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Belships
Investor Presentation • Aug 22, 2024
3553_rns_2024-08-22_cde95849-c3fa-49b0-a432-0dd76f08a7fa.pdf
Investor Presentation
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COMPANY PRESENTATION | Q2 AUGUST 2024
Investment Case
Stable demand side, commodity driven and correlated with GDP
Reduced Yard capacity, limited availability before 2027
Uncertainty on design and fuel
Modern and uniform fleet, versatile segment
12x Newbuildings under construction
All growth financed without equity Fixed interest rates, unique optionality Lower risk to new regulations Higher leverage, lower costs
Highlights – Q2 2024
STEADY COURSE – SOLID RESULTS AND CONTINUED DIVIDEND
- EBITDA of USD 29.3m including USD 2.9m from operating business
- Net result of USD 18.9m
- Declared dividend of NOK 0.55 per share
- Sold two debt-free Supramax vessels (2016-built) for a total of USD 56.6m
- Declared purchase option for BELMAR (2021-built) for a price of USD 25.5m
- Acquired 2024-built Ultramax bulk carrier for USD 41m to be delivered in Q1 2025
- Expanded newbuilding program with two new leased vessels in 2027 and 2028
- TCE of USD 16 982 gross per day for owned fleet
- 83 per cent of ship days in Q3 2024 are fixed at USD 16 800 gross per day
- 41 per cent of ship days in the next four quarters are fixed at USD 16 650 gross per day
- Cash breakeven for 2024 of about USD 10 900 per day per vessel
- 2028
New and Simplified Structure
Dry Bulk Operator
Proven Track Record
Listed on the Oslo Stock Exchange
Modernised and increased the fleet from seven to 41x ships
STRATEGIC DIVESTMENTS
Simplified and renewed operating business and outsourced technical management
CREATING VALUE
GOVERNANCE
transparency
Norwegian-based corporate structure which protects shareholder rights and promotes
Dividends and share appreciation resulting in the highest total return of all listed dry bulk companies*
29x Vessels on the water.....
JAPANESE LEASE
20x Vessels
Fixed interest rates, zero covenants
With purchase options, no obligations
Lease durations until 2027-2034
Average cost of debt 5.2 per cent, all-in
BANK FINANCE
7x Vessels
Margin 195 bps
Maturity in 2029
USD 100m undrawn capacity
DEBT FREE
2x Vessels
BELSOUTH (2015)
BELINDA (2016)
......and 12x Newbuildings coming in 2024-2028
| and 12x Newbuildings coming | in 2024-2028 | |
|---|---|---|
| DELIVERIES | INVESTMENT HIGHLIGTS | |
| Q3 2024 | Q1 2027 | Japanese-built 64 000 dwt Ultramax represents the |
| Q4 2025 | Q3 2027 | highest quality and efficiency available today |
| Q4 2025 | Q4 2027 | Japanese lease financing with fixed costs |
| Q2 2026 | Q1 2028 | 100% leverage – No cash invested |
| Q4 2026 | Q2 2028 | Cost of capital 6.5 per cent all in |
| Q4 2026 | Q3 2028 | 7 years duration with optional period up to 10 years |
| Purchase options during the charter, all in USD |
||
| No obligation to acquire any of the vessels |
||
| A levered bet on a historically low order book |
No cash invested, zero impact on dividend capacity during construction
Ultramax – Superior Risk/Reward
Average earnings per day last 7 years
Supramax: BSI58, Kamsarmax: BPI82, Capesize: BCI 5TC sourced: Baltic Exchange as of Jul 2024
Improving Markets, Strong Start to 2024 Current freight market - Spot and forward
Ultramax Spot Forward market
RATES – The Baltic Ultramax Index (BSI-63) averaged 17 065 per day in Q2 2024
DEMAND – Overall volumes continue to grow and shows that the demand side is stable and resilient. According to Fearnleys, shipment volumes in Q2 2024 were 291 million tonnes, all time high, marginally up from the record last year. The highest growth (quarter-on-quarter) was seen in iron ore and coal, both up 10 %+, whilst steels, fertilizers, minor bulks and grains increased by between 2.5-4 %. Suez Canal remains closed for normal trade. SENTIMENT – The average spot rate for an Ultramax is currently around
Transits through Panama Canal is beginning to normalize, whilst the
USD 16 500 and according to the FFA market it is expected to average USD 17 500 per day for the rest of 2024. If these market levels continue, we believe ship values may increase further.
