Belships

Investor Presentation • May 12, 2022

COMPANY PRESENTATION | Q1 2022 MAY 2022

Belships ASA – Owner and Operator of Bulk Carriers

Highlights – Q1 2022

Earnings summary RECORD QUARTER – EXTRAORDINARY DIVIDEND AND POSITIVE MARKET OUTLOOK

• Operating income of USD 229.5m (USD 76.4m)
• EBITDA of USD 60.5m (USD 14.7m) including USD 22.6m from Lighthouse Navigation
• Net result of USD 59.5m (USD 16.5m)
• Declared ordinary dividend of USD 26.2m (NOK 1.00 per share)
• Declared extraordinary dividend of USD 32.7m (NOK 1.25 per share)
• TCE of USD 25 466 gross per day for owned fleet
• Secured long term lease agreements for four vessels at competitive terms
• 90 per cent of ship days in Q2 are booked at about USD 24 700 gross per day. 70 per cent of ship days in the next four quarters are booked at about USD 24 000 gross per day.
• Modern fleet of 29 vessels with an average age of 3.5 years and daily cash breakeven for 2022 of about USD 10 000 per vessel

Subsequent events

• Belships has entered into agreements for the acquisition of two modern Japanese 64 000 dwt Ultramax bulk carriers built in 2019 and 2020. The vessels are financed through time charter lease agreements for a fixed period of about 5 years with options to extend for a further 2 years. Cash breakeven will be about USD 11 200 per day per vessel. Belships will pay a total of USD 12.0m as down payment. The agreements come with options to repurchase the vessels significantly below current market levels. Delivery of the vessels is expected within Q2 2022.
• Declared option to purchase Ultramax bulk carrier BELNIPPON with strike price significantly below current market levels. Conclusion is expected within Q3 2022.

Q1 2022	Q1 2021
Average TCE	Average TCE
USD 25 466/day	USD 12 802/day
EBITDA	EBITDA
USD 60.5m	USD 14.7m
Net result	Net result
USD 59.5m	USD 16.5m

Financial position Cash and cash equivalents USD 161.2m Interest bearing debt USD 461.8m Book value Equity USD 295.1m Ships USD 574.1m Other assets USD 139.7m Other liabilities USD 118.1m Assets Equity and liabilities

Proven Ability to Execute Growth Strategy

Execution

Acquisitions

Purchased 22 new ECO vessels

Divestments

Sold 9 oldest vessels in fleet

Cash Investment Net cash invested USD 8m

Financing 75 per cent of debt is fixed interest rate leases

Added value creation

Expanded Lighthouse Navigation

Result

Uniform Fleet

29x modern ECO bulk carriers

Low cost model Cash breakeven of USD 10 000

Dividends NOK 4.10 per share over last 4 quarters

Total return Top performing dry-bulk share last 3 years

Market Cap USD 100m USD 560m

Lighthouse Navigation – Dry Bulk Operating

Track record

Profitable every year since inception in 2009

Risk Management

Skin in the game - leading employees invested

Growth

Offices in 4 countries with 80 employees

Volume

About 65 vessels under operation*

Performance

Average EBITDA of USD 20.8m last four quarters

Ultramax – Superior Risk/Reward

Average earnings per day - last 3 years

Capesize USD 21 995/day

Standard deviation: 237%

Ultramax: BSI58 plus 10% premium Kamsarmax: BPI82 Capesize: BCI 5TC Source: Baltic Exchange

| BELSHIPS ASA | 6

Risk (Annualised standard deviation)

Market Update – Low Orderbook, Increasing Ship Values

0% 20% 40% 60% 80% 100% 120% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Orderbook in % of existing fleet Orderbook currently 6% of existing fleet 22% of midsize-fleet is 15+ years old and non-eco design 11% of midsize-fleet is 20+ years old, approaching recycling

Lowest fleet growth in decades

Supra/Ultramax order book

ORDERBOOK/SUPPLY - The order book for Supra/Ultramax bulk carriers is 6 per cent. In relative terms, we are heading towards the lowest rate of supply growth in 30 years. 28 Supra/Ultramax bulk carriers were delivered in the first quarter. 101 vessels are scheduled to be delivered for the remaining part of the year. However, it will likely be even lower, as some registered orders usually are cancelled, deferred or simply incorrect.

