B+H Ocean Carriers, Ltd. Announces Unaudited Results for the First Quarterly Period Ended March 31, 2007

Business Wire, May 12, 2007

NEW YORK -- B H Ocean Carriers Ltd. (AMEX: BHO) reported unaudited net income of $2.7 million or $0.38 per share basic and diluted, for the three months ended March 31, 2007, compared to unaudited net income of $8.9 million, or $1.26 per share basic and $1.22 diluted, for the three months ended March 31, 2006. EBITDA for the three months ended March 31, 2007 was $11.3 million as compared to $13.2 million for the comparable period of 2006. Basic earnings per share calculations are based on weighted average shares outstanding of 6,986,499 and 7,087,785 respectively, for the three months ended March 31, 2007 and 2006. Diluted earnings per share calculations are based on weighted average shares outstanding of 6,986,499 and 7,315,224 for the three months ended March 31, 2007 and 2006, respectively. All remaining options were exercised during the first quarter of 2007; therefore there are no dilutive securities.

The Company noted that offhire relating to its double hull conversion project was 65 days in the first quarter of 2007 and that offhire related to drydocking totaled 41 days in the same period. The Company said that charter hire rates on those voyages made to position two vessels for conversion were significantly less than rates for similar vessels.

The Company also reported that losses on the market value of derivative instruments were $1.2 million. Approximately $1.0 million of the losses were from changes in the market value of put option contracts which were entered into to mitigate the risk associated with changes in charter rates. The balance of $0.2 million was due to changes in the market value of interest rate swaps that do not qualify as cash flow hedges.

The following is a discussion of our financial condition and results of operations for the quarterly period ended March 31, 2006 and 2005. You should read this section together with the unaudited and audited consolidated financial statements for the periods mentioned above.

Quarter Ended March 31, 2007 (unaudited) versus March 31, 2006 (unaudited)

Revenues

Revenues from voyage, time and bareboat charters increased $5.7 million or 27% from the first quarter of 2006 to that of 2007. The increase is due to the vessel acquisitions made in 2006 and to the fact that there were 496 more voyage days, which generate greater gross revenues per charter, in the first quarter of 2007 than in the same period of 2006. The Company, through wholly-owned subsidiaries, acquired one combination carrier in the first quarter of 2006 and one Panamax product tanker in the second quarter of 2006. The new vessels accounted for additional revenue of $1.9 million and $1.1 million respectively, in the first quarter of 2007 versus 2006. The increase in voyage days resulted in additional revenue of $2.6 million for the MR fleet and $0.1 million on one combination carrier. The change from time charters to voyage charters marks a deliberate shift of exposure to the spot market to take advantage of favorable market conditions.

The medium range ("MR") fleet time-charter equivalent rate "TCE" for on-hire days in the three months ended March 31, 2007 was $12,628 versus $14,170 for the comparable period in 2006. This is due to the fact that two vessels were chartered at significantly lower rates in order to position them for conversion to double hulled vessels. The Company noted that offhire relating to this double hull conversion project was 65 days in the first quarter of 2007.

Other revenue of $0.5 million earned in respect of a profit sharing arrangement on one vessel was recorded in the first quarter of 2007. Other revenue of $0.9 million in 2006 was earned in respect of the combination carrier acquired in 2006, in lieu of time-charter revenue, from the January 15, 2006 effective date of the purchase until the closing date.

At December 31, 2007, five of the Company's MR product tankers were employed in the voyage charter market and one was being converted to a fully double-hulled vessel. The remaining seven of the Company's combination carriers and two Panamax product tankers were employed on long-term time charters.

Voyage Expenses

Voyage expenses increased $4.6 million or 278% from the first quarter of 2006 to the first quarter of 2007. The increase is due to the fact that there were 429 voyage days during the three month period ended March 31, 2007 whereas there were only 23 voyage days during this period in 2006. The ship owner is responsible for the port, canal and fuel charges of a voyage charter but is not responsible for these costs when on either a time or bareboat charter.

Vessel Operating Expenses

Vessel operating expenses increased $3.0 million or 45% for the three month period ended March 31, 2007 versus the comparable period in 2006. $1.5 million of this increase is the result of the vessels acquisitions noted above and the remainder is attributable to higher crew related expenses, higher cost of spares and higher repair and maintenance expenses.

Depreciation and Amortization

The increase in depreciation and amortization of $1.3 million or 37% is due to the increase in the number of vessels and to the completed conversions of two of the Company's MRs to fully double hulled vessels. The conversion cost is being amortized over the 5 year remaining estimated useful life of the vessels.