Uncertainty of the macro-economic climate has prompted Fearnley Securities to cut Norwegian bulker player Belships’ stock from ‘buy’ to ‘hold’. The investment bank praised the Oslo-listed company’s fleet and management for doing nearly everything right in recent years. And a big first-quarter profit is predicted.

But analysts Peder Nicolai Jarlsby, Erik Gabriel Hovi and Ulrik Mannhart argue that there are too many “red flags” for the bulker sector to back the stock.

Results are due on 12 May and Fearnleys is tipping Ebitda of $63m, including $24m from in-house cargo trading division Lighthouse. This would be well above consensus of $50m. “We expect another strong quarter, once again driven by a knockout result from Lighthouse,” the analysts said.

“Although Belships has a stellar fleet and management has done about everything right over the past years, we believe there are simply too many red flags on the macro/dry bulk horizon to maintain our buy recommendation,” they added.

Fearnleys points to only marginal, if any, growth in iron ore volumes, a fragile Chinese construction sector and overall lower economic growth as posing concerns, particularly into the second half of 2022. Longer-term, however, fleet growth and increased scrutiny of older tonnage will aid the dry bulk market and particularly those owners with modern vessels like Belships.

In March, Belships revealed a hugely profitable start to 2022 for Lighthouse, which banked Ebitda of $16m for January and February. The unit operated 65 ships during these two months.

Belships also said time charter equivalent (TCE) earnings will be about $23,900 per day for its fleet in the first three months. In the following four quarters, the shipowner has contract coverage of about 55% at $23,000 per day.