Historically Low Supply Side
| M. DWT | No. | Built | |
|---|---|---|---|
| 9.46 | 187 | Pre-2000 | |
| 17.69 | 346 | 2000-2004 | |
| 33.11 | 602 | 2005-2009 | |
| 83.14 | 1,464 | 2010-2014 | |
| 52.11 | 851 | 2015-2019 | |
| 38.20 | 625 | 2020-2024 | |
| 233.71 | 4,075 | Total |
The order book is about 9 per cent of the sailing fleet
Current fleet growth is about 3.5 per cent annualised
Only 1/3 of the existing fleet are modern ECO type Ultramax vessels
There is not available shipyard capacity to renew or the change the fleet within the next decade
Significant de-risk: Highly Profitable Contract Coverage
Period Contract coverage Rate (USD/day)
2024 Cash break even of USD 10 900 per day per vessel
Payouts since dividend policy Q2 2021
Creating value and returning it to shareholders
Solid Platform: Renewed and Simplified
The Newest Ultramax Fleet
No need for modernisation
Low Cost, Long Duration Financing
Fixed interest rates, unique optionality
Market Dynamics
Rising ship values, historically low supply-side
Dividend Visibility
Contract coverage and high cash position
Value
Discount to Net Asset Values and favourable risk/reward
Important Information
This presentation has been prepared by Belships ASA (the "Company") exclusively for information purposes. This presentation is confidential and may not be copied, distributed, reproduced, published or passed on, directly or indirectly, in whole or in part, or disclosed by any recipient, to any other person (whether within or outside such person's organisation or firm) or published in whole or in part, by any medium or in any form for any purpose or under any circumstances.
The information in this presentation speaks as of 19 August 2024 and the Company assumes no obligation to amend, correct or update the information in this presentation. None of the Company or any of their respective directors, officers, employees, agents, affiliates, advisors or any person acting on their behalf, shall have any liability whatsoever, (whether direct or indirect, in contract, tort or otherwise) for any loss whatsoever arising from any use of this presentation, or otherwise arising in connection with this presentation. The contents of this presentation shall not be construed as legal, business or tax advice, and the furnishing of this presentation should not be considered as the giving of investment advice by the Company or any of its directors, officers, agents, employees or advisers. Prospective investors should consult its own legal, business or tax advisor as to legal, business or tax advice.
This presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forwardlooking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in this presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or subsidiaries or any such person's directors, officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecasted developments. This presentation has been prepared for information purposes only, and does not constitute or form part of, and should not be construed as, any offer, invitation or recommendation to purchase, sell or subscribe for any securities in any jurisdiction and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with, or act as an inducement to enter into, any investment activity. This presentation is subject to Norwegian law and any dispute arising in respect of this presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo district court as legal venue.
