Belships

Investor Presentation • Nov 12, 2021

COMPANY PRESENTATION | Q3 2021 November 2021

Belships ASA – Owner and Operator of Bulk Carriers

Highlights – Q3 2021

STRONG QUARTER – RETURNING VALUE TO SHAREHOLDERS	Earnings summary
 Operating income of USD 205.3m (USD 43.3m)	Q3 2021	Q3 2020
 EBITDA of USD 57.1m (USD 5.9m) including USD 23.3m from Lighthouse Navigation	Average TCE	Average TCE
 Net result of USD 35.2m (USD -4.2m)	USD 25 378/day	USD 9 067/day
 Declared dividend of USD 16.0m (NOK 0.55 per share)	EBITDA	EBITDA
 Net TCE of USD 25 378 per day for owned fleet	USD 57.1m	USD 5.9m
 Entered into agreements to acquire two new Ultramax bulk carriers	Net result	Net result
77 per cent of ship days in Q4 are booked at about USD 29 000 net per day. 42 per	USD 35.2m	USD -4.2m
cent of ship days in the next four quarters are booked at about USD 25 500 net per day
	Financial position
 Modern fleet of 30 vessels with an average age of about 4 years and cash breakeven of about USD 10 500 per day	Assets	Equity and liabilities
	Owned ships	Equity
	USD 203.1m	USD 231.6m (31%)
	Leased ships	Mortgage loans
	USD 308.7m	USD 135.2m
	Cash and cash equivalents	Lease liabilities
	USD 106.5m	USD 281.4m
	Other assets	Other liabilities
	USD 124.0m	USD 94.1m

Proven Ability to Execute Growth Strategy

Key milestones 2019 - 2021

2024 at L+275bps

Expansion of Lighthouse Navigation to Oslo, Singapore and Melbourne

in the fleet

Dividend of NOK 0.40 per share declared for Q2 2021 Dividend of NOK 0.55 per share declared for Q3 2021

7 → 30 bulk carriers

Uniform Ultramax fleet

USD 30m → 420m

Market cap increased by 14x

Lighthouse Navigation – Commercial Operations

Lighthouse Navigation was established in 2009 and is the commercial arm of Belships ASA providing chartering and operations with a long track record of positive results. The commercial operations and operating activities have expanded and is now present in Bangkok, Oslo, Singapore and Melbourne. Lighthouse is also a commercial manager for bulk carriers owned by SFL Corporation Ltd.

Track record

Profitable every year since its inception in 2009.

Vessels under management

About 70 vessels operated during the quarter

Expanding operation – profitable growth

Present in 4 countries with 80 employees

Low risk profile

Hands-on approach with leading employees invested

Ultramax – Superior Risk/Reward

Average earnings per day - last 10 years

Risk (Annualised standard deviation)

Ultramax: BSI58 plus 10% premium. BSI58 is BSI52 plus \$293 per day prior to 2015 Kamsarmax: BPI82 2018-2021, BPI74 plus \$1 300 day prior to 2018 Capesize: BCI 5TC 2014-2021, BCI 4TC prior to 2014

Uniform and Modern Fleet of 30 Bulk Carriers

Vessel	Built	DWT	Yard	Vessel	Built	DWT	Yard
TBN BELMONDO Newbuild	2023	64,000	Imabari	BELTIGER	2017	63,000	New Times
Newbuild TBN BELYAMATO	2022	64,000	Imabari	BELISLAND	2016	61,000	Imabari
TBN BELTOKYO Newbuild	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 (TO BE DELIVERED)	2016	58,000	Tsuneishi
BELMAR	2021	64,000	Imabari	BELTIDE (TO BE DELIVERED)	2016	58,000	Tsuneishi
BELFAST	2021	64,000	Imabari	BELFOREST	2015	61,000	Imabari
BELAJA	2020	61,000	Shin Kurushima	BELHAWK	2015	61,000	Imabari
BELMOIRA	2020	61,000	Shin Kurushima	BELPAREIL	2015	63,000	Hantong
BELFUJI	2020	63,000	Imabari	BELSOUTH	2015	63,000	Hantong
BELRAY	2019	61,000	Shin Kurushima	BELOCEAN	2011	58,000	Dayang
BELNIPPON	2018	63,000	Imabari	BELNOR	2010	58,000	Dayang
BELHAVEN	2017	63,000	Imabari	BELSTAR	2009	58,000	Dayang

