made
available to the customer and ends on agreed return date.
When the ships are off-hire the Group does not recognise
any time charter revenues except if the contracts can be
negotiated with rates and for periodical maintenance
days in accordance with contract, on which revenue is
recognised. Time charter agreements where the Group
acts as lessee are accounted in accordance with IFRS 16 (See
item F.
Voyage Charter
In a Voyage Charter contract, the charterer hires the ship to
transport a specific agreed-upon cargo for a single voyage.
The consideration for such a contract is determined on
the basis of a freight rate per metric ton of cargo carried
or occasionally on a lump sum basis. The charterer is
responsible for any short loading of cargo or dead freight.
The voyage charter party generally has standard payment
terms of 90/95% freight paid within three to five days after
completion of loading.
We have determined that our voyage charter
contracts consist of a single performance obligation
of transporting the cargo within a specified period.
Therefore, the performance obligation is met evenly as
the voyage progresses through recognition of revenues
and costs on a straight line basis over the estimated voyage
days from the commencement of loading to completion of
discharge.
Costs to obtain a voyage contract is immediately
expensed as the Group has elected to apply the optional
practical expedients for contracts expected to be
recognized within a year.
Other revenue/Management fee
The Group also provides technical services, crewing, port
agency and logistical services on ships not operated by the
Group. Revenue on such services are recognised over time,
as the performance obligation is satisfied over time.
For such revenue, the Group has a right to
consideration from the customer in an amount that
corresponds directly with the value to the customer of the
Group’s performance completed to date. This revenue is
classified as Management fees.
K) EMPLOYEE BENEFITS
Defined contribution pension scheme
All current employees in Norwegian companies are
member of the company’s defined contribution scheme.
The premium is charged as incurred by operations. Social
security tax expense is recognized based on the pension
plan payments.
Defined benefit pension scheme
Actuarial gains and losses arising from changes in actuarial
assumptions are recognised as other comprehensive
income in the period in which they arise. The cost of
providing benefits under the defined benefit plan is
determined using the projected unit credit method.
30
BELSHIPS Annual Report 2021
The company has unfunded pension liabilities.
These relate to early retirement and pension to persons,
that have not been included in the service pension scheme.
Pension obligations are estimated by an independent
actuary.
L) INVESTMENT IN ASSOCIATES AND JOINT
VENTURES
A joint venture is a type of joint arrangement whereby the
parties that have joint control have the right to the net
assets of the joint venture. Joint control is the contractually
agreed sharing of control of the arrangement, which
exists only when decisions about relevant activities require
unanimous consent of the parties sharing control.
An associate is an entity in which the Group has
significant inﬂuence. Significant inﬂuence is the power to
participate in the financial and operating policy decisions
of the investee but is not control or joint control over those
policies.
The Group’s investments in joint ventures and
associates are accounted for by using the equity method.
Under this method, the investment is initially recognized
at cost. Goodwill relating the associate or joint venture is
included in the carrying amount of the investment and not
tested for impairment individually.
The income statement reﬂects the Group’s share of
the net result after tax of the associate or joint venture.
Any depreciation or amortization of the Group’s excess
values are included the net result from the joint ventures.
Any change in other comprehensive income of the
associate or joint venture is presented separately in the
Group’s other comprehensive income.
M) CONTINGENT ASSETS AND OBLIGATIONS
Contingent liabilities are not recognised in the annual
accounts. Significant contingent liabilities are disclosed,
with the exception of contingent liabilities in which the
possibility of loss is considered remote.
Contingent assets are not recognised in the annual
accounts but are disclosed if there is a certain probability
that a significant benefit will be added to the Group.
N) TAXES ON INCOME
Tax expenses consist of tax payable and changes in
deferred tax. Deferred tax/tax assets are calculated on all
differences between accounting values and tax values
of assets and liabilities, with the exception of temporary
differences related to investments in subsidiaries, affiliated
companies or jointly controlled enterprises when the
Group controls when the temporary differences will
be reversed, and that is not expected to occur in the
foreseeable future.
Deferred tax assets are recognised when it is
likely that the company will have sufficient profit for
tax purposes in subsequent periods that will enable the
company to utilize the tax asset. Similarly, the company will
reduce the deferred tax asset to the extent the company
no longer regards it as being likely that it can utilize the
deferred tax asset.
Deferred tax liabilities and deferred tax assets
are measured on the basis of prevailing tax rates for the
companies in the Group where temporary differences have
occurred, based on tax rates that have been enacted or
substantively enacted by the end of the reporting period.
Tax payable is calculated with the tax rate in the
actual tax regime. Deferred tax liabilities and deferred
tax assets are entered at nominal value calculated with
the tax rate in the actual tax regime and are classified as
long-term liability or intangible fixed asset in the balance
sheet. Tax payable and deferred tax are entered directly
against equity to the extent the tax items relate to equity
transactions.
In addition to companies subject to ordinary
taxation in Norway, Singapore and China, the Group
consists of companies within the shipping taxation scheme
in Norway and Singapore. The deferred tax positions
associated with the different tax regimes cannot be offset.
A corresponding situation also applies to tax positions
between jointly controlled operations and the rest of the
Group. These cannot be offset.
O) IMPAIRMENT OF ASSETS
At the end of each reporting period, every ship is assessed
for impairment indicators. The same applies when
events or changes occur that may entail that the asset’s
carrying amount may not be recovered. In assessing the
need for impairments, assets are grouped at the lowest
level at which there is identifiable and predominantly
independent cash inﬂows, which means per ship.
Impairment is calculated as the difference between the
asset’s carrying amount and the value considered as
recoverable. The recoverable amount is the higher of
the asset’s fair value less cost to sell and its value-in-use
to the Group. Value-in-use is calculated by discounting
anticipated future cash ﬂows from the asset. When it is
assumed that the asset’s value is lower than its carrying
amount, an impairment loss is recognised.
Impairment loss recognised in earlier periods is
reversed only in case of changes to the estimates used to
determine the recoverable amount. However, the reversal
amount may only be so high that book value after reversal
at most corresponds to the value at which the asset would
have been registered if it had not been impaired earlier.
Such reversals are recorded in the profit and loss.
P) BORROWING COSTS
Borrowing costs directly attributable to the acquisition
or construction of an asset that necessarily takes a
substantial period of time to get ready for its intended
use are capitalised as part of the cost of the asset. All other
borrowing costs are expensed in the period in which they
occur. Borrowing costs consist of interest and other costs
that an entity incurs in connection with the borrowing of
funds.
Q) EVENTS AFTER THE BALANCE SHEET DATE
New information after the balance sheet date regarding
the company’s financial position as of the balance sheet
date is taken into consideration in the annual accounts.
Events after the balance sheet date that do not affect the
company’s financial position as of the balance sheet date,
but which will have an impact on the company’s financial
position in the future are disclosed if significant.
R) SHARE-BASED PAYMENTS
Employees and management in Belships ASA have received
options to purchase company shares. Market value of the
awarded options is measured at time of the award and
charged to expense over the vesting period as a payroll
cost with corresponding increase in other paid-in equity.
The market value of the options granted is estimated using
the Black and Scholes option pricing model.
Consolidated
31
BELSHIPS Annual Report 2021
S) CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, bank
deposits and other short-term and in particular liquid
investments to be redeemed within 3 months. Cash and
cash equivalents are recognised at nominal values in the
balance sheet.
T) RESTRICTED DEPOSITS
Restricted cash include all deposits in separate accounts,
which will be used to cover accrued taxes withheld for
employees and deposits provided as security for certain
guarantees.
