BW LPG Limited (BWLP) on Q4 2024 Results - Earnings Call Transcript

Operator: [Call Starts Abruptly] Afterwards, we will open up for a Q&A session. The questions can be put into the Q&A chat or you can raise your hand, unmute yourself and ask your question directly. Before we begin, I would like to highlight the legal disclaimers displayed on the current slide. Please also note that today's call is being recorded. I will now give the word to our CEO, Christian. Kristian Sorensen: Thank you, Aline, and hi, everyone, and thank you for taking the time to be with us today as we review our 2024 Q4 financial results and recent developments. Let's turn to Slide 4, please. For a large part of the quarter, the spot market rates fluctuated in the $35,000 to $40,000 range per day, and our TC income per available day ended at $37,900. This is somewhat lower than previous quarter, but above our guiding of $36,000 per day. The board has declared a dividend of $0.42 per share, which consists of 75% payout of the impact from our shipping activities, topped up with an additional dividend declared from product services for 2024. Total dividend for the year represents 123% payout ratio of our total shipping impact. We're very happy with our product services result last year. The investment we made back in November 22 is already returned with a tidy profit. We do recognize that the accounting result for product services is challenging to decipher. I would recommend that our investors and analysts focus on product services realized results as a guidance on the actual trading performance. The unrealized cargo and paper positions are just showing the change in valuation from end date of one quarter compared to end date of the next quarter, and do not necessarily show a loss when the positions are realized. Moving on to our ship asset side, we closed the Avance Gas transaction as planned, and all 12 VLGCs were well delivered to BW LPG by New Year's Eve. The acquisition has further solidified our position as the world's leading owner and operator of VLGCs with a current owned and operated fleet of 52 vessels, of which 22 are equipped with LPG dual fuel propulsion technology. In addition, we have added to our own fleet with the previous declared purchase option of the 2019 built BW Kizoku, which was delivered to us earlier this month as a purchase price of $69.8 million. Some weeks ago, we also exercised the purchase option of the 2020 built sister vessel BW Yushi, with equally attractive purchase price of around $70 million when the vessel is delivered to us in Q2. On the sale side, we concluded the sale and delivery of the 2007 built BW Cedar earlier this month, and it was generating about $65 million in proceeds and a net book gain of $32 million. Looking at our charting activities, we have over the last months concluded several time charters with commencement throughout 2025, and at the moment, we have 31% of our fleet exposure covered by time charter out at $44,800 per day, and 2% covered by FFA hedges at $50,600 per day for calendar year 2025. This is following our strategy to maintain a solid time charter ratio to sustain the volatility in the spot market. On the market outlook, the VLGC market fundamentals are positive, although the spot market currently is battling in the seasonal winter trough, with less cargoes for export from the U.S. Spot rates are hovering mid $20,000 per day from the Middle East, as well as from the U.S. Gulf, but to anticipate more volumes from the U.S. when you move into the April loading window. And together with the rest of the shipping industry, we're closely following the geopolitical and regulatory developments. I will take the measure if necessary to optimize our company position by using our size and commercial platform. The Panama Canal is operating basically at full capacity and the VLGC is currently absorb about two to three canal slots per day, which is equivalent to 25% of the Neo Panama Canal traffic. Since the capacity is limited to around 10 transits in total per day, it goes without saying that the canal is very sensitive for certain increases or one or two more dry cargo container or LNG vessels competing for the slots. Looking towards the middle of 2025, we'll have a terminal expansion from energy transfer on the U.S. Gulf Coast, and this is an expansion which can flex between LPG and Ethane exports. And we currently assume 50% of the volumes to be designated for LPG. We have more details on this on Slide 7, but for obvious reasons, we view the terminal expansion plans in the U.S. and the Middle East as a positive driver for the VLGC market when matched against the growing demand side in Asia. One thing to keep an eye on is the accelerating dry-docking program for the VLGC fleet this year, with about 80 of a total of 400 ships being scheduled for docking in 2025 compared to 35 last year. And the FFA market is