BW LPG Limited - Update on BW LPG’s Product Services Q2 2024 Segment Performance

Rhea-AI Summary

BW LPG has provided an update on its Product Services segment performance for Q2 2024. BW Product Services reported an estimated gross profit of approximately USD 26 million for the quarter ended 30 June 2024. After expenses and taxes, the estimated net profit was approximately USD 16 million. During Q2 2024, a USD 30 million share capital reduction was finalised, resulting in a book equity of approximately USD 68 million at the end of the quarter. The average Value-At-Risk (VAR) for the quarter was approximately USD 5 million. BW LPG will release its full Q2 2024 financial report on 22 August 2024.

Positive

• Estimated gross profit of USD 26 million for Q2 2024
• Estimated net profit of USD 16 million for Q2 2024
• Book equity of USD 68 million after capital reduction

Negative

• USD 30 million share capital reduction implemented

Insights

Financial Analyst

The reported net profit of USD 16 million for BW Product Services in Q2 2024 is significant. This figure, after accounting for general and administrative expenses and income taxes, highlights the company’s ability to manage its operational costs effectively while handling volatile market conditions. However, it's essential to note that the gross profit was USD 26 million, suggesting that operational expenses and taxes accounted for a substantial portion of earnings. Investors should consider the sustainability of these profits and the impact of derivative gains and losses on future earnings.

The USD 30 million share capital reduction finalized in Q2 2024 might be seen as a strategic move to optimize the company's balance sheet. While this decreases the equity, it increases the earnings per share for existing shareholders, which can be attractive to investors. However, it also reduces the company's financial cushion, which could be a risk if market conditions turn adverse.

The Value-At-Risk (VAR) of USD 5 million for the quarter indicates the level of risk the company is exposed to in its trading operations. VAR is a statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over a specific time frame. A VAR of USD 5 million suggests that the company’s trading positions are relatively conservative, but investors should still be vigilant about potential market shifts that could affect these numbers.

Market Research Analyst

From a market perspective, BW Product Services’ performance in Q2 2024 shows resilience. The report of a USD 16 million net profit in a challenging market environment could be seen as a strong indicator of the company's adeptness in market navigation. However, investors should look at the bigger picture, examining how these profits align with industry benchmarks and the company’s historical performance.

The company's decision to undergo a share capital reduction in the amount of USD 30 million is noteworthy. This move can be interpreted as an effort to enhance shareholder value, potentially making the stock more attractive. However, it also signals a reduction in retained earnings which could limit future investments or operational flexibility.

Additionally, the gross profit of USD 26 million, contrasted with the net profit, raises questions about operational efficiency and the impact of non-operational factors, such as hedging transactions, on the bottom line. Investors should be cautious about how sustainable these profits are when derivative gains or losses are stripped away.

SINGAPORE--(BUSINESS WIRE)-- BW LPG Limited (“BW LPG” or the “Company”, OSE ticker code: “BWLPG.OL”, NYSE ticker code “BWLP”) today provides an update on its Product Services’ (“BW Product Services”) Q2 2024 segment performance. For the quarter ended 30 June 2024, BW Product Services reported an estimated gross profit of approximately USD 26 million. Gross profit represents the realised trading profit plus net derivative gains and losses from open cargo contracts and hedging transactions.

After general and administrative expenses and income taxes, BW Product Services made an estimated net profit of approximately USD 16 million for the quarter.

In Q1 2024, the Board of BW Product Services approved a USD 30 million share capital reduction which was finalised during Q2 2024. Post capital reduction, BW Product Services reported a book equity of approximately USD 68 million for the quarter ended 30 June 2024.

The average Value-At-Risk (VAR) for the quarter was approximately USD 5 million.

BW LPG will release its Q2 2024 financial report on 22 August 2024.

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, an in-house LPG trading division and a growing presence in LPG terminal infrastructure and distribution, BW LPG offers an integrated, flexible, and reliable service to customers along the LPG value chain. More information about BW LPG can be found at https://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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240716418571/en/

Kristian Sørensen

Chief Executive Officer



Samantha Xu

Chief Financial Officer

E-mail: investor.relations@bwlpg.com

Source: BW LPG Limited

FAQ

What was BW LPG's Product Services estimated gross profit for Q2 2024?

BW LPG's Product Services reported an estimated gross profit of approximately USD 26 million for Q2 2024.

What was the net profit of BW LPG's Product Services for Q2 2024?

BW LPG's Product Services made an estimated net profit of approximately USD 16 million for Q2 2024.

When will BW LPG (BWLP) release its full Q2 2024 financial report?

BW LPG will release its Q2 2024 financial report on 22 August 2024.

What was the book equity of BW LPG's Product Services after the capital reduction in Q2 2024?

After the capital reduction, BW LPG's Product Services reported a book equity of approximately USD 68 million for the quarter ended 30 June 2024.