Belships

Quarterly Report • Feb 21, 2022

QUARTERLY REPORT – Q4 2021

21 February 2022

Belships ASA

Lilleakerveien 6D, N-0283 Oslo, Norway www.belships.com Enterprise no: NO 930776793 MVA

RECORD QUARTER – IMPROVED DIVIDEND AND MARKET OUTLOOK

HIGHLIGHTS

• Operating income of USD 235.2m (USD 59.9m)
• EBITDA of USD 70.4m (USD 11.3m) including USD 22.9m from Lighthouse Navigation
• Net result of USD 59.2m (USD 0.9m)
• Declared dividend of USD 25.6m (NOK 0.90 per share)
• Extraordinary dividend payment planned for Q1 2022
• Net TCE of USD 28 965 per day for owned fleet
• Acquired three new bulk carriers
• Sold the three oldest vessels with significant gains
• 88 per cent of ship days in Q1 are booked at about USD 23 900 net per day. 65 per cent of ship days in the next four quarters are booked at about USD 23 000 net per day.
• Modern fleet of 27 vessels with an average age of 3.7 years and daily cash breakeven for 2022 of about USD 10 000 per vessel

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-tovalue 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 will pay a sum of USD 4.0m as downpayment upon signing the agreement. The agreement is conditional upon certain steps to be completed by the parties involved. Conclusion is expected within Q1 2022.

Financial results commentary

Belships reports a net result of USD 59.2m for Q4 2021, compared to a net result of USD 0.9m for Q4 2020. The increase in net result is mainly caused by the improved freight market and Belships increased fleet. EBITDA contribution from Lighthouse Navigation was USD 22.9m in Q4 2021 compared to USD 4.8m in Q4 2020. The increase in EBITDA from Lighthouse Navigation is due to

the expansion of the companies and increased margins from freight trading. Net freight revenue for owned vessels was USD 64.7m in Q4 2021 compared to USD 17.3m in Q4 2020. The increase in net freight revenue is driven by an increase in TCE on owned vessels from 10 502 in Q4 2020 to 28 965 in Q4 2021 and an increase in vessel days of about 35 per cent.

Ship operating expenses were USD 15.4m in Q4 2021 compared to USD 8.7m in Q4 2020. The increase is due to growth in active days of about 35 per cent, stemming from fleet expansion. Ship operating expenses include non-recurring takeover costs for vessels delivered in the quarter of USD 2.0m, and Covid-19 related crewing expenses of USD 1.5m.

Fleet status

Time charter equivalent (TCE) earnings per ship in the quarter was recorded at USD 28 965 net per day versus BSI index of USD 28 956 net per day for the same period. 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.

	Q1	Q2	Q3	Q4	Q1	Q2
	2022	2022	2022	2022	2023	2023
Contract coverage	88	62	53	43	34	24
	%	%	%	%	%	%
Net TCE rate (USD/day)	23	22	22	22	22	22
	900	400	300	200	000	100

No vessels were drydocked in the quarter and the fleet sailed without significant off-hire with a total of 2 349 on-hire vessel days.

BELHAWK, BELTIDE, BELFRIEND and BELTOKYO were delivered as scheduled during Q4 2021.

Ultramax newbuildings BELYAMATO and BELMONDO are expected to be delivered from Imabari Shipbuilding, Japan in November 2022 and January 2023.

Transactions

Belships entered into agreements for the acquisition of two bulk carriers built in 2016 named BELFRIEND and BELTIDE. The vessels were delivered during the quarter. The purchase price was USD 28.0m per vessel, of which 60 per cent has been financed under a new bank loan facility.

Belships entered into agreements for the sale of BELNOR (2010) and BELSTAR (2009). The vessels were built in 2010 and 2009. Delivery to the new owners occurred in Q4 2021 and Q1 2022 respectively. Belships realised a gain of approximately USD 5.1m in Q4 2021 and USD 5.9m in Q1 2022. Total net cash flow after delivery of the vessels was approximately USD 8m in Q4 2021 and 16.5m in Q1 2022 after repayment of outstanding loans.

Belships entered into agreement for the sale of BELOCEAN (2011). Delivery to the new owner occurred in Q1 2022. Belships realised a gain of approximately USD 5.6m in Q1 2022. Total net cash flow after delivery of the vessel was approximately USD 19.1m as the debt was repaid in Q4 2021.

Belships entered into an agreement for the acquisition of a 64 000 dwt Ultramax newbuilding resale currently under construction at a Japanese shipyard. Delivery is expected January 2023. The intention is to finance the vessel on similar terms as previously acquired newbuilding resales.