pricing in a substantial uptake in the spot rates later in the year and is currently trading at levels translating to low $40,000 per day, although with limited liquidity. So, let's turn to page 6 for a closer look at the market fundamentals please. Looking at the details and the market the first month of 2025, the spot market has shown a seasonal lack of momentum with less cargoes from the U.S. made available for exports compared to Q4. At the same time, the Middle East exports were dominated by cargo flows by Indian charters. Normally, this time of the year, we do see a turning point with a hand flow and more U.S. cargoes made available for the international market. And in the final balanced market like we are now, the sensitivity of plus minus five to six cargoes a month is enough to drive the market up or down. The more exciting factor in the VLGC market this next year is the expansion of the US export terminal capacity, which we anticipate will push the U.S. VLGC exports towards the mid-60 million tons per year mark by end 2026. In such cases, it's representing an approximate 12% increase from the 2024 VLGC export volumes. On this slide, we summarized the export terminal expansion projects in the U.S. and Canada as well as the Middle East. The number of projects represents a substantially increase in LPG export capacity of about 45% by 2028, and for North America specifically about 66% increase. This is if we assume the flex capacity at U.S. terminals being in full LPG service. If all the flex capacity is designated to Ethan, which we believe is unlikely, it will still represent about 29% growth in LPG export capacity for North America and the Middle East combined. As mentioned, we assume that the middle point of about 50% of the flex capacity will be designated for LPG. Of course, the total LPG export capacity includes all vessel sizes. VLGC is historically counting for about 85% of the export volumes. We know that some of the volumes will be lifted on smaller LPG vessels, but over time, wheel disease will remain the most cost-efficient way of transporting LPG over longer distances, with quick turnarounds at load and discharge port terminals allowing for higher terminal utilization. Next slide, please. The overall landscape remains largely unchanged since the last update. In Asia, demand for LPG continues to grow, driven by the residential sector in the Indian subcontinent, as well as Southeast Asia, while China's petrochemical industry is steadily increasing its use of propane as feedstock for its PDH plants. What's interesting to note from last week's news is that there is increased attention at government level about India potentially importing more of their energy from the U.S. in the future to diversify their sourcing of energy. If this materializes, it will add significant ton-miles compared to today's Middle East-India milk run trade. And another trend is that wheel disease cover a larger part of the Indian LPG imports at the cost of smaller vessels due to improved infrastructure and terminal capacity. And more wheel disease are consequently going to serve the growing Indian imports of LPG. If you look at the wheel disease fleet and new buildings, there is not much change from last quarter except for four more vessels added to the list with delivery 2027-'28. There is good visibility on the new building deliveries over the next 18 months, and for 2025, we have 13 vessels on our list. And then I turn the microphone to you, Samantha. Samantha Xu: Thank you, Kristian, and hello, everyone. In the past winter quarter, where lower activities were experienced, we have achieved a 96% fleet utilization and a TCE of $36,700 per calendar day or $37,900 per available day. This is in part thanks to our consistent strategy execution using healthy level Time Charter and FFA for coverage, avoid leaving earnings purely to spot market swings. The benefit is clear when you look at the difference between the spot rate excluding FFA, which is $31,600 this quarter, and spot rate including FFA, which is $35,400 per day, as shown in the slide here. In Q4, the Time Charter portfolio was 38% of the total shipping exposure, supporting the earning when the spot market softened. For Q1 2025, we have fixed 91% of the available fleet days at about $36,000 per day. Looking ahead, our Time Charter out fleet is estimated to generate a profit of around $22 million over our Time Charter in fleet, with the balance of our fixed Time Charter out portfolio estimated to bring additional $137 million for 2025. Next slide, please. On product services side, the business achieved a gross profit of $50 million, which included a remarkable realized profit of $59 million, which represents the money in the bank from our successful trading activities. The unrealized cargo and paper position has seen some notable mark-to-market changes this quarter, total of $44 million. After