BW LPG Posts Lower Profit

BW LPG Ltd. has reported $34.9 million, or $0.23 per share, in profit attributable to shareholders for the second quarter, down 54.56 percent from the same three-month period last year.

The liquefied petroleum gas (LPG) shipper noted a fall in LPG volumes exported from the United States to China in the first few weeks of the trade war between the world’s top two economies was offset by U.S. shipments to other countries.

BW LPG’s time charter equivalent (TCE) income for the April-June 2025 quarter rose 2.76 percent year-on-year to $152.7 million. A 31 percent increase in available days was offset by a 33 percent decrease in the LPG spot market to $35,000 a day. VLGC [very large gas carrier) freight rates averaged $38,800 per available day, with 94 percent fleet utilization.

Shipping revenue totaled $230.54 million for 2Q 2025, down 12.13 percent against 2Q 2024.

“Albeit a softer spot market, the TCE income (shipping) continues to be well supported by the increased time charter coverage of 44 percent (2Q 2024: 35 percent) of available days at $43,000 per day (2Q 2024: $42,800 per day)”, BW LPG said.

“Additionally, our India subsidiary continued to deliver stable TCE income of $30.7 million for 2Q 2025 (2Q 2024: $30.6 million), mainly from fixed-rate time charters”.

The product services segment generated $14.8 million in gross profit, down 39.59 percent year-on-year. 2Q 2025 benefited from $6 million of realized gains from cargoes and $9 million of positive change in mark-to-market valuations of open cargo and hedging positions.

Product services revenue totaled $813.36 million for 2Q 2025, up 32.45 percent from 2Q 2024.

Profit after tax landed at $43.4 million, down 48.84 percent. Profit before tax was $47.07 million, down 47.33 percent. Operating profit was $58.84 million, down 34.12 percent.

BW LPG, listed in New York and Oslo and majority-owned by Singapore-based BW Group Ltd., declared a dividend of $0.22 per share.

“The first half of 2025 was characterized by significant geopolitical events that impacted both freight rates and trading patterns”, BW LPG said.

“Spot rates for the Houston to Chiba route started the year around $40,000 but began to decline gradually through the winter months. Milder winter temperatures in the U.S. compared to recent years, however, supported export volumes and VLGC earnings.

“As freight rates strengthened going into April, the emerging trade war between the US and China had a dramatic effect on U.S. LPG volumes destined for China. In just a few weeks, export volumes fell sharply, pulling spot rates down.

“However, this shock to the market proved short-lived, as excess U.S. LPG production not consumed domestically is priced to clear in the international market. Consequently, export volumes continued to flow out of the U.S., finding new markets in different countries. Regular importers of U.S. LPG increased their purchase volumes, while India emerged as a new buyer of significant U.S. volumes”.

U.S. LPG exports via VLGCs in 1H 2025 grew 7.1 percent year-on-year.

Meanwhile LPG exports from the Middle East on VLGCs rose 0.6 percent year-on-year in January-June 2025, “partly due to reversed OPEC+ production cuts”, BW LPG said.

“Like U.S. exports, Middle East shipments were affected by the trade war, with export volumes shifting away from India towards China”, it said.

“This shift positively impacted ton-mile demand and led to higher freight rates. Additional support for spot earnings was observed in June when geopolitical uncertainty and a heightened risk of closure in the Strait of Hormuz drove VLGC rates higher.

“Despite the rapid rebalancing of LPG trades, overall rates for the first half were significantly lower than the same period of 2024.

“Following the end of the first half of 2025, the reshuffling of trading patterns began to revert to normal. Chinese LPG imports from the US increased in July, although from a low baseline. In contrast, Indian imports from the US decreased significantly, and Middle Eastern exports began to stabilize, returning to a more balanced distribution between India and China.

“As we moved into August, demand for pre-booked Panama Canal slots has been stronger than usual, resulting in fewer canal transit auctions and fees considerably above typical levels. In response, several VLGCs have been rerouted away from the Panama Canal to take the longer route via the Cape of Good Hope. While conditions in the Panama Canal can change rapidly, the effects of vessels sailing around the Cape can last for months”.

BW LPG received seven new VLGCs in 1H 2025 and expects an additional seven to be delivered by year-end.

At the end of 1H 2025 it had $792.03 million in current assets including $320.95 million in cash and cash equivalents. Current liabilities stood at $621.28 million including $214.59 million in borrowings.

To contact the author, email jov.onsat@rigzone.com