Belships' fleet has increased and improved with only modest cash investments, signalling the competitive advantage Belships has in sourcing ship finance. The Japanese-designed bulk carriers entering the fleet represent the highest quality and lowest fuel consumption available in the market today.

Lighthouse Navigation

Lighthouse Navigation has delivered another strong quarter with EBITDA of USD 22.9m, bringing the full year 2021 EBITDA to USD 64.1m. The quarterly result includes provisions for potential lossmaking contracts of USD 5.0m based on the forward freight market at year end.

Sustainability

Belships aims for the highest standards in corporate governance and is well placed to deliver emission cuts in line with industry ambitions for 2030. Belships will publish a comprehensive sustainability report for 2021 (ESG Report) reflecting our ongoing commitment to transparency and meeting investor and stakeholder expectations.

Belships is compliant with the upcoming emission regulations from IMO in 2023 (EEXI) without additional CAPEX signalling the competitive advantage of Belships modern eco-fleet.

Financial and corporate matters

At the end of the quarter, cash and cash equivalents totalled USD 105.2m, whilst mortgage debt amounted to USD 110.9m.

Total debt repayments in the quarter amounted to USD 58.5m, whereof USD 27.5m is repayment of debt on divested vessels, USD 24.5m voluntary prepayment and USD 6.5m is ordinary instalments.

Net leasing liability at the end of the quarter was USD 326.4m. Leasing liabilities have been calculated under the assumption that all purchase options to acquire Ultramax bulk carriers on bareboat charters will be exercised. Belships have no contractual obligations to acquire any of its leased vessels.

At the end of the quarter, book value per share amounted to NOK 9.51 (USD 1.08), corresponding to a book equity ratio of 34 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 payment

Based on the financial result in the fourth quarter 2021 the Board declared a dividend payment of USD 25.6m (NOK 0.90 per share) equivalent to about 53 per cent of net result adjusted for noncontrolling interests.

Furthermore, an extraordinary dividend is expected to be declared together with the Q1 2022 report.

Market highlights

In the fourth quarter, the Baltic Supramax Index (BSI-58) averaged USD 30 480 per day, slightly down from USD 34 269 per day in Q3 2021. A very strong sentiment kicked off the quarter before peaking towards the end of October, whereafter spot markets trended downward towards yearend. Overall, 2021 averaged USD 27 406 per day for Supramaxes recording the best year in a decade.

Total Supramax shipment volumes ended at 246 million tons in Q4, slightly down from 255 million tons in Q3. October recorded an all-time high shipment of 94 million tons pairing with a booming spot market. In contrast, 79 million tons were shipped in November, which was the lowest month of the year. This was primarily caused by China's intervention in the coal markets by capping prices and increasing domestic production significantly. This froze import demand across Asia as buyers temporised in anticipation of decreasing commodity prices. Also, curbs in steel production contributed to a lower activity in imports. These measures did seem to have a temporary and short-term nature as the underlying fundamentals continued to appear very tight.

For the full year, 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. Overall, 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, 21 vessels were delivered in the fourth quarter, down from 32 vessels in the third quarter. For the full year, 103 vessels were delivered, down from 143 in 2020.

At the time of writing, 18 Supra/Ultramax bulk carriers have been delivered so far in 2022 according to Clarksons Research. Only 89 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 newbuildings in other segments than dry cargo is absorbing 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 have been stable for the past couple of months despite the high freight market, and current values appear historically low in comparison with earnings.

Outlook

The Baltic Exchange Supramax index YTD 2022 has averaged about USD 20 000 per day with Ultramaxes earning an additional premium.

Recently, the sentiment in the market significantly improved, and continued strong bulk markets is expected in the near term. Freight Forward Agreements (FFA) for Supramax currently indicate a market average of about USD 26 000 for the remaining part 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. On the back of stable demand, we remain optimistic in terms of market prospects.

The purpose of growth has been to increase profitability and the value and attractiveness of owning our shares. 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.

