BW LPG Limited(BWLP) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Time Charter income per available day was $46,800, slightly lower than the previous quarter but above the guidance of$43,000 per day [3] - The net profit after tax for Q3 was $120 million, with profit attributed to equity holders of the company at$105 million, translating to an earnings per share of $0.79 [21][22] - The net leverage ratio increased to 21$58 million, driven by gross profits of $71 million, which included an unrealized mark-to-market gain of$86 million [18][21] - The Time Charter and FFA portfolio represented about 45% of the shipping exposure, with 90% of available days fixed at approximately $36,000 per day for Q4 [17] Market Data and Key Metrics Changes - The VLGC market experienced significant volatility, with freight rates fluctuating between low$20,000 and $50,000 per day [4] - The market outlook for Q4 and next year is positive, with US Gulf export levels stabilizing and freight rates finding an equilibrium around$40,000 per day [8][10] Company Strategy and Development Direction - The company is focused on expanding its fleet, with five out of twelve acquired Avance Gas ships delivered and plans for further deliveries [4][27] - The company aims to maintain a healthy leverage and financing structure while evaluating refinancing options for vessels in early 2025 [27][28] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the market fundamentals, highlighting the expected increase in North American export capacity and growth in Middle Eastern export volumes [10][11] - The company anticipates greater volatility in unrealized positions in future quarters due to the nature of their trading activities [20] Other Important Information - The Board declared a dividend of $0.42 per share, representing a 100$750 million, expected to remain healthy post-delivery of the Avance Gas fleet [26][27] Q&A Session Summary Question: Cost and revenue timing for Avance vessels - Management indicated that costs for the ships will be incurred before revenues, as invoicing occurs post-voyage completion [32] Question: Impact of asset market prices on new acquisitions - Management noted that the asset market for new ships has remained stable over the past six to eight months [38] Question: Adjustments to net leverage ratio and dividend policy - Management confirmed that the dividend policy remains unchanged, with the Board having the final say on declarations [44] Question: Product Services performance in current market conditions - Management acknowledged the challenges in extracting value due to fluctuating rates but emphasized the diverse strategies available to the Product Services division [68] Question: Guidance on G&A and depreciation - Management explained that G&A expenses fluctuate based on accrued bonuses and that depreciation will increase with the acquisition of new vessels [71][74]