NYSE:BWLP BW LPG Q1 2024 Earnings Report $10.26 -0.10 (-0.94%) Closing price 05/6/2025 03:59 PM EasternExtended Trading$10.06 -0.20 (-1.97%) As of 04:30 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast BW LPG EPS ResultsActual EPS$1.07Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/ABW LPG Revenue ResultsActual Revenue$1.04 billionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/ABW LPG Announcement DetailsQuarterQ1 2024Date5/30/2024TimeN/AConference Call DateThursday, May 30, 2024Conference Call Time7:00AM ETUpcoming EarningsBW LPG's Q1 2025 earnings is scheduled for Tuesday, May 20, 2025, with a conference call scheduled at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckInterim ReportEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by BW LPG Q1 2024 Earnings Call TranscriptProvided by QuartrMay 30, 2024 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:01Welcome to BW LPG's First Quarter 2024 Financial Results Presentation. Bringing you through the presentation today are CEO, Christian Sorensen and CFO, Samantha Shi. We are pleased to answer questions at the end of the presentation. Should you have any, please type them into the Q and A function in your Zoom panel. You may also use the raise hand option. Operator00:00:27Before we begin, we wish to highlight the legal disclaimers shown on the current slide. This presentation held on Zoom is also recorded. I now turn the call over to Christian. Speaker 100:00:42Hi, everyone, and welcome to our 2024 Q1 presentation. Thank you for taking time to join us today as we present our financial results and recent events. It's been a busy period for our company. So let's turn to Slide 4, please. We delivered another strong quarter with the result of $150,000,000 net profit after tax on the back of a strong time charter equivalents of $61,500 per available day, which includes a positive IFRS adjustment of $26,000,000 We booked a net gain of $20,000,000 from the sale of the BW Princess, and it was another good quarter by our trading units BW Product Services, showing a profit of $21,000,000 where we subsequently returned $30,000,000 to its shareholders in April through the preannounced capital return. Speaker 100:01:38The quarterly NPAT translates into an earnings per share of 1.07 dollars and the Board has secured $1 per share in dividends, which is equivalent to 106% of the earnings from our shipping activities, which calculates to an annualized dividend yield of 22% basis Tuesday's closing price in New York. On the shipping side, we have mutually agreed with Vital to terminate our pool and charter back arrangements. There is no financial impact anticipated from the termination of the agreements. Will look forward to continuing doing business together in the day to day chartering markets. For our trading activity, we are happy to announce that Product Services have concluded a multiyear extension of their cargo contract with Enterprise Product Partners, which will significantly improve our optionality and ability to capture profits in the LPG value chain. Speaker 100:02:34In addition, the transaction is enabling us to grow our business at a time when growing in shipping is more expensive than ever, and it bolsters our business model for the future markets. The expansion of our trading volumes will be financed by trading facilities already in place, and the value at risk is anticipated to only increase from $6,000,000 to $8,000,000 reflecting the balanced trading portfolio that Product Services is running. And finally, we are very proud about our milestone dual listing on the New York Stock Exchange. The reception in the U. S. Speaker 100:03:09Investor market has been very satisfactory, reflected in a 27% increase in our U. S. Dollar denominated share price since the listing, and the share trading volume in the U. S. Is picking up. Speaker 100:03:22Turning over to our market outlook. We remain positive on the sector with several indicators pointing in the right direction, both in the underlying LPG commodity market as well as the supply demand balance in the VLGC markets, and this is even without disruptions in the Panama Canal. So let's turn to Page 6 for a closer look at the market fundamentals. The U. S. Speaker 100:03:50Production and export volumes are still the locomotives in the LPG growth story and continue to deliver on the upside of the expectations. According to recent EIA figures, the production and export volumes are up 8% 14%, respectively, year to date compared to same period last year. We maintain our positive view on the U. S. Export volumes for 2024 and '25. Speaker 100:04:15We regard the CapEx plans by the U. S. Terminal companies as a positive sign for the future U. S. LPG export volumes and believe they will remove any potential bottlenecks for the medium term. Speaker 100:04:28The Middle East exports are expected to be stable for this year unless OPEC decides on any cutback reversals, while we anticipate more volumes to come on stream from next year onwards from Abu Dhabi and later Qatar. The increasing LPG exports from the U. S. And the Middle East are meeting a growing demand side in Asia, both for industrial purposes, well represented by rapidly increasing demand by the Chinese PDH plants and from the residential sector, especially in the Indian subcontinent and Southeast Asian countries. The Indian demand for LPG is now consuming about half of the Middle East exports, making the rest of the Asian market increasingly dependent on the U. Speaker 100:05:10S. LPG exports to meet the underlying and higher demand, which follows growing population and prosperity. Also worthwhile to note is that LPG, by being a byproduct from oil and natural gas production, has a history of always being price and eventually finding a home since no producers want to store LPG for a prolonged period of time. And this market dynamics makes it a competitively priced energy source, which easily penetrates new markets since it's relatively easy to handle compared with other energy sources, which require much higher infrastructure investments. Let's turn to Slide 7. Speaker 100:05:53Looking at the global VLGC fleet balance for the next 18 to 24 months, it is a sharply abating curve of newbuilding deliveries when we move into the second half of this year. We only have a handful of VLGCs set for