U) REPORTING BY SEGMENTS
Operating segments are components of a business that are
evaluated regularly by the chief operating decision maker
for the purpose of assessing performance and allocating
resources. The Groups chief operating decision maker is
the CEO. The Group is divided into the operating segments
dry bulk and technical management. The dry bulk segment
is further divided into 2 reportable segments: own ships
(owned or leased) and operation/commercial management
(Lighthouse Navigation), which is how the information is
presented to the Management and the Board. Transactions
between the business units are based on market
conditions. Segment turnover, segment costs and segment
results include transactions between segments.
V) RELATED PARTY TRANSACTIONS
Transactions with related parties are carried out at market
terms. See note 9 for further information.
W) CASH FLOW STATEMENT
The cash ﬂow statement has been prepared using the
indirect method. Liquid assets include cash, bank deposits
(restricted and unrestricted) and other short-term
investments which can be converted to cash within 3
months. For restricted deposits, see note 8.
X) CLASSIFICATION FINANCIAL POSITION
The Group presents assets and liabilities in statement of
financial position based on current/non-current classification.
An asset is considered current when it is:
• expected to be realised or intended to sold or consumed
in normal operating cycle
• held primarily for the purpose of trading
• expected to be realised within twelve months after the
reporting period
or
• cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period
All other assets are classified as non-current.
A liability is considered current when it is:
• expected to be settled in normal operating cycle
• held primarily for the purpose of trading
• due to be settled within twelve months after the
reporting period
or
• there is no unconditional right to defer the settlement
of the liability for at least twelve months after the
reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-
current assets and liabilities.
Y) NON-CURRENT ASSETS CLASSIFIED
AS HELD-FOR-SALE
Assets are classified as held-for-sale when the following
criteria are met:
• Management has committed to a plan to sell the asset
• The asset is available for immediate sale in its present
condition
• The sale of the asset is highly probable to be completed
within a one year period
• The asset is being actively marketed at a sale price that is
reasonable in relation to its current market value.
Assets classified as held-for-sale are measured at the
lower of their carrying value or fair value less the costs of
disposal. Held-for-sale assets are no longer depreciated
and are shown separately in the financial statements.
32
BELSHIPS Annual Report 2021
NOTE 3 USE OF ESTIMATES AND JUDGEMENT IN PREPARATION OF THE ANNUAL ACCOUNTS
Preparing the annual accounts in accordance with IFRS as
adopted by EU requires the management to use estimates
and assumptions affecting the amounts reported in the
accounts with notes. The management assumptions
and valuations are based on past experience and on
miscellaneous other factors assumed to be reasonable
and appropriate. This applies in particular to impairment
assessment of ships. Future events can entail a change in
these estimates. Estimates and the underlying assumptions
are evaluated on an ongoing basis.
Changes in accounting estimates are entered in the
period when the changes occur. If the changes also apply
to future periods, the effect is distributed over the current
and future periods and appears in the current note.
IMPAIRMENT ASSESSMENT – SHIPS
The Group assess whether there are any impairment
indicators present at the end of each reporting period. If
an impairment indicator is identified, the Group carries out
impairment tests pursuant to IAS 36. The Group also assess
whether previous recorded impairment charges should be
reversed.
NOTE 4 REVENUE
Belships has entered into period time charters with
various parties during 2021 The remaining ﬂeet have
been operated in the spot market by Belships’ subsidiary
Lighthouse Navigation. Net earnings in 2021 per ship for
the entire ﬂeet amount to USD 21 226 versus BSI index of
USD 25 431 net per day. The inherent lag in our business
PERIOD TIME CHARTERS
Impairment test calculations demand a significant
degree of estimation. The Group considers each ship
as a separate cash generating unit and has compared
recoverable amounts against carrying amounts at the end
of the year. Recoverable amounts are based on observable
market values or value in use calculations. Value-in-use
values have been derived from calculation of present value
of estimated cash ﬂows over the useful life of the ship.
The value-in-use calculations of the Group’s owned
and leased ships are mainly sensitive to changes in revenue
and cost of capital assumptions. Revenues have been based
on the ships current contracts and long-term historical
rates for equivalent ships. The useful life of assets and the
method of depreciation are evaluated yearly. Remaining
useful life is estimated on the date of the presentation of
accounts.
means that when the spot markets fall, our outperform-
ance will tend to be higher. Conversely, when the market
rises, our performance will tend to lag on a short-term
basis. It is also affected by a certain number of period
time charter contracts which contribute to our contract
coverage for 2022-2023.
Consolidated
Vessel USD per day
Commence-
ment
Duration
months Domicile
BELTOKYO *Index-linked Dec-21 22 - 26 Switzerland
BELRAY 23 000 Jul-21 21 - 24 Switzerland
BELFORCE 24 000 Sep-21 22 - 25 United States
BELFUJI 24 000 Jun-21 22 - 25 United States
BELAJA 22 250 Dec-21 12 - 14 United States
BELNIPPON 22 000 Jun-21 11 - 13 United States
BELISLAND 22 000 Sep-21 21 - 24 United States
BELFOREST 21 250 Jun-21 11 - 13 United States
BELMONT 10 500 Dec-20 11 - 13 United States
BELKNIGHT 35 500 Aug-21 5 - 7 Singapore
BELATLANTIC 35 000 Aug-21 3 - 6 Singapore
BELTRADER 34 000 Aug-21 5 - 7 Hong Kong
BELMAR 41 000 Sep-21 5 - 7 Hong Kong
BELGUARDIAN 24 700 Dec-21 10 - 12 Netherlands
BELHAWK 35 000 Nov-21 3 - 5 Netherlands
BELHAVEN 26 250 Oct-21 21 - 24 Netherlands
BELFAST 25 000 Dec-21 11 - 13 Netherlands
BELMOIRA 23 000 Jun-21 22 - 24 United States
BELINDA 27 000 Sep-21 10 - 12 Bermuda
BELSOUTH 25 250 Oct-21 23 - 25 Denmark
*TCE linked to 115% of BSI-58 index
33
BELSHIPS Annual Report 2021
NOTE 5 SEGMENT INFORMATION
The segment reporting is in accordance with the reporting
to the Chief Operating Decision Maker (CEO).
Segment performance is evaluated based on profit
or loss and is measured consistently with profit or loss
in the consolidated financial statements. The Group’s
financing and income taxes are managed on a Group basis
but are allocated to applicable operating segments.
Transfer prices between operating segments are on
an arm’s length basis in a manner similar to transactions
with third parties.
Own
1 January - 31 December 2021 ships
The group has one customer in 2021 which
accounted for more than 10% of the total turnover in the
group, no customer accounted for more than 10% in 2020.
Beyond that, the group has three customers in 2021 and
two customers in 2020 that account for more than 10% of
total turnover in any segment.
The operating segments have worldwide activities.
Shipping in general offers a global service covering major
global trade routes. There are no particular focus on
geographic region for ships as the charterers decide trade
routes on individual basis. Consequently, no geographical
segments have been presented other than the domicile of
the largest charterers listed under note 4.
