BW LPG reported a Q2 2024 Net Profit After Tax (NPAT) of US$ 85 million, yielding an annualised return on equity of 21% with US$53 million free cash flow generated. The Q2 operating profit was US$ 89 million, and earnings per share was US$ 0.58.
The Company’s net leverage ratio was 12% in Q2 with available liquidity at US$ 578 million at the end of the quarter. On the back of another strong quarter, the Board has declared a cash dividend of US$ 0.58 per share, or a total dividend of US$ 76 million. This represents a 100% earnings payout ratio and an annualised dividend yield of 15%.
Commercial Performance Shipping – Q2 VLGC freight rates averaged US$ 49,700 per available day or US$ 48,000 per calendar day, with 95% fleet utilisation. Time Charter Equivalent (TCE) income was US$ 148.6 million for the quarter, and our India subsidiary contributed a stable TCE income of US$ 30.6 million for Q2.
Product Services – Product Services reported a US$ 24.5 million gross profit for Q2. After considering other expenses, comprising mainly of G&A and income tax expenses, Product Services reported a net profit after tax of US$ 15.7 million for the quarter.
Corporate Update
With reference to the press release dated August 15, 2024, BW LPG announced the transaction to acquire 12 Very Large Gas Carriers (VLGCs) from Avance Gas for a total consideration of US$ 1,050 million. This acquisition increases the number of VLGCs owned and operated by BW LPG from 41 to 53, of which 22 are LPG dual-fuel.
This transaction further solidifies BW LPG’s position as the world’s leading owner and operator of VLGCs, with the largest number of LPG dual-fuel powered VLGCs. This fleet expansion comes at an opportune time with VLGC newbuild deliveries abating and continued growth in global LPG export volumes.
The strategic transaction will enhance BW LPG’s commercial scale and increase its operational leverage in a market expected to remain strong in the coming years, and as such solidify earnings and dividend potential.
Highlights and Subsequent Events
- Another strong quarter for shipping with daily TCE of US$ 49,660 per available day and US$ 48,030 per calendar day.
- Generated NPAT of US$ 85 million or earnings per share of US$ 0.58. Declared a Q2 2024 cash dividend of US$0.58 per share amounting to US$76.4 million, representing 121% of Shipping NPAT and 100% of total earnings.
- For the third quarter of 2024, we have fixed ~86% at an average rate of ~US$ 43,000 per available day.
- BW Product Services generated a net accounting profit of US$ 15.7 million in Q2 after adjusting for G&A and tax provisions.
- Announced the acquisition of 12 VLGCs from Avance Gas at a total purchase price of US$ 1,050 million. Closing of the transaction will take place on a vessel-by-vessel basis with targeted completed by 31 December 2024.
- Successfully completed the redomiciliation from Bermuda to Singapore on 1 July 2024.
- The BW LPG US listing has broadened investor access and strengthened our capital market activities with ~230,000 daily trading volume. The additional listing has supported share price development during the quarter.