BW LPG profit hits record, but warns on virus

LPG shipping company BW LPG recorded its highest ever quarterly profit in the fourth quarter of 2019, which it attributed to a rise in exports from North America. But it warned that the coronavirus has increased uncertainty about LPG trade and production.

The firm made a profit of $154mn in the fourth quarter, compared with a loss of $34mn a year earlier. It said there was a 26pc rise in exports from north America over that period, and time charter equivalent (TCE) rates more than doubled to average $50,600/d.

It said while its freight outlook is still positive for this year, and while the coronavirus outbreak has had a limited impact so far on LPG freight rates, "the unpredictable development of this outbreak has increased uncertainty with potential near-term impact on LPG imports into China and longer-term impact on LPG production following the decline in oil and gas prices."

BW LPG said that four very large gas carrier (VLGC) newbuilds were delivered into the global fleet, and none were recycled in the fourth quarter, representing 6pc fleet growth on a yearly basis. It said 21 vessels will be delivered in 2020, with 17 of these in the first half.

It said it will retrofit and exercise options for the delivery of four additional dual-fuel LPG propulsion engines, in addition to the eight it announced earlier in February. This will help the company to meet the increasingly stringent marine emissions standards enforced at the start of this year by the International Maritime Organisation (IMO).

BW fleet was 45 strong last year, including 43 VLGCs and two large gas carriers (LGCs). It operates two jointly-owned VLGCs and two VLGCs on time-charter agreement that are currently under construction.

By Efcharis Sgourou

source: Argus Media