21 February 2022

THE BOARD OF BELSHIPS ASA

Peter Frølich Chairman

Frode Teigen Sverre Jørgen Tidemand Marianne Møgster

Carl Erik Steen Birthe Cecilie Lepsøe Jorunn Seglem

Lars Christian Skarsgård CEO

CONSOLIDATED STATEMENT OF INCOME

The quarterly figures are not audited

		Q4	Q4
USD 1 000		2021	2020	2021	2020
Gross freight revenue	Note	297 087	78 095	808 237	220 332
Voyage expenses		-71 263	-19 918	-164 929	-61 065
Net freight revenue	2	225 824	58 177	643 308	159 267
Management fees		2 797	1 679	7 366	6 095
Operating income	2	228 621	59 856	650 674	165 362
Share of result from j/v and assoc. comp.		8 242	1 541	14 323	3 052
T/C hire expenses		-140 523	-36 642	-400 710	-90 401
Ship operating expenses		-15 417	-8 673	-50 457	-38 675
Operating expenses management companies		-9 151	-3 627	-30 756	-11 861
General and administrative expenses		-1 332	-1 135	-4 795	-3 491
Operating expenses		-158 181	-48 536	-472 395	-141 376
EBITDA		70 440	11 320	178 279	23 986
Depreciation and amortisation	3	-8 102	-6 036	-28 735	-27 286
Impairment	3	0	-89	0	-4 957
Gain on sale of ships	3	15 333	0	15 333	2 469
Other gains/(-losses)		2 691	-891	-4 048	1 165
Operating result (EBIT)		80 362	4 304	160 829	-4 623
Interest income		160	242	815	985
Interest expenses		-5 040	-3 233	-15 881	-13 668
Other financial items		-1 014	-340	-2 308	-729
Currency gains/(-losses)		-379	239	-1 325	875
Net financial items		-6 273	-3 092	-18 699	-12 537
Result before taxes		74 089	1 212	142 130	-17 160
Taxes	5	-14 881	-349	-8 708	-583
Net result		59 208	863	133 422	-17 743
Hereof majority interests		48 480	-1 742	103 983	-19 898
Hereof non-controlling interests		10 728	2 605	29 439	2 155
Earnings per share		0.23	0.01	0.54	-0.08
Diluted earnings per share		0.23	0.01	0.53	-0.08

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	Q4	Q4
USD 1 000	2021	2020	2021	2020
Net result	59 208	863	133 422	-17 743
Other comprehensive income not to be reclassified
to profit or (loss) in subsequent periods:
Actuarial gain/(loss) on defined benefit plans	3	-10	3	-10
Items that may be subseq. reclassified to profit or (loss):
Exchange differences	-149	-9	-74	63
Total comprehensive income	59 062	844	133 351	-17 690
Hereof majority interests	48 334	-1 677	103 912	-19 761
Hereof non-controlling interests	10 728	2 521	29 439	2 071

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The quarterly figures are not audited

	31 Dec	31 Dec
USD 1 000	2021	2020
NON-CURRENT ASSETS Note
Intangible assets	0	1 770
Ships 3	580 628	371 637
Prepayment of ships	0	3 000
Property, Plant, and Equipment	4 227	4 878
Investments in j/v and assoc. companies	13 997	2 123
Other non-current assets	821	5 394
Total non-current assets	599 673	388 802
CURRENT ASSETS
Assets held for sale 3	23 933	5 917
Bunkers	16 492	5 344
Current receivables	52 332	30 431
Cash and cash equivalents	105 204	33 985
Total current assets	197 961	75 677
Total assets	797 634	464 479
EQUITY AND LIABILITIES
Equity
Paid-in capital	158 802	137 962
Retained earnings	82 739	5 956
Non-controlling interests	31 378	6 099
Total equity	272 919	150 017
Non-current liabilities
Long term interest bearing debt 4	412 881	247 315
Other non-current liabilities	1 757	2 769
Total non-current liabilities	414 638	250 084
Current liabilities
Current portion of interest bearing debt 4	24 467	34 162
Other current liabilities	85 610	30 216
Total current liabilities	110 077	64 378
Total equity and liabilities	797 634	464 479

CONSOLIDATED STATEMENT OF CASH FLOW

The quarterly figures are not audited

	31 Dec	31 Dec
USD 1 000	2021	2020
Cash flow from operating activities
Net result before taxes	142 130	-17 160
Adjustments to reconcile profit before tax to net cash flows:
Depreciations/impairment on fixed assets	28 735	32 243
Gain on sale of ships and other gains/(losses)	-15 333	-2 469
Share-based compensation expense	500	545
Difference between pension exps and paid pension premium	-19	-66
Share of result from j/v and associated companies	-14 323	-3 052
Net finance costs	18 699	12 537
Change in current items	6 253	4 928
Interest received	815	985
Interest paid	-15 881	-13 668
Financing costs	-1 276	0
Income tax paid	-852	-1 119
Net cash flow from operating activities	149 447	13 704
Cash flow from investing activities
Proceeds from sale of ships	62 541	0
Payment of ships	-90 454	-15 250
Received instalments from sale of ships	12 661	2 615
Additions to ships	-4 346	-5 672
Other investments	-676	0
Net cash flow from investing activities	-20 274	-18 307
Cash flow from financing activities
Proceeds from non-current debt	52 360	14 700
Paid-in capital (net)	15 952	0
Repayment of non-current debt	-95 015	-20 101
Sold treasury shares	129	0
Dividend paid	-31 380	-439
Net cash flow from financing activities	-57 954	-5 840
Net change in cash and cash equivalents during the period	71 219	-10 443
Cash and cash equivalents at 1 January	33 985	44 428
Cash and cash equivalents at end of period (incl. restricted cash)	105 204	33 985