accounting for G&A, tax, et cetera., product services closed off the quarter with a net profit of $3.4 million. As we mentioned in previous quarters, the large sum of mark-to-market value is due to the gradual phase in of our multiple year term contract. While the amount is significant, it is only a delta reflected on the balance sheet date and will continue to fluctuate before the positions are realized. As of the end 2024, product services book equity reported $130 million. As usual show, we would like to highlight that the reported book equity does not include the unrealized fiscal shipping position of $14 million, which was based on our internal valuation. In Q4, our average value at risk was $7 million reflecting a well-balanced trading book, including cargoes shipping and derivatives, even with the increased volume from the mentioned term contract. Coming to the financial highlights, the company reported a net profit after tax of $40 million in Q4, including a profit of $17 million from BWLPG India, and $3 million from product services. Profit attributable to equity holders of the company was $31 million per quarter, which translates to a earning per share of $0.22 per share and analyze the annualized earning yield of 8% when calculated on our year-end share price. The Q4 dividend concluded 2024 with a total dividend of $2.42 per share. We reported a net leverage ratio of 33% in Q4, an increase from 12% in Q3. This increase was mainly driven by the additional borrowings used to finance the advanced gas fleet, with the last vessel delivered on 31st December, a perfect conclusion for the eventful year. Compared with the previous quarter, we increased borrowings by $628 million, including drawdowns from our revolving credit facilities, shareholder bridge loan, and transfer of Chinese leasing. For Q4, the board declared a dividend of a $0.42 per share, which consists of a 75% paid out of our shipping profits top up by $0.28 dividend from product services. The dividend showcases the function of product services, stabilize and enhance the returns to the shareholders when the shipping market softens. It also speaks to our strategy, execution ability and our ongoing commitment to return value to shareholders. As the Q4 ends, the balance sheet reported a shareholder equity of $1.9 billion. The annualized return on equity and capital employed for Q4 were 9% and 7% respectively. Our 2024 OpEx concluded at $8,300 per day, a marginal reduction then last quarter reported. For 2025, we expected the operating cash breakeven for our own fleet to be about $19,800 and for the whole fleet, including time travel vessels to be $22,200. The all-in cash breakeven is estimated to be $25,600 driven primarily by dry dock program in 2025 and increased interest cost. On the liquidity side, we ended ‘24 with a healthy position of $603 million post-completion of advanced gasoline delivery, supported by $232 million in cash and $371 million in unjoined revolving facilities. The repayment profile, as you can see here, is healthy and sustainable. We plan to refinance a few facilities starting from this year to achieve a more efficient leverage. The refinancing is not expected to further increase the current leverage ratio. On the product services side, trade finance utilization is still on a moderate level of $168 million or 21% of our available credit line, giving sufficient room for future trading needs. With that, I would like to conclude my updates and back to you, Aline. Operator: Thank you, Samantha. We would now like to open the call for your questions. [Operator Instructions]. We have Charles here raising his hand. Please proceed. Unidentified Analyst: Thanks so much. Watching the financing process that you have used during the addition of new ships, could you explain to me and to us that your strategy where you're using the ship as the issuance of stock for the ship, so as a financing method, and also connect that with your rationale of paying out more dividends than you are actually earning for that particular period? That's it. Thank you. Kristian Sorensen: Thanks, Charles, for your question. If I understood it, I couldn't hear you that well. You broke up a little bit, but with regards to the share issuance, we issued shares back last year in connection with the Avance Gas transaction when the share price was trading close to our NAV. They were issued in a way which were regarded as accretive to the shareholders at the time, and we could use the share as a currency. There was a second question. I didn't really catch it. If you could please repeat. Unidentified Analyst: Of course. My second question is, what is your thinking and strategy in paying out dividends that are in excess of earnings? Is this a share stabilization strategy, and is this something that maybe is temporary? Kristian Sorensen: So, thank you. So, this is a temporary thing because