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BW LPG Financial results for INANCIAL RESULTS for Q2 2020 and H1 2020 with a high fleet utilisation of 97%

Highlights for the Quarter

  • Achieved Q2 2020 VLGC freight rates of USD 39,100 per day with a high fleet utilisation of 97%
  • Q2 2020 net profit after tax of USD 62 million or an earnings per share of USD 0.45. H1 2020 net profit after tax of USD 143 million with an earnings per share of USD 1.03
  • H1 2020 annualised return on equity of 24% with USD 300 million of free cash flow
  • Declared Q2 2020 cash dividend of USD 0.15 per share, bringing total dividends declared for H1 2020 to USD 0.35 per share
  • Retrofitting world’s first LPG dual-fuel engines on BW Gemini and BW Leo, taking the lead and advancing technology towards zero-carbon fuel propulsion
  • Committed to twelve retrofits through 2020 and 2021 as retrofitting provides significantly more environmental benefits compared to newbuildings as confirmed by DNV, and boosts an already efficient and clean fleet without adding capacity
  • Collaborating with Hafnia on bunker procurement for economies of scale and best in class logistics

Financial Performance

BW LPG Limited (“BW LPG”, the “Company”, OSE ticker code: “BWLPG.OL”) reported a Q2 2020 net profit after tax of USD 62 million and a H1 2020 net profit after tax of USD 143 million, yielding a H1 2020 annualised return on equity of 24%.

Time Charter Equivalent (TCE) income amounted to USD 149 million in Q2 2020 and USD 311 million in H1 2020, mainly attributable to higher LPG spot rates and higher fleet utilisation. Included in TCE income for the quarter is USD 17 million relating to the effects of IFRS 15 – Revenue from Contracts with Customers.

EBITDA was USD 113 million for the quarter and USD 239 million for H1 2020, representing an EBITDA margin of approximately 77%. Earnings per share was USD 0.45 for Q2 2020 and USD 1.03 for H1 2020.

Net leverage ratio decreased to 46.2% at the end of the quarter, mainly due to solid cash flows from operations, net of US$145 million in total dividends paid for 2019 and Q1 2020.

The Board has declared a Q2 2020 cash dividend of USD 0.15 per share amounting to USD 21 million. This brings total dividends declared for H1 2020 to USD 0.35 per share, amounting to USD 49 million. The shares will be traded ex-dividend from 1 September 2020. The dividend will be payable on or about 11 September 2020 to shareholders on record as at 2 September 2020.

BW LPG is retrofitting the world’s first LPG dual-fuel engines on BW Gemini and BW Leo, taking the lead and advancing technology towards zero-carbon fuel propulsion. The Company is committed to twelve retrofits through 2020 and 2021. Retrofitting provides significantly more environmental benefits compared to newbuildings as confirmed by DNV, and boosts an already efficient and clean fleet without adding capacity.

BW LPG is collaborating with Hafnia on bunker procurement. Hafnia supports the bunkering of over 450 ships and will bring economies of scale and best in class logistics to BW LPG.

Market Outlook

Although VLGC freight rates collapsed at the end of May, the market recovered strongly towards the end of July and rates increased to over USD 50,000 per day in early August. In 2021, a weaker outlook for U.S. LPG supply coupled with a relatively high number of newbuild deliveries are expected to put downward pressures on vessel utilisation.