delivery from the yards, while the global fleet is approaching 400 units. For 2025, only a dozen vessels are scheduled for delivery. The yards are still talking deliveries for new orders more than 3 years forward, and this gives us good visibility of the market in the next 18 to 24 months. So to summarize, the market fundamentals for both the LPG commodity markets and the VLGC markets are strong and reflected in the current rate level, which is fluctuating between $60,000 to $70,000 per day. Speaker 100:06:44The FFA market is priced for the remainder of this year at levels in the region low to mid $60,000 per day and this is without any serious delays in the Panama Canal, which continue to be a wildcard also in the future. And with this, I'm pleased to let Samantha take you through the commercial performance and our financials. Speaker 200:07:06Thank you, Christian, and hello, everyone. It's a call. Good to speak to you. For the Q1 of 2024, we delivered a TCE of US9,400 dollars per calendar day and US61,500 dollars per available day, a continued solid performance. We have a healthy coverage through our time charter and FFAA portfolio, which represents about 37% of our shipping exposure. Speaker 200:07:36For the Q2, we have fixed 84% of the available days at about US49,000 dollars per day. For 20 24, our time charter out fleet generates a profit around US25 $1,000,000 over our time charter in fleet. Additionally, more shipping capacity that is fixed on time charter during the quarter is estimated to generate about $39,000,000 for year 2020 4, up from US19 $1,000,000 as reported in Q1. Moving to Slide 11. Product services delivered a solid performance in the beginning of the year. Speaker 200:08:20In Q1, it yield a net profit of US20 $1,000,000 and increased its net asset value to US82 $1,000,000 as of end March. The net profit was contributed by gross profit of $33,000,000 after netting off G and A and tax provisions. The gross profit includes realized gain of US18.7 million dollars and unrealized cargo and derivative gain of $14,000,000 The reported net profit does not include unrealized fiscal shipping valuation, which is $31,000,000 at the end of March based on our internal valuations. This shipping valuation dropped from the previous quarter reflecting a decline of a 12 month freight forward market at the end of March compared with the substantially higher market in Q4. For Q1, we reported an average value at risk of $5,000,000 on a well balanced trading book, including cargoes, shipping and derivatives. Speaker 200:09:32As announced earlier, we concluded a multiyear contract with the enterprise product partners in Texas. The contract will have the potential to double our volume up from the U. S. Gulf, providing product services with a strong cargo position. Next slide please. Speaker 200:09:54Moving to the financial highlights. In Q1, we continue a good business performance and reported a net profit after tax of US150 $1,000,000 on a consolidated basis. This includes US10 $1,000,000 in profit from BW LPG India and RMB 21,000,000 from Product Services. The net profit also includes a positive adjustment of RMB 26,000,000 dollars related to the effect of IFRS 15 for the quarter as the TCE for the strangling voyages over the quarter end is recognized on the low to discharge base. We reported an earnings per share of $1.07 mainly contributed by our core shipping business. Speaker 200:10:43This translates into an annualized earning yield of 38% when compared against our share price at the end of March. We reported a net leverage ratio of 7% in Q1, a decrease from 21% at the end of December. This substantial decrease was due to repayment of shipping loan, decrease in restricted cash held for the derivative margin requirement and decrease in product services or short term trade finance drawn at the end of Q1. On the basis of a low leverage ratio and considering the business performance as well as the capital requirement ahead. The Board has declared a dividend of $1 per share in Q1. Speaker 200:11:33This represents a 93% of payout ratio of Q1 total profit or 106% of the shipping impact. The dividend payout reflects our commitment to return value to our shareholders as we continue to deliver a high dividend yield of 22 percent when calculated on yesterday's share price. Our balance sheet ended the quarter with a shareholder's equity of $1,700,000,000 Our annualized Q1 return on equity and capital employed was 37% and 30%, respectively. In Q1, our daily OpEx came in at 8,700 dollars per day due to higher than expected maintenance and repair expense. For 2020 4, we expect our own fleet operating cash breakeven to be about $17,300 per day. Speaker 200:12:36As you can see, our liquidity continued to remain healthy. On a consolidated basis, we ended Q1 with a CAD661 1,000,000 in liquidity, including CAD340 1,000,000 in cash, CAD347 1,000,000 in undrawn revolving facilities, which will support us for upcoming CapEx expenditures. Ship financing debt stood at $244,000,000 as end March comprised of the balance to Ship Finance term loan was spread out with no major repayment until 2026. Trade finance drawn stood at a moderate level of $167,000,000 or 21% of our $796,000,000 trading line, leaving a healthy headroom for growth. With that, I would like to conclude my update. Speaker 200:13:33And back to you, Lisa. Thank you, Samantha. Operator00:13:38We will open the floor for questions now. Should you have questions, please type them into the Q and A channel. You can also click the raise hand button to ask your question verbally. Please note that participants have been automatically muted. We have 2 questions. Operator00:14:08Eric, please go ahead. Speaker 300:14:13Just a question, Christian, because you're saying that obviously growing within shipping now is challenging or expensive or I mean depending on how you're going to frame it. But then we'll still turn it in because of course you are now I mean, you're basically now if you exclude the debt on BW India, you're debt free. So then what's the alternative? Because your cash earnings are significantly higher than your net profits. So obviously, we're entering a stage where you're either going to build substantial cash coffers or are you going to have to pay out more? Speaker 300:14:53Are you considering doing some kind of extraordinary