Belships

Earnings Release • May 8, 2014

1

Belships – Q1 2014 results

May 8, 2014

Q1 2014 highlights

• Gross revenue of \$6.1m (\$6.3m)
• EBITDA of \$2.1m (\$2.2m)
• Net income of \$0.3m (\$0.5m)
• All vessels operating normally modern fleet average age 3.8 years
• Contract coverage 100% for delivered vessels \$110m fixed charter backlog.
• Contract signed in June 2013 with Imabari Shipbuilding in Japan for 2 x 61,000 dwt eco-design bulkcarriers for delivery second half 2015 and first half 2016 at USD 28.25 million per ship. Newbuilding prices in Japan for Supramax now around USD 33 million.
• Long term lease including purchase options for a third 61,000 dwt eco-design from Imabari Shipbuilding for delivery Q1 2017.
• Shift in strategy: Full concentration on the dry bulk market M/T Belaia redelivered March 2014.
• A new term loan facility of USD 50 million was secured for a period of 6 years from March 2014 for the three bulk carriers already in service. Both the margin and the covenants are an encouraging improvement compared to the terms for the previous financing.
• The Board has proposed a dividend of NOK 0.05 per share for 2013.

Key investment highlights

Business strategy and corporate structure

• Owner/operator of dry bulk tonnage to highly reputable and good credit risk customers
• Concentration on one asset type «pure play» diversification to be handled by the individual investor
• Focus on growth in portfolio size and to diversify the customer base
• Focus on medium to long term charter arrangements maintaining a duration spread to minimize the residual risk exposure
• Fixed long term charters will provide stable distributable cash flows
• Cost efficient operation and administration «lean and mean»
• Transparency, good corporate governance and shareholder friendly information philosophy
• Targeting an efficiently priced equity with an attractive dividend ratio

Tonnage overview

Vessel name	Dwt	Built/yard	Type	Customer	T/C-rate (net)
Belstar	58,000	2009/Dayang	Supramax bulk	Canpotex	\$16,000
Belnor	58,000	2010/Dayang	Supramax bulk	Canpotex	\$16,000
Belocean	58,000	2011/Dayang	Supramax bulk	Canpotex/open	\$16,000
Imabari n/b	61,000	2015/Imabari	Vessel name Supramax bulk Vessel name	Open
Imabari n/b	61,000	2016/Imabari	Supramax bulk	Canpotex **)	\$17,300
Imabari n/b *)	61,000	2017/Imabari	Supramax bulk	Open

*) Lease period of 8+1+1+1 years with purchase option from end of year 4 of JPY 2.91 bn, decreasing annually by JPY 110 m. **) One n/b will be swapped with either Belnor of Belocean for the balance period of c/p with Canpotex. New charter hire will be USD 17,300/day.

Attractive newbuilding contracts

• Two newbuilding contracts for 61,000 dwt Supramax bulk carriers with Imabari Shipbuilding in Japan:
• Delivery scheduled for the second half 2015 and the first half 2016
• Contract price is USD 28.25 million per vessel
• A rights issue was completed in 2013 to finance the downpayments for the vessels

• A third newbuilding 61,000 dwt Supramax bulk carrier from Imabari Shipbuilding in Q1 2017 on long term lease with purchase option

• Founded in 1901

• Japan's biggest shipyard
• 8 yard locations
• More than 2,000 ships delivered
• Annual production of ~90 ships
• Represents ~23% of Japan's annual shipbuilding

The I-Star 61,000 dwt is the new ECO supramax design developed by Imabari, with the latest technology available for fuel efficiency and low emissions

Eco-design implies significant fuel savings

Fuel savings ECO design
	Handysize	Supramax	Panamax	Capesize
NPV (USD m)	2.7	3.1	4.4	5.8

HFO \$600/mt, 8% interest, 5 years, 270 days at sea

Contract coverage

• USD 115m fixed charter backlog

Canpotex was established in 1972 by three Canadian potash producers: Agrium, Mosaic and PotashCorp. Canpotex manages transportation and has invested in 5,000 specialized railcars and two port terminals. Canpotex has supplied over 185 million mt of potash since 1974 to customers in countries like Australia, Brazil, China, India, Indonesia and Japan.

Belships ASA has the option to sell maximum two of the Canpotex-vessels after 5 alt. 7 years without obligation to continue the Charter.

Open position

	2014	2015	2016	2017	2018
Belships' fleet:	0 %	3 %	31 %	49 %	50 %

USD/DAY		End 2013	Mid 2014*	End 2014*	Mid 2015*
CAPESIZE	170'	19,500	23,000	28,000	23,000
PANAMAX	75'	13,000	14,000	15,000	17,000
SUPRAMAX	53'	12,500	12,000	13,000	14,000

Financial Highlights

USD 1 000	Q1 2014	2013	2012	2011	2010
Operating income	6 079	25 973	25 895	26 855	18 374
EBITDA	2 121	9 334	8 975	8 312	7 754
Total assets	121 280	119 424	117 044	131 017	137 370
Net debt	36 111	37 204	52 706	60 552	58 352
Equity	67 253	66 958	52 779	54 433	54 834
Equity ratio	55.5%	56.1%	45.1%	41.5%	40.0%

Value adjusted balance sheet

11

The Belships share

Ownership and Organization chart

Shareholder overview

Shareholder	# shares	%
Sonata AS (Sverre J. Tidemand)	28 619 391	60.4%
Tidships AS (Otto G. Tidemand)	6 201 058	13.1%
Longbow Limited	2 308 680	4.9%
SEB London	987 419	2.1%
Gemsco AS	920 590	1.9%
Importer AS	681 476	1.4%
Sverre J. Tidemand	582 782	1.2%
Belships ASA	498 000	1.0%
Carlings AS	400 000	0.8%
Jasto AS	350 000	0.7%
Tidinvest II AS	315 414	0.7%
Jenssen & Co. AS	302 816	0.6%
Torstein Søland	300 000	0.6%
Chrem Capital AS	270 000	0.6%
Kontrari AS	250 000	0.5%
Atalanta AS	236 639	0.5%
Carl Erik Steen	207 203	0.5%
Achilles Finans AS	123 444	0.3%
John Tore Kristiansen	119 000	0.3%
Kjell Egil Larsen	110 000	0.2%
Top 20 shareholders	43 783 912	92.3%

Contact details

Ulrich Müller, Managing Director Tel: +47 22 52 76 15 / +47 924 90 400 Stein H. Runsbech, Commercial Director Tel: +47 22 52 76 09 / +47 901 03 528 Osvald Fossholm, Finance Director Tel: +47 22 52 76 17 / +47 908 87 393 Ove B. Staurset, Operations Manager Tel: +47 22 52 76 30 / +47 920 12 511

Belships ASA

Lilleakerveien 4, N-0283 Oslo, Norway Phone: +47 22 52 76 00 - Fax: +47 23 50 08 82 E-mail: chartering@belships.no Web site: www.belships.com Org. no.: 930 776 793