Result 4th quarter 2006
FINANCIAL PERFORMANCE
Belships' operating income for the 4th quarter 2006 amounted to USD
14,003,000 (4th quarter 2005: USD 15,860,000). The company's operating
profit amounted to USD 1,960,000 (USD 1,113,000) The positive profit
development is mainly related to Elkem Chartering's Handysize Operation.
Profit after tax for the 4th quarter amounted to USD 939,000 (USD
511,000). The operating profit for the year amounted to USD 7,034, 000 (USD
7,636,000), and profit after tax was USD 6,027,000 (USD 3,925,000). The
profit after tax is influenced by the positive outcome of the tax issue in
Singapore reported earlier. The report for the 4th quarter has been
submitted in accordance with IAS 34. For reconciliation with previous
annual and quarterly accounts according to generally accepted accounting
practices in Norway, we refer to the transition document published
previously.
OPERATIONS
The dry cargo market improved further during the 4th quarter. The basis
for this is a steady increase in Chinese ore import, increased use of coal
in the production of electric power and the fact that newbuildings planned
for delivery during the quarter, to a large extent were moved forward into
2007. Elkem Chartering's profit for the 4th quarter was better than
anticipated. The Handysize Operation contributed to the improved profit
both through the spot market and an almost ideal positioning with regard
to our own contract cargo. The Handymax ships continued on their regular
charter parties with results as anticipated. Belships' own tonnage, M/S
Belnor and M/S Belisland, continued their charter parties with results as
anticipated.
FINANCIAL AND OTHER ISSUES
The company's solidity and financial position strengthened during the 4th
quarter. As per 31 December, the group's liquidity amounted to USD 33.8
mill. compared to USD 33.5 mill. at 30 September.
The company's mortgage debt at the end of the 4th quarter amounted to USD
11.8 mill. The loan is repaid by semi-annual instalments of USD 1.5 mill.
In addition the company has a bond issue amounting to USD 15.8 mill. due
in 2011.
At the end of the year, the book value per share was NOK 5.53, while the
book equity-to-assets ratio came to 37.66%. The market value of M/S Belnor
is significantly higher than the book value.
The board will propose to the general meeting a payment of dividend of NOK
0.75 per share. During the 4th quarter Belships acquired 324,000 own
shares at an average cost price of NOK 9.69 per share. At year-end the
company owned 726,000 own shares at an average cost price of NOK 9.34 per
share.
OUTLOOK
So far the dry cargo market has weakened slightly in 2007, and this is
inter alia related to the delivery of newbuildings which have been delayed
from the 4th quarter of 2006. A clarification of the market trends is
expected after the Chinese New Year at the end of February. It is worth
noting that Chinese steel producers already in January signed contracts
with the largest suppliers of iron ore for the fiscal year starting in
April. This is different from last year, when the price negotiations
stretched into June and led to considerable uncertainty. The Handymax ship
M/S Legend Phoenix has been fixed for a period of 3 years starting in
April 2007, which will result in a profit contribution in Belships of
approx. USD 2 mill per year. The Board anticipates a satisfactory result
for the 1st quarter 2007. |
