BW LPG Limited

Q1 2026 reported TCE income of $55,500 per available day versus guidance of $54,000 and $51,300 per calendar day. Profit after minority interest was $164 million, equal to EPS of $1.08; total net profit after tax was $187 million, including $9 million from BW LPG India and $98 million from Product Services. Product Services reported $127 million gross profit and a $98 million profit after tax, while net leverage was 26.3% versus 28.4% at year-end 2025. Q1 OpEx was $7,300 per day, own-fleet operating cash breakeven for 2026 is expected at about $19,000 per day, and all-in cash breakeven is estimated at $24,500 per day. For Q2 2026, management is guiding to about $81,000 per day fixed for 85% of available days, including 40% fixed time charter coverage at $44,000 per day. For full-year 2026, 42% of the portfolio is secured with fixed rate time charter and FFA hedges at $44,800 and $48,100 per day, respectively, and time charter-out portfolio income is expected to be around $245 million.

Kristian Sørensen framed the quarter as another period of exceptional market strength, driven by geopolitical disruption, especially the Middle East conflict and the closure of the Strait of Hormuz, which he said created inefficiencies and boosted freight rates. He emphasized that BW LPG is using the environment to advance fleet renewal, announcing eight Panamax newbuildings and describing them as a flexible, future-proof addition that should lower fleet age by about 3 years after delivery. His tone was confident but cautious on geopolitics, repeatedly noting that timing around Hormuz reopening and broader normalization is uncertain.

Samantha Xu highlighted the operating performance and balance sheet strength, pointing to TCE of $51,300 per calendar day and 92% fleet utilization after off-hire and waiting time. She said Product Services had a realized loss of $10 million but benefited from a $145 million increase in mark-to-market on cargo positions, and she emphasized that these gains will fluctuate as positions are gradually realized. She also noted net leverage of 26.3%, shareholders’ equity of $2 billion, liquidity of $680 million made up of $176 million cash and $442 million undrawn facilities, and trade finance utilization of $161 million, while saying 2026 all-in cash breakeven rises slightly to $24,500 because of pre-delivery funding costs for the newbuilds.

Analysts focused heavily on Product Services, asking whether the sharp mark-to-market gain would be secured and how results should look going forward. Management said the arbitrage is narrower than at the peak, but the business is designed to lock margins through hedging, and they expect a large part of the gain to be realized in Q2 and possibly Q3, with possible mark-to-market correction from current high levels. Other questions centered on the vessel still inside the Strait of Hormuz, the outlook for Middle East volumes, Panama Canal congestion and El Niño, time-charter coverage, voyage and chartering expenses, and potential buybacks; management said the stranded ship remains on charter with cargo onboard, expects more vessels to ballast to the U.S., sees Panama congestion remaining a meaningful support to long-haul trade, and said share repurchases are not attractive while the stock trades above NAV.