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

The quarterly figures are not audited

USD 1 000

		Majority interest
		Paid-in			Retained
	Share	Treasury	Share	Other	b Other	Non	Total
	capital	shares	premium	paid-in	equity	controlling	equity
As at 31 December 2021			reserves	equity		interests
Equity as at 31 December 2020	53 617	-166	47 775	36 736	5 956	6 099	150 017
Share issue, net of transaction costs	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	-27 220	-4 160	-31 380
Net result for the period	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
As at 31 December 2020
Equity as at 31 December 2019	50 403	-166	39 499	36 191	25 717	4 471	156 115
Share issue, net of transaction costs	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 period	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

KEY FINANCIAL FIGURES

	31 Dec	31 Dec
	2021	2020
		23 986
	10.13	-0.34
	1.80	1.18
	0.34	0.32
USD	0.54	-0.08
NOK	4.78	-0.66
USD	1.08	0.66
NOK	9.51	5.61
	245 981 508	228 175 404
	250 609 708	227 490 765
	USD 1000	178 279

DEFINITION OF NON-IFRS FINANCIAL MEASURES

The Group's financial information is prepared in accordance with international financial reporting standards ("IFRS") as adopted by the European Union. In addition, it is the management's intention to provide alternative performance measures that are regularly reviewed by management to enhance the understanding of the Group's performance, but not instead of, the financial statements prepared in accordance with IFRS. The alternative performance measures presented may be determined or calculated differently by other companies. Due to the recent establishment of the enlarged Group, Management is in the initial phase of assessing its external financial reporting and performance measures are therefore subject to change.

The alternative performance measures are intended to enhance comparability of the results and to give supplemental information to the users of the Group's external reporting.

• § Time charter equivalent (TCE) is defined as freight revenues less voyage expenses divided by the number of available on-hire days
• § Current ratio - is defined as total current assets, divided by total current liabilities
• § EBITDA is the earnings before interest, taxes, depreciation and amortisation
• § EBIT is the earnings before interest and taxes. It can be calculated by the result before tax added by the interest
• § Equity ratio is equal to shareholders' equity including non-controlling interest, divided by total assets
• § Interest coverage ratio is equal to earnings before interest and taxes (EBIT), divided by interest expenses
• § Book equity per share is defined as total equity, divided by number of issued shares at end of period

NOTES TO THE CONSOLIDATED ACCOUNTS

The consolidated financial statements are presented in USD thousands unless otherwise indicated

Note 1 Accounting principles

These interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, "Interim Financial Reporting". They do not include all of the information required for full annual financial reporting and should be read in conjunction with the consolidated financial statements of Belships for the year ended 31 December 2020.

EPS is calculated on the basis of average number of outstanding shares in the period in Belships ASA.

This report was approved by the Board of Directors on 21 February 2022.

Note 2 Segment information

USD 1 000	January - December 2021
	Own	Lighthouse	Ship		Group
	ships	Navigation	managm.	Admin.	transactions	Total
Gross freight revenue	190 530	616 583	0	0	1 124	808 237
Voyage expenses	-19 871	-147 278	0	0	2 220	-164 929
Net freight revenue	170 659	469 305	0	0	3 344	643 308
Management fees	0	9 530	4 576	0	-6 740	7 366
Operating income	170 659	478 835	4 576	0	-3 396	650 674
Share of result from j/v and assoc. co.	0	14 305	18	0	0	14 323
T/C hire expenses	0	-400 710	0	0	0	-400 710
Ship operating expenses	-52 174	-1 679	0	0	3 396	-50 457
Operating expenses management co.	0	-26 609	-4 147	0	0	-30 756
General and administrative expenses	-970	0	0	-3 825	0	-4 795
Operating expenses	-53 144	-414 693	-4 129	-3 825	3 396	-472 395
EBITDA	117 515	64 142	447	-3 825	0	178 279
Depreciation and amortisation	-26 460	-1 872	-159	-244	0	-28 735
Gain on sale of ship	15 333	0	0	0	0	15 333
Other gains/-losses	-6 739	2 691	0	0	0	-4 048
Operating result (EBIT)	99 649	64 961	288	-4 069	0	160 829
Interest income	763	45	4	3	0	815
Interest expenses	-15 700	-125	-10	-46	0	-15 881
Other financial items	-2 022	-11	-12	-263	0	-2 308
Currency gains/(-losses)	-1 492	48	42	77	0	-1 325
Net financial items	-18 451	-43	24	-229	0	-18 699
Result before taxes	81 198	64 918	312	-4 298	0	142 130
Taxes	0	-8 666	-42	0	0	-8 708
Net result	81 198	56 252	270	-4 298	0	133 422
Hereof majority interests	81 198	26 914	169	-4 298	0	103 983
Hereof non-controlling interests	0	29 338	101	0	0	29 439
Assets	639 162	136 090	6 067	16 315	0	797 634
Liabilities	447 787	73 451	1 495	1 982	0	524 715