The new regulations (EEXI) in 2023 might cause a slight contraction on the supply side as older vessels may have to reduce their maximum sailing speed. However, high bunker prices have already resulted in a moderate reduction in average sailing speeds.

NEWBUILDING PRICES: Ordering activity for bulk carriers remain relatively low, prices have increased due to rising steel prices and high demand from other shipping segments. This has reduced the available shipbuilding capacity for bulk carriers for the next two years. A Japanese Ultramax newbuilding would today cost in the region of USD 38m (up from USD 36m last quarter) with delivery end 2024/2025.

SECONDHAND VESSEL VALUES: Today's 1 year time charter contracts for Ultramax vessels are in the region of USD 29-30 000 per day. Net annual cash flow per vessel is USD 6m+.

Following the historical pattern of very high correlation between the 1-year period contract and the price for secondhand bulk carriers, the value of a fiveyear old Japanese vessel should be significantly higher than today, and at least equal to the cost of a newbuilding with 2-year forward delivery.

Market Update – Highly Profitable Levels, Strong Outlook

Current Spot market spot and FFA

RATES – The Baltic Supramax Index (BSI-58) averaged 25 155 per day in Q1 2022 – the highest start to a year since 2008. The freight market continue to display the advantages of the versatile Supra/Ultramax segments compared to the larger vessel segments. The FFA market is currently trading at USD 29 000 for Supramaxes for the remaining part of 2022, with Ultramaxes earning an additional premium.

CONGESTION – Extra waiting time in port continues unabated causing fleet inefficiencies which contribute to tighter market dynamics. This may seem a short-term inefficiency, however, the trend has been apparent over the past several years.

CARGO – Breakbulk and other minor bulks grew by 7 and 9 per cent, year on year, whereas coal and iron ore dropped by 22 and 52 per cent, respectively. The strong growth in minor bulk commodities reflect high rates of global industrial production, whereas the drop in coal was due to Indonesia's temporary export ban, and the drop in iron ore was due to lower demand from China and seasonal factors. Shipment volumes for April indicate an upwards trend in volumes . High demand in the container markets continue to add support as some cargoes typically transported in containers are being shipped in bulk carriers. This is a swing factor to watch carefully as one should expect normalised trade flows over time.

ECONOMIC STIMULUS AND GROWTH – Credit growth and economic stimulus is positive for the dry bulk market. Seaborne iron ore is predominantly driven by Chinese demand, whereas minor bulks tend to correlate closer with wider GDP growth. General consensus points toward continued economic growth in 2022.

Significant de-risk: Highly Profitable Contract Coverage

Cash breakeven for remaining open days next four quarters below zero

Undervalued – Strong Downside Protection

Potential cash yield from operations next four quarters

80%

Significant free cash flow and dividend capacity

Belships ASA - Investment Highlights

Platform

Proven track record – growth delivered

Market

Infrastructure/raw materials boom and the lowest orderbook in 30 years

Visibility Highly profitable contract coverage

Value

Discount to NAV and outsized dividend yield

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 11 May 2022 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

