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Belships Investor Presentation 2020
3553_rns_2020-02-21_00d571cd-a12f-41d7-a025-8312d9b4d305.pdf
Investor Presentation
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COMPANY PRESENTATION Q4 2019
FEBRUARY 2020
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 21 February 2020 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. Forward-looking 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.
Investment highlights
Agenda
| Highlights – Q4 2019 |
5 |
|---|---|
| Company introduction | 6 |
| Market update | 15 |
| Strategy | 19 |
Highlights – Q4 2019
Continued spot performance and growth Key figures
- Operating income of USD 40.4 million (Q4 2018: USD 29.2m)
- EBITDA of USD 7.4m (USD 5.9m)
- Net result of USD 2.1m (USD 1.2m, excl. purchase bargain gain)
- Net TCE earnings per ship of USD 11 992 per day versus BSI index of USD 10 226 net per day
- 70% of total ship days in Q1 2020 have been booked at USD 9 625 net per day
- Average cash breakeven per vessel about USD 9 500 per day for next 12 months
- Ship-for-shares acquisition of 2017-built 63 000 dwt Ultramax for delivery in Q2 2020
- Bareboat agreement with purchase options for 64 000 dwt Ultramax for delivery 2H 2020
- BELEAST delivered to its charterer in December for the agreed bareboat and subsequent sale
- Agreement for bareboat charter and subsequent sale of PACIFIC LIGHT
- Modern fleet with an average age of 5 years including newbuildings
- Initiated carbon footprint fleet study
USD 2.1m
| Q4 2019 |
FY 2019 | ||
|---|---|---|---|
| Average TCE | Average TCE | ||
| USD 11 992/day | USD 11 201/day | ||
| BSI index USD 10 266/day net | BSI index USD 9 451/day net | ||
| EBITDA | EBITDA | ||
| USD 7.4m | USD 32.2m | ||
| Net result | Net result |
USD 5.1m
Integrated owner and operator of geared dry bulk vessels
Creating the best in-class listed dry bulk company
Recent transactions
- 2020 Ultramax Bareboat - In October, Belships agreed a 7-year bareboat charter for a 61 000 dwt Ultramax bulk carrier newbuilding from Shin Kurushima, Japan. The estimated cash breakeven for the Vessel upon delivery is about USD 11 000 per day including operational expenses. The vessel was delivered in February 2020 and named BELAJA. Belships paid a sum of USD 3m prior to delivery. The agreement comes with purchase options below current market values and can be exercised after the fourth year until the end of the charter.
- 2020 Ultramax Bareboat - In December, Belships announced it had entered into agreement for a 10-year bareboat charter of a 64 000 dwt Ultramax bulk carrier newbuilding. The vessel will be delivered by Imabari Shipyard during second half of 2020. Estimated cash breakeven for the vessel upon delivery is about USD 10 750 per day including operational expenses. Belships will pay a sum of USD 3m upon signing contract, expected to occur during March 2020. The agreement comes with purchase options below current market values and can be exercised after the fourth year until the end of the charter.
- 2017 Ultramax ship-for-shares (NOK 7.15 per share) - In December, acquisition was announced for a modern secondhand Ultramax bulk carrier from Japanese Owners for a price of USD 24.5m. The 63 000 dwt vessel was built in 2017 by Imabari Shipyard. Delivery is expected during the second quarter of 2020. The payment for the vessel will be settled by issuing new shares equivalent to 50 per cent of the purchase price at a subscription price of NOK 7.15 per share, and the remaining in cash upon delivery. Utilising Accordion Tranche basis 60% financing, the transaction will have a positive cash effect of about USD 2.45 million.
- PACIFIC LIGHT bareboat and subsequent sale - Belships has entered into an agreement with Marti Shipping & Ship Management of Turkey for a bareboat charter and subsequent sale of PACIFIC LIGHT. The 50 000 dwt bulk carrier was built in 2007, and is currently the oldest ship in Belships' fleet. Belships will realize a gain of approximately USD 2.4m upon delivery in March or April 2020. The Charterer has an obligation to purchase the vessel within 24 months and the net cash flow during the period will be approximately USD 1.8m after repayment of outstanding loans.