Lighthouse Ship Admini- Group
Navigation management stration transactions Total
Gross freight revenue
Voyage expenses
190 530
-19 871
616 583
-147 278
0
0
0
0
1 124
2 220
808 237
-164 929
Net freight revenue
Management fees
170 659
0
469 305
9 530
0
4 576
0
0
3 344
-6 740
643 308
7 366
Operating income
Share of result from j/v and associated companies
T/C hire expenses
Ship operating expenses
Operating expenses ship management
General and administrative expenses
170 659
0
0
-52 174
0
-970
478 835 4 576 0 -3 396 650 674
14 305
-400 710
-1 679
-26 609
0
18
0
0
-4 147
0
0
0
0
0
-3 825
0
0
3 396
0
0
14 323
-400 710
-50 457
-30 756
-4 795
Operating expenses -53 144 -414 693 -4 129 -3 825 3 396 -472 395
Operating result (EBITDA)
Depreciation and amortisation
Gain on sale of ship
Other gains/(losses)
Operating result
Interest income
Interest expenses
Other financial items
Currency gains/(-losses)
117 515
-26 460
15 333
-6 739
99 649
763
-15 700
-2 022
-1 492
64 142
-1 872
0
2 691
64 961
45
-125
-11
48
447
-159
0
0
288
4
-10
-12
42
-3 825
-244
0
0
-4 069
3
-46
-263
77
0
0
0
0
0
0
0
0
0
178 279
-28 735
15 333
-4 048
160 829
815
-15 881
-2 308
-1 325
Net financial items -18 451 -43 24 -229 0 -18 699
Result before tax
Tax
81 198
0
64 918
-8 666
312
-42
-4 298
0
0
0
142 130
-8 708
Net result
Hereof majority interests
Hereof non-controlling interests
Assets
Liabilities
Cash ﬂow from operating activities
Cash ﬂow from investing activities
Cash ﬂow from financing activities
81 198
81 198
0
639 162
447 787
99 584
-19 598
-42 655
56 252 270 -4 298 0 133 422
26 914 169 -4 298 0 103 983
29 338 101 0 0 29 439
136 090 6 067 16 315 0 797 634
73 451 1 495 1 982 0 524 715
54 396 -880 -3 653 0 149 447
-676 0 0 0 -20 274
-4 160 0 -11 139 0 -57 954
34
BELSHIPS Annual Report 2021
Own Lighthouse Ship Admini- Group
1 January - 31 December 2020 ships Navigation management stration transactions Total
Gross freight revenue 77 955 142 377 0 0 0 220 332
Voyage expenses -16 953 -45 870 0 0 1 758 -61 065
Net freight revenue 61 002 96 507 0 0 1 758 159 267
Management fees 0 6 167 5 480 0 -5 552 6 095
Operating income 61 002 102 674 5 480 0 -3 794 165 362
Share of result from j/v and associated companies 0 3 058 -6 0 0 3 052
T/C hire expenses 0 -90 401 0 0 0 -90 401
Ship operating expenses -41 213 -1 256 0 0 3 794 -38 675
Operating expenses ship management 0 0 -3 490 0 0 -3 490
General and administrative expenses -358 -8 371 0 -3 133 0 -11 862
Operating expenses -41 571 -96 970 -3 496 -3 133 3 794 -141 376
EBITDA 19 431 5 704 1 984 -3 133 0 23 986
Depreciation and amortisation -24 717 -2 165 -221 -183 0 -27 286
Impairment -4 957 0 0 0 0 -4 957
Gain on sale of ship 2 469 0 0 0 0 2 469
Other gains 1 165 0 0 0 0 1 165
Operating result -6 609 3 539 1 763 -3 316 0 -4 623
Interest income 937 21 17 10 0 985
Interest expenses -13 537 -97 -16 -18 0 -13 668
Other financial items -724 -21 16 0 0 -729
Currency gains/(-losses) 926 -13 -38 0 0 875
Net financial items -12 398 -110 -21 -8 0 -12 537
Result before tax -19 007 3 429 1 742 -3 324 0 -17 160
Tax -250 6 -339 0 0 -583
Net result -19 257 3 435 1 403 -3 324 0 -17 743
Hereof majority interests -19 257 1 496 1 187 -3 324 0 -19 898
Hereof non-controlling interests 0 1 939 216 0 0 2 155
Assets 409 261 42 348 5 036 7 834 0 464 479
Liabilities 286 584 23 946 2 352 1 580 0 314 462
Cash ﬂow from operating activities 5 205 6 985 1 473 -2 058 0 11 606
Cash ﬂow from investing activities -18 307 0 0 764 0 -17 543
Cash ﬂow from financing activities -4 067 -355 -84 0 0 -4 506
Consolidated
35
BELSHIPS Annual Report 2021
NOTE 6 SHIPS AND OTHER FIXED ASSETS
Ships, owned Ships, right-to-use assets
Capitalised Capitalised Property,
drydocking drydocking plant and
Ships expenses Total Ships expenses Total Ships, total equipment
2021
Cost per 1 January 250 905 14 067 264 972 165 745 4 225 169 970 434 942 4 195
Additions 75 650 5 709 81 359 210 112 8 522 218 634 299 993 486
Disposals -56 307 -5 052 -61 359 -50 0 -50 -61 409 -140
Cost per 31 December 270 248 14 724 284 972 375 807 12 747 388 554 673 526 4 541
Depreciations per 1 January 38 217 6 344 44 561 11 547 1 280 12 827 57 388 23
Depreciation for the year** 9 451 2 359 11 810 13 676 1 381 15 057 26 867 658
Impairment 0 0 0 0 0 0 0 0
Disposals -12 788 -2 502 -15 290 0 0 0 -15 290 -1
Depreciations per 31 December 34 880 6 201 41 081 25 223 2 661 27 884 68 965 680
Book value per 31 December 235 368 8 523 243 891 350 584 10 086 360 670 604 561 3 861
Other non-depreciable assets 0 0 0 0 0 0 0 366
Total book value per 31 December 235 368 8 523 243 891 350 584 10 086 360 670 604 561 4 227
2020
Cost per 1 January 232 092 9 435 241 527 99 072 1 449 100 521 342 048 4 552
Additions 23 615 5 564 29 179 73 588 2 776 76 364 105 543 1 245
Disposals -4 802 -932 -5 734 -6 915 0 -6 915 -12 649 -1 602
Cost per 31 December 250 905 14 067 264 972 165 745 4 225 169 970 434 942 4 195
Depreciations per 1 January 23 485 4 990 28 475 7 418 383 7 801 36 276 453
Depreciation for the year** 9 989 2 378 12 367 10 959 897 11 856 24 223 792
Impairment 4 957 0 4 957 0 0 0 4 957 0
Disposals -214 -1 024 -1 238 -6 830 0 -6 830 -8 068 -1 222
Depreciations per 31 December 38 217 6 344 44 561 11 547 1 280 12 827 57 388 23
Book value per 31 December 212 688 7 723 220 411 154 198 2 945 157 143 377 554 4 172
Other non-depreciable assets 0 0 0 0 0 0 0 706
Total book value per 31 December 212 688 7 723 220 411 154 198 2 945 157 143 377 554 4 878
*
*
*
) The amount includes “Ships held for sale” amounting to 23 933 in 2021 and 5 917 in 2020.
**) Total depreciations in Consolidated statement of profit and loss includes depreciations on charter-party agreements which amounted to 1 210 in 2021 (2020: 2 271).
For more information about depreciations on charter-party agreements, see note 4 in our Annual report 2019.
See note 7 for further details related to period time charters.