we are paying out dividends from the product services result of 2024. If you look at how the dividend is constructed, it's 75% of the shipping impact and then topped up with dividends that we are paid out from product services. So, we're not really paying out more than we earn in such case. Unidentified Analyst: Okay, that's great. Thank you very much. That concludes my questions. Operator: Thank you. If anyone else would like to raise his/her hand? We have John Dickson, please unmute yourself and proceed. Unidentified Analyst: Kristian, my question is really related to the potential tariffs that the United States is leveraging against China. Do you have any idea of how that type of situation would impact the trade between the United States and China as it relates to LPG? Kristian Sorensen : That's a great question, which is not so easy to answer. I don't really want to speculate because, when it comes to the tariffs on LPG, there are not such tariffs at the moment. And of course, we're monitoring the developments closely, like I said, both on the regulatory and on the commercial side. And when we have facts on the table, we will of course, evaluate and take measures if necessary to position a company in optimal way by using our size and also the commercial platform, which gives us significant flexibility to position the fleet and the portfolio in the most optimal way, depending on the prevailing market conditions and circumstances. But it's very hard for me to speculate on anything at the current moment. And we need to -- what we're doing, we're acting on facts when we have them in front of us at the table. Unidentified Analyst: I understand. Also, my second question is kind of related to Charles's question, when I'm looking at your shares, they're actually trading, at least in the U.S. market at a discount to your last 10 years of net income. As you're paying down the debt, obviously, the other 25% of your earnings you can either use that to pay down debt, cover operating expenses, or give out dividends. But my question is, are you guys looking at any type of share buyback with your shares trading at such a reasonable level? Kristian Sorensen : So, if you look back was it last year, we activated our share buyback program the last time, and we do have a mandate to reactivate a share buyback program as well. So, this is something we consider when we believe it's the time is right. We may do so they also in the future. So, we have done so in the past. Operator: Anyone else who would like to verbally ask a question? Yes, we have [Indiscernible]. Please proceed. Unidentified Analyst : Thank you. My question relates to the increased debt ratio. What is your strategy as far as reducing the ratio? Maybe you're going to keep it the same way or, how is that going to affect your dividend payout? Samantha Xu : Maybe just to share a little bit of a history is, that we through the past how to say 2023, 2024 because of the good earning we have had opportunity to pay down debt to the extent that there was one quarter reported leverage ratio of a 12%. And I think, that is an extreme case where the equity holder will probably render that is not a very effective per se, a leverage level. So, through the Avance Gas fleet acquisition, now the leverage ratio is just slightly above 30%. And we believe we are at a healthy level and throughout the time and the cash flow from operations will gradually pay down the debt and equally paid out to the shareholder as well via dividend, provided that there is no other opportunities in the market. Happy to say that we have a very healthy liquidity right now, as we have shown in our liquidity slide and the further refinancing is not going to further increase our leverage ratio. It's only to refinance the existing facilities. Unidentified Analyst: And just to follow up on that, are you seeking to pay out 100% of the earnings over a longer term? Or are you looking to use some of the earnings to reduce leverage? Samantha Xu : Well, I think that really depends. I think that, well, it's our responsibility to reduce the leverage. So, it will be equally have considered to pay down our debt as well as giving back to our shareholders. If you look at the history for '23 and '24, we have been both able to return a good dividend close to mid-90% for the past 2 years to the shareholders as well as a significantly pay down the debt. Operator: Next, we have Harry with Ford. Please go ahead. Harry, we can't hear you yet. I've noticed that you've unmuted yourself, but we cannot hear you. So maybe let's proceed with Axel Styrman and please, Harry come back if you can afterwards. Please Axel, if you want to go first. Axel Styrman: Yes. Just a question. You commented on potential tariffs, Kristian. But the lates now have moved from the U.S. regarding Chinese vessels. Of course, that proposal from a trade representative is out on hearing