Belships

Earnings Release • Feb 16, 2018

Belships ASA : Report 4th quarter 2017

Belships ASA : Report 4th quarter 2017

HIGHLIGHTS

· Operating income of USD 7.6 m (Q3: USD 6.7 m)

· EBITDA of USD 3.7 m (USD 3.5 m)

· Impairment reversal of USD 2.0 m

· Net result of USD 3.2 m (USD 1.7 m)

· M/S Belnippon delivered from Imabari Shipbuilding 24th January

· All ships operating normally - modern fleet - average age 4.5 years

· Contract coverage 100% for delivered ships - around USD 50 million fixed

charter

· Financial advisor appointed to evaluate strategic alternatives

· Dividend proposal of NOK 0.10 per share

4th quarter 2017 results

Belships operating income in 4th quarter 2017 was USD 7.6 million (Q3: USD 6.7

million), while EBITDA amounted to USD 3.7 million (USD 3.5 million). The

Group's operating result amounted to USD 4.6 million (USD 2.9 million), while

net result for 4th quarter 2017 was USD 3.2 million (USD 1.7 million). The

figures for fourth quarter includes impairment reversal of USD 2.0 million. Net

result for 2017 was USD 6.4 million (USD -14.6 million). The negative result in

2016 is explained by impairment of the fleet of USD 13.8 million. Impairment

reversal in 2017 amounted to USD 2.5 million.

The Board proposes a dividend of NOK 0.10 per share for 2017.

Fleet status

Belships concentrates on the dry bulk market, with 6 modern Supramax/Ultramax in

service.

M/S Belstar, M/S Belnor and M/S Belisland have continued the long-term contracts

to Canpotex of Canada. Canpotex is one of the world's largest exporters of

potash, a fertilizer product imported in large volumes by countries such as

China, India and Brazil. M/S Belforest and M/S Belocean are both on time charter

to Cargill. M/S Belocean was recently extended to Cargill for 6-8 months at USD

10,150/day effective from 1st February. M/S Belnippon was delivered from Imabari

Shipbuilding in January and has been fixed on time charter to Cargill for 10-13

months at USD 11,500/day. All ships have sailed without significant off-hire.

Technical management is handled by Belships Management (Singapore), with a total

fleet of 12 ships under technical management.

Newbuilding program

Belships' remaining newbuilding program with Imabari Shipbuilding in Japan

includes one 63 000 dwt eco-design Ultramax bulk carrier on a long-term T/C-in

agreement incl. purchase option for delivery within first half 2020.

Financial and corporate matters

As per 31 December the Group's cash totaled USD 5.5 million compared to USD 7.4

million as per 30 September.

The mortgage debt as per 31 December was USD 28.25 million. Net lease obligation

as at 31 December was USD 42.8 million. In addition Belships has a long-term

loan facility of SGD 2 million, secured by the lease agreement for our Singapore

office. Net lease obligation and mortgage debt were reduced by USD 4.65 million

in the 4th quarter and includes payment of an extraordinary instalment amounting

to USD 3 million.

The waiver from the ship mortgage lender was terminated in 4th quarter and the

on-demand guarantee from the main shareholder was returned. Main terms in the

loan agreement are as follows: Minimum cash USD 3 million, annual instalment USD

5 million, minimum value 120% in 2018 and 125% in 2019 and payment of dividend

is limited to 50% of net result.

Hedging the Group's interest exposure on bank loan is considered on an ongoing

basis. The hedging level of interest rate exposure is currently around 70%.

At the end of the 4th quarter of 2017, the book value per share amounted to NOK

4.57 (USD 0.56), while the equity ratio was 25.8%. Added value related to the

long-term charter party for M/S Belisland is not reflected in the balance sheet.

Market highlights

The Capesize-index ended the 4th quarter at USD 19 341 per day, whereas the

Panamax-index ended at USD 11 183 per day. The Supramax-index ended the quarter

at USD 10 478 per day. As per today the Cape index stands at USD 12 727 per day,

Panamax-index at USD 11 309 per day and Supramax-index at USD 10 054 per day.

Baltic S&P Assessment's valuation of a 5-year old Supramax is currently USD

17.5 million.

Outlook

China's iron ore imports surged in 2017 and the replacement of domestic produced

iron ore with imports is expected to continue in 2018. Brazil offers the highest

quality iron ore and the transportation to China has a significant ton-mile

effect, compared to the lower grade iron ore sourced from Australia.

In addition to the increasing Chinese demand for overseas high-grade iron ore

and coal, the grain market has contributed significantly with increased demand

for corn and soy crop from US Gulf and East Coast South America.

The supply is expected to increase by a modest 1-2% p.a. in 2018-19, whereas the

demand is expected to increase by 3-4% p.a. If so, we should see an improvement

in ship values and charter rates.

Belships' vessels are fully covered until October 2018 when M/S Belocean becomes

open, followed by M/S Belforest in November and M/S Belnippon in January 2019.

The company is well positioned for a dry bulk market that we believe will be

strengthening in 2018-19.

Belships' vessels are chartered out on fixed rates to reputable counterparts,

representing a future nominal gross hire of around USD 50 million.

Focus remains to continue developing Belships as an owner and operator of modern

bulk carriers to reputable counterparts, building a portfolio of quality ships

and robust charter parties that will generate distributable cash flows.

The Company's largest shareholder, Sonata AS, has informed the Board of

Directors, that it is reviewing its long-term ownership. The Company has in

consultation with Sonata AS, appointed ABG Sundal Collier as financial advisor,

to evaluate strategic alternatives

Oslo, 16 February 2018

THE BOARD OF BELSHIPS ASA

Please contact CEO Ulrich Müller at phone +47 22 52 76 15 if any questions.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.