36
BELSHIPS Annual Report 2021
SPESIFICATION OF THE GROUP’S SHIPS
Accumulated
Accumulated Capitalised depreciation
ordinary drydocking on capitalised
Built year Ownership Cost price depreciation expenses dd. expenses Book value
BELPAREIL 2015 100 % 24 492 -5 836 767 -268 19 155
BELSOUTH 2015 100 % 24 535 -5 570 1 143 -343 19 765
BELINDA 2016 100 % 24 569 -5 272 920 -263 19 954
BELMONT 2016 100 % 24 596 -5 216 986 -206 20 160
BELATLANTIC 2016 100 % 24 360 -4 888 1 620 -746 20 346
BELSTAR 2009 100 % 11 899 -1 819 1 120 -552 10 648
BELOCEAN 2011 100 % 13 912 -2 000 1 680 -306 13 286
BELLIGHT 2016 100 % 22 825 -2 285 1 184 -225 21 499
BELHAVEN 2016 100 % 23 410 -1 484 330 -285 21 971
BELTIGER 2017 100 % 21 650 -305 100 -100 21 345
BELTIDE 2016 100 % 27 000 -205 1 000 -33 27 762
BELFRIEND 2016 100 % 27 000 0 1 000 0 28 000
Ships, owned 270 248 -34 880 11 850 -3 327 243 891
BELFOREST 2015 BBC 24 920 -3 170 776 -194 22 332
BELISLAND* 2016 BBC 25 838 -3 233 1 136 -496 23 245
BELRAY 2019 BBC 27 351 -2 121 700 -303 25 627
BELAJA 2020 BBC 26 962 -1 847 1 000 -383 25 732
BELMOIRA 2020 BBC 26 961 -1 846 1 000 -383 25 732
BELFAST 2021 BBC 26 964 -880 1 000 -183 26 901
BELTRADER 2021 BBC 24 953 -295 1 000 -67 25 591
BELGUARDIAN 2021 BBC 24 953 -295 1 000 -67 25 591
BELKNIGHT 2021 BBC 25 453 -339 1 000 -67 26 047
BELFORCE 2021 BBC 26 343 -274 1 000 -50 27 019
BELMAR 2021 BBC 27 083 -322 1 000 -66 27 695
BELHAWK* 2015 BBC 21 437 -167 783 -33 22 020
BELTOKYO 2021 BBC 32 925 -100 1 000 -16 33 809
BELFUJI 2020 TC 15 876 -3 886 0 0 11 990
BELNIPPON 2018 TC 17 468 -7 478 0 0 9 990
ALAM MUTIARA 2012 TC 3 518 -2 169 0 0 1 349
Consolidated
Ships, right-of-use assets 379 005 -28 422 12 395 -2 308 360 670
Total ﬂeet 649 253 -63 302 24 245 -5 635 604 561
*
) BELISLAND and BELHAWK are accounted for as owned vessels in accordance with IAS 16. Belships has elected to present these vessels under ships,
right-to-use assets in the disclosure as this better reﬂects the economic substance of the entered into sale leaseback transactions.
FLEET
The group controlled a ﬂeet of 27 ships at the end of the
year. Ship transactions during the year include delivery
of the 7 newbuildings BELFAST, BELMAR, BELGUARDIAN,
BELTRADER, BELKNIGHT, BELFORCE and BELTOKYO,
delivery of the 4 secondhand vessels BELTIGER, BELHAWK,
BELFRIEND and BELTIDE and sale of the 7 oldest vessels
BELFORT, BELORIENT, BELFRI, BELCARGO, BELSTAR,
BELNOR and BELOCEAN. Belships also entered into
agreements for the acquisition of the 2 newbuilding
resales BELYAMATO and BELMONDO with expected
delivery in November 2022 and January 2023 respectively.
IMPAIRMENT TESTS
At the end of each reporting period, the Group assess
whether there are any impairment indicators present. The
company has concluded that no impairment indicators
were present at the end of the year.
37
NOTE 7 LEASE AGREEMENTS
The company considers all of its bareboat agreements
to meet the lease definition under IFRS 16, while the
long-term time charter contracts contain both lease and
service components. During 2021 the group entered into 9
bareboat lease agreements.
SPECIFICATION OF LEASE AGREEMENTS
Lease liabilities Built year Leased year Ownership
T/C HIRE EXPENSES
T/C hire expenses of USD 400.7m relates to chartering
activity in Lighthouse Navigation. Expenses comprise short-
term hire of tonnage and services from other shipowners.
Net present Net present
value of value of
Lease Purchase Discount lease purchase Non-
maturity option rate payments option Current current
Ships
BELRAY 2019 2019 Bareboat 2026 2023-2026 5.57% 10 214 12 539 1 147 21 606
BELNIPPON 2018 2018 T/C 2025 2022-2025 6.63% 13 377 - 1 948 11 429
BELISLAND* 2016 2021 Bareboat 2028 2024-2032 4.46% 12 802 7 513 1 315 19 000
BELFOREST 2015 2015 Bareboat 2025 2015-2025 5.88% 7 702 9 417 1 331 15 788
BELFUJI 2020 2020 T/C 2027 2024-2027 6.37% 10 226 - 2 331 7 895
BELMOIRA 2020 2020 Bareboat 2027 2024-2027 5.70% 11 177 11 743 1 110 21 810
BELAJA 2020 2020 Bareboat 2027 2024-2027 5.71% 11 277 11 736 1 103 21 910
ALAM MUTIARA 2012 T/C 2022 N/A 5.00% 1 397 - 1 397 -
BELFAST 2021 2021 Bareboat 2031 2025-2031 6.32% 16 566 7 652 794 23 424
BELMAR 2021 2021 Bareboat 2031 2025-2031 5.25% 18 936 8 747 1 050 26 633
BELTRADER 2021 2021 Bareboat 2028 2025-2031 5.11% 12 603 10 321 1 054 21 870
BELGUARDIAN 2021 2021 Bareboat 2028 2025-2031 5.11% 12 603 10 321 1 054 21 870
BELKNIGHT 2021 2021 Bareboat 2028 2024-2028 5.15% 12 882 10 222 1 090 22 014
BELFORCE 2021 2021 Bareboat 2027 2024-2028 4.65% 11 488 12 475 1 163 22 800
BELHAWK* 2015 2021 Bareboat 2028 2024-2031 4.46% 13 336 6 358 1 404 18 290
BELTOKYO 2021 2021 Bareboat 2027 2025-2033 4.54% 13 548 16 194 1 271 28 470
Total ships 190 134 135 238 20 562 304 810
Offices N/A N/A Lease 2021-2063 N/A 5-6% 1 065 389 676
*
) The bareboat charters for BELISLAND and BELHAWK are accounted for as financial liability under IFRS 9. Belships has elected to present these vessels
under lease liabilities in the disclosure as this better reﬂects the economic substance of the entered into sale leaseback transactions.
Lease maturity for bareboat leases is when Belships expect to exercise the purchase option.
PAYMENT SCHEDULE
2022 2023 2024 2025 2026 Subsequent Total
Lease payments 37 878 40 245 40 355 40 237 36 763 71 833 267 311
Exercising purchase options - - - - 33 387 177 695 211 082
Total 37 878 40 245 40 355 40 237 70 150 249 527 478 392
The payment schedule takes into account subsequent events, refer to disclosure 23.
LOAN FACILITIES
The group entered into a new USD 140m loan facility in
April 2019. The first tranche of USD 110m replaced existing
loan arrangements. The second tranche of USD 30m was
made available for ﬂeet expansion. Additional tranches
totalling USD 33.6m was made available for the acquisition
of BELFRIEND and BELTIDE during 2021. The initial loan
of USD 140m has a margin of 275 basis points over LIBOR
and matures in Q2 2024, the additional tranches totalling
USD 33.6m has a margin of 230 basis points over LIBOR and
matures in Q2 2024. The USD 14m loan acquired as part of
the acquisition of shares in Bellight AS was repaid during
the year. Total outstanding under the loan facilities at the
end of the year was USD 110.9m. Arrangement fee and
other transaction costs related to the mortgage debt were
initially recorded as a reduction of the debt in the balance
sheet, and subsequently amortised over the loan period in
accordance with the amortised cost principle.