		Q1	Q1
USD 1 000		2022	2021	2021
Gross freight revenue	Note	258 287	107 290	808 237
Voyage expenses		-30 802	-32 354	-164 929
Net freight revenue	2	227 485	74 936	643 308
Management fees		2 003	1 453	7 366
Operating income	2	229 488	76 389	650 674
Share of result from j/v and assoc. comp.		12 366	760	14 323
T/C hire expenses		-156 818	-46 672	-400 710
Ship operating expenses		-13 362	-10 815	-50 457
Operating expenses management companies		-8 564	-914	-30 756
General and administrative expenses		-2 601	-4 018	-4 795
Operating expenses		-168 979	-61 659	-472 395
EBITDA		60 509	14 730	178 279
Depreciation and amortisation	3	-8 236	-7 540	-28 735
Gain on sale of ships	3	12 308	0	15 333
Other gains/(-losses)		3 494	-6 734	-4 048
Operating result (EBIT)		68 075	456	160 829
Interest income		4	219	815
Interest expenses		-5 079	-3 516	-15 881
Other financial items		-1 628	-148	-2 308
Currency gains/(-losses)		-641	-247	-1 325
Net financial items		-7 344	-3 692	-18 699
Result before taxes		60 731	-3 236	142 130
Taxes		-1 197	19 743	-8 708
Net result		59 534	16 507	133 422
Hereof majority interests		46 738	14 914	103 983
Hereof non-controlling interests		12 796	1 593	29 439
Earnings per share		0.24	0.07	0.54
Diluted earnings per share		0.23	0.07	0.53

Consolidated statement of income Consolidated statement of financial position

		31 Mar	31 Mar	31 Dec
USD 1 000		2022	2021	2021
NON-CURRENT ASSETS	Note
Intangible assets		0	19 752	0
Ships	3	574 108	388 795	580 628
Prepayment of ships		10 050	0	0
Property, Plant, and Equipment		4 090	5 002	4 227
Investments in j/v and assoc. companies		26 829	3 492	13 997
Other non-current assets		230	119	821
Total non-current assets		615 307	417 160	599 673
CURRENT ASSETS
Assets held for sale	3	0	6 701	23 933
Bunker inventory		27 155	9 551	16 492
Current receivables		71 333	44 701	52 332
Cash and cash equivalents		161 162	51 570	105 204
Total current assets		259 650	112 523	197 961
Total assets		874 957	529 683	797 634
EQUITY AND LIABILITIES
Equity
Paid-in capital		132 014	154 206	158 802
Retained earnings		122 804	20 980	82 739
Non-controlling interests		40 275	7 692	31 378
Total equity		295 093	182 878	272 919
Non-current liabilities
Long term interest bearing debt	4	437 127	267 227	412 881
Other non-current liabilities		1 733	2 264	1 757
Total non-current liabilities		438 860	269 491	414 638
Current liabilities
Current portion of interest bearing debt	4	24 640	29 435	24 467
Other current liabilities		116 364	47 879	85 610
Total current liabilities		141 004	77 314	110 077
Total equity and liabilities		874 957	529 683	797 634

Uniform and Modern Fleet of 29 Bulk Carriers

Vessel	Built	DWT	Yard	Vessel	Built	DWT	Yard
Newbuild TBN BELMONDO	2023	64 000	Imabari	BELNIPPON	2018	63 000	Imabari
Newbuild TBN BELYAMATO	2022	64 000	Imabari	BELHAVEN	2017	63 000	Imabari
BELTOKYO	2021	64 000	Imabari	BELTIGER	2017	63 000	New Times
BELMAR	2021	64 000	Imabari	BELISLAND	2016	61 000	Imabari
BELFAST	2021	64 000	Imabari	BELINDA	2016	63 000	Hantong
BELFORCE	2021	61 000	Dacks	BELMONT	2016	63 000	Hantong
BELKNIGHT	2021	61 000	Dacks	BELATLANTIC	2016	63 000	Hantong
BELTRADER	2021	61 000	Dacks	BELLIGHT	2016	63 000	New Times
BELGUARDIAN	2021	61 000	Dacks	BELFRIEND	2016	58 000	Tsuneishi
BELAJA	2020	61 000	Shin Kurushima	BELTIDE	2016	58 000	Tsuneishi
BELMOIRA	2020	61 000	Shin Kurushima	BELFOREST	2015	61 000	Imabari
BELFUJI	2020	63 000	Imabari	BELHAWK	2015	61 000	Imabari
Acquisition I	2020	64 000	Japan	BELPAREIL	2015	63 000	Hantong
Acquisition II	2019	64 000	Japan	BELSOUTH	2015	63 000	Hantong
BELRAY	2019	61 000	Shin Kurushima