Highly Profitable Contract Coverage

42 per cent of available ship days in 2022 are booked at about USD 25 500 net per day

Undervalued – Strong Downside Protection

Potential cash yield from operations in 2022 (excluding Lighthouse Navigation)

Dividend policy of minimum 50 per cent of net result

Belships is Determined to be Proactive and Contribute to a Sustainable Shipping Industry

CO2 per tonne km

Agenda

2020

• Modernisation continues, with three fully-financed new eco Ultramax vessels being delivered in 2020
• New carbon footprint study initiated with DNVGL
• Belships regarded as leading within corporate governance by Danske Bank and on course for delivering emission cuts in line with industry ambitions for 2030
• Part of the Maritime Anti-Corruption Network (MACN) working towards the vision of a maritime industry free of corruption

2021

• 14 x ECO Ultramax Newbuildings to be delivered in 2019-2023
• Signed the Neptune declaration as part of ongoing work to mitigate impact of Covid-19 on our seafarers
• Issued first comprehensive ESG report in accordance with the Marine Transport Framework

Shipping is the most energy efficient means of transporting goods and resources

Contributing towards sustainable shipping through modernisation and transparency

Market Update – High Levels, High Volatility

Current Supramax spot and FFA curve

Spot rates Forward rates CORONA (COVID-19) – Port closures and vessel waiting times especially in Asia are causing fleet inefficiencies which contribute to tighter market dynamics. Economies are continuing to recover after last years historical dip as evidenced by rising interestrates in many OECD economies. Manufacturing PMI has rebounded strongly and is currently indicating continued growth.

CARGO – The rally in commodity markets this year has resulted in increased import figures for most regions – evidencing a widespread demand recovery. Prices for iron ore and coal are down from peak levels, guided ore volumes ex Brazil for next year appear supportive for freight market. Grain exports from Australia and potential end of year coal rebound on the back of a brewing energy crisis appears to be the main triggers short term. The disruptions in the container markets continue to add support as some cargo typically transported in containers are now being shipped in bulk carriers.

RATES – The fourth quarter so far has displayed very volatile rates as the spot markets dropped significantly in a period of under two weeks. This is a reminder that freights are sensitive to swings both ways regardless of fundamentals. Main reasons are the end-of-year curbs in steel production coupled with a reduction in waiting times. Still, the currentfreight rate levels are high and the FFA market is trading at levels indicating above USD 20 000 per day all next year for Ultramaxes.

Positive Outlook Supported by Lowest Orderbook in 30 Years

Lowest fleet growth in decades

ORDERBOOK/SUPPLY - The publicly quoted order book for the Supra/Ultramax segment is below 6 per cent – historically very low. In relative terms, we are heading towards the lowest rate of supply growth in 30 years. The average sailing speed has increased in 2021, showing that the market has been able to absorb this inherent fleet supply during a sharp increase in spot rates. This is an importantindicator of positive market fundamentals.

STIMULUS AND ECONOMIC GROWTH – Credit growth and economic stimulus was evident before COVID-19, and has continued as a reaction from governments to counter the economic effects of the pandemic. This has been positive for the dry bulk market and may last well into 2022 as the effects of fiscal stimulus usually lags about 12-24 months. Seaborne iron ore is predominantly driven by Chinese demand, whereas minor bulks tend to correlate closer with GDP. General consensus points towards healthy levels of economic activity for next year.

GREEN SHIFT, INFRASTRUCTURE BOOM OR ENERGY CRISIS – Alone or toghether, they all contribute to dry bulk demand. We expect this to accelerate from the ongoing green shift and activity in infrastructure in US and Europe. The market outlook is positive for 2022 and 2023.