payout? Or how should we think about your balance sheet the year or 2 down the road at the current market outlook? Speaker 100:15:04Thanks, Erik. Like you say, it's and again, it's not our aim to be debt free or anything, but it's simply hard for us to find any profitable ways to invest at the moment and thereby increase our debt side. So I think when it comes to the dividend, that's something and the balance sheet composition is something which we always discuss with the Board. So I don't want to rule out anything, but again, this is something which is at the Board's discretion and we'll see what the future brings. But you're right, we are a bit, I would say, too robust on our balance sheet. Speaker 100:15:52But again, it's not an aim for us to be debt free or anything. So but we like to if you raise debt, it should be against projects that we believe are creating value for the company and the shareholders. Speaker 300:16:12Okay. That's fair. And just on the market now, I mean, we're seeing some time charter activity. I think we're seeing 2, 3 year deals now being done, dollars 50,000 a day, which is approximately where it should be also based on share prices at least. What are you seeing? Speaker 300:16:31And if I also may ask, are you surprised about the strength you've seen over the past few months compared to where we were? I mean, it's been quite a turnaround in sentiment at least in a few months' time. Speaker 100:16:48Yes. I think if you look at the U. S. Exports specifically, they have I think it's fair to say that they have surprised us on the upside. The resilience in the U. Speaker 100:17:02S. Production and export volumes is more than also we anticipated. But again, we do see that the on the time charter front this is there are definitely discussions out there with and among market players who are in need for shipping going forward. And if you need to ship these days, you simply have to pay up. I think that's the way it works. Speaker 100:17:35So I believe you refer to a 3 year deal around $50,000 which is something we are not surprised to see. And there are other market participants also looking for ways to cover their same level. Speaker 300:17:58Okay. And one final one. I mean, we're sitting some distance away from this, but obviously, you are seeing quite decent investment activity into both fractionating capacity, export capacity, etcetera, out of the U. S. So given your relationship to enterprise, I mean, on the production side, is that potentially becoming a bottleneck as you see it? Speaker 300:18:19I mean, it doesn't look like infrastructure is going to be a bottleneck. But given the drilling activity we're now seeing and expectations ahead, is that at all be copying anyone's fair? Or is it just business as usual? Speaker 100:18:35I would say that we wouldn't have seen the recent investments done by the terminal operators and other players in the U. S. Shale gas market, had it not been for them actually believing in the shale gas story also going forward. So and the fact that, for instance, energy transfer bought WTG Midstream, I think, is another sign of these big operators and terminal operators consolidating because they see there is still an upside potential in the U. S. Speaker 300:19:18Okay. Thank you very much. Operator00:19:22Thank you, Erik. Peter, please go ahead. Speaker 400:19:26Yes. Hello. Just firstly, a quick question on the Vitol ships. You're right that there is no financial impact from it. But could you share some of the background behind those ships being pulled from the pool? Speaker 100:19:41Yes. Well, this was a COA sorry, pool participation with shipping capacity, charter back kind of COA, which was tested for a year, and it didn't work out as intended. And then we have amicably agreed with it all that let's rather meet in the spot market. So it's very undramatic in all ways. Speaker 400:20:13Okay, okay. Good to hear. You also write that the Panama passages now is normalized. But I suppose then you refer, of course, to your market. In the overall market, it's still a substantial reduction in the number of France. Speaker 400:20:27And to the best of my knowledge, there is still a substantial auction premium to be paid. So question part 1 is, what is the auction premiums these days? And 2, very good if you can elaborate on what the consequence of still hefty payments to use the Canal is impacting the VLGC markets? Speaker 100:20:55Yes. So the on the Panama Canal side, there have been great fluctuations in the auction price, and we have seen levels from $600,000,000 $700,000 per day up to $1,800,000 a couple of weeks ago, and then it fell back to $500,000 again. And now I think it's, as far as I can recall, it's back to $700,000 thereabout. So this is a daily auction, which is hard to predict, but there is definitely big fluctuations from week to week. And I think in general, you can say that there is there has been a willingness to pay up to get the ships through the canal, both from the charter side and also from the owner side. Speaker 100:21:48But in general, you can say that the Panama Canal capacity, it is what it is. The more ships coming into the market and we anticipate that there will be congestion in and around the Panama Canal also in the future because the capacity is pretty much fixed. And especially during high season, it's going to be more congestion coming than what we see today. That's what we anticipate at least. Speaker 400:22:21Okay. But I read you as if you now pay the auction fees on Yustica now predominantly and opt not to do the long kept Good Hope round? Speaker 100:22:34No. It depends on where we are discharging in Asia. So basically, if you are in Northeast Asia, you try to see whether it's possible to go back via the Panama Canal. If not, you go around South Africa all the way back to the U. S. Speaker 100:22:53So but it depends on where you are coming open after discharge. And then there is obviously a view on the situation in and around the Panama Canal before you decide on which direction to go. Speaker 400:23:06And that applies also to the lead and leg, the front haul? Speaker 100:23:11On the front haul, it's negotiated on a case by case basis with the charter. So and then you typically have a rate to go around the Cape or you can have a rate to go via Panama. But the this is something