Note 2 Segment information, continued

USD 1 000	January - December 2020
	Own	Lighthouse	Ship		Group
	ships	Navigation	managm.	Admin.	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 assoc. co.	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 management co.	0	-8 371	-3 490	0	0	-11 861
General and administrative expenses	-358	0	0	-3 133	0	-3 491
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 (EBIT)	-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 taxes	-19 007	3 429	1 742	-3 324	0	-17 160
Taxes	-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

Note 2 Segment information, continued

USD 1 000			Q1 - 2021					Q1 - 2020
	Own		Ship	Adm/		Own		Ship	Adm/
	ships	LHN	mgmt	Grp.trs	Total	ships	LHN	mgmt	Grp.trs	Total
Gross freight revenue	27 504	79 197	0	589	107 290	20 005	29 470	0	0	49 475
Voyage expenses	-4 354	-28 000	0	0	-32 354	-5 240	-12 909	0	357	-17 792
Net freight revenue	23 150	51 197	0	589	74 936	14 765	16 561	0	357	31 683
Management fees	0	1 687	1 089	-1 323	1 453	0	1 600	1 306	-1 033	1 873
Operating income	23 150	52 884	1 089	-734	76 389	14 765	18 161	1 306	-676	33 556
Share of result from j/v and assoc. comp.	0	761	-1	0	760	0	573	0	0	573
T/C hire expenses	0	-46 672	0	0	-46 672	0	-15 583	0	0	-15 583
Ship operating expenses	-11 135	-414	0	734	-10 815	-10 158	-419	0	676	-9 901
Operating exps management companies	0	-3 049	-914	0	-3 963	0	-1 962	-961	0	-2 923
General and administrative expenses	-95	0	0	-874	-969	-138	0	0	-731	-869
Operating expenses	-11 230	-49 374	-915	-140	-61 659	-10 296	-17 391	-961	-55	-28 703
Operating result (EBITDA)	11 920	3 510	174	-874	14 730	4 469	770	345	-731	4 853
Depreciation and amortisation	-6 982	-469	-42	-47	-7 540	-6 054	-655	-13	-6	-6 728
Gain on sale of ship	0	0	0	0	0	2 469	0	0	0	2 469
Other gains/-losses	-6 734	0	0	0	-6 734	2 936	0	0	0	2 936
Operating result (EBIT)	-1 796	3 041	132	-921	456	3 820	115	332	-737	3 530

USD 1 000			Q2 - 2021					Q2 - 2020
	Own		Ship	Adm/		Own		Ship	Adm/
	ships	LHN	mgmt	Grp.trs	Total	ships	LHN	mgmt	Grp.trs	Total
Gross freight revenue	36 840	128 917	0	-66	165 691	16 285	21 588	0	0	37 873
Voyage expenses	-4 267	-23 513	0	774	-27 006	-4 335	-6 880	0	451	-10 764
Net freight revenue	32 573	105 404	0	708	138 685	11 950	14 708	0	451	27 109
Management fees	0	2 108	1 016	-1 405	1 719	0	1 363	1 312	-1 167	1 508
Operating income	32 573	107 512	1 016	-697	140 404	11 950	16 071	1 312	-716	28 617
Share of result from j/v and assoc. comp.	0	1 725	-2	0	1 723	0	728	14	0	742
T/C hire expenses	0	-88 253	0	0	-88 253	0	-14 692	0	0	-14 692
Ship operating expenses	-9 828	-419	0	697	-9 550	-9 342	-841	0	716	-9 467
Operating exps management companies	0	-6 053	-900	0	-6 953	0	-1 824	-865	0	-2 689
General and administrative expenses	-82	0	0	-1 322	-1 404	-1	0	0	-637	-638
Operating expenses	-9 910	-93 000	-902	-625	-104 437	-9 343	-16 629	-851	79	-26 744
Operating result (EBITDA)	22 663	14 512	114	-1 322	35 967	2 607	-558	461	-637	1 873
Depreciation and amortisation	-5 720	-467	-42	-84	-6 313	-6 506	-934	-12	-247	-7 699
Impairment	0	0	0	0	0	-4 868	0	0	0	-4 868
Other gains/-losses	-5	0	0	0	-5	-598	0	0	0	-598
Operating result (EBIT)	16 938	14 045	72	-1 406	29 649	-9 365	-1 492	449	-884	-11 292