waiting for reactions until 24th of March. But during the Avance transaction, you acquired 8 Chinese-built ships and you have, as far as I know Chinese-built ships, except from three ships you have in the pool, which you likely could redeliver or negotiate out of the pool if this new proposal is being realized with the fees trading on U.S. ports. Since the U.S. has nearly 50% of the global LPG trade, this is, of course, very important. I'm just wondering if you -- if this materializes, what is your plan regarding the Chinese-built vessels? Kristian Sorensen: Thanks, Axel. Yes, like I said, it's hard for us to speculate on anything. And we will, of course, evaluate and take the necessary measures, if necessary, if this is imposed. And if you look at our commercial platform, which I alluded to also in the presentation, we have ways to employ our vessels outside of the U.S. market, if necessary. So, we will come back with how we plan to deploy these ships if it's something which becomes necessary. So, I think apart from that, it's not easy for me at this point in time to be more specific. But I'm sure we will be able to navigate through challenging waters, thanks to our size and commercial platform. Axel Styrman: Thank you, Kristian. Just a follow-up. I mean, obviously, it's possible to trade the Chinese-built ships from the Middle East, for example. But these potential fees also apply if you own Chinese-built vessels, not only calling U.S. ports, but if you just own Chinese-built ship, but -- is this something you can comment on now? Or... Kristian Sorensen: It's -- as you said, the legislative proposals out for -- on public hearing. So, it's something which is difficult for us to comment on. If you look at the size of the world fleet, which is built in China, regardless of shipping segment. I think as a general comment, it will have a very disruptive implications on the whole shipping market. So, I don't think if you look at the market today, trading houses, shipping companies, oil and energy majors all have Chinese built vessels in their fleets. So, with that in mind, let's see exactly what comes out of the public hearing. Axel Styrman: Thank you. Just a final question to the P&L on the charter expenses. You booked approximately $1.2 million profit. Can you comment on this? How did that actually happen? Kristian Sorensen: Samantha? Samantha Xu : Yes. Can you please the specific, Axel? Where you... Axel Styrman: As a charter high expenses, which this -- for this quarter, actually, you booked a profit of $1.173 million. So, I'm just wondering how did that -- what happened there? How did you end up with a net positive charter expense? Samantha Xu : Yes. I -- that's -- let me think -- that is pertaining to one of the vessels off hire, which is our higher income as a booked. Operator: Thank you. Harry with Ford, if you would like to try again to meet yourself, please? Unfortunately, we still can't hear you, but you can also type your question in the Q&A chat, if you'd like. We can't hear you, unfortunately. Sorry about that. Anyone else who would like to raise the hand. If not, we would then proceed to the questions that were typed into the chat. So, in the chat, we have Tushar Chadha asking, do you expect the asset price to soften in coming years due to increase in vessel supply? If yes, do you have any plans to further expand your fleet? Kristian Sorensen: So, we do not see any signs of asset prices softening either on the newbuilding prices nor on the secondhand values. They're all holding up, also for forward delivery. So -- and we are happy with the fleet we currently have and don't have any plans to expand any further at this point in time. Operator: Thank you, Kristian. We have another question in the chat related to the previous one on ships built in China from Cho Mars. Can you discuss the cost of new ships, also how much of fleet is built in China? And what would the impact be of charges on Chinese-built ships like charges by the U.S.? Kristian Sorensen: Yes. So, this is partly the same question, which I replied to earlier. If you look at the fleet today, just to start with that one, it's 15% of about 400 ships on the water today, which are built in China. So, it's not such a big part of the fleet. Most is built in in Korea and about 25% is built in Japan. If you look at the ordering and the order book, it's -- we count about 24 ships being on order in China at the moment out of a total close to 100 ships. So, it's not big share assets, but it's obviously a substantial part of the new building order book. When it comes to the impact on charges on Chinese-built ships like discussed also with Axel Axle Styrman, the likely scenario then is that you end up trading the ships elsewhere, and fewer vessels are available for trade on the U.S. Operator: Thank you. We have one more question in the chat from Williams Squimaggi. What were the