The group has several covenant requirements
including requirements related to equity ratio, net
working capital and available liquidity. The group was in
compliance with all covenants during and at the end of the
year.
38
BELSHIPS Annual Report 2021
REPAYMENT SCHEDULE
Instalments - 9 414 9 414 9 414 9 414 78 015 115 671
Interests 3 239 3 107 2 843 2 580 2 316 1 092 15 177
Total 3 239 12 521 12 257 11 994 11 730 79 107 130 848
2022 2023 2024 2025
The repayment schedule takes into account subsequent events, refer to disclosure 23.
NOTE 8 BANK DEPOSITS
The Group’s bank balance amounted to USD 105 389
(2020: 34 190) at year end. Short-term restricted cash is
related to employees withholding tax.
NOTE 9 RELATED PARTIES
No loans are issued or security provided with respect to the
company’s shareholders or associated parties.
NOTE 10 RECEIVABLES AND LIABILITIES
Current receivables consist mainly of accrued revenues,
and receivables related to operation of the ships. Other
current liabilities mainly include current liability related to
the ordinary operation of the ships. All current receivables
and liabilities are due within 12 months.
Consolidated
2026 Subsequent Total
39
BELSHIPS Annual Report 2021
NOTE 11 INVESTMENTS AND GROUP COMPANIES
COMPANIES INCLUDED IN THE CONSOLIDATED ACCOUNTS
Business
location Main activity
Ownerchip/
voting
percentage
Belships Shipholding AS Oslo
Belships Shipholding II AS Oslo
Bel Ship I AS Oslo
Bel Ship II AS Oslo
Belpareil AS Oslo
Belsouth AS Oslo
Belinda AS Oslo
Belmot AS Oslo
Belatlantic AS Oslo
Belhaven AS Oslo
Beltiger AS Oslo
Beltide AS Oslo
Belfriend AS Oslo
Beleast AS Oslo
Belpacific AS Oslo
Belfort AS Oslo
Belorient AS Oslo
Belstar AS Oslo
Belnor Ship AS Oslo
Belocean AS Oslo
Belcargo AS Oslo
Belfri AS Oslo
Bellight AS Oslo
Belships Lighthouse AS Oslo
1
Lighthouse Navigation Management AS Oslo
2
Lighthouse Navigation Pte Ltd Singapore
3
Belships Management (Singapore) Pte Ltd Singapore
1
Lighthouse Navigation Management AS
Lighthouse Navigation AS Oslo
2
Lighthouse Navigation Pte Ltd
Afri-Bulk Navigation Private Limited Singapore
Lighthouse Maritime Limited Hong Kong
Lighthouse Navigation Co Ltd Thailand
Siam Thara Agency Co Ltd Thailand
3
Belships Management (Singapore) Pte Ltd
Belships (Tianjin) Ship Management & Consultancy Co Ltd China
Belships (Shanghai) Shipmanagement Co Ltd China
INVESTMENT IN JOINT VENTURES (JV) AND ASSOCIATED COMPANIES (AC)
Business
location
Orient Asia Lines Ltd Hong Kong
Orient Asia Lines BV The Netherlands
Lineco Holding BV The Netherlands
Belships (Myanmar) Shipmanagement Limited Myanmar
Belchem Philippine Incorporation Philippine
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Shipping 100.00 %
Commercial management 50.01 %
Commercial management 50.01 %
Technical management 100.00 %
Commercial management 100,00 %
Commercial management 100.00 %
Commercial management 100.00 %
Commercial management 100.00 %
Agency 57.50 %
Crewing 75.00 %
Crewing 100.00 %
Ownership/
voting
JV / AC percentage
JV 50.00 %
JV 50.00 %
JV 50.00 %
AC 40.00 %
AC 24.00 %
40
BELSHIPS Annual Report 2021
THE SHARE OF PROFIT AND LOSS AND BALANCE SHEET ITEMS FOR INVESTMENTS IN JOINT VENTURES
AND ASSOCIATES ARE RECOGNIZED BASED ON EQUITY METHOD:
Orient Asia
Lines BV
2021
Gross revenue 1 075 0 1 075
EBITDA 671 -5 666
EBIT 671 -5 666
Net result 671 27 938 28 609
Total comprehensive income 671 27 938 28 609
Group’s share of profit for the year 335 13 969 14 305
*
Non-current assets 0 25 472 25 472
Current assets 1 068 2 218 3 286
Total assets 1 068
Non-current liabilities 0
Current liabilties 376
Total liabilities
Total equity opening balance
Profit for the year
Capital distribution/reduction
376
70
671
-49
Total equity closing balance 692
Owners interest 346
Minor share in other associated companies
Book value of owner interest
*) A share of the result amounting to 18 in a minor associated company is not included in the table.
2020
Gross revenue
EBITDA
EBIT
Net result
Total comprehensive income
1 786
1 539
1 539
1 539
1 539
Group’s share of profit for the year
Non-current assets
Current assets
770
0
431
Total assets
Non-current liabilities
Current liabilities
431
0
361
Total liabilities
Total equity opening balance
Profit for the year
Capital distribution/reduction
361
1 523
1 539
-2 992
Total equity closing balance 70
Owner’s interest 35
Minor share in other associated companies
Book value of owner interests
LineCo
Holding BV
27 690
0
15
15
3 988
27 938
-4 888
27 039
13 519
0
0
0
0
4 564
2 282
5 595
176
5 771
0
1 923
1 923
1 373
4 564
-1 949
3 988
1 994
Total
28 758
0
391
391
4 058
28 609
-4 937
27 731
13 865
132
13 997
1 786
1 539
1 539
1 539
6 103
3 052
5 595
607
6 202
0
2 284
2 284
2 896
6 103
-4 941
4 058
2 029
94
2 123
Consolidated
41
BELSHIPS Annual Report 2021
NOTE 12 EQUITY
SHARE CAPITAL
Belships ASA’s 253 136 666 shares, each with a face value of
NOK 2.00, was as of 31 December 2021 distributed among
2990 shareholders. Each share has one vote.
NUMBER OF SHARES
2021 2020
Ordinary shares, issued
and paid-in per 1 January 228 175 404 212 224 705
Share issue 24 961 262 15 950 699
Ordinary shares, issued
and paid-in per 31 December 253 136 666 228 175 404
TREASURY SHARES
The company holds 371 800 treasury shares in total with an
average cost price of NOK 10.70 as of 31 December 2021.
AUTHORISATION TO ISSUE NEW SHARES
At the Annual general meeting in 2021 the Board received
authorisation to issue up to 120 million new shares. In
March 2021 a total of 20 million shares were issued at NOK
7.00 per share. In August 2021 a total of 4 961 262 shares
were issued at NOK 7.50 per share as part of consideration
for the vessel BELTIGER.
