Belships, a prominent player in the maritime industry, has released its 2Q23 report, revealing a performance that aligns well with expectations despite the challenging environment. The company’s key figures met our projections, instilling a sense of stability in the midst of uncertain times.
Steady Outlook in Shipping Contracts
With nearly all shipping days for 3Q23 secured through contracts and over half of the shipping days for the next year similarly contracted, Belships showcases its commitment to stability in a volatile market. Notably, the company has also made a strategic move to bolster its fleet by ordering two additional Ultramaxes, bringing the total fleet size to an impressive 36 vessels, inclusive of newbuildings. This expansion reflects Belships’ proactive approach to growth.
Resilience in Financial Performance
The reported figures for 2Q23, while not reaching the heights of previous quarters, demonstrate a steady and robust performance, consistent with both our expectations and the broader consensus. The intricacies of Lighthouse Navigation often make predictions challenging, but the spotlight was on the shipping segment, which yielded an operating income of nearly USD 50 million and an EBITDA of USD 34 million. This achievement is attributed to favorable contractual agreements. The company’s assertion that 91% of shipping days in 3Q23 are secured at USD 18,100/day and 58% of the following four quarters at the same rate further solidifies their position.
Strategic Divestment and Dividends
A noteworthy development in 2Q23 was the divestment of Belships Management, a Singapore-based company specializing in technical and crew management. This move was previously announced and has resulted in a tangible gain of USD 8.5 million in the company’s Profit and Loss statement. Furthermore, Belships proposed a quarterly dividend of NOK 0.60 per share, equivalent to roughly 60% of the adjusted net profit, aligning well with market expectations.
Fleet Expansion Plans
Belships is not resting on its laurels. The company’s vision for growth includes the order of two new vessels set to join the fleet in 2H24 and 1H27. Additionally, the ongoing construction of six newbuildings signifies the company’s commitment to maintaining a modern and robust fleet, bolstering its competitive edge.
Navigating Forward
As the industry grapples with uncertain market conditions, Belships stands resilient. The company’s contract coverage provides a buffer for profitability, with the cash break-even point set at USD 10,900/day, a figure comfortably below the current spot rates. While spot rates are currently below this threshold, the Forward Freight Agreements (FFAs) for Supramaxes indicate a promising market average of approximately USD 12,000/day for the remainder of the year. Looking ahead, the long-term outlook remains positive due to favorable forecasts resulting from a historically low order book and an aging fleet.
In conclusion, Belships’ performance in the face of challenges showcases its strategic resilience and commitment to stability. The maritime industry is a turbulent sea, but Belships’ steady course and strategic decisions have positioned it to navigate the waves with confidence.