USD 1 000			Q3 - 2021					Q3 - 2020
	Own		Ship	Adm/		Own		Ship	Adm/
	ships	LHN	mgmt	Grp.trs	Total	ships	LHN	mgmt	Grp.trs	Total
Gross freight revenue	55 334	182 553	0	282	238 169	19 901	34 988	0	0	54 889
Voyage expenses	-5 060	-30 065	0	819	-34 306	-2 919	-10 136	0	464	-12 591
Net freight revenue	50 274	152 488	0	1 101	203 863	16 982	24 852	0	464	42 298
Management fees	0	2 360	1 077	-2 040	1 397	0	1 382	797	-1 144	1 035
Operating income	50 274	154 848	1 077	-939	205 260	16 982	26 234	797	-680	43 333
Share of result from j/v and assoc. comp.	0	3 594	4	0	3 598	0	190	6	0	196
T/C hire expenses	0	-125 262	0	0	-125 262	-386	-23 098	0	0	-23 484
Ship operating expenses	-15 191	-423	0	939	-14 675	-10 753	-562	0	681	-10 634
Operating exps ship management	0	-9 507	-1 182	0	-10 689	0	-2 087	-535	0	-2 622
General and administrative expenses	-20	0	0	-1 070	-1 090	-119	0	0	-730	-849
Operating expenses	-15 211	-131 598	-1 178	-131	-148 118	-11 258	-25 557	-529	-49	-37 393
Operating result (EBITDA)	35 063	23 250	-101	-1 070	57 142	5 724	677	268	-729	5 940
Depreciation and amortisation	-6 225	-465	-38	-52	-6 780	-6 224	-433	-22	-144	-6 823
Other gains/-losses	0	0	0	0	0	-282	0	0	0	-282
Operating result (EBIT)	28 838	22 785	-139	-1 122	50 362	-782	244	246	-873	-1 165

Note 2 Segment information, continued

USD 1 000			Q4 - 2021					Q4 - 2020
	Own		Ship	Adm/		Owned		Ship	Adm/
	ships	LHN	mgmt	Grp.trs	Total	ships	LHN	mgmt	Grp.trs	Total
Gross freight revenue	70 852	225 916	0	319	297 087	21 764	56 331	0	0	78 095
Voyage expenses	-6 190	-65 700	0	627	-71 263	-4 459	-15 945	0	486	-19 918
Net freight revenue	64 662	160 216	0	946	225 824	17 305	40 386	0	486	58 177
Management fees	0	3 375	1 394	-1 972	2 797	0	1 822	2 065	-2 208	1 679
Operating income	64 662	163 591	1 394	-1 026	228 621	17 305	42 208	2 065	-1 722	59 856
Share of result from j/v and assoc. comp.	0	8 225	17	0	8 242	0	1 567	-26	0	1 541
T/C hire expenses	0	-140 523	0	0	-140 523	386	-37 028	0	0	-36 642
Ship operating expenses	-16 020	-423	0	1 026	-15 417	-10 960	566	0	1 721	-8 673
Operating expenses ship management	0	-8 000	-1 151	0	-9 151	0	-2 498	-1 129	0	-3 627
General and administrative expenses	-773	0	0	-559	-1 332	-100	0	0	-1 035	-1 135
Operating expenses	-16 793	-140 721	-1 134	467	-158 181	-10 674	-37 393	-1 155	686	-48 536
Operating result (EBITDA)	47 869	22 870	260	-559	70 440	6 631	4 815	910	-1 036	11 320
Depreciation and amortisation	-7 533	-471	-37	-61	-8 102	-5 933	-143	-174	214	-6 036
Impairment	0	0	0	0	0	-89	0	0	0	-89
Gain on sale of ships	15 333	0	0	0	15 333	0	0	0	0	0
Other gains/-losses	0	2 691	0	0	2 691	-891	0	0	0	-891
Operating result (EBIT)	55 669	25 090	223	-620	80 362	-282	4 672	736	-822	4 304

Note 3 Ships

At the end of each reporting period, the Company assesses whether there are any impairment indicators present. The Company has concluded that there are no impairment indicators pursuant to IAS 36.