Dividend paid (NOK per share) 0.95 0.00
THE 20 LARGEST SHAREHOLDERS IN BELSHIPS ASA AT 31 DECEMBER 2021
Number of shares Percentage
1 Kontrari AS 103 000 000 40.69 %
2 Kontrazi AS 32 500 000 12.84 %
3 Sonata AS 12 747 492 5.04 %
4 LGT Bank AG 11 515 918 4.55 %
5 Jakob Hatteland Holding AS 11 000 000 4.35 %
6 Meglerkonto Innland DNB NOR Bank ASA 9 973 286 3.94 %
7 Wenaasgruppen AS 8 149 330 3.22 %
8 Jahatt AS 5 000 000 1.98 %
9 Saxo Bank A/S 3 176 972 1.26 %
10 Stavanger Forvaltning AS 2 750 000 1.09 %
11 UBS Switzerland AG 2 615 792 1.03 %
12 Barclays Capital Sec. Ltd Firm 2 259 911 0.89 %
13 J.P. Morgan Bank Luxembourg S.A. 1 765 050 0.70 %
14 Ole Ketil Teigen 1 500 000 0.59 %
15 J.P. Morgan Securities PLC 1 228 955 0.49 %
16 The Bank Of New York Mellon SA/NV 1 178 157 0.47 %
17 SIX SIS AG 1 164 580 0.46 %
18 Cape Invest AS 976 078 0.39 %
19 August Ringvold Agentur AS 810 509 0.32 %
20 Caceis Bank Spain SA 757 743 0.30 %
Total 20 largest shareholders 214 069 773 84.57 %
Other shareholders 39 066 893 15.43 %
Total number of shares 253 136 666 100.00 %
NUMBER OF SHARES OWNED BY BOARD MEMBERS IN BELSHIPS ASA
Note Number of shares Outstanding options
Peter Frølich (chairman) 100 000 0
Frode Teigen
1 135 500 000 0
Sverre J. Tidemand
2 12 747 492 0
Carl Erik Steen 179 154 0
Birthe Cecilie Lepsøe 7 500 0
Jorunn Seglem 35 000 0
Marianne Møgster 0 0
NUMBER OF SHARES OWNED BY THE MANAGEMENT IN BELSHIPS ASA
Lars Christian Skarsgård, CEO * 3 544 900 5 000 000
Osvald Fossholm, CFO
4 35 000 49 300
*) See note 16 for more information about separate share option plan.
42
BELSHIPS Annual Report 2021
1) Includes shares held by Kontrari AS and Kontrazi AS, companies controlled by Frode Teigen.
2) Includes shares held by Sonata AS, a company in which Sverre J. Tidemand controls.
3) Includes shares held by AS Torinitamar, a company owned by Lars Christian Skarsgård.
4) Includes shares held by Krino Invest AS, a company owned by Osvald Fossholm.
For changes in equity, see separate statement.
NOTE 13 EARNINGS PER SHARE
Basic earnings per share is the ratio between net result of
AVERAGE NUMBER OF SHARES
the year attributable to ordinary equity holders (i.e. net
profit with dividend deducted) and the issued average
Average number of issued shares 245 981 508
number of shares outstanding during the period.
Treasury shares -371 800
When calculating diluted earnings per share, net
Average number of options outstanding 5 049 300
result attributable to ordinary equity holders and the
Diluted average issued number of shares 250 659 008
number of issued average outstanding shares are adjusted
for share options. In “the denominator” all share options
(see note 16) which are “in-the-money” and exercisable
EARNINGS PER SHARE
are taken into consideration. In the calculations, share
options are considered as having been converted at the
2021
time they were awarded.
NOTE 14 SALARIES, NUMBER OF EMPLOYEES
2021 2020
Salaries 1 704 1 134
Social security tax 310 223
Pension expenses 140 134
Other allowances 537 581
Total payroll expenses 2 691 2 072
Number of full-time office staff in 2021 was 154 for the
Group of which 19 in the Norwegian companies.
Payroll expenses in Singapore and Bangkok are
reclassified as operating expenses ship management. See
note 20 for more details.
LOAN TO EMPLOYEES
No loans to employees exist at year-end 2021.
REMUNERATION
Chief executive Financial
2021 officer director
Salary 464 223
Pension expenses 23 24
Share-based payment expense 500 2
Other remuneration 2 18
Remuneration in accordance with the Accounting Act
§ 7-31b is presented in note 11 in the parent company
accounts. Other remuneration includes telephone,
insurance agreements etc.
Net result for the year 133 422
Earnings per share 0.54
Diluted earnings per share 0.53
BONUS
No bonus scheme was adopted for 2021.
SHARE OPTIONS
Share options to the employees are described in note 16.
The Chief Executive Officer has a separate option scheme
which is also described in note 16.
REMUNERATION TO THE BOARD
2021 2020
The Board 233 170
Audit committee 20 9
Nomination committee 6 5
Board members are not awarded share options
THE GROUP’S FEES TO THE AUDITOR
(EXCLUDING VAT)
2021 2020
Remuneration for audit services 288 242
Other assurance services 17 21
Assistance related to tax 49 76
Other audit related assistance 52 54
Total 406 393
Consolidated
43
NOTE 15 OTHER GENERAL ADMINISTRATIVE EXPENSES
2021 2020
Office expenses 179 223
Furniture, office supplies 336 222
Travelling, entertainment costs 17 35
Other services 1 227 630
Other general administrative expenses 345 309
Total administrative expenses 2 104 1 419
Administration expenses in Singapore and Bangkok are reclassified as operating expenses ship management.
See note 20 for more details.
NOTE 16 OPTIONS TO EMPLOYEES
At the Annual general meeting (AGM) in 2019, the Board
was authorised to issue up to 200 000 share options to
employees in Belships ASA. The option price is 105%
of closing share price on the day of the AGM. The
authorization is valid for two years. In accordance with this
authorisation, options to buy 200 000 shares at NOK 8.79
were awarded in November 2019. No options have been
exercised.
At the AGM in 2020, the Board was authorised to
issue up to 200 000 share options to employees. The option
price is 105% of closing share price on the day of the AGM.
The authorization is valid for two years. In accordance with
this authorisation, options to buy 200 000 shares at NOK
6.20 were awarded in November 2020. 16 200 options have
been exercised.
The above mentioned option programs require a
service period of 12 months before they can be exercised.
The option can be exercised after one year from the date
of the AGM which approved the option program and
runs unto the date of the next AGM. The option programs
include all employees in the parent company. The
employees must be employed in the company at the time
when the options can be exercised in order to have a right
to exercise them.
SUMMARY OF OUTSTANDING OPTIONS
EMPLOYEE SHARE OPTION PLAN
Fair value of options has been calculated using the Black
and Scholes options pricing model. The fair value of
options awarded in 2019 and 2020 was NOK 2.60 and NOK
1.17, respectively. The fair value of outstanding share
options are calculated at time of award and charged
against profit and loss over the period until they can be
exercised. The cost related to the share options above
amounted to 2 in 2021.
2021 2020
Outstanding options 1 January 5 400 000 5 400 000
Awarded 0 200 000
Exercised -16 200 0
Not exercised -334 500 -200 000
Outstanding options 31 December 5 049 300 5 400 000
SHARE OPTION PLAN CHIEF EXECUTIVE OFFICER
The CEO in Belships, Lars Christian Skarsgård was in March
2019 granted options to subscribe for up to five million
shares in the Company with an exercise price of NOK
6 per share. The options can be exercised in the period
between 36 months and 60 months from 15 March 2019.
The company may honour exercised options by delivery
of new shares in a share issue, by sale of existing shares,
or by way cash settlement (i.e. payment of the difference
between the market price of the shares less the exercise
price). Options that have not been exercised will lapse
if Skarsgård terminates his position as CEO or if he is
terminated from his position with cause. If Skarsgård is
terminated from his position without cause during the
first 12 months, 2/3 of the options will lapse and if he is
terminated from his position without cause during the
first 24 months, 1/3 of the options will lapse. If Skarsgård is
terminated without cause during the exercise period, the
options will lapse unless they are exercised within three
months.
