Another solid report was posted this morning by Belships. Although the first glance might be somewhat negative, lower than predicted figures came in from the volatile Lighthouse Navigation segment, while our estimates were spot on for the main segment to look at – the drybulk shipping. As the feet renewing investments were not impacting the P&L figures, dividends came in larger than we anticipated: NOK /sh. ST outlook is positive for the company due to the large portion of COA, while the LT market fundamentals remain promising seeing historically low orderbook, thus, we are not likely to make drastic changes to our estimates following the report.
Drybulk shipping segment just as we predicted
The quarter marked a peak in the Supramax rates but also a gradual decline towards the end of it and into the third quarter. Still, with many of the contracts fixed, Belships managed to deliver shipping segment’s figures spot on our expectations and USD 55.5m (USD 55.7m expected by us) operation income and USD 40.7m (USD 40.4m expected by us) EBITDA. The more volatile Lighthouse Navigation segment posted somewhat weaker than we predicted numbers, explained by the provisions for potential loss-making contracts of USD 10.7m based on the forward freight market at the end of the quarter. Solid bottom line resulted in NOK /sh dividends for the shareholders, higher than we predicted, as we had the fleet-adjustment-costs included in the income statement.
Short-term under contracts, long-term supply very low
The war in Ukraine sparked an energy crisis and spurred inflationary pressures in most economies. China continued to fight the pandemic with severe lockdowns in major cities. This has resulted in lower GDP forecasts and fears of demand destruction from increasing commodity prices and rising interest rates. However, the supply side for Belships’ segment is historically low. Looking at the shorter period, the company stated that 97% of ship days in 3Q22 @ USD 24,/d and 72% of ship days in the next four quarters @ USD 23,/d are fixed, which are very solid levels, which signal for at least couple of strong reports upcoming. Thus, we are likely to make only limited changes to our estimates.
