LIQUIDITY EVENT FOR SHAREHOLDERS
HIGHLIGHTS Q4
- EBITDA of USD 19.4m
- Net result of USD 7.5m
- TCE of USD 15 552 gross per day for owned fleet
- Agreement for recommended voluntary cash offer
- No dividend declared
- 72 per cent of ship days in Q1 2025 are fixed at USD 13 600 gross per day
- 27 per cent of ship days in the next four quarters are fixed at USD 14 350 gross per day
- Uniform fleet of 42x Ultramax vessels including 12x newbuildings
Overview of voluntary cash offer by Blue Northern BLK to acquire all shares in Belships
- On December 19, 2024, Belships ASA ("Belships") announced an agreement with Blue Northern BLK Ltd (the "Offeror") for the Offeror to make a voluntary cash offer to all shareholders in Belships
- The Offeror is a company established by Entrust Global, a global asset manager with multiple investments within shipping and offshore
- The offer price is NOK 20.5 per share (adjusted for any dividends distributed before the completion of the offer). The settlement will be in cash (NOK), and the offer price represents a premium of 29.4% compared to the last closing price before the agreement was announced on December 19, 2024
- A total of 68.43% of Belships' shareholders (including board members) have pre-accepted the offer. The offer is also recommended by the Belships' board, which unanimously advises Belships' shareholders to accept the offer
- Belships' board has received a fairness opinion from Nordea Bank Abp, filial i Norge concluding that the offer price is fair, from a financial point of view
- The offer is described in an offer document dated January 21, 2025, which has been approved by Oslo Børs (the "Offer Document")
- ABG Sundal Collier is the financial advisor to the Offeror. The Offer Document and acceptance form is available on ABG Sundal Collier's website (www.abgsc.com/transactions)
- Shareholders in Belships who wish to accept the offer can do so by returning the acceptance form to ABG Sundal Collier prior the expiration of the offer period on February 20, 2025 at 16:30 (CET) (subject to a possible extension of the offer period by the Offeror) in accordance with the procedures described in the Offer Document
Please refer to the Offer Document for complete information about the offer. This description is only intended as a summary of certain points in the Offer Document. The offer can only be accepted based on the Offer Document and the full terms and conditions stated therein.
Financial results commentary
Belships reports a net result of USD 7.5m compared to USD 19.3m in the previous quarter (which included extraordinary book gains of about USD 6m). Freight market rates were also lower in the fourth quarter, with the Baltic Exchange index for Ultramax vessels (BSI-63) averaging USD 13 865 gross per day compared to USD 16 591 in the previous quarter. However, Belships continued to benefit from stronger contract coverage resulting in time charter equivalent earnings (TCE) of USD 15 552 gross per vessel per day.
Fleet status
Three vessels were drydocked in the quarter. The remaining fleet sailed without significant off-hire with a total of 2 584 on-hire vessel days in the quarter.
Belships' vessels are not transiting the Red Sea nor the Black Sea, and none of our vessels have been involved in any related incidents.
| Contract coverage | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | |
| Fixed-rate contracts | 72% | 17% | 14% | 7% | |
| Average fixed-rate (USD/day) | 13 600 | 15 500 | 15 900 | 15 900 | |
| Index-linked contracts | 19% | 40% | 37% | 25% | |
| Open/Uncontracted | 9% | 43% | 49% | 68% | |
| 100% | 100% | 100% | 100% |
Belships has increased the number of vessels chartered out on floating index-linked contracts at an average of 103 per cent to the corresponding Baltic index for Ultramax vessels (BSI-63). Belships has the option to convert any portion of the remaining period to a fixed rate, based on the prevailing FFA curve at any given time.
Belships will take delivery of a 64 000 dwt Japanese-built Ultramax (2024-built) during Q1 2025 and the vessel will be named BELSAKURA. The purchase price is USD 41.0m and the intention is to utilise our available Accordian Tranche which implies financing for 60 per cent of the purchase price and the remaining will be financed from the company's available cash.
Newbuildings
Japanese-design 64 000 dwt Ultramax bulk carriers
Updated delivery schedule:
BELFORTUNE expected delivery Q4 2025
BELFOX expected delivery Q4 2025
BELFUTURE expected delivery Q2 2026
BELAVANTI expected delivery Q4 2026
BELTEMPO expected delivery Q4 2026
BELROSSO expected delivery Q1 2027
BELSTAR expected delivery Q3 2027
BELCARGO expected delivery Q3 2027
BELVICTORY expected delivery Q3 2027
BELNOR expected delivery Q1 2028
BELOCEAN expected delivery Q3 2028
BELFRIEND expected delivery Q3 2028
All vessels are leased on time charter for periods up to a maximum of 7 to 10 years from delivery, with purchase options around current market levels. There is no obligation to purchase any of the vessels. Cash breakeven for the vessels upon delivery is about USD 14 300 per day on average. Belships is not using any equity, therefore this newbuilding program will not have any impact on cash and dividend capacity during the construction period.
The Japanese-design 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.
Operating business
Norwegian Bulk Carriers (NBC) recorded an EBITDA of USD 0.1m for the quarter. NBC continues to demonstrate good risk management with limited exposure and a cautious approach amidst the market uncertainty which was observed towards the end of 2024 and into the new year.