The fair value of the options at time of award was
NOK 2.57 per share. The calculated cost of USD 500 has
been recognised as an expense in 2021.
44
BELSHIPS Annual Report 2021
The following forms the basis for the calculation:
Share price at the time the option was awarded: The share
price is set as equal to the stock exchange share price when
the option was awarded.
Exercise price per option: The exercise price was 105 %
of the stock exchange market price when the option was
awarded.
Volatility: Historic volatility set as indication of future
volatility. Expected volatility equals a historic volatility of
39%.
NOTE 17 PENSIONS
DEFINED CONTRIBUTION SCHEME
The Norwegian employees are member of the company’s
defined contribution scheme, which is in line with the
occupational pension scheme for employees in Norway
in accordance with the Act on Mandatory occupational
pensions. Annual payable cost is reﬂected in the income
statements and the company does not have any future
liabilities related to this scheme. Total costs amounted
to 144 (144) in 2021. Pension costs in Singapore and
Lighthouse Navigation AS in Oslo are reclassified as under
operating expenses in management companies and
amounted to 221 (203) in 2021.
Duration of options: It is assumed that all employees will
exercise their options when the service period has been
completed.
Dividend: Estimated dividend per share is NOK 0 per year.
Risk free interest rate: Interest rate used as a basis for calcu-
lating options is equal to the interest rate on government
bonds over the duration of the options, i.e. 2% for 2020.
Decrease in the number of employees: Expected reduction
is 0.
DEFINED BENEFIT SCHEME
In addition to defined contribution scheme, the legacy
Belships has unfunded pension liabilities which are
covered through the daily operations. These relate to early
retirement and pension to persons, that have not been
included in the defined contribution scheme. There are 4
retired persons included in this scheme.
Pension commitments are calculated by an
independent actuary. The basis for the calculation is shown
below. The mortality table (K2013) for Norway is used in
the calculations.
Social security costs are recorded based on net
pension obligation in the balance sheet included estimate
discrepancy. Change in the pension obligation for the
subsidiary Lighthouse Navigation Pte Ltd amounted to 111
(43) in 2021, and includes 20 persons.
2021 2020
Consolidated
ASSUMPTIONS
Discount rate 1.90 % 1.70 %
Future wage adjustment 2.75 % 2.25 %
Pension adjustment 0 % 0 %
G-adjustment 2.50 % 2.00 %
Return on pension plan assets 1.90 % 1.70 %
CHANGES IN THE PRESENT VALUE OF THE DEFINED BENEFIT OBLIGATION
1 January 760 745
Interest cost 118 27
Benefits paid -25 -28
Actuarial losses on obligation -3 10
Currency exchange gain/(loss) -8 6
As at 31 December
PENSION EXPENSES IN CONSOLIDATED ACCOUNTS
842 760
Pension expenses defined benefit scheme -4 -10
Pension expenses defined contribution scheme 144 144
Net pension expenses in consolidated accounts 140 134
Pension expenses in Singapore and Bangkok are reclassified as operating expenses ship management.
See note 20 for more details.
45
NOTE 18 FINANCIAL MARKET RISK
Financial market risk is considered to be the risk of changes
in foreign exchange rates and interest rates that may affect
the value of the Group’s assets, obligations and future cash
ﬂows.
Belships has a continuing focus on its risk exposure.
Derivatives may be used to reduce financial market risk,
but are only used to hedge specific exposures. When use of
derivatives are considered appropriate, only well-known
conventional derivative instruments are considered, i.e.
OTC agreements such as swaps, options and forward
freight agreements. Derivative transactions are only made
with reputable financial institutions. Credit risk relating to
these derivatives is therefore limited.
Belships is only using derivatives to reduce or
limit risk related to ﬂuctuations in interest and foreign
exchange rates.
Financial derivatives are not used to obtain financial
revenues through ﬂuctuating interest rates, nor are
financial derivatives used when there is no underlying
exposure.
INTEREST RATE RISK
The long-term interest rate is still at a low level. Belships
strategy is to manage interest risk. Hedging the Group’s
interest exposure is considered on an ongoing basis.
Entering into interest rate hedging agreements are based
on developments in the interest rate market and internal
analysis.
The table below shows the sensitivity related to
changes in interest rate levels. The calculation includes
total interest-bearing debt.
SENSITIVITY TO CHANGES IN INTEREST RATE LEVELS
2021
Change in the interest rate level in basis points -100/+100
Effect on result before tax 1109/-1109
AVERAGE EFFECTIVE INTEREST RATE ON DEBT (%)
2021
Interest bearing loans 3.11
Financial leases 5.34
CAPITAL STRUCTURE AND EQUITY CAPITAL
The primary objective of the Group’s capital
management is to achieve best possible credit
rating, and to maximize the shareholders values. The
company’s goal is to maintain an equity capital ratio of
at least 35%. The equity ratio is calculated by dividing
the book equity to total assets as shown below:
2021
Total equity as at 31 December 272 919
Total assets 797 634
Equity ratio as at 31 December 34%
Net debt is defined as interest-bearing debt (short
and long-term) and accounts payable less cash. Equity
comprises paid-in equity and retained earnings.
2021
Interest bearing debt 437 348
Other current liabilities 85 610
Cash reserves 105 389
Net debt 417 569
Equity 272 919
Total equity and net debt 690 488
Net debt ratio 40 %
LIQUIDITY RISK
Liquidity risk is the risk that suitable sources of funding
for the Group’s business activities may not be available.
Prudent liquidity risk management implies maintaining
sufficient cash balances, credit facilities and other
financial resources to maintain financial ﬂexibility under
dynamic market conditions. The Group’s principal source
of liquidity are operating cash ﬂows from its operational
assets. In addition to its operating cash ﬂows, the Group
relies on the debt capital markets for long-term funding.
At year-end 2021 the Group has outstanding interest
bearing debt of USD 110.9 million and USD 326.4 million
in lease liability. Available cash and cash equivalents
amount to USD 105.4 million.
CREDIT RISK
There will always be a credit risk related to the Group’s
business. Belships monitors this risk and the strategy is to
carefully select counterparts. The ships acquired through
the merger are secured on medium to long-term charter
contracts, toward two customers, Canpotex Shipping
Services Ltd and Cargill. Those customers are considered
to be solid and reputable counterparts. Other ships
operate under short-term spot engagements with a
broader customer base. The customers are often recurring,
however, the risk related to any specific customer’s
insolvency or inability to compensate for the services
provided is low.
CURRENCY RISK
The functional currency of Belships is USD as the majority
of the Group’s transactions are denominated in USD.
Currency risks arise in connection with transactions that
are completed in other currencies than USD, mainly in NOK
or THB. This applies mainly to administrative expenses,
salaries and declaration of ship purchase options.
46
BELSHIPS Annual Report 2021
FAIR VALUE MEASUREMENTS
Fair value is defined as present value of future cash ﬂows.
For the above derivatives, fair value is confirmed by
The valuation has the following classification of levels
the financial institution, which is counterpart. The fair
for measuring fair value:
values of current financial assets and liabilities carried at
Level 1: Quoted prices in active markets for identical assets
amortised cost approximate their carrying amounts. The
or liabilities.
long-term liabilities have ﬂoating interest rate with a fixed
margin. The margin is considered not to have significantly
Level 2: Valuation based on other observable factors,
changed since drawing date, thus carrying amount is
either directly (prices) or indirectly (derived from prices)
considered a reasonable estimate of fair value.
than quoted prices included within level 1 of the asset or
obligation.
