Belships — Investor Presentation 2023

May 9, 2023

COMPANY PRESENTATION | Q1 2023 MAY 2023

Our business – Dry Bulk Shipowning and Operating

Highlights – Q1 2023

Earnings summary CONTRACT COVERAGE SECURES OUTPERFORMANCE AND DIVIDEND OUTLOOK

• Operating income of USD 112.8m
• EBITDA of USD 43.7m including USD 8.2m from Lighthouse Navigation
• Net result of USD 27.8m
• Declared dividend of NOK 0.70 per share
• TCE of USD 20 559 gross per day for owned fleet 100 per cent outperformance of market
• Acquisition of 4x Ultramax newbuildings 2024-2026
• 98 per cent of ship days in Q2 2023 are fixed at USD 19 000 gross per day
• 72 per cent of ship days in the next four quarters are fixed at USD 18 600 gross per day
• Modern fleet of 35 vessels, including newbuildings, with cash breakeven for 2023 of about USD 10 900 per vessel per day

Average TCE	EBITDA
USD 20 559/day	USD 43.7m
Net result	Dividend
USD 27.8m	NOK 0.70 per share

Financial position
Assets	Equity and liabilities
Cash and cash equivalents	Book value equity
USD 127.7m	USD 295.6m
Book value ships	Lease liabilities
USD 771.3m	USD 465.1m
Net working capital	Bank debt
USD 6.7m	USD 145.0m

Lighthouse Navigation – Dry Bulk Operating

New Fleet – Unparalleled Optionality

• 75 % of debt
• All with fixed interest rates, zero covenants
• All leases with purchase options, no obligations
• Average maturity in 2030
• 25 % of debt
• No covenants restricting dividend distributions
• Maturity in 2027

• BELSOUTH is debt free

Acquisition of Resale Newbuildings – All fully financed

4x 64 000 DWT Ultramax Bulk Carriers Delivery

• Japanese-built 64 000 dwt Ultramax represents the highest quality and efficiency available today
• Japanese lease financing with fixed costs
• 100% leverage No cash invested
• 7 years duration with optional period upto 10 years
• Average cash breakeven about USD 14 000/day
• Purchase options during the charter, all in USD
• No obligation to acquire any of the vessels
• A levered bet on a historically low order book

Zero impact on cash and dividend capacity during construction period

Ultramax – Superior Risk/Reward

Average earnings per day last 5 years

Compelling Supply Side – Historically Low Orderbook

Lowest fleet growth in decades – Ageing fleet

ORDERBOOK/SUPPLY - The order book for Supra/Ultramax bulk carriers is about 7 per cent. In relative terms, we are heading towards the lowest rate of supply growth in 30 years. Reduced amount of newbuildings coupled with very little scrapping/recycling has led to a consistantly ageing fleet (see graph left below).

NUMBERS FOR THOUGHT: Currently there are about 4 000 ships on the water in the 45 – 65 000 dwt bracket. Only 1/3 of these are Ultramax vessels. The rest – are smaller, older and/or non-economical.

100x vessels are scheduled to be delivered in 2023. We assume the same level of newbuilding delvieries in 2024 and 2025. Even if newbuilding supply doubled it would take a decade to modernise the existing fleet – let alone be sufficient to scale the adaptation of new fuels like ammonia/methanol.

REGULATIONS: The new regulations (EEXI) in 2023 and Carbon Intensity Index (CII) from 2024 are clear signs of a new emission landscape emerging. Many old/non-economical ships may have to reduce max speed in order to achieve compliance. We believe it will be a competitive advantage to operate the most modern fleet possible over the next 5-10 years.

NEWBUILDING PRICES: Ordering activity for bulk carriers remains low, cost inflation and high demand from other shipping segments has reduced the available shipbuilding capacity for bulk carriers for the next 3 years. A Japanese Ultramax newbuilding would today cost in the region of USD 37m with delivery in Q2 2026.

SECONDHAND VESSEL VALUES: Secondhand values decreased abut 20 per cent during 2H 2022. Values for new/modern vessels held up better than old ships. Sentiment has picked up and values for modern ships are up 15% since the bottom in December.

Early signs of life, expectations are high

Current freight market - Spot and FFA

RATES – The Baltic Supramax Index (BSI-58) averaged 10 200 per day – down from 14 800 in Q4 and 19 700 in Q3. The Baltic Exchange Supramax spot index is currently about USD 12 500 and has improved YTD. Freight Forward Agreements (FFA) currently indicate a market average of about USD 16 000 for an Ultramax for the remaining part of the year.

DEMAND – According to Fearnleys, Q1 2023 shipment volumes were 260 million tonnes, compared to 256 million tonnes shipped in Q4 2022. The highest growth was seen in the iron ore trades increasing 80%, grains by 9%, whilst minor bulks fell 9% from Q4. Overall flattish development into Q2 as steell margins tighten and commodity prices have receded from very high levels.

Port congestion normalised to pre-COVID levels. Congestion may again increase this year, however we believe that it could be offset by an increase in the average sailing speed of the vessels.

FOOD, ENERGY AND INFRASTRUCTURE – Seaborne iron ore is predominantly driven by Chinese demand for steel production, whereas minor bulks tend to correlate closer with wider GDP growth. Rising inflation and recession fears has lowered GDP growth estimates, though indicators are mostly positive for 2023. China reopening and pent-up demand effects from last year, coupled with economic stimulus is expected to support dry bulk demand in the medium term.