Consolidated Statement of Income and Financial Position
| Q2 | Q2 | YTD Q2 | YTD Q2 | ||||
|---|---|---|---|---|---|---|---|
| USD 1 000 | 2024 | 2023 | 2024 | 2023 | 2023 | ||
| Gross freight revenue | Note | 84 562 | 145 473 | 239 340 | 293 337 | 563 441 | |
| Voyage expenses | -15 086 | -30 898 | -57 848 | -67 666 | -139 085 | ||
| Net freight revenue | 2 | 69 476 | 114 575 | 181 492 | 225 671 | 424 356 | |
| Management fees | 0 | 624 | 1 507 | 1 155 | 3 408 | ||
| Operating income | 2 | 69 476 | 115 199 | 182 999 | 226 826 | 427 764 | |
| Share of result from j/v and assoc. comp. | 0 | 1 379 | 2 206 | 4 809 | 6 407 | ||
| T/C hire expenses | -23 014 | -56 132 | -86 877 | -107 863 | -194 155 | ||
| Ship operating expenses | -14 055 | -14 761 | -29 766 | -29 096 | -60 865 | ||
| Operating expenses management companies | -914 | -3 731 | -4 589 | -8 013 | -16 306 | ||
| General and administrative expenses | -2 163 | -1 500 | -3 348 | -2 840 | -5 233 | ||
| Operating expenses | -40 146 | -74 745 | -122 373 | -143 003 | -270 152 | ||
| EBITDA | 29 330 | 40 454 | 60 626 | 83 823 | 157 612 | ||
| Depreciation and amortisation | 3 | -10 070 | -11 331 | -20 699 | -22 602 | -45 738 | |
| Gain on sale of ships | 3 | 0 | 0 | 0 | 0 | 316 | |
| Gain on sale of subsidiary | 5 951 | 0 | 5 951 | 0 | 0 | ||
| Other gains/(-losses) | 500 | -1 073 | 1 187 | 757 | 350 | ||
| Operating result (EBIT) | 25 711 | 28 050 | 47 065 | 61 978 | 112 539 | ||
| Interest income | 1 081 | 559 | 2 191 | 971 | 2 527 | ||
| Interest expenses | -7 340 | -8 551 | -14 873 | -17 023 | -33 184 | ||
| Other financial items | -1 505 | 371 | -1 465 | -182 | 2 065 | ||
| Currency gains/(-losses) | 126 | -2 842 | -201 | -690 | 1 049 | ||
| Net financial items | -7 638 | -10 463 | -14 348 | -16 924 | -27 543 | ||
| Result before taxes | 18 073 | 17 587 | 32 717 | 45 054 | 84 996 | ||
| Taxes | 823 | -916 | 1 834 | -4 109 | -7 562 | ||
| Net result from continuing operations | 18 896 | 16 671 | 34 551 | 40 945 | 77 434 | ||
| Result from discontinuing operation | 5 | 0 | 8 458 | 0 | 8 806 | 8 806 | |
| Net result for the period | 18 896 | 25 129 | 34 551 | 49 751 | 86 240 | ||
| Hereof majority interests | 18 044 | 23 575 | 31 646 | 44 134 | 75 895 | ||
| Hereof non-controlling interests | 852 | 1 554 | 2 905 | 5 618 | 10 346 | ||
| Earnings per share for continuing operations | 0.07 | 0.07 | 0.14 | 0.16 | 0.31 | ||
| Diluted earnings per share for continuing operations | 0.07 | 0.07 | 0.13 | 0.16 | 0.30 | ||
| Earnings per share | 0.08 | 0.10 | 0.14 | 0.20 | 0.34 | ||
| Diluted earnings per share | 0.07 | 0.10 | 0.13 | 0.20 | 0.34 | ||
Consolidated statement of income Consolidated statement of financial position
| 30 Jun | 30 Jun | 31 Dec | |
|---|---|---|---|
| USD 1 000 | 2024 | 2023 | 2023 |
| NON-CURRENT ASSETS | Note | ||
| Intangible assets | 639 | 0 | 0 |
| Ships 3 |
662 069 | 733 798 | 731 596 |
| Property, Plant and Equipment | 383 | 1 064 | 883 |
| Investments in j/v and assoc. companies | 14 000 | 7 847 | 9 934 |