which is discussed with charters on a case by case basis, depending on the situation at any point in time in the Panama Canal. Speaker 400:23:40Okay. A final question from me. As also Paul Wilson alluded to, it's pricey. But just how pricey is it really? Because you sold some old ships last year, which I think is fair to say surprised most people on sort of the upside of that price or those prices. Speaker 400:24:01But if you were to dispose of some of your 15, 16 tonnage, what would that price be? Speaker 100:24:14Well, I think the last reference point is a deal done by PetroDek, where they sold it in the low SEK80 1,000,000, wasn't it? So I think that is the last reference point. But I can double check that, Petri, so I'm misguiding you. Speaker 400:24:33Would you sell on those prices, Christian? Speaker 100:24:37We have no plans to sell any more ships at the moment, Patrick. Speaker 400:24:43Okay. Thank you. Speaker 100:24:44The reason for that is also it's also because we if you sell ships at one point, you start reducing your capacity to generate revenues. So it's important for us to keep a certain size to be able to generate revenues also in the future. Operator00:25:06The next question comes from Axel Speaker 500:25:12Sturman from Kepler Cheuvreux. I have a question related to the PDH plants in China. I have your comment related to recent market intelligence regarding the margins there, which has been weak lately. Do you think this is a consequence of increased capacity? Or do you think it's a consequence of softer demand? Speaker 100:25:44I think when you look at the PDH plants run rate, they have been weak to relatively weak for quite a long period of time. But we still see that they continue to run on new PDH plants are opening. And they are many of them are also linked to other petrochemical projects in China. So we don't really see any big change in this since the last half year or so or even longer. So for us, there is no change in the way we regard the Chinese demand from the PDH side. Speaker 500:26:28Thank you. Operator00:26:33Over to you, Kaia, for questions from the Q and A channel. Speaker 600:26:37Thank you, Lisa. We have one question here from Nuno Rodriguez asking about the TCE guiding for the 2nd quarter, which is lower than the actual Q1 TCE. And does this mean that the net profit for Q2 is expected to decrease? Speaker 200:27:02Yes, Tayo, I'm happy to answer the question. I think let's remember the timing when we fixed for the TC out in order to secure our earning and hedge for it is earlier than the quarter. So that's why let's also don't forget that the last quarter we come from an extremely strong historically high freight market. Hence by comparison, we feel it's a little bit low. But let's reassure that compared with our 17,300 operating cash breakeven, $49,000 is a very healthy rate. Speaker 200:27:47And also that doesn't mean that the net profit will necessarily be a decrease in compared with this quarter. The reality is that we do not know until the book is closed, but there are also other elements, for example, product services performance as well as other accounting related factors can impact the net result. Speaker 600:28:15Then next we have a question from Blaise Francis Ndolomingo. Apologize for the pronunciation. A question slightly overlapping with the previous one. Your guidance of TCE revenue per available day for the Q2, 49,000 dollars per day, is down compared to last year's TCE revenue of $52,500 per available day. Can you go a bit more in detail with regards to the reasons? Speaker 600:28:44What is your guidance with regards to the impact of this on earnings? Will the decrease in net finance expenses, which help earnings in the Q1, also be able to offset the TCE revenue per available day decline in the 2nd quarter? Speaker 200:29:01Well, thanks for the question. I believe that was also answered early on. As for the net finance expenses, I will assure that that's a natural outcome of a very how to say, we're almost debt free at the moment. In addition to that, we also run a very healthy cash management program, which means that the net finance expenses will be trending low as well. Speaker 100:29:31And if I can also make a comment to the reasons why it's coming off compared to TCE revenue of €52,500,000 it's because of the events in the Q1 and there is a backlog on the earnings and revenues. So since we have this sharp rate drop in January, we are not immune to it. And it affects some of the positions also into the second quarter. Operator00:30:15Please note that participants have been automatically muted. Please press unmute before speaking. Finally, a question from the chat channel, Kaia? Speaker 600:30:52Yes. Another question here from Blaise Francis Hondo Lomingo. Yes. Thank you for your answer. Highly appreciated. Speaker 600:31:01No questions, sorry. Operator00:31:03Okay. Final. Should you have questions, please type them into the Q and A channel. You can also click the raise hand button to Speaker 100:31:23I think we are coming to the end of the presentation here. So thanks everyone for the questions and for your participation. And I think you can round it off there. Thanks everyone. Operator00:31:35Thank you for attending BW LPG's Q1 20 24 financial results presentation. More information on BW LPG and BW Product Services are available at www.bwlpg. Comandwww.bwproductservices.com, respectively. Have a good day and a good night.