Singapore’s BW Epic Kosan (BWEK) has increased earnings and expects even higher shipping demand for LPG in the rest of this year.

The Oslo-listed owner of 76 smaller gas carriers said net profit in the first quarter grew to $9.1m from $7m in the same period a year ago.

Revenue was up at $90.6m versus $59.8m in 2021.

Chief executive Charles Maltby said the increased scale of the fleet combined with improving market conditions and effective cost management boosted the result.

During the period, BWEK sold the 5,019-cbm Epic St George (built 207) to Blue Energy and Maritime of Vietnam for a reported $10.5m.

This was in line with its strategy to focus on larger and new ships, with the market strong for such assets, Maltby added.

“Our strategy remains to focus on the LPG, petrochemicals, and speciality gases sector, grow the average size of our fleet and maintain an attractive average age,” the CEO said.

Time charter equivalent (TCE) earnings were up 7.5% year-on-year in the quarter at $11,726 per day.

Operating costs rose 12.2% to $4,957 per day, impacted by the change in the fleet to include semi-refrigerated and ethylene vessels with higher running costs.

Administrative costs were down 13% due to economies of scale from the 2021 merger between BW’s Epic Gas and J Lauritzen’s Lauritzen Kosan that created the company.

War situation being monitored

“We are monitoring the conflict in Ukraine and implementing measures to minimise the impact on our staff, operations, and financial results,” the company said.

None of the vessels are chartered to or owned by Russian companies or trade in Russia or Ukraine.

BWEK is however concerned about the impact of energy costs, including LPG, for developing economies.

“However, driven by increasing supply of LPG, we anticipate 3.7% growth in LPG seaborne trade over 2022, whilst smaller gas vessel fleet growth forecasts are 2.2% before any scrapping, which should result in further positive earnings momentum,” the company said.

Norway’s Norne Securities said very strong margins had led to record results for BWEK.

But the investment bank added: “The ordering of new vessels has picked up in the larger LPG segments despite higher commodity and technology costs.”