| Other non-current assets | 470 | 1 050 | 2 956 |
| Total non-current assets | 677 561 | 743 759 | 745 370 |
| CURRENT ASSETS | |||
| Assets held for sale 3 |
48 598 | 26 614 | 0 |
| Bunker inventory | 5 129 | 9 217 | 8 556 |
| Current receivables | 28 752 | 33 055 | 50 662 |
| Cash and cash equivalents | 92 167 | 148 234 | 128 276 |
| Total current assets | 174 646 | 217 120 | 187 495 |
| Total assets | 852 206 | 960 879 | 932 864 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Paid-in capital | 132 255 | 141 096 | 141 736 |
| Retained earnings | 142 169 | 130 470 | 128 935 |
| Non-controlling interests | 8 654 | 25 509 | 34 890 |
| Total equity | 283 078 | 297 075 | 305 561 |
| NON-CURRENT LIABILITIES | |||
| Deferred tax | 4 453 | 3 837 | 6 537 |
| Long-term interest-bearing debt 4 |
487 016 | 557 482 | 536 668 |
| Other non-current liabilities | 182 | 845 | 954 |
| Total non-current liabilities | 491 651 | 562 164 | 544 160 |
| CURRENT LIABILITIES | |||
| Current portion of interest-bearing debt | 49 531 4 |
45 100 | 26 735 |
| Other current liabilities | 27 946 | 56 540 | 56 409 |
| Total current liabilities | 77 476 | 101 640 | 83 144 |
| Total equity and liabilities | 852 206 | 960 879 | 932 864 |
Uniform and Modern Fleet of 41x Bulk Carriers
| Vessel | Built | DWT | Yard | |
|---|---|---|---|---|
| BELFRIEND | 2028 | 64 000 | Japan | |
| BELOCEAN | 2028 | 64 000 | Japan | |
| BELNOR | 2028 | 64 000 | Japan | |
| BELSTAR | 2027 | 64 000 | Japan | |
| BELVICTORY | 2027 | 64 000 | Japan | |
| BELROSSO | 2027 | 64 000 | Japan | |
| BELAVANTI | 2026 | 64 000 | Japan | |
| BELTEMPO | 2026 | 64 000 | Japan | |
| BELFUTURE | 2026 | 64 000 | Japan | |
| BELFORTUNE | 2025 | 64 000 | Japan | |
| BELFOX | 2025 | 64 000 | Japan | |
| BELGRACE | 2024 | 64 000 | Shin Kasado | |
| 1 TBN BELSAKURA |
2024 | 64 000 | Japan | |
| BELMONDO | 2023 | 64 000 | Imabari | |
| BELYAMATO | 2022 | 64 000 | Imabari | |
| BELTOKYO | 2021 | 64 000 | Imabari | |
| BELFORCE | 2021 | 61 000 | Dacks | |
| BELKNIGHT | 2021 | 61 000 | Dacks | |
| BELTRADER | 2021 | 61 000 | Dacks | |
| BELGUARDIAN | 2021 | 61 000 | Dacks | |
| BELMAR | 2021 | 64 000 | Imabari |
| Vessel | Built | DWT | Yard |
|---|---|---|---|
| BELFAST | 2021 | 64 000 | Imabari |
| BELAJA | 2020 | 61 000 | Shin Kurushima |
| BELMOIRA | 2020 | 61 000 | Shin Kurushima |
| BELFUJI | 2020 | 63 000 | Imabari |
| BELNIKE | 2020 | 63 000 | Imabari |
| BELTANGO | 2020 | 64 000 | Mitsui |
| BELFORTE | 2019 | 64 000 | Mitsui |
| BELRAY | 2019 | 61 000 | Shin Kurushima |
| BELNIPPON | 2018 | 63 000 | Imabari |
| BELAFONTE | 2017 | 63 000 | Imabari |
| BELHAVEN | 2017 | 63 000 | Imabari |
| BELTIGER | 2017 | 63 000 | New Times |
| BELISLAND | 2016 | 61 000 | Imabari |
| BELINDA | 2016 | 63 000 | Hantong |
| BELMONT | 2016 | 63 000 | Hantong |
| BELATLANTIC | 2016 | 63 000 | Hantong |
| BELLIGHT | 2016 | 63 000 | New Times |
| BELFOREST | 2015 | 61 000 | Imabari |
| BELHAWK | 2015 | 61 000 | Imabari |
| BELSOUTH | 2015 | 63 000 | Hantong |
1) Acquired, vessel will be delivered within Q1 2025