Belships ASA - Investment Highlights

Platform

Proven track record – growth delivered

Governance

Simple structure, low costs and transparency leader

Flexibility

Majority of the fleet with purchase options – no obligations

Leverage

High operational leverage providing significant upside and dividend capacity

Key drivers

Infrastructure/raw materials boom ahead of lowest orderbook in 30 years

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 November 2021 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

	Q3	Q3	YTD Q3	YTD Q3
USD 1 000	2021	2020	2021	2020	2020
Gross freight revenue Note	238 169	54 889	511 150	142 237	220 332
Voyage expenses	-34 306	-12 591	-93 666	-41 147	-61 065
2 Net freight revenue	203 863	42 298	417 484	101 090	159 267
Management fees	1 397	1 035	4 569	4 416	6 095
2 Operating income	205 260	43 333	422 053	105 506	165 362
Share of result from j/v and assoc. comp.	3 598	196	6 081	1 511	3 052
T/C hire expenses	-125 262	-23 484	-260 187	-53 759	-90 401
Ship operating expenses	-14 675	-10 634	-35 040	-30 002	-38 675
Operating expenses management companies	-10 689	-2 622	-21 605	-8 234	-11 861
General and administrative expenses	-1 090	-849	-3 463	-2 356	-3 491
Operating expenses	-148 118	-37 393	-314 214	-92 840	-141 376
EBITDA	57 142	5 940	107 839	12 666	23 986
3 Depreciation and amortisation	-6 780	-6 823	-20 633	-21 250	-27 286
3 Impairment	0	0	0	-4 868	-4 957
Gain on sale of ships	0	0	0	2 469	2 469
Other gains/(-losses)	0	-282	-6 739	2 056	1 165
Operating result (EBIT)	50 362	-1 165	80 467	-8 927	-4 623
Interest income	224	236	655	743	985
Interest expenses	-4 000	-3 386	-10 841	-10 435	-13 668
Other financial items	-950	-13	-1 294	-389	-729
Currency gains/(-losses)	-798	282	-946	636	875
Net financial items	-5 524	-2 881	-12 426	-9 445	-12 537
Result before taxes	44 838	-4 046	68 041	-18 372	-17 160
6 Taxes	-9 619	-127	6 173	-234	-583
Net result	35 219	-4 173	74 214	-18 606	-17 743
Hereof majority interests	25 024	-4 260	55 503	-18 156	-19 898
Hereof non-controlling interests	10 195	87	18 711	-450	2 155
Earnings per share	0.14	-0.02	0.29	-0.08	-0.08
Diluted earnings per share	0.14	-0.02	0.29	-0.08	-0.08

Consolidated statement of income Consolidated statement of financial position

	30 Sep	30 Sep	31 Dec
	2021	2020	2020
USD 1 000 NON-CURRENT ASSETS
Note Intangible assets 6	11 178	2 506	1 770
Ships, owned 3	203 105	223 500	214 494
Ships, right-of-use assets 3	308 661	160 667	157 143
Prepayment of lease obligations on ships	0	3 000	3 000
Property, Plant, and Equipment	4 375	4 312	4 878
Investments in j/v and assoc. companies	5 779	1 883	2 123
Other non-current assets	2 373	13 392	5 394
Total non-current assets	535 471	409 260	388 802
CURRENT ASSETS
Asset held for sale 3	21 349	0	5 917
Bunkers	14 963	6 174	5 344
Current receivables	64 031	13 053	30 431
Cash and cash equivalents	106 461	35 453	33 985
Total current assets	206 804	54 680	75 677
Total assets	742 275	463 940	464 479
EQUITY AND LIABILITIES
Equity Paid-in capital	158 678	137 830	137 962
Retained earnings	49 773	7 633	5 956
Non-controlling interests	23 131	3 937	6 099
Total equity	231 582	149 400	150 017
Non-current liabilities
Mortgage debt 4	120 907	132 313	119 561
Lease liability 5	265 447	124 484	127 754
Other non-current liabilities	2 189	2 364	2 769
Total non-current liabilities	388 543	259 161	250 084
Current liabilities
Mortgage debt 4	14 268	10 368	22 176
Lease liability 5	15 975	19 375	11 986
Other current liabilities	91 907	25 636	30 216
Total current liabilities	122 150	55 379	64 378
Total equity and liabilities	742 275	463 940	464 479