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallBW LPG Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckInterim report BW LPG Earnings HeadlinesBW LPG to Release Q1 2025 Financial Report and Host Earnings PresentationMay 6 at 1:52 AM | tipranks.comBW LPG Limited “ Q1 2025 Financial Report Release and Earnings Presentation on 20 May 2025May 6 at 1:31 AM | investing.comHere’s How to Claim Your Stake in Elon’s Private Company, xAII predict this single breakthrough could make Elon the world’s first trillionaire — and mint more new millionaires than any tech advance in history. And for a limited time, you have the chance to claim a stake in this project, even though it’s housed inside Elon’s private company, xAI.May 7, 2025 | Brownstone Research (Ad)BW LPG Limited – Q1 2025 Financial Report Release and Earnings Presentation on 20 May 2025May 6 at 1:05 AM | businesswire.comBW LPG Limited - Audited Financial Statements 2024May 2, 2025 | businesswire.comBW LPG Releases 2024 Financial Statements Ahead of AGMMay 2, 2025 | tipranks.comSee More BW LPG Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like BW LPG? Sign up for Earnings360's daily newsletter to receive timely earnings updates on BW LPG and other key companies, straight to your email. Email Address About BW LPGBW LPG (NYSE:BWLP), an investment holding company, engages in ship owning and chartering activities worldwide. The company operates through Shipping and Product Services segments. The company involved in the transportation of liquefied petroleum gas to oil companies, and trading and utility companies. It also offers integrated liquified petroleum gas (LPG) delivery services and support; wholesale and trade of LPG; and management services. It owns and operates LPG vessels and a fleet of very large gas carriers. The company was formerly known as BW Gas LPG Holding Limited and changed its name to BW LPG Limited in September 2013. BW LPG Limited was founded in 1935 and is headquartered in Singapore.View BW LPG ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Palantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's EarningsAmazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousRocket Lab Braces for Q1 Earnings Amid Soaring ExpectationsMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2 Upcoming Earnings Monster Beverage (5/8/2025)Coinbase Global (5/8/2025)Brookfield (5/8/2025)Anheuser-Busch InBev SA/NV (5/8/2025)ConocoPhillips (5/8/2025)Shopify (5/8/2025)Cheniere Energy (5/8/2025)McKesson (5/8/2025)Enbridge (5/9/2025)Petróleo Brasileiro S.A. - Petrobras (5/12/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 7 speakers on the call. Operator00:00:01Welcome to BW LPG's First Quarter 2024 Financial Results Presentation. Bringing you through the presentation today are CEO, Christian Sorensen and CFO, Samantha Shi. We are pleased to answer questions at the end of the presentation. Should you have any, please type them into the Q and A function in your Zoom panel. You may also use the raise hand option. Operator00:00:27Before we begin, we wish to highlight the legal disclaimers shown on the current slide. This presentation held on Zoom is also recorded. I now turn the call over to Christian. Speaker 100:00:42Hi, everyone, and welcome to our 2024 Q1 presentation. Thank you for taking time to join us today as we present our financial results and recent events. It's been a busy period for our company. So let's turn to Slide 4, please. We delivered another strong quarter with the result of $150,000,000 net profit after tax on the back of a strong time charter equivalents of $61,500 per available day, which includes a positive IFRS adjustment of $26,000,000 We booked a net gain of $20,000,000 from the sale of the BW Princess, and it was another good quarter by our trading units BW Product Services, showing a profit of $21,000,000 where we subsequently returned $30,000,000 to its shareholders in April through the preannounced capital return. Speaker 100:01:38The quarterly NPAT translates into an earnings per share of 1.07 dollars and the Board has secured $1 per share in dividends, which is equivalent to 106% of the earnings from our shipping activities, which calculates to an annualized dividend yield of 22% basis Tuesday's closing price in New York. On the shipping side, we have mutually agreed with Vital to terminate our pool and charter back arrangements. There is no financial impact anticipated from the termination of the agreements. Will look forward to continuing doing business together in the day to day chartering markets. For our trading activity, we are happy to announce that Product Services have concluded a multiyear extension of their cargo contract with Enterprise Product Partners, which will significantly improve our optionality and ability to capture profits in the LPG value chain. Speaker 100:02:34In addition, the transaction is enabling us to grow our business at a time when growing in shipping is more expensive than ever, and it bolsters our business model for the future markets. The expansion of our trading volumes will be financed by trading facilities already in place, and the value at risk is anticipated to only increase from $6,000,000 to $8,000,000 reflecting the balanced trading portfolio that Product Services is running. And finally, we are very proud about our milestone dual listing on the New York Stock Exchange. The reception in the U. S. Speaker 100:03:09Investor market has been very satisfactory, reflected in a 27% increase in our U. S. Dollar denominated share price since the listing, and the share trading volume in the U. S. Is picking up. Speaker 100:03:22Turning over to our market outlook. We remain positive on the sector with several indicators pointing in the right direction, both in the underlying LPG commodity market as well as the supply demand balance in the VLGC markets, and this is even without disruptions in the Panama Canal. So let's turn to Page 6 for a closer look at the market fundamentals. The U. S. Speaker 100:03:50Production and export volumes are still the locomotives in the LPG growth story and continue to deliver on the upside of the expectations. According to recent EIA figures, the production and export volumes are up 8% 14%, respectively, year to date compared to same period last year. We maintain our positive view on the U. S. Export volumes for 2024 and '25. Speaker 100:04:15We regard the CapEx plans by the U. S. Terminal companies as a positive sign for the future U. S. LPG export volumes and believe they will remove any potential bottlenecks for the medium term. Speaker 100:04:28The Middle East exports are expected to be stable for this year unless OPEC decides on any cutback reversals, while we anticipate more volumes to come on stream from next year onwards from Abu Dhabi and later Qatar. The increasing LPG exports from the U. S. And the Middle East are meeting a growing demand side in Asia, both for industrial purposes, well represented by rapidly increasing demand by the Chinese PDH plants and from the residential sector, especially in the Indian subcontinent and Southeast Asian countries. The Indian demand for LPG is now consuming about half of the Middle East exports, making the rest of the Asian market