Singapore's BW LPG is hopeful of continued good earnings from its VLGCs after rates recovered from a "collapse" at the end of the second quarter.
The company's fleet of 46 VLGCs averaged rates of $26,800 per day, with 94% utilisation.
VLGC freight rates plunged at the end of June, and recovered in a V-shape, making the third quarter the weakest so far in 2020, BW LPG said.
Net profit was chopped to $25m as a result, down from $117m in 2019, in line with expectations.
Time charter equivalent income was $101m, against $185m a year ago.
Ebitda was $67m for the quarter.
Outlook brighter
The company said it remains optimistic about the VLGC market for the rest of the year, and has upgraded its view for 2021.
"The VLGC freight market is strong and is supported by resilient LPG exports out of the US, recovery in LPG exports from the Middle East, and a widening arbitrage driven by strong demand and reduced fleet availability," BW LPG said.
Cash and cash equivalents amounted to $112.8m at 30 September.
BW LPG is paying a cash dividend of $0.15 per share, or 84% of earnings.
Analyst Anders Karlsen at Danske Bank said: "We see this as a clear signal of high confidence for Q4 and a bit of catch up from lagging their dividend payments as per their stated policy.
"The result itself was not massively surprising as they guided on 80% of their fixtures for Q3 when last reporting. Ebitda and Ebit therefore ended much in line with expectations."
With a solid cash flow, the company paid down debt and reduced its net leverage ratio to 44% in the quarter, from 54% in 2019.
The company said its retrofitted 84,195-cbm BW Gemini (built 2015), the world's first LPG-powered VLGC, is on a historic transpacific crossing on LPG propulsion to the US, where it will receive the largest-ever load of LPG on a single keel.