BELHAWK, BELTIDE, BELFRIEND and BELTOKYO were delivered during Q4 2021 as scheduled.

A total gain of USD 15.3m was recorded during the quarter after BELFRI, BELCARGO and BELNOR were delivered to its new owners.

Belships entered into agreements for the acquisition of two bulk carriers built in 2016 named BELFRIEND and BELTIDE. The vessels were delivered during the quarter. The purchase price was USD 28.0m per vessel, of which 60 per cent has been financed under a new bank loan facility.

Belships entered into agreements for the sale of BELNOR (2010) and BELSTAR (2009). The vessels were built in 2010 and 2009. Delivery to the new owners occurred in Q4 2021 and Q1 2022 respectively. Belships realised a gain of approximately USD 5.1m in Q4 2021 and USD 5.9m in Q1 2022. Total net cash flow after delivery of the vessels was approximately USD 8m in Q4 2021 and 16.5m in Q1 2022 after repayment of outstanding loans.

Belships entered into agreement for the sale of BELOCEAN (2011). Delivery to the new owner occurred in Q1 2022. Belships realised a gain of approximately USD 5.6m in Q1 2022. Total net cash flow after delivery of the vessel was approximately USD 19.1m as the debt was repaid in Q4 2021.

Belships entered into an agreement for the acquisition of a 64 000 dwt Ultramax newbuilding resale currently under construction at a Japanese shipyard to be named BELMONDO. Delivery is expected January 2023. The intention is to finance the vessel on similar terms as previously acquired newbuilding resales.

Note 4 Interest bearing debt

Total mortgage debt at the end of the quarter amounted to USD 110.9m after debt repayments of USD 58.5m in the quarter. Transaction costs related to the mortgage debt were initially recorded as a reduction of debt in the balance sheet and subsequently amortised over the loan period in accordance with the amortised cost principle.

Leasing liabilities at the end of the quarter arising from bareboat obligations and long-term time charters were USD 326.4m. Corresponding right-of-use assets, including upfront payments relating to the purchase options, were recorded at USD 360.7m.

Belships has no obligation to purchase any of the leased vessels.

Belships was in compliance with all covenants during the quarter.

Note 5 Taxes

The Company recognised USD 19.8m in deferred tax assets previously not recognised consisting of USD 26.1m in tax loss carried forward offset by USD 6.3m in temporary differences per Q1 2021. The deferred tax assets were recognised by the Company after concluding it is likely that the company will have sufficient profit in subsequent periods to utilise the tax assets after the significant improvements seen in the freight market during Q1 2021.

As at the end of 2021, substantially all of the company's activity in Norway have been organised in the Norwegian tonnage tax regime. Consequently, management does not expect to utilise remaining tax losses

carried forward and no deferred tax asset has been recorded. The tax expense for Q4 2021 consist of USD 3.7m in tax payable and USD 11.2m in changes in deferred tax assets.

Note 6 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 will pay a sum of USD 4.0m as downpayment upon signing the agreement. The agreement is conditional upon certain steps to be completed by the parties involved. Conclusion is expected within Q1 2022.

20 LARGEST SHAREHOLDERS

Updated 14 February 2022

	Number of
Shareholder	shares	%
KONTRARI AS	103 000 000	40.69%
KONTRAZI AS	32 500 000	12.84%
LGT BANK AG	11 515 918	4.55%
JAKOB HATTELAND HOLDING AS	11 000 000	4.35%
MEGLERKONTO INNLAND DNB NOR BANK ASA	10 035 698	3.96%
WENAASGRUPPEN AS	8 149 330	3.22%
SONATA AS	7 747 492	3.06%
JAHATT AS	5 000 000	1.98%
BARCLAYS CAPITAL SEC. LTD FIRM	3 006 133	1.19%
SAXO BANK A/S	2 885 075	1.14%
STAVANGER FORVALTNING AS	2 750 000	1.09%
UBS SWITZERLAND AG	2 615 792	1.03%
J.P. MORGAN SECURITIES PLC	1 997 603	0.79%
J.P MORGAN AG	1 765 050	0.70%
SIX SIS AG	1 290 800	0.51%
CAPE INVEST AS	1 200 000	0.47%
GLAAMENE INDUSTRIER AS	1 093 316	0.43%
THE BANK OF NEW YORK MELLON SA/NV	1 054 124	0.42%
AVANZA BANK AB	922 467	0.36%
CACEIS BANK SPAIN SA	920 443	0.36%
OTHER SHAREHOLDERS	42 687 425	16.86%
TOTAL OUTSTANDING SHARES	253 136 666	100.00%