increasingly dependent on the U. Speaker 100:05:10S. LPG exports to meet the underlying and higher demand, which follows growing population and prosperity. Also worthwhile to note is that LPG, by being a byproduct from oil and natural gas production, has a history of always being price and eventually finding a home since no producers want to store LPG for a prolonged period of time. And this market dynamics makes it a competitively priced energy source, which easily penetrates new markets since it's relatively easy to handle compared with other energy sources, which require much higher infrastructure investments. Let's turn to Slide 7. Speaker 100:05:53Looking at the global VLGC fleet balance for the next 18 to 24 months, it is a sharply abating curve of newbuilding deliveries when we move into the second half of this year. We only have a handful of VLGCs set for delivery from the yards, while the global fleet is approaching 400 units. For 2025, only a dozen vessels are scheduled for delivery. The yards are still talking deliveries for new orders more than 3 years forward, and this gives us good visibility of the market in the next 18 to 24 months. So to summarize, the market fundamentals for both the LPG commodity markets and the VLGC markets are strong and reflected in the current rate level, which is fluctuating between $60,000 to $70,000 per day. Speaker 100:06:44The FFA market is priced for the remainder of this year at levels in the region low to mid $60,000 per day and this is without any serious delays in the Panama Canal, which continue to be a wildcard also in the future. And with this, I'm pleased to let Samantha take you through the commercial performance and our financials. Speaker 200:07:06Thank you, Christian, and hello, everyone. It's a call. Good to speak to you. For the Q1 of 2024, we delivered a TCE of US9,400 dollars per calendar day and US61,500 dollars per available day, a continued solid performance. We have a healthy coverage through our time charter and FFAA portfolio, which represents about 37% of our shipping exposure. Speaker 200:07:36For the Q2, we have fixed 84% of the available days at about US49,000 dollars per day. For 20 24, our time charter out fleet generates a profit around US25 $1,000,000 over our time charter in fleet. Additionally, more shipping capacity that is fixed on time charter during the quarter is estimated to generate about $39,000,000 for year 2020 4, up from US19 $1,000,000 as reported in Q1. Moving to Slide 11. Product services delivered a solid performance in the beginning of the year. Speaker 200:08:20In Q1, it yield a net profit of US20 $1,000,000 and increased its net asset value to US82 $1,000,000 as of end March. The net profit was contributed by gross profit of $33,000,000 after netting off G and A and tax provisions. The gross profit includes realized gain of US18.7 million dollars and unrealized cargo and derivative gain of $14,000,000 The reported net profit does not include unrealized fiscal shipping valuation, which is $31,000,000 at the end of March based on our internal valuations. This shipping valuation dropped from the previous quarter reflecting a decline of a 12 month freight forward market at the end of March compared with the substantially higher market in Q4. For Q1, we reported an average value at risk of $5,000,000 on a well balanced trading book, including cargoes, shipping and derivatives. Speaker 200:09:32As announced earlier, we concluded a multiyear contract with the enterprise product partners in Texas. The contract will have the potential to double our volume up from the U. S. Gulf, providing product services with a strong cargo position. Next slide please. Speaker 200:09:54Moving to the financial highlights. In Q1, we continue a good business performance and reported a net profit after tax of US150 $1,000,000 on a consolidated basis. This includes US10 $1,000,000 in profit from BW LPG India and RMB 21,000,000 from Product Services. The net profit also includes a positive adjustment of RMB 26,000,000 dollars related to the effect of IFRS 15 for the quarter as the TCE for the strangling voyages over the quarter end is recognized on the low to discharge base. We reported an earnings per share of $1.07 mainly contributed by our core shipping business. Speaker 200:10:43This translates into an annualized earning yield of 38% when compared against our share price at the end of March. We reported a net leverage ratio of 7% in Q1, a decrease from 21% at the end of December. This substantial decrease was due to repayment of shipping loan, decrease in restricted cash held for the derivative margin requirement and decrease in product services or short term trade finance drawn at the end of Q1. On the basis of a low leverage ratio and considering the business performance as well as the capital requirement ahead. The Board has declared a dividend of $1 per share in Q1. Speaker 200:11:33This represents a 93% of payout ratio of Q1 total profit or 106% of the shipping impact. The dividend payout reflects our commitment to return value to our shareholders as we continue to deliver a high dividend yield of 22 percent when calculated on yesterday's share price. Our balance sheet ended the quarter with a shareholder's equity of $1,700,000,000 Our annualized Q1 return on equity and capital employed was 37% and 30%, respectively. In Q1, our daily OpEx came in at 8,700 dollars per day due to higher than expected maintenance and repair expense. For 2020 4, we expect our own fleet operating cash breakeven to be about $17,300 per day. Speaker 200:12:36As you can see, our liquidity continued to remain healthy. On a consolidated basis, we ended Q1 with a CAD661 1,000,000 in liquidity, including CAD340 1,000,000 in cash, CAD347 1,000,000 in undrawn revolving facilities, which will support us for upcoming CapEx expenditures. Ship financing debt stood at $244,000,000 as end March comprised of the balance to Ship Finance term loan was spread out with no major repayment until 2026. Trade finance drawn stood at a moderate level of $167,000,000 or 21% of our $796,000,000 trading line, leaving a healthy headroom for growth. With that, I would like to conclude my update. Speaker 200:13:33And back to you, Lisa. Thank you, Samantha. Operator00:13:38We will open the floor for questions now. Should you have questions, please