This was the quarter full of records and all-time-highs for Belships and while the extreme Supramax rates signalled for strong Own Ships performance, tremendous figures from Lighthouse Navigation segment put the cherry on top. Strong results led to NOK 0.4/sh dividends, doubling our predictions. Very solid outlook remains as well and we will make upward estimate changes in our model, mostly the LN segment, while our positive stance towards the stock is likely to be reiterated.
Ships somewhat better, but what a performance from Lighthouse Navigation
Seeing the extreme Supramax rates, but keeping the lag in mind, we projected almost USD 30m in operating income for the ships and USD 19m in EBITDA, but the results beat our expectations and came in at USD 32.6m and USD 22.7m respectively. The lag from rates to revenues is still there, also meaning that when the spot markets fall, the outperformance should commence. However, this is not the story just yet, as the Supramax rates are breaching record levels, while the preliminary estimates for Supramax shipment volumes in July are showing another all-time record. However, this could have been predicted, but the Lighthouse Navigation – the commercial operations – brought the results to the next level with NOK 14.5m in EBITDA. Such results brought the quarterly dividends to NOK 0.4/sh, in line with the previously stated politics of 50% of the net result.
2/5 vessels of 3Q21 already delivered
To benefit from elevated rates, Belships had planned the delivery of five Ultramax vessels in 3Q21: two have already been delivered in August, one should be delivered in the next two weeks and two more in September, thus, as planned. In addition to this, there will be two newbuilds coming in 4Q21 and 4Q22.
Outlook remains strong, estimates should be upped
The demand growth has been strong across almost all commodities and regions through 2Q21 while we can already see the winter restocking season ahead. The vessel deliveries, on the other hand, are on track to be the lowest since 2007 in number of vessels and in relative terms it is approaching the lowest level in several decades. Thus, we will up our estimates, especially for the Lighthouse Navigation segment, and we expect at least 2 upcoming years to be very strong for the company.
Source: Norne Research