Significant de-risk: Highly Profitable Contract Coverage

2023 Belships cash break-even USD 10 900 per vessel per day

Payouts since dividend policy Q2 2021

Creating value and returning it to shareholders

A Safe Harbour in High Seas

Modern Ultramax Fleet

35x vessels with an average age of 4 years

Fully Financed

Fixed interest rates on 75% of debt

Market Dynamics

Short term headwinds vs lowest orderbook in 30 years

Solid Contract Coverage

Dividend capacity secured for 2023

Value

Discount to NAV and outsized dividend yield

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 8 May 2023 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

	Q1	Q1
USD 1 000	2023	2022	2022
Gross freight revenue Note	147 864	258 287	926 494
Voyage expenses	-36 768	-30 802	-204 769
Net freight revenue 2	111 096	227 485	721 725
Management fees	1 801	2 003	8 996
Operating income 2	112 897	229 488	730 721
Share of result from j/v and assoc. comp.	3 460	12 366	31 065
T/C hire expenses	-51 731	-156 818	-450 524
Ship operating expenses	-14 335	-13 362	-55 571
Operating expenses management companies	-5 278	-8 564	-26 663
General and administrative expenses	-1 340	-2 601	-7 068
Operating expenses	-69 224	-168 979	-508 761
EBITDA	43 673	60 509	221 960
Depreciation and amortisation 3	-11 286	-8 236	-39 031
Gain on sale of ships 3	0	12 308	22 274
Other gains/(-losses)	1 830	3 494	1 342
Operating result (EBIT)	34 217	68 075	206 545
Interest income	413	4	962
Interest expenses	-8 472	-5 079	-26 106
Other financial items	-556	-1 628	-1 895
Currency gains/(-losses)	2 254	-641	-2 362
Net financial items	-6 361	-7 344	-29 401
Result before taxes	27 856	60 731	177 144
Taxes	-88	-1 197	-2 084
Net result	27 768	59 534	175 060
Hereof majority interests	23 190	46 738	146 886
Hereof non-controlling interests	4 578	12 796	28 174
Earnings per share	0.11	0.24	0.69
Diluted earnings per share	0.11	0.23	0.69

Consolidated statement of income Consolidated statement of financial position

		31 Mar	31 Mar	31 Dec
USD 1 000		2023	2022	2022
NON-CURRENT ASSETS	Note
Ships	3	771 282	574 108	747 042
Prepayment of ships		0	10 050	6 900
Property, Plant, and Equipment		3 930	4 090	3 702
Investments in j/v and assoc. companies		14 936	26 829	29 483
Other non-current assets		1 080	230	1 076
Total non-current assets		791 228	615 307	788 203
CURRENT ASSETS
Bunker inventory		15 862	27 155	14 675
Current receivables		59 991	71 333	57 544
Cash and cash equivalents		127 691	161 162	139 871
Total current assets		203 544	259 650	212 090
Total assets		994 772	874 957	1 000 293
EQUITY AND LIABILITIES
Equity
Paid-in capital		158 359	157 435	158 359
Retained earnings		103 046	97 383	98 864
Non-controlling interests		34 192	40 275	40 112
Total equity		295 597	295 093	297 335
NON-CURRENT LIABILITIES
Long-term interest bearing debt	4	580 047	437 127	555 202
Other non-current liabilities		1 780	1 733	1 729
Total non-current liabilities		581 827	438 860	556 931
CURRENT LIABILITIES
Current portion of interest bearing debt	4	30 022	24 640	50 053
Other current liabilities		87 326	116 364	95 974
Total current liabilities		117 348	141 004	146 027
Total equity and liabilities		994 772	874 957	1 000 293

Appendix: Belships ASA – Group Structure

Appendix: Uniform and Modern Fleet of 35 Bulk Carriers

Vessel	Built	DWT	Yard
NEWBUILD TBN	2026	64 000	Japan
NEWBUILD TBN	2025	64 000	Japan
NEWBUILD TBN	2025	64 000	Japan
NEWBUILD TBN	2024	64 000	Japan
BELMONDO	2023	64 000	Imabari
BELYAMATO	2022	64 000	Imabari
BELTOKYO	2021	64 000	Imabari
BELFORCE	2021	61 000	Dacks
BELKNIGHT	2021	61 000	Dacks
BELTRADER	2021	61 000	Dacks
BELGUARDIAN	2021	61 000	Dacks
BELMAR	2021	64 000	Imabari
BELFAST	2021	64 000	Imabari
BELAJA	2020	61 000	Shin Kurushima
BELMOIRA	2020	61 000	Shin Kurushima
BELFUJI	2020	63 000	Imabari
BELNIKE	2020	63 000	Imabari
BELTANGO	2020	64 000	Mitsui

Vessel	Built	DWT	Yard
BELFORTE	2019	64 000	Mitsui
BELRAY	2019	61 000	Shin Kurushima
BELNIPPON	2018	63 000	Imabari
BELAFONTE	2017	63 000	Imabari
BELHAVEN	2017	63 000	Imabari
BELTIGER	2017	63 000	New Times
BELISLAND	2016	61 000	Imabari
BELINDA	2016	63 000	Hantong
BELMONT	2016	63 000	Hantong
BELATLANTIC	2016	63 000	Hantong
BELLIGHT	2016	63 000	New Times
BELFRIEND	2016	58 000	Tsuneishi
BELTIDE	2016	58 000	Tsuneishi
BELVEDERE	2015	66 000	Mitsui
BELFOREST	2015	61 000	Imabari
BELHAWK	2015	61 000	Imabari
BELSOUTH	2015	63 000	Hantong