Key Highlights
- Robust TCE Income: Time Charter Equivalent (TCE) income for Q3 2024 reached $46,800 per available day and $46,500 per calendar day, with 98% fleet utilization.
- Avance Gas Vessel Deliveries: The company began deliveries of nine new Avance Gas vessels on November 1, expected to be eligible for Q3 dividends. These deliveries represent a share issuance of 14.4 million shares, increasing outstanding shares to 146.7 million. Upon completion of all 12 vessels, the total share count will reach 151.6 million.
- Dividend Announcement: Declared a cash dividend of $0.42 per share for Q3 2024, equating to a 100% payout ratio of Shipping Net Profit After Tax (NPAT). This totals $61.6 million based on 146.7 million outstanding shares.
- Strategic Fleet Renewal: Initiated a fleet renewal program with the sale of the 2007-built BW Cedar and acquisition of the 2019-built BW Kizoku, aligning with favorable market conditions.
Financial Performance
BW LPG reported Q3 2024 NPAT of $120 million, delivering a 30% annualized return on equity. Earnings per share stood at $0.79, with a net leverage ratio of 21% and available liquidity of $750 million at quarter-end.
Commercial Overview
- Shipping: Generated TCE income of $145.5 million in Q3, supported by stable contributions from the India subsidiary, which reported $32.9 million in TCE income.
- Product Services: Achieved a net profit of $58.5 million, primarily driven by an $85.8 million unrealized Mark-to-Market (MtM) gain. However, the unrealized nature of these gains does not immediately enhance dividend capacity.
Market Update
The VLGC market faced challenges early in Q3 due to disruptions like Hurricane Beryl and technical issues at export terminals. Despite these setbacks, North American LPG exports rose 6.7% year-over-year, while Middle Eastern exports showed marginal growth.
Fleet Capacity Outlook
By the end of 2024, 22 new VLGC vessels will be delivered, with an additional 13 expected in 2025. Established shipbuilders indicate no new deliveries before 2027.
VLGC Freight Market Outlook
The market anticipates steady growth in LPG exports, supported by expansion projects in North America and increased production in the Middle East. Chinese PDH plants are expected to further drive demand, with new facilities set to commence operations in 2025 and 2026.
Conclusion
BW LPG continues to capitalize on strong market fundamentals and strategic fleet investments, positioning itself for sustained growth and shareholder returns.