type them into the Q and A channel. You can also click the raise hand button to ask your question verbally. Please note that participants have been automatically muted. We have 2 questions. Operator00:14:08Eric, please go ahead. Speaker 300:14:13Just a question, Christian, because you're saying that obviously growing within shipping now is challenging or expensive or I mean depending on how you're going to frame it. But then we'll still turn it in because of course you are now I mean, you're basically now if you exclude the debt on BW India, you're debt free. So then what's the alternative? Because your cash earnings are significantly higher than your net profits. So obviously, we're entering a stage where you're either going to build substantial cash coffers or are you going to have to pay out more? Speaker 300:14:53Are you considering doing some kind of extraordinary payout? Or how should we think about your balance sheet the year or 2 down the road at the current market outlook? Speaker 100:15:04Thanks, Erik. Like you say, it's and again, it's not our aim to be debt free or anything, but it's simply hard for us to find any profitable ways to invest at the moment and thereby increase our debt side. So I think when it comes to the dividend, that's something and the balance sheet composition is something which we always discuss with the Board. So I don't want to rule out anything, but again, this is something which is at the Board's discretion and we'll see what the future brings. But you're right, we are a bit, I would say, too robust on our balance sheet. Speaker 100:15:52But again, it's not an aim for us to be debt free or anything. So but we like to if you raise debt, it should be against projects that we believe are creating value for the company and the shareholders. Speaker 300:16:12Okay. That's fair. And just on the market now, I mean, we're seeing some time charter activity. I think we're seeing 2, 3 year deals now being done, dollars 50,000 a day, which is approximately where it should be also based on share prices at least. What are you seeing? Speaker 300:16:31And if I also may ask, are you surprised about the strength you've seen over the past few months compared to where we were? I mean, it's been quite a turnaround in sentiment at least in a few months' time. Speaker 100:16:48Yes. I think if you look at the U. S. Exports specifically, they have I think it's fair to say that they have surprised us on the upside. The resilience in the U. Speaker 100:17:02S. Production and export volumes is more than also we anticipated. But again, we do see that the on the time charter front this is there are definitely discussions out there with and among market players who are in need for shipping going forward. And if you need to ship these days, you simply have to pay up. I think that's the way it works. Speaker 100:17:35So I believe you refer to a 3 year deal around $50,000 which is something we are not surprised to see. And there are other market participants also looking for ways to cover their same level. Speaker 300:17:58Okay. And one final one. I mean, we're sitting some distance away from this, but obviously, you are seeing quite decent investment activity into both fractionating capacity, export capacity, etcetera, out of the U. S. So given your relationship to enterprise, I mean, on the production side, is that potentially becoming a bottleneck as you see it? Speaker 300:18:19I mean, it doesn't look like infrastructure is going to be a bottleneck. But given the drilling activity we're now seeing and expectations ahead, is that at all be copying anyone's fair? Or is it just business as usual? Speaker 100:18:35I would say that we wouldn't have seen the recent investments done by the terminal operators and other players in the U. S. Shale gas market, had it not been for them actually believing in the shale gas story also going forward. So and the fact that, for instance, energy transfer bought WTG Midstream, I think, is another sign of these big operators and terminal operators consolidating because they see there is still an upside potential in the U. S. Speaker 300:19:18Okay. Thank you very much. Operator00:19:22Thank you, Erik. Peter, please go ahead. Speaker 400:19:26Yes. Hello. Just firstly, a quick question on the Vitol ships. You're right that there is no financial impact from it. But could you share some of the background behind those ships being pulled from the pool? Speaker 100:19:41Yes. Well, this was a COA sorry, pool participation with shipping capacity, charter back kind of COA, which was tested for a year, and it didn't work out as intended. And then we have amicably agreed with it all that let's rather meet in the spot market. So it's very undramatic in all ways. Speaker 400:20:13Okay, okay. Good to hear. You also write that the Panama passages now is normalized. But I suppose then you refer, of course, to your market. In the overall market, it's still a substantial reduction in the number of France. Speaker 400:20:27And to the best of my knowledge, there is still a substantial auction premium to be paid. So question part 1 is, what is the auction premiums these days? And 2, very good if you can elaborate on what the consequence of still hefty payments to use the Canal is impacting the VLGC markets? Speaker 100:20:55Yes. So the on the Panama Canal side, there have been great fluctuations in the auction price, and we have seen levels from $600,000,000 $700,000 per day up to $1,800,000 a couple of weeks ago, and then it fell back to $500,000 again. And now I think it's, as far as I can recall, it's back to $700,000 thereabout. So this is a daily auction, which is hard to predict, but there is definitely big fluctuations from week to week. And I think in general, you can say that there is there has been a willingness to pay up to get the ships through the canal, both from the charter side and also from the owner side. Speaker 100:21:48But in general, you can say that the Panama Canal capacity, it is what it is. The more ships coming into the market and we anticipate that there will be congestion in and around the Panama Canal also in the future because the capacity is pretty much fixed. And especially during high season, it's going to be more congestion coming than what we see today. That's what we anticipate at least. Speaker 400:22:21Okay. But