Level 3: Valuation based on factors not taken from
observable markets (not observable assumptions).
SUMMARY OF FINANCIAL ASSETS AND OBLIGATIONS
Non-cash charges
Interest Changes in
01.01.2021 Cash Flows charges fair values Other 31.12.2021
Interest bearing loans
Financial leases*
141 737
139 740
-31 730
-10 925
-
-
-
-
-906
197 620
110 913
326 435
Total 281 447 -42 655 - - 196 714 437 348
*
) The bareboat charters for BELISLAND and BELHAWK are accounted for as financial liability under IFRS 9. Belships have elected to present these vessels
under Financial leases in the disclosure as this better reﬂects the economic substance of the entered into sale leaseback transactions.
ASSETS AND OBLIGATIONS MEASURED AT FAIR VALUE
Level 1 Level 2 Level 3 Total
2021 2020 2021 2020 2021 2020 2021 2020
Financial investments 542 764 542 764
Total 542 764 542 764
FINANCIAL LIABILITIES MEASURED
AT AMORTIZED COST
2021
Interest bearing loans 110 913
Financial leases 326 435
Total 437 348
The fair value of credit facilities and obligations under
financial leases is estimated by discounting future cash
ﬂows using rates currently available for debt on similar
items. The obligations under financial leases as of 31
December 2021 reﬂects best timing estimate of declaring
purchase options. Further, the lease agreements are newly
entered into, and there has not been any significant
changes in the credit risk of the Group. Fair value of the
obligations under financial leases are therefore not
considered to be materially different from book value as of
the reporting date. The group has not made observations
indicating that there has been any significant difference
between the fair value and carrying amount except for
un-amortised loan transaction costs.
Consolidated
47
NOTE 19 TAXES
TONNAGE TAX
The Companies subject to Tonnage tax are exempt from
ordinary tax on their shipping income. Companies within
the tonnage tax system in Norway and in Singapore pay a
tonnage fee based on the size of the ship. Tonnage tax is
recognized as other operating expenses.
RECONCILIATION OF THE YEAR’S INCOME TAX EXPENSE
ORDINARY TAXATION
Further, in Norway, Thailand and Singapore the Group
has several management companies subject to ordinary
income tax, with a tax rate from 16 % to 22 %. In Norway,
the Group has a significant tax loss carried forward,
currently without any convincing evidence of utilizing
the tax losses. Accordingly, no deferred tax asset related
to temporary differences is recorded related to the
Norwegian companies within ordinary tax regime.
In Singapore and in Thailand there are minimal
temporary differences related to the commercial and
ship management operation. In Thailand the Company
has a tax payable related to ordinary company taxation
of USD 4 914 (2020: USD -6) and payable tax in Singapore
amounting to USD 42 (2020: USD 339).
2021 2020
Result for the year before tax
Result from companies within the tonnage tax regime
142 130
-43 380
-17 160
-549
Net result for companies subject to ordinary company taxation
Statutory tax rate (Norway)
Estimated tax expense at statutory rate
Net non tax related expenses/(income)
Results from joint venture and associated companies
Difference between Norwegian, Singapore and Thailand regional national tax
Tax effect of deferred tax asset not recorded in the balance sheet incl. exchange rate effect
98 750
22 %
21 725
-970
-3 151
-4 115
-4 781
-17 709
22 %
-3 896
698
-671
-542
4 994
Total income tax expense/(income)
TAX LOSS CARRIED FORWARD
The Group had a tax loss carried forward of USD 66.4m as
at 31 December 2021 in Norway. No deferred tax benefits
are recognised in the balance sheet. Taxable income
subject to ordinary Norwegian taxation does not indicate
any reporting of deferred tax benefits.
Calculation of deferred taxes is based on temporary
differences between statutory books and tax values which
exist at the end of the year.
DEFERRED TAX PER 31 DECEMBER
Temporary differences
Deferred sale gain/(loss) fixed asset
Property, plant and equipment
Pensions
Other temporary differences
32 373
7 125
-244
-2 547
-1 344
31 239
-276
-764
Total temporary differences
Non-deductible interest cost carry forward ordinary tax regime
Tax loss carried forward ordinary tax regime
36 707
-2 730
-66 436
28 855
-6 969
-107 371
Net temporary differences
Nominal tax rate on deferred tax
-32 459
22 %
-85 485
22 %
8 708 583
In accordance with IAS 12 for treatment of taxes,
tax reducing temporary differences and tax increasing
temporary differences that are reversed, or can be reversed
in the same period and jurisdiction are assessed and the
amount recorded net.
Future tax payable in the Group is expected to be
related to ship management and commercial operation
in Singapore and in Thailand. In Norway the group has
significant tax losses.
2021 2020
Deferred tax assets -7 141 -18 807
Deferred tax assets recognised in the Balance sheet 0 0
Deferred tax assets not recognised in the Balance sheet -7 141 -18 807
48
BELSHIPS Annual Report 2021
NOTE 20 SPECIFICATIONS OPERATING EXPENSES AND OTHER FINANCIAL ITEMS
2021 2020
Ship operating expenses
Crew expenses 23 949 19 255
Maintenance and spare parts 4 759 8 292
Insurance 2 529 2 178
Other ship operating expenses 19 220 8 950
Total ship operating expenses 50 457 38 675
Operating expenses management companies
Administration costs 25 017 8 230
General & selling expenses 4 481 2 666
Fixed costs 1 257 965
Total operating expenses management companies 30 756 11 861
NOTE 21 ENVIRONMENTAL ISSUES
The company has not been charged any penalties due
to breach of environmental rules and regulations, and is
not committed to implement any specific actions in that
respect.
NOTE 22 CONTINGENCIES
The Board is not aware of any material disputes the
company may be in involved in as at 31 December 2021.
NOTE 23 SUBSEQUENT EVENTS
Belships has entered into agreements to sell and lease back
BELLIGHT and BELFOREST on bareboat charters for 10 and
11.5 years, respectively. The lease agreements have fixed
rates for the entire period with an average cost of capital
of about 4.4 per cent. Net cash effect upon delivery will be
about USD 14.0m in total in Q1 2022.
Belships has agreed to a new USD 116m loan
facility. Proceeds from the facility will be used to repay all
outstanding amounts under the existing credit facility with
two vessels being left unencumbered. The new loan has
a reduced margin of 225 basis points and a loan-to-value
ratio of 55 per cent, with the first instalment in 2023 and
final maturity in 2027. Lenders for the new loan facility
are DNB Bank and Sparebank 1 SR-Bank. The agreement
is conditional upon certain steps to be completed by the
parties involved. Conclusion is expected within Q1 2022.
Belships has entered into agreement to sell and
lease back BELYAMATO. The bareboat charter is for 10
years. The lease agreement has a fixed rate for the entire
period with an average cost of capital of 4.6 per cent.
Belships paid a sum of USD 4.0m as downpayment upon
signing the agreement.
Belships has entered into agreement for a period
time charter contract for a period of about 22-26 months
at a gross rate of USD 23 750 per day. Belships has entered
into agreement to sell and lease back BELMONDO. The
bareboat charter is for 10 years. The lease agreement has
a fixed rate for the entire period with an average cost of
capital of 4.8 per cent.
Belships paid a sum of USD 4.5m as downpayment
upon signing the agreement.
Consolidated
49