most recent challenges to motivate the team? Kristian Sorensen: Well, a fantastic question. To motivate the team, it's -- we have done quite a lot over the last years in our company. So, I would say that just by the share activity level in BW LPG over the last couple of years, we have a very motivated team in general. So, I don't think there are any specific challenges I should list, which have kind of taken down the motivation of the team. But Samantha, I also leave to you to reply on this. Samantha Xu : I think it has been a remarkable 2 years and especially the past year from -- also from market but most importantly as a company, the milestones that we have across, including U.S. listing as well as the acquisition of the 12 vessels. It's landmark and milestones. So, I think for what I know the company is very energized for these decisions accomplishments that we have made. So, I think the team is in high morral at the moment. Operator: Thank you, Samantha and Kristian. Back to a verbally asked question or raised hand from Desmond. Unidentified Analyst: I just had a quick question. Regarding that Avance Gas is now a major shareholder of BW LPG, do you anticipate any of their governance team taking a more active role in the company? Or is it a more passive kind of stake? Kristian Sorensen: Yes. So, the fact is that Avance Gas has actually dividended out all their BW LPG shares to their shareholders. So Avance Gas only holds a tiny portion left in BW LPG. And when it comes to the new shareholders that we have, which, of course, are very happy with and welcoming. There are no such plans. Operator: We have another question in the chat from John. Can you provide some information on upcoming CapEx in Q1 and FY '25? Kristian Sorensen: Samantha, would you say it's drydockings and so on, maybe you can give some more color to it. Samantha Xu : Yes. I think on the CapEx, primarily reflecting in 2025 is also reflected as part of the cash breakeven is primarily contributed by our plants dry docking program. If I do not remember wrongly, it's -- I should speak when I have the detailed number in front of me. It's approximately $4,000 per day for the CapEx projects. That's on average for 2025, hopefully, that give you a little bit of color. Operator: We have Harry again raising his hand. Do you want to try again, Harry? Harry, no, I can't hear you. I'm sorry. Anyone else who would like to ask a question? We have Michail [indiscernible]. We can't hear you right now. Michail, can you try again. Then we have Charles up again, please. Unidentified Analyst: Kristian, can you comment on what you see is the global perception problem with the shipping industry in general? So, we all see that the price to earnings multiples for shipping on a global basis is both extremely low and seems to be lately perpetually decreasing. Is there a public persona that perhaps this is going to be the subject of some sort of either a global war, sabotage or terrorism? What do you think is the global perception that is causing these incredibly low PEs? And do you see any hope on the horizon that they will be viewed with a lesser risk factor? That's it. Kristian Sorensen: Thanks. That's a very interesting question, actually. I think the main reason for it is the volatility in earnings over the cycle. So, it's typically shares that you would like to hold on the expected earnings are on the rise. And then due to the nature of the shipping industry, and the various shipping segments. This is very much a volatile market that most of us operate in. Having said that, that's also one of the reasons why we, in our business model, maintain a relatively high portion of our fleet in the time charter market to smoothen out this volatility as well as if you look at our strategy over the last years, we are spelling out our wings and moving into adjacent parts of the value chain so that we can take out some of volatility on the shipping earnings at the same time as we participate in value creation in other parts of the LPG value chain, like, for instance, now with product services, as reflected in the dividend for Q4. And of course, at the moment, with increased geopolitical risks and the questions you have about global trade patterns and trade in general, shipping is, in many ways, exposed to that because what's typically was good for trade. It's good for shipping in general and vice versa. So, I think the industry is suffering a bit under the current geopolitical landscape and the circumstances. Operator: John Dixon, up next. Unidentified Analyst: Kristian, Samantha, I'll just add one other question. I believe it was a year or so ago, maybe 1.5 years, BW announced a joint venture in India with a port over there for distribution. And I know you're talking about the other aspects of the value chain. Can you just give us a follow-up on how that joint venture is proceeding along? Kristian Sorensen: Thanks, John. Yes. So, I think we next quarter, you can have some more to inform on -- when it comes to the term loan. We are currently in a phase where we're putting all the last parts of the puzzle together to start the construction of the terminal. So hopefully, next quarter, we will be able to give a more, let's say, detailed update on the progress there. But it's moving forward according to the plans we had. And it's going to be an exciting new part of our business when it's up and running in 2 years, 3 years' time as we plan for now. So, the Indian market is obviously on the back of that becoming even more important for us, but we do believe and see that the India LPG market is increasing. It's great prospects for the future growth in India, and we are happy to participate in that, both on the shipping sourcing of LPG and also eventually on the terminal side. So hopefully, we can -- we expect to update our investors more in detail by next quarter. Operator: Michail [indiscernible], you want to try again to unmute yourself, please? Unidentified Analyst: I was just curious is there a proposed date for payment of the dividend? Samantha Xu : Well, the proposed date of the payment of dividends a little bit depending on which market you hold your share, Michail. So first of all is that I believe we were going to pay that out in -- actually, it's the best that if I refer to the press release, just a one out a day ago. Yes, so the payment of dividend, I didn't want to feature with the wrong answer. So, the dividend payout there, you have the share in Oslo Store Exchange will be 24th of March, plus/minus and if you hope to share in the New York Stock Exchange, you'll be around 19th of March for this quarter. Operator: Harry with Ford, do you want to try again? Unfortunately, we still can't hear you. Anyone else who has another question. If not, then let's proceed. And I will hand back to Kristian for some closing remarks. Kristian Sorensen: Yes. Thank you, Alina I think that by then, we are coming to the end of this presentation. I would like to thank everyone dialing in and listening to us. And look forward to seeing you again in the next quarter. Thanks, everyone. Operator: Thank you very much. That concludes BW LPG's Fourth Quarter 2024 Financial Results Presentation. The call transcript and the recording will be available on our website shortly. So, thank you all for dialing in, and we wish you a good rest of your day.
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BW LPG Limited (BWLP) Surpasses Earnings Estimates with Strong Performance

  • BW LPG Limited (BWLP) reported an EPS of $0.30, surpassing the estimated $0.20, driven by robust TCE income.
  • The company declared a cash dividend of $0.28 per share, showcasing its commitment to shareholder value.
  • BWLP's financial metrics reveal a healthy financial standing, with a P/E ratio of 4.49 and an earnings yield of 22.25%.

BW LPG Limited (NYSE:BWLP), trading as "BWLP" on the NYSE, is a prominent player in the liquefied petroleum gas (LPG) shipping industry. The company is known for its extensive fleet and global operations. BWLP competes with other major shipping companies in the LPG sector, focusing on efficient and reliable transportation services.

On May 20, 2025, BWLP reported earnings per share (EPS) of $0.30, exceeding the estimated $0.2074. This strong EPS performance is supported by the company's robust Time Charter Equivalent (TCE) income, which averaged $39,800 per available day and $38,800 per calendar day. Despite the lower-than-expected revenue of $158.7 million, BWLP's ability to surpass EPS estimates highlights its operational efficiency.

BWLP's financial health is further underscored by its decision to declare a cash dividend of $0.28 per share for the first quarter of 2025. This dividend represents 75% of the company's net profit after tax, reflecting its commitment to returning value to shareholders. The record date for this dividend is set for May 30, 2025, with distribution in Norwegian Krone for shares registered with Euronext VPS.

The company's valuation metrics provide additional insights into its financial standing. BWLP has a price-to-earnings (P/E) ratio of approximately 4.49, indicating a relatively low valuation compared to its earnings. Its price-to-sales ratio of about 0.49 suggests modest market valuation of its sales. The enterprise value to sales ratio is 0.74, while the enterprise value to operating cash flow ratio is 3.54, reflecting its cash flow generation capabilities.

BWLP maintains a debt-to-equity ratio of 0.65, indicating a moderate level of debt compared to equity. The current ratio of 1.11 suggests a slightly higher level of current assets compared to current liabilities, which is a positive sign for short-term financial health. With an earnings yield of 22.25%, BWLP offers a strong return on investment for shareholders.