Highlights
• Achieved Q3 2022 VLGC freight rates of USD 37,200 per calendar day
• Generated Q3 2022 Net Profit after Tax of USD 46.4 million or an earnings per share of USD 0.32
• Concluded the sale and delivery of one vessel in October 2022, generating approximately USD 44.2 million in liquidity and a net book gain of USD 2.3 million
• Declared a Q3 2022 cash dividend of USD 0.25 per share amounting to USD 33.3 million
• Received approval from the Spanish regulatory authority for the acquisition of Vilma Oil’s LPG trading operations
Financial Performance
BW LPG Limited ("BW LPG", the "Company", OSE ticker code: "BWLPG.OL") reported a Q3 2022 Net Profit After Tax of USD 46.4 million, yielding an annualised return on equity of 12.5% with USD 57.8 million of free cash flow. EBITDA was USD 92.8 million for the quarter, and earnings per share was USD 0.32.
Net leverage ratio remained low at 24.6% in Q3 2022, mainly due to solid cash flows from operations and investing activities. Available liquidity was USD 365 million at the end of Q3 2022. On the back of another strong quarter, the Board has declared a cash dividend of USD 0.25 per share amounting to USD 33.3 million. This translates to a pay-out ratio of 77% of NPAT for the quarter.
Commercial Performance
Q3 2022 VLGC freight rates averaged USD 37,200 per calendar day, or USD 38,200 per available day with 98% commercial utilisation. Time Charter Equivalent (“TCE”) income was USD 130.0 million for Q3 2022, mainly due to higher LPG spot rates and higher fleet utilisation with the completion of the dual fuel propulsion engine retrofitting program in the previous quarter. This also includes a net positive impact of USD 3.0 million related to the effects of IFRS 15.
The acquisition of Vilma Oil’s LPG trading operations as earlier announced on 1 August 2022 has been approved by the Spanish regulatory authority. The transaction is expected to be completed by the end of the year.
The sale and delivery of BW Prince (2007-built, Hyundai Heavy Industries, Ulsan, Korea) for further trading was concluded in October 2022. The transaction generated approximately USD 44.2 million in liquidity and a net book gain of USD 2.3 million.
Technical Performance
The Company continues to benefit from operating the world’s largest fleet of LPG-powered Very Large Gas Carriers. Year-to-date, approximately 22,300 metric tons of LPG fuel were used, translating to over USD 6 million in savings from fuel price differentials and over 12,000 MT of carbon emissions saved compared to compliant fuel.
The Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) come into force on 1 January 2023. BW LPG has positioned itself well in anticipation of tightening environmental regulations, and we expect operations to remain business-as-usual with all vessels fulfilling their commercial obligations.
Market Outlook
For 2023, the Company remains optimistic despite growing macroeconomic concerns and continued geopolitical uncertainties. This is driven by record high gas production in the U.S., significant growth in the Middle East, and strong growth in European LPG imports. We expect continued strong growth in the Far East in 2023, driven by the completion of Chinese PDH plants.
