BW LPG NYSE: BWLP reported second-quarter profit attributable to equity holders of $120 million, or $0.79 per share, as elevated VLGC freight markets supported its shipping operations amid disruptions to LPG trade flows. The company declared a quarterly dividend of $0.95 per share, representing 100% of shipping net profit after tax and above the minimum 75% payout outlined in its dividend policy.
CEO Kristian Sørensen said the first half of 2026 was among the most volatile periods on record for the VLGC market. The closure of the Strait of Hormuz following the U.S.-Iran war disrupted Middle Eastern LPG exports and shifted more supply responsibility to the U.S. Gulf Coast. At the same time, Panama Canal congestion and water-related transit restrictions have encouraged vessels to take the longer route around the Cape of Good Hope, reducing effective vessel availability.
Shipping Results Fell Short of Guidance on Accounting Adjustments
BW LPG reported shipping time-charter-equivalent income of $74,000 per available day during the second quarter, below its prior guidance of $81,000 per day. Sørensen said the difference was primarily attributable to negative IFRS 15 and freight-forward agreement adjustments totaling $28.4 million, or approximately $7,500 per available day.
CFO Samantha Xu said the shipping business generated TCE income of $71,600 per calendar day and $74,000 per available day, while underlying spot performance was stronger. Spot TCE was $85,200 per available day including waiting time and FFA effects, and $87,600 per day excluding those items. Fleet utilization was 96% during the quarter.
For the third quarter, the company said it had fixed about 92% of available fleet days at an average rate of approximately $88,000 per day. That figure includes indexed time-charter agreements, meaning the final rate may still vary with the spot market. BW LPG’s all-in cash breakeven was $24,900 per day, including capital-expenditure needs.
The company said 41% of third-quarter fleet capacity was fixed under time-charter agreements at $44,300 per day. For the second half of 2026, BW LPG had secured 45% of its portfolio through fixed-rate time charters and FFA hedges at $44,100 and $48,000 per day, respectively. The remaining fixed-rate time-charter portfolio is expected to produce about $249 million of second-half revenue.
Trading Unit Records Realized Gain but Quarterly Loss
BW Product Services generated a realized trading gain of $127 million in the second quarter, but reported a loss after tax of $31 million. Xu said the loss primarily reflected non-cash mark-to-market movements, including a $190 million decrease in cargo-position valuations that was partly offset by a $45 million increase in paper-position valuations.
The division ended the quarter with net asset value of $119 million. Xu said the reported net asset value did not include an internally valued $70 million unrealized physical shipping position. Average value at risk increased to $70 million, driven by higher market volatility and additional cargo exposure from term contracts.
Responding to an analyst question, Xu said the increase in general and administrative expenses during the quarter was correlated with compensation related to the positive trading result.
Vessel Sales, Charter Activity and Liquidity
BW LPG continued to reshape its fleet during the quarter and subsequent period. The company sold the 2007-built BW Elm, which was delivered to its new owner in July, and the 2007-built BW Birch, which is expected to be delivered by mid-November at the latest. Sørensen said the sale of BW Birch is expected to generate net proceeds of approximately $64 million.
The company also announced the sale of the 2015-built BW Levant, scheduled for delivery to its new owner by mid-November. In addition, BW LPG fixed one of its 2016-built LPG dual-fuel retrofit vessels on a five-year charter at a rate in the mid-to-high $40,000-per-day range, with delivery scheduled for the end of 2026.
Xu said BW LPG had $773 million of liquidity at the end of the second quarter, comprising $302 million in cash and $471 million of undrawn revolving credit facilities. Net leverage declined to 23.5% from 26.3% at the end of the first quarter. Shareholders’ equity stood at $2.1 billion.
The company recorded 99 dry-dock days in the second quarter and expects another 58 dry-dock days in the third quarter.
Market Outlook Centers on Trade Disruptions
Sørensen said U.S. LPG exports increased approximately 16% year over year in the first half of 2026, aided by higher production and expanding export capacity. In contrast, Middle Eastern LPG exports declined 46% as the Strait of Hormuz remained closed. BW LPG counted more than 30 vessels employed or idling in the Arabian Gulf or Indian Ocean.
Exports from the U.S. to India rose 212% year over year in the first half, while U.S. LPG exports to China increased 2%. The company expects North American LPG exports to rise 18% in 2026 versus 2025, while Middle Eastern export volumes are expected to fall roughly 20 million tons short of pre-war forecasts for the year.
Management said a reopening of the Strait of Hormuz could initially pressure U.S. Gulf freight rates by narrowing the U.S.-Far East LPG arbitrage. However, Sørensen said U.S. LPG would ultimately need to continue moving to Asian markets because Europe and Latin America lack sufficient capacity to absorb the bulk of North American export volumes.
BW LPG also noted that the VLGC order book has risen to 157 vessels, with deliveries extending through the end of 2030. The current fleet totals 437 vessels, while 127 vessels are expected to be at least 20 years old by the end of 2030, compared with 68 vessels at the end of 2026.
About BW LPG (NYSE:BWLP)
BW LPG NYSE: BWLP is a pure‐play owner and operator of liquefied petroleum gas (LPG) carriers. The company's core business centers on the maritime transportation of LPG, predominantly propane and butane, under both time‐ and voyage‐charter arrangements. Its fleet comprises pressurized and semi‐refrigerated vessels designed to meet the specific requirements of LPG producers, traders and end‐users around the world.
Headquartered in Singapore, BW LPG serves a global customer base, with commercial offices in key energy hubs including Houston, London, Dubai and Tokyo.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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