The average EBITDA per quarter in the last five years for Norwegian Bulk Carriers has been USD 2.5m.
Sustainability
Belships aims for high standards in corporate governance and is well placed to deliver emission cuts in line with industry ambitions for 2030. Belships publishes a sustainability report on an annual basis (ESG Report) reflecting our commitment to transparency and efforts to meet investor and stakeholder expectations.
Belships was ranked in the top quartile in the Webber Research Report: 2024 ESG Scorecard. The research report aims to identify where each company ranks against its listed peers within the shipping industry.
Financial and corporate matters
At the end of the quarter, cash and cash equivalents totalled USD 100.2m, whilst interest bearing bank debt amounted to USD 81.0m.
The purchase of the leased vessel BELMAR (2021) was concluded during the quarter. The purchase option for the vessel was about USD 25.5m which is significantly below current market value. The acquisition was financed from the company's available cash.
Belships now has three unencumbered vessels.
Leasing liabilities at the end of the quarter amounted to USD 444.3m, details on a per-vessel basis can be found in disclosure 4 of the financial statement.
All leased vessels are calculated with the assumption that purchase options to acquire the vessels will be exercised. However, Belships has no obligation to acquire any of the leased vessels. 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 NOK 11.74 (USD 1.03), corresponding to a book equity ratio of 32 per cent. Value-adjusted equity is significantly higher.
Dividend policy
Belships ASA aims to distribute quarterly cash dividends targeting about 50 per cent of net result adjusted for non-recurring items. Other surplus cash flow may be used for accelerated amortisation of debt, share buy-backs or vessel acquisitions considered to be accretive to shareholders' value.
Dividend payments
The Board has elected not to declare a dividend for the quarter due to the ongoing recommended voluntary cash tender offer.
Any dividend paid out during the voluntary offer period would reduce the offer price by an equal amount.
Market highlights
In the fourth quarter, the Baltic index for Ultramax vessels (BSI-63) averaged USD 13 865 per day - down from USD 16 591 per day in the preceding quarter. According to Fearnleys, preliminary estimates for Q4 2024 shipment volumes were 282 million tonnes, compared to 276 million tons in the third quarter and 283 million tons shipped in the second quarter. Compared to a year earlier, shipments of coal, iron ore, and grains were lower, whereas steels, minor bulks, and fertilizers displayed positive growth. Total shipment volume growth was 1.5 per cent year-on-year in the fourth quarter.
Port congestion, as measured by the average waiting time in port for ships to discharge, increased compared to the third quarter, as did waiting times in loading ports. However, the average sea voyage duration fell, so the total average voyage duration increased by just 0.5 days. Average vessel speeds remain relatively low, this seems to follow a trend over the past several years of decreasing normal sailing speeds.
29 Supra/Ultramax vessels were delivered in the fourth quarter of 2024, compared to 47 vessels in the third quarter, and a total of 168 for the full year, according to Fearnleys. In January, 24 vessels were delivered, and a further 164 are scheduled to be delivered during this year. This compares to an existing fleet of Supra/Ultramax vessels on the water today of about 4 100 in total. Fleet growth has increased slightly in the last months, to 5 per cent. The rate of fleet growth can be expected to remain around this level in 2025, then decrease in 2026 and 2027. The total dry bulk orderbook to existing fleet ratio stands at just below 10 per cent, which is still at historical lows.
Relatively low newbuilding activity for dry bulk continues, as higher prices, full orderbooks, and continued high demand for other vessel segments dictate the position with shipyards. Lack of conviction and alternatives for fuel and propulsion systems also appear to restrain new orders to some extent. Available delivery positions with reputable shipyards appear increasingly distant, with some new orders being reported in 2027 and 2028. A potential lead time of up to four years for a bulk carrier is unprecedented.
Outlook
The average spot market rate for Ultramax vessels according to the Baltic Exchange is currently at about USD 9 000, displaying a weak trend so far in the new year. However, this is normally the low season in the dry bulk market and the market is expected to improve into the second quarter. The FFA market (Forward Freight Agreements) currently indicates a market average of around USD 13 000 for the next twelve months. Ship values have showed softer development so far in 2025. Modern and economical vessels continue to be in higher demand than older vintages.
Belships has fixed-rate contract coverage for 72 per cent of ship days in Q1 2025 at about USD 13 600 per day, and 27 per cent of ship days in the next four quarters at about USD 14 350 per day. All period contracts are fixed with highly reputable and recognised charterers.
Belships financing has been secured for many years ahead, and most of the debt is with fixed interest rates significantly below current market levels.
With 12x Ultramax newbuildings under construction for delivery between 2025 and 2028, Belships will be taking delivery of new vessels whilst the orderbook and the rate of supply growth approaches the lowest levels in 30 years. We believe the best way for Belships to approach the green shift is to own and operate the most efficient vessels currently available, with a financing structure that gives unparalleled optionality and flexibility.
Over the next four years, Belships has a very flexible position where the company can decide to either utilise the newbuilding program for growth, or as replacement for existing tonnage. In case of the latter, this would potentially free up substantial capital.
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.
The voluntary offer which was launched in January is unanimously recommended by the Board of Belships ASA.
11 February 2025
THE BOARD OF BELSHIPS ASA
For further information, please contact Lars Christian Skarsgård, Belships CEO, phone +47 977 68 061 or e-mail LCS@belships.no
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