I read you as if you now pay the auction fees on Yustica now predominantly and opt not to do the long kept Good Hope round? Speaker 100:22:34No. It depends on where we are discharging in Asia. So basically, if you are in Northeast Asia, you try to see whether it's possible to go back via the Panama Canal. If not, you go around South Africa all the way back to the U. S. Speaker 100:22:53So but it depends on where you are coming open after discharge. And then there is obviously a view on the situation in and around the Panama Canal before you decide on which direction to go. Speaker 400:23:06And that applies also to the lead and leg, the front haul? Speaker 100:23:11On the front haul, it's negotiated on a case by case basis with the charter. So and then you typically have a rate to go around the Cape or you can have a rate to go via Panama. But the this is something which is discussed with charters on a case by case basis, depending on the situation at any point in time in the Panama Canal. Speaker 400:23:40Okay. A final question from me. As also Paul Wilson alluded to, it's pricey. But just how pricey is it really? Because you sold some old ships last year, which I think is fair to say surprised most people on sort of the upside of that price or those prices. Speaker 400:24:01But if you were to dispose of some of your 15, 16 tonnage, what would that price be? Speaker 100:24:14Well, I think the last reference point is a deal done by PetroDek, where they sold it in the low SEK80 1,000,000, wasn't it? So I think that is the last reference point. But I can double check that, Petri, so I'm misguiding you. Speaker 400:24:33Would you sell on those prices, Christian? Speaker 100:24:37We have no plans to sell any more ships at the moment, Patrick. Speaker 400:24:43Okay. Thank you. Speaker 100:24:44The reason for that is also it's also because we if you sell ships at one point, you start reducing your capacity to generate revenues. So it's important for us to keep a certain size to be able to generate revenues also in the future. Operator00:25:06The next question comes from Axel Speaker 500:25:12Sturman from Kepler Cheuvreux. I have a question related to the PDH plants in China. I have your comment related to recent market intelligence regarding the margins there, which has been weak lately. Do you think this is a consequence of increased capacity? Or do you think it's a consequence of softer demand? Speaker 100:25:44I think when you look at the PDH plants run rate, they have been weak to relatively weak for quite a long period of time. But we still see that they continue to run on new PDH plants are opening. And they are many of them are also linked to other petrochemical projects in China. So we don't really see any big change in this since the last half year or so or even longer. So for us, there is no change in the way we regard the Chinese demand from the PDH side. Speaker 500:26:28Thank you. Operator00:26:33Over to you, Kaia, for questions from the Q and A channel. Speaker 600:26:37Thank you, Lisa. We have one question here from Nuno Rodriguez asking about the TCE guiding for the 2nd quarter, which is lower than the actual Q1 TCE. And does this mean that the net profit for Q2 is expected to decrease? Speaker 200:27:02Yes, Tayo, I'm happy to answer the question. I think let's remember the timing when we fixed for the TC out in order to secure our earning and hedge for it is earlier than the quarter. So that's why let's also don't forget that the last quarter we come from an extremely strong historically high freight market. Hence by comparison, we feel it's a little bit low. But let's reassure that compared with our 17,300 operating cash breakeven, $49,000 is a very healthy rate. Speaker 200:27:47And also that doesn't mean that the net profit will necessarily be a decrease in compared with this quarter. The reality is that we do not know until the book is closed, but there are also other elements, for example, product services performance as well as other accounting related factors can impact the net result. Speaker 600:28:15Then next we have a question from Blaise Francis Ndolomingo. Apologize for the pronunciation. A question slightly overlapping with the previous one. Your guidance of TCE revenue per available day for the Q2, 49,000 dollars per day, is down compared to last year's TCE revenue of $52,500 per available day. Can you go a bit more in detail with regards to the reasons? Speaker 600:28:44What is your guidance with regards to the impact of this on earnings? Will the decrease in net finance expenses, which help earnings in the Q1, also be able to offset the TCE revenue per available day decline in the 2nd quarter? Speaker 200:29:01Well, thanks for the question. I believe that was also answered early on. As for the net finance expenses, I will assure that that's a natural outcome of a very how to say, we're almost debt free at the moment. In addition to that, we also run a very healthy cash management program, which means that the net finance expenses will be trending low as well. Speaker 100:29:31And if I can also make a comment to the reasons why it's coming off compared to TCE revenue of €52,500,000 it's because of the events in the Q1 and there is a backlog on the earnings and revenues. So since we have this sharp rate drop in January, we are not immune to it. And it affects some of the positions also into the second quarter. Operator00:30:15Please note that participants have been automatically muted. Please press unmute before speaking. Finally, a question from the chat channel, Kaia? Speaker 600:30:52Yes. Another question here from Blaise Francis Hondo Lomingo. Yes. Thank you for your answer. Highly appreciated. Speaker 600:31:01No questions, sorry. Operator00:31:03Okay. Final. Should you have questions, please type them into the Q and A channel. You can also click the raise hand button to Speaker 100:31:23I think we are coming to the end of the presentation here. So thanks everyone for the questions and for your participation. And I think you can round it off there. Thanks everyone. Operator00:31:35Thank you for attending BW LPG's Q1 20 24 financial results presentation. More information on BW LPG and BW Product Services are available at www.bwlpg. Comandwww.bwproductservices.com, respectively. Have a good day and a good night.Read morePowered by