Pushing the growth agenda – net cash invested USD 2.7m
Cash effect recent transactions (USDm)
Purchase options provide flexibility and reduce risk
Overview of vessel purchase options 2020 – 2031
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Modern fleet of 24 vessels with average age of ~5 years
| Vessel | Built | DWT | Yard | Ownership | |
|---|---|---|---|---|---|
| x a m Ultra 6 x 1 |
BELMAR (NEWBUILD) |
2021 | 64,000 | Japan | BB-in1 |
| BELFAST (NEWBUILD) |
2020 | 64,000 | Japan | BB-in2 | |
| BELAJA (NEWBUILD) |
2020 | 61,000 | Shin Kurushima |
BB-in3 | |
| BELMOIRA (NEWBUILD) |
2020 | 61,000 | Shin Kurushima | BB-in3 | |
| BELFUJI (NEWBUILD) | 2020 | 63,000 | Imabari | TC-in4 | |
| BELRAY (NEWBUILD) |
2019 | 61,000 | Shin Kurushima | BB-in5 | |
| BELNIPPON | 2018 | 63,000 | Imabari | TC-in6 | |
| BELHAVEN (TBD) | 2017 | 63,000 | Japan | Owned7 | |
| BELISLAND | 2016 | 61,000 | Imabari | BB-in8 | |
| BELFOREST | 2015 | 61,000 | Imabari | BB-in9 | |
| BELINDA | 2016 | 63,000 | Hantong | Owned | |
| BELMONT | 2016 | 63,000 | Hantong | Owned | |
| BELATLANTIC | 2016 | 63,000 | Hantong | Owned | |
| SOFIE VICTORY |
2016 | 63,000 | New Times | Owned | |
| BELPAREIL | 2015 | 63,000 | Hantong | Owned | |
| BELSOUTH | 2015 | 63,000 | Hantong | Owned |
Ultramax vessels Supramax vessels
| Vessel | Built | DWT | Yard | Ownership | |
|---|---|---|---|---|---|
| x a m pra u S 8 x |
BELOCEAN | 2011 | 58,000 | Dayang | Owned |
| BELNOR | 2010 | 58,000 | Dayang | Owned | |
| BELSTAR | 2009 | 58,000 | Dayang | Owned | |
| BELCARGO | 2008 | 58,000 | Tsuneishi | Owned | |
| BELFRI | 2007 | 55,000 | Kawasaki | Owned | |
| BELORIENT | 2008 | 50,000 | PT Pal | Owned | |
| BELFORT | 2008 | 50,000 | PT Pal | Owned | |
| PACIFIC LIGHT1 | 2007 | 50,000 | PT Pal | Owned |
1) To enter into two year bareboat charter during March or April 2020. The vessel will be sold to the charterers as part the agreement.
1) On Delivery 2H 2021 ten years bareboat charter with purchase options after fourth year.
2) Delivery 2H 2020 ten years bareboat charter with purchase options after fourth year.
3) Delivery Q1 2020 for seven years bareboat charter with purchase options after fourth year.
4) Delivery Q1 2020 for eight years time charter with purchase options after fourth year.
5) Delivered in October 2019 seven years bareboat with purchase options after fourth year.
6) Eight years time charter with purchase options after fourth year.
7) Delivery Q2 2020.
8) Fifteen years bareboat charter with purchase options after fifth year.
9) Twelve years bareboat charter with purchase options after third year.
There are no purchase obligations on any of the lease agreements. | Company introduction |
Ultramax segment – superior risk/reward
Comparison last 10 years
Ultramax: BSI58 plus 10% premium. BSI58 is BSI52 plus \$293 per day prior to 2015 Kamsarmax: BPI82 2018-2019, BPI74 plus \$1 300 day prior to 2018 Capesize: BCI 5TC 2014-2019, BCI 4TC prior to 2014
Source: Baltic Exchange, Belships
| Company introduction |
19% outperformance of the BSI index in 2019
Belships TCE vs BSI 58 (net USD per day)
2020 guidance – low cash break even and cost base
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Market update
- 2019 - The year of trade wars and iron ore supply disruption, both set to normalise this year
- CORONA - Dramatic start to 2020 driven by negative economic impacts stemming from Corona virus, shutdowns and extended Chinese New Year
- IMO 2020 - Fuel price differences between 3.5 and 0.5 per cent sulphur content peaked at USD 300 per mt in December
- ORDERBOOK/SUPPLY - Historically low orderbook and fleet growth to decrease sharply from 2H 2020
- STIMULUS - Leading indicators are pointing to continued economic growth, low interest rates and energy prices. Continued credit growth and economic stimulus in Chinese economy
- REBOUND - Near-term outlook much depends on when China resumes normal activity, which may lead to positive effect from pent-up demand on top of normal volume normalisation
- CONTANGO - Forward rates for remaining days in 2020 have already started to move
Belships' Cargo mix
Cargo per category - 2019
Diverse cargo base reduces risk Strong and stable volume growth
Supramax/Ultramax shipments – agricultural and minerals
Low orderbook – lowest fleet growth since 2001-2003
Markets started to improve in February
2020 FFA rates Supramax ~USD 10.000/day Ultramax ~USD 11,300/day
2020 HFO vs VLSFO spread ~USD 197 per mt
Strategy
Our main offices
Belships ASA
Oslo +47 22 52 76 00 [email protected]
Lighthouse Navigation
Bangkok +66 2 654 3100 [email protected]
Belships Management
Singapore +65 6507 3939 [email protected]