PERIOD CHARTER COVERAGE

Updated 21 February 2022
Vessel	Start	TCE	Duration
BELTOKYO	Dec-21	Index-linked*	22 - 26 months
BELFORCE	Sep-21	\$ 24,000	22 - 25 months
BELTRADER	Feb-22	\$ 21,400	21 - 24 months
BELGUARDIAN	Dec-21	\$ 24,700	10 - 12 months
BELMAR	Feb-22	\$ 21,600	24 - 29 months
BELFAST	Dec-21	\$ 25,000	11 - 13 months
BELAJA	Dec-21	\$ 22,250	12 - 14 months
BELMOIRA	Jun-21	\$ 23,000	22 - 24 months
BELFUJI	Jun-21	\$ 24,000	22 - 25 months
BELRAY	Jul-21	\$ 23,000	21 - 24 months
BELNIPPON	Jun-21	\$ 22,000	11 - 13 months
BELHAVEN	Oct-21	\$ 26,250	21 - 24 months
BELISLAND	Sep-21	\$ 22,000	21 - 24 months
BELINDA	Sep-21	\$ 27,000	10 - 12 months
BELTIDE	Jan-22	\$ 24,500	11 - 13 months
BELFOREST	Jun-21	\$ 21,250	11 - 13 months
BELSOUTH	Oct-21	\$ 25,250	23 - 25 months
*TCE linked to 115% of BSI-58 index

Table Includes all ongoing period charters above 180 days

FLEET LIST

Updated 21 February 2022

Ship	Ownership	Built year	Dwt	Yard
BELMONDO (NEWBUILD)	TBD1	2023	64 000	Imabari
BELYAMATO (NEWBUILD)	TBD2	2022	64 000	Imabari
BELTOKYO	BBC3	2021	64 000	Imabari
BELFORCE	BBC4	2021	61 000	Dacks
BELKNIGHT	BBC5	2021	61 000	Dacks
BELTRADER	BBC6	2021	61 000	Dacks
BELGUARDIAN	BBC6	2021	61 000	Dacks
BELMAR	BBC7	2021	64 000	Imabari
BELFAST	BBC8	2021	64 000	Imabari
BELMOIRA	BBC9	2020	61 000	Shin Kurushima
BELAJA	BBC9	2020	61 000	Shin Kurushima
BELFUJI	TC10	2020	63 000	Imabari
BELRAY	BBC9	2019	61 000	Shin Kurushima
BELNIPPON	TC10	2018	63 000	Imabari
BELHAVEN	100%	2017	63 000	Imabari
BELTIGER	100%	2017	63 000	New Times
BELISLAND	BBC11	2016	61 000	Imabari
BELINDA	100%	2016	63 000	Hantong
BELMONT	100%	2016	63 000	Hantong
BELATLANTIC	100%	2016	63 000	Hantong
BELLIGHT	BBC12	2016	63 000	New Times
BELFRIEND	100%	2016	58 000	Tsuneishi
BELTIDE	100%	2016	58 000	Tsuneishi
BELHAWK	BBC13	2015	61 000	Imabari
BELFOREST	BBC14	2015	61 000	Imabari
BELPAREIL	100%	2015	63 000	Hantong
BELSOUTH	100%	2015	63 000	Hantong

• 1) Expected to be delivered January 2023
• 2) Expected to be delivered November 2022, 10 yr bareboat charter with purchase options after fourth year
• 3) 12 yr bareboat charter with purchase options after fourth year
• 4) 10 yr bareboat charter with purchase options after third year
• 5) 7 yr bareboat charter with purchase options after third year
• 6) 10 yr bareboat charter with purchase options after fourth year
• 7) 10 yr bareboat charter with purchase options after fourth year
• 8) 10 yr bareboat charter with purchase options after fourth year
• 9) 7 yr bareboat charter with purchase options after fourth year
• 10) 8 yr time charter with purchase options after fourth year
• 11) 11 yr bareboat charter with purchase options after third year
• 12) 10 yr bareboat charter with purchase options after third year
• 13) 9.5 yr bareboat charter with purchase options after third year
• 14) 10.5 yr bareboat charter with purchase options after third year

There are no purchase obligations on any of the above lease agreements.