BW LPG Posts Higher Shipping Revenue

BW LPG Ltd on Thursday reported $340.8 million in shipping revenue for the second quarter (Q2), up from $230.5 million for the same three-month period last year as a dramatic increase in spot rates offset fewer operating days.

The Singapore-headquartered liquefied petroleum gas (LPG) shipper, part of maritime and energy multinational BMW Group, delivered a spot performance of $85,200 per day, up 139 percent against Q2 2025.

"The first half of 2026 was one of the most volatile periods on record for the VLGC [very large gas carrier] market. Following the outbreak of war in the Middle East, the closure of the Strait of Hormuz caused significant disruption to regional LPG pricing and global VLGC trade patterns", BW LPG said in its quarterly report.

"In the immediate aftermath of the conflict, LPG importers shifted their procurement towards the U.S., driving export terminal fees sharply higher while VLGC freight rates weakened.

"As additional U.S. export capacity subsequently came online, vessel availability rather than export infrastructure emerged as the primary bottleneck in the LPG value chain.

"Towards the end of June, the price differential between U.S. and Far East LPG (the arbitrage) narrowed considerably as expectations for a sustained reopening of the Strait of Hormuz grew. More recently, spot VLGC rates have strengthened alongside a widening US-Far East LPG arbitrage as tensions in the Middle East have re-escalated.

"In addition, declining water levels have prompted the Panama Canal Authority to impose transit restrictions, resulting in more VLGCs sailing via the Cape of Good Hope. The longer voyage distances have reduced the effective supply of vessels and provided further support to freight rates".

The spot performance was partially offset by the re-delivery of two time chartered-in vessels and the sale of VLGC BW Lord, which reduced available fleet days by 216 days year-on-year to 3,713 days in Q2 2026, BW LPG said.

Its shipping segment also benefited from an increased time charter coverage of 53 percent, compared to 44 percent in April-June 2025.

Time charter equivalent profit, which covers both the shipping and Products Services segments, rose $122.2 million year-on-year to $274.9 million for Q2 2026.

BW LPG's Product Services segment recorded a gross loss of $18.1 million, compared to an income of $14.8 million for Q2 2025. A sharp increase in realized trading profits to $127.4 million was "more than offset by an unrealized mark-to-market loss of $145.5 million on open positions in the quarter", BW LPG said.

Profit attributable to shareholders grew to $120.1 million, or $0.79 per share, for Q2 2026 from $34.9 million for Q2 2025. New York- and Oslo-listed BW LPG declared a dividend per share of $0.95, compared to $0.22 for Q2 2025.

Operating profit rose to $140.4 million for Q2 2026 from $58.8 million for Q2 2025.

Operating activities generated $205.9 million in net cash, compared to $94.7 million for Q2 2025. Adjusted free cash flow was $192.6 million, compared to $13.4 million for Q2 2025.

"Spot VLGC earnings are expected to remain highly sensitive to geopolitical developments and disruptions to global trading patterns", BW LPG said.

"A full reopening of the Strait of Hormuz would almost certainly increase Middle East LPG export volumes.

"However, it could also narrow the U.S.-Far East arbitrage and reduce overall ton-mile demand for VLGCs.

"Assuming conflict resolution in Q3 2026, the Middle East exports are expected to gradually recover, although full recovery is expected to take 12-36 months depending on local conditions and infrastructure damage severity.

"North American LPG exports are expected to continue growing, supported by new export infrastructure and increasing gas-rich oil production from the Permian Basin.

"The Ras Tanura-Chiba Forward Freight Agreement market for the remainder of 2026 is currently indicating earnings slightly below $180,000 per day, although liquidity remains limited".

BW LPG ended Q2 2026 with $303.9 million in cash and cash equivalents, while current assets totaled $962.28 million. Current liabilities totaled $668.72 million including $202.64 million in borrowings. Net leverage ratio stood at 28.4 percent.

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