BW LPG Limited - Financial Results for Q1 2024
BW LPG (NYSE: BWLP) reported a strong Q1 2024 performance. Key highlights include a daily TCE of $61,500, a net profit after tax (NPAT) of $150 million, and earnings per share of $1.07. The company declared a $1.00 per share dividend, representing a 93% payout ratio. BW LPG generated $468.5 million in free cash flow and achieved an operating profit of $157.8 million, with a net leverage ratio at an all-time low of 7% and liquidity of $661 million.
Notable commercial achievements include signing a multi-year cargo contract with Enterprise Product Partners and selling a VLGC for $65 million. BW LPG also successfully listed on the New York Stock Exchange and plans to redomicile from Bermuda to Singapore.
The market outlook shows fluctuating VLGC spot rates due to seasonal demand and supply dynamics, with a recovery expected through the remainder of 2024. The global VLGC fleet has increased to 394 vessels, with new additions expected in the coming years.
- Daily TCE of $61,500 in Q1 2024.
- NPAT of $150 million, EPS of $1.07.
- Declared a $1.00 per share dividend, 93% payout ratio.
- Generated $468.5 million in free cash flow.
- Operating profit of $157.8 million.
- Net leverage ratio at an all-time low of 7%.
- Liquidity of $661 million.
- Signed a multi-year cargo contract with Enterprise Product Partners.
- Sold a VLGC for $65 million.
- Successful listing on the New York Stock Exchange.
- Q2 2024 booked 84% at an average rate of ~$49,000 per day, lower than Q1.
- Spot rates fell by 90% during January and February due to a cold snap in the US and reduced production.
- Potential for Panama Canal congestion affecting transit times.
Insights
The financial results reported by BW LPG for Q1 2024 showcase a robust performance with a Net Profit After Tax (NPAT) of
The Time Charter Equivalent (TCE) rates and fleet utilization underscore the company's operational efficiency. With TCE income at
In terms of market outlook, the recovery in global VLGC spot rates and increased US LPG export growth are favorable indicators. The demand from China for LPG has also shown a positive trend, which could sustain spot earnings. The redomiciling from Bermuda to Singapore and the successful listing on the NYSE are strategic moves aimed at enhancing the company's market presence and access to capital.
For retail investors, these results reflect strong financial health, effective operational management and strategic market positioning. The company's high dividend payout and solid earnings underline its potential as a stable investment with good returns.
The announcement of a multi-year cargo contract with Enterprise Product Partners is a significant development. This contract provides optionalities to double the current cargo volume in the US Gulf, which will improve the company's shipping and cargo trading flexibility. This agreement not only secures a stable revenue stream but also positions BW LPG to capitalize on future growth opportunities in the LPG market.
Additionally, the recovery in VLGC spot rates and the positive demand outlook in Asia, particularly China, indicate a favorable market environment for BW LPG. The adjustment in transit restrictions in the Panama Canal, which has normalized the number of daily slots, further enhances operational efficiency and reduces potential bottlenecks.
The increase in the number of VLGCs in the global fleet to 394 vessels also suggests that there is sufficient capacity to meet anticipated market demands. However, the company will need to stay vigilant about potential congestion and varying market dynamics that could impact shipping rates and operational costs.
For retail investors, the strategic contract and market recovery provide a positive outlook for BW LPG's future performance, suggesting sustained revenue growth and operational stability.
Highlights and Subsequent Events
- Strong quarterly performance with daily TCE of
- Generated NPAT of
- For the second quarter of 2024, we have fixed
- BW Product Services generated a net accounting profit of
- BW Product Services is pleased to announce a multi-year cargo contract with Enterprise Product Partners, with optionality to double the current cargo volume in the US Gulf. This will significantly improve the combined shipping and cargo trading flexibility.
- Delivered one VLGC to new owners for further trading in February 2024, generating
- BW LPG successfully listed on the New York Stock Exchange (NYSE) on 29 April 2024.
Financial Performance
BW LPG Limited (“BW LPG”, the “Company”, NYSE ticker code: “BWLP”, OSE ticker code: “BWLPG.OL”) reported a Q1 2024 Net Profit After Tax (NPAT) of
The net leverage ratio was at an all-time low at
Commercial Performance
Shipping – Q1 VLGC freight rates averaged
BW LPG delivered BW Princess (2008-built, Hyundai Heavy Industries,
Product Services – Product Services reported a
Corporate Update
BW LPG successfully listed on the New York Stock Exchange (NYSE) on 29 April 2024, while maintaining the current listing on the Oslo Stock Exchange (OSE). The Company thanks all stakeholders and shareholders for their support and looks forward to increasing the presence in the largest capital market in the world.
The Company is in the process of redomiciling from
Market Outlook
At the start of 2024, VLGC spot rates for the US/Far East route soared to nearly
However, as in previous years during January and February, a cold snap in the US increased domestic demand for LPG and temporarily reduced production, leading to a significant rise in US LPG prices. Concurrently, demand in the Far East declined resulting in falling LPG prices in
After spot rates bottomed out around OPEX levels in early February, the market experienced a significant recovery, driven by recalibrated product prices and strong US LPG export growth. The EIA reports that YTD average net propane exports from the US have increased by
The futures market reflects continued strength in spot earnings, trading in the low to mid
Transit restrictions in the Panama Canal changed more rapidly than anticipated in January, allowing more VLGCs to transit through the Canal. By the end of the first quarter, the number of daily slots had normalized to levels seen in the summer of 2023. However, we anticipate that congestion may occur from time to time, depending on usage by container and LNG vessels, and the canal’s water level.
At the beginning of 2024, the global VLGC fleet stood at 378 vessels. Since then, 16 VLGCs have been added, bringing the current fleet to 394. Over the next 18 months, we observe a sharply abating number of newbuildings for delivery, with six additional VLGCs to be added for the remainder of 2024 and 13 scheduled for delivery in 2025.
Q1 2024 Earnings Presentation and Interim Financial Report
Please see the attachments for the Q1 2024 Earnings Presentation and Interim Financial Report.
- BW LPG Q1 2024 Earnings Presentation
- BW LPG Q1 2024 Interim Financial Report
BW LPG will present its financial results at 13:00hrs CET today. The presentation will be hosted by Kristian Sørensen (CEO) and Samantha Xu (CFO).
With reference to the press release dated 16 May 2024, please note the change in dial-in details for the Presentation. The Presentation will be held live via Zoom. Please register at the link below:
A presentation recording will also be available after the event on the Company’s website at: https://www.investor.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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240529989440/en/
Kristian Sørensen, CEO
Samantha Xu, CFO
E-mail: investor.relations@bwlpg.com
Source: BW LPG Limited
FAQ
What was BWLP's net profit for Q1 2024?
What is BWLP's earnings per share for Q1 2024?
What dividend did BWLP declare for Q1 2024?
What was BWLP's operating profit for Q1 2024?
What is BWLP's liquidity at the end of Q1 2024?
What is BWLP's average daily TCE for Q1 2024?
What is BWLP's net leverage ratio as of Q1 2024?
What was the gross profit for BWLP's Product Services in Q1 2024?
What significant contract did BWLP sign in Q1 2024?
Did BWLP list on any new stock exchange in Q1 2024?
What are the future spot rate expectations for BWLP?
