(Singapore, 23 May 2023)
Highlights and Subsequent Events
- Strongest quarterly performance on record with highest-ever daily TCE of USD 58,700 per calendar day and USD 60,900 per available day
- Generated Q1 NPAT of USD 131 million which translates to an earnings per share of USD 0.95 (NOK 10.33)
- Declared Q1 cash dividend of USD 0.95 (NOK 10.33) per share, representing a pay-out ratio of 100% of NPAT and an annualised dividend yield of 43%
- High liquidity of USD 532 million and low net leverage ratio of 21%
- Sold three vessels at a combined premium of USD 43 million to book value, and welcomed six vessels to the pool fleet in Q1 and Q2 2023
- Fixed approximately 90% of available fleet days for Q2 2023 at an average rate of about USD 50,000 per day
- New USD 50 million share buy-back program resolved by the Board; to be executed as open market purchases or a tender offer with details to follow
Financial Performance
BW LPG Limited (“BW LPG”, the “Company”, OSE ticker code: “BWLPG.OL”) reported its strongest quarterly performance on record with highest ever daily Time Charter Equivalent (“TCE”) of USD 58,700 per calendar day. Net Profit After Tax (“NPAT”) for the quarter was USD 131 million, yielding an annualised return on equity of 33% with USD 171 million of free cash flow, and representing an earnings per share of USD 0.95.
Net leverage ratio was down to 21% in Q1 2023, mainly due to solid cash flows from operations and investing activities. Available liquidity was USD 532 million at the end of the quarter. On the back of the strongest quarter on record, the Board has declared a cash dividend of USD 0.95 which translates to an annualised dividend yield of 43% to shareholders and a pay-out ratio of 100% of NPAT. Due to the strong performance and market outlook, the Board has decided to pay a dividend of 100% of NPAT although net leverage is not yet below 20%.
Between 8 December 2021 and 11 April 2023, BW LPG has bought back a total of 7.3 million shares amounting to approximately USD 46 million. The Board has resolved to initiate a new share buy-back program for the purchase of shares up to a maximum of USD 50 million. Details on execution will be provided when the new share buy-back program is launched.
Commercial Performance
Q1 2023 VLGC freight rates averaged USD 58,700 per calendar day, or USD 60,900 per available day with 97% commercial utilisation. TCE income for the Shipping segment was USD 200 million for the quarter, mainly due to higher LPG spot rates and higher fleet utilisation. In addition, our Indian subsidiary continues to contribute stable TCE income of USD 24 million for Q1 2023, mainly from fixed-rate time charters and solid spot rates.
BW Product Services concluded its first full quarter of operations, delivering a net profit after tax of USD 3 million for the quarter and trading over 1 million MT of LPG.
The sale and delivery of BW Thor was concluded in Q1, and the same for BW Odin and BW Austria in Q2. In a strong second-hand market, the sale of the latter two vessels generated approximately USD 113 million in liquidity and a net book gain of approximately USD 26 million. BW LPG is pleased to welcome five vessels to the pool in Q1 and one additional vessel in Q2. BW Messina (2017-built, Daewoo Shipbuilding & Marine Engineering Co) was delivered to BW LPG in Q2, following the declaration of an attractive purchase option under the time charter agreement as reported in Q1.
Market Outlook
For 2023, the VLGC market looks strong but volatile. Key underlying drivers include solid US and steady Middle Eastern export growth, improved economics for Propane Dehydrogenation (PDH) plants in China and continued shipping inefficiencies. The high newbuilding prices also contribute to higher time charter rates.
Q1 2023 Earnings Presentation and Interim Financial Report
Please see attachments for the Q1 2023 Earnings Presentation and Interim Financial Report.
1. BW LPG Q1 2023 Earnings Presentation
2. BW LPG Q1 2023 Interim Financial Report
BW LPG will host an investor presentation of the financial results at 13:00hrs CET today. The presentation will be made by Anders Onarheim (CEO), Kristian Sørensen (Deputy CEO and Head of Strategy), Elaine Ong (CFO), and Niels Rigault (EVP, Commercial).
The presentation will be held live via Zoom. Please register in advance at the link below:
https://tinyurl.com/BWLPGQ12023EP
A recording of the presentation will also be available after the event on the Company’s website at: https://www.bwlpg.com/investors.
For further information, please contact:
Elaine Ong, CPA, CA
Chief Financial Officer
Tel: +65 6705 5506
E-mail: elaine.ong@bwlpg.com
Iver Baatvik
Head of Corporate Development and Investor Relations
Tel: +65 6705 5519
E-mail: iver.baatvik@bwlpg.com
About BW LPG
BW LPG is the world’s leading owner and operator of LPG vessels, owning and operating Very Large Gas Carriers (VLGC) with a total carrying capacity of over 3 million CBM. With five decades of operating experience in LPG shipping, experienced employees and an in-house LPG trading division, BW LPG offers an integrated, flexible, and reliable service to customers. More information about BW LPG can be found at www.bwlpg.com.
BW LPG is associated with BW Group, a leading global maritime company involved in shipping, floating infrastructure, deepwater oil & gas production, and new sustainable technologies. Founded in 1955 by Sir YK Pao, BW controls a fleet of over 490 vessels transporting oil, gas and dry commodities, with its 200 LNG and LPG ships constituting the largest gas fleet in the world. In the renewables space, the group has investments in solar, wind, batteries, biofuels and water treatment.
This information is subject to disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.
