SOLID RESULTS IN CHALLENGING MARKETS, FURTHER GROWTH IN THE PIPELINE
HIGHLIGHTS
- EBITDA of
USD 33.0m - Net result of
USD 15.3m - Declared dividend of
NOK 0.45 per share - TCE of
USD 17 905 gross per day for owned fleet – 78 per cent outperformance of market - Added 2x Ultramax newbuildings with delivery 2026-27, zero cash invested
- Prepaid
USD 13.2m of bank debt – two debt free vessels in the fleet - 87 per cent of ship days in Q4 2023 are fixed at
USD 17 800 gross per day - 42 per cent of ship days in the next four quarters are fixed at
USD 17 800 gross per day - Cash breakeven for 2024 is expected to remain unchanged at
USD 10 900 per day - The newest Supra/Ultramax fleet with 38 ships including eight newbuildings
Financial results commentary
Time charter equivalent earnings (TCE) in the quarter was
Ship operating expenses amounted to
Fleet status
One vessel was drydocked in the quarter. The remaining fleet sailed without significant off-hire with a total of 2 759 on-hire vessel days in Q3 2023.
Contract coverage | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | |
Fixed-rate contracts | 87% | 50% | 17% | 13% | |
Average fixed-rate (USD/day) | 17 800 | 17 800 | 17 600 | 17 300 | |
Index-linked contracts | 10% | 17% | 13% | 3% | |
Open | 3% | 33% | 70% | 84% | |
100% | 100% | 100% | 100% |
Estimated cash breakeven for 2023 is
Cash breakeven for 2024 is expected to remain unchanged at
Transactions
In August, BELVEDERE was delivered to its new owner. Net cash after repayment of outstanding loan was
In September,
Newbuildings
64 000 dwt Ultramax bulk carriers under construction at Japanese shipyards:
NEWBUILD 1 expected delivery Q4 2024
NEWBUILD 2 expected delivery Q4 2025
NEWBUILD 3 expected delivery Q4 2025-Q1 2026
NEWBUILD 4 expected delivery Q1 2026
NEWBUILD 5 expected delivery H2 2026
NEWBUILD 6 expected delivery H2 2026 (new)
NEWBUILD 7 expected delivery H1 2027
NEWBUILD 8 expected delivery Q2-Q3 2027 (new)
The vessels are leased on time charter for a period of 7 to 10 years from date of delivery with purchase options around current market levels during the charter.
The Japanese-designed bulk carriers entering the fleet represent the highest quality and lowest fuel consumption available in the market today and will contribute to further reduce Belships’ carbon emissions on an intensity-basis.
Lighthouse Navigation
Lighthouse Navigation recorded an EBITDA of
The average EBITDA per quarter in the last five years has been
Sustainability
In July,
Belships’ vessels are compliant with the new emission regulations from IMO without additional investments signalling the competitive advantage of owning a modern fleet.
Financial and corporate matters
At the end of the quarter, cash and cash equivalents totalled
Leasing liabilities at the end of the quarter amounted to
All lease agreements have fixed interest rates for the entire duration of the contracts and all purchase options are denominated in USD.
At the end of the quarter, book value per share amounted to
Dividend policy
Dividend payment
Based on the financial result in Q3 2023 the Board declared a dividend payment of
This brings the total dividends paid out since Q2 2021 to
Market highlights
In the third quarter, the Baltic Supramax Index (BSI-58) averaged
Asset values were stable during the quarter, however, in September values started to increase again and this trend continued into the fourth quarter. Still, asset values are lower now compared to the start of the year. New and modern vessels continue to be markedly higher in demand than less economical older ships.
According to Fearnleys, preliminary estimates for Q3 2023 shipment volumes were 282 million tonnes, an all-time high again, after 275 million tonnes in the preceding quarter. The highest growth (quarter-on-quarter) was seen in minor bulks (7 per cent), coal (7 per cent) and grains (4 per cent). Iron Ore (-15 per cent), breakbulk cargoes (-11 per cent) and steel products (-7 per cent) contributed negatively. Fertilizer shipments were up slightly in volume, by two per cent. Importantly, overall volumes continue to grow and show that the demand side is stable and resilient despite the turmoil in financial markets and concerns over inflation and interest rates.
Port congestion, as measured by the average waiting time in port for ships to discharge, continued to reduce during the third quarter. Coupled with shorter, albeit marginal, average voyage durations – this contributed to slightly less favourable supply-side fundamentals. Average sailing speeds remain relatively unchanged. Current levels of port congestion are now at pre-Covid normalised levels. As we have highlighted before, changes in port congestion, voyage duration and/or vessel speeds affect the overall vessel efficiency in the dry bulk market on a short-term basis more than a change in the number of newbuildings in the orderbook.
39 Supra/Ultramax vessels were delivered in Q3 2023, compared to 33 vessels in the previous quarter, according to Fearnleys. In October, only seven vessels were delivered, and 19 remain on schedule to be delivered before year-end.
Year-on-year, the fleet grew by 3.5 per cent in the third quarter, about the same rate as in the second quarter. According to Fearnleys, fleet growth is likely to remain around this level for the next year. The number of ships delivered per quarter compares to an existing fleet of Supra/Ultramax vessels on the water today of about 4 100 in total. With an orderbook-to-fleet of about 7-8 per cent, we are approaching the lowest rate of supply growth in 30 years.
Relatively low newbuilding activity for dry bulk continues as the lack of conviction and alternatives for fuel and propulsion systems appear to restrain new orders. Higher input costs as well as full orderbooks and continued high demand for other vessel segments dictate the position with shipyards. Available delivery positions with reputable shipyards remain distant, at least two and a half years ahead. For the premier Japanese shipyards, available delivery positions are even later – more than 3 years from now.
Outlook
The Baltic Exchange Supramax index is currently about
Lighthouse Navigation continues to deliver good results. They have reduced positions ahead of an expected slower end-of-year period in the markets. We expect continued profitability contributing to Belships’ dividend capacity.
Furthermore, we have five vessels chartered out on floating index-rate contracts. This is because we believe the rates and market sentiment has a good probability of improving during the next year, and
With eight Ultramax newbuildings under construction for delivery between 2024 and 2027,
We are focused on financial discipline and returning capital to our shareholders. A competitive return for our shareholders is to be obtained through an increase in the value of the company’s shares and the payment of dividends, as measured by the total return.
Based on Belships’ current contract coverage, we expect to generate free cash flow and continue to pay quarterly dividends.
THE BOARD OF BELSHIPS ASA
For further information, please contact Lars Christian Skarsgård,
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
Attachments
Belships ASA - Report Q3 2023- Belships Company Presentation Q3 2023
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