Singapore’s BW LPG has lined up another sale of an elderly VLGC as it revealed a profit drop in the first quarter.
An agreement has been signed for the disposal of the 85,000-cbm BW Liberty (built 2007) to an unnamed third party.
VesselsValue pegs the VLGC as worth $47m. Delivery is set for the second quarter.
The sale is expected to generate $25m in liquidity and a net book gain of $4m.
The delivery of the 79,000-cbm Niigata (built 2010) and BW Trader (built 2006) to new owners for further trading was concluded in February and March.
These transactions generated $70m in liquidity and a gain of $14m.
BW LPG also revealed that Maas Capital, its new partner in Indian joint venture BW LPG India, has bought a bigger stake in the operation.
EnTrust Global-backed investor Maas completed a $50m investment in January that reduced BW LPG’s own stake to 67%.
Now Maas has acquired more stock to cut this further to 52%.
The move reflected a shared confidence in the Indian LPG market, and belief in the long-term fundamentals of the business, BW LPG said.
BW LPG India controls eight VLGCs, making it the largest India-flagged operator.
Profit falls as rates drop
In the first quarter, BW LPG said its net profit was $58m, down from $71m a year ago, mainly due to lower spot rates and lower fleet utilisation arising from the retrofitting of three VLGCs with LPG dual-fuel propulsion technology.
The dividend has been raised to $0.31 per share, equivalent to 75% of earnings, from 50% previously.
This pay-out ratio will stay the same if net debt leverage remains below 30%.
The most cash since 2013
BW LPG now has its highest ever available liquidity of $651m, and the lowest net leverage ratio of 25%, since its initial public offering (IPO) in 2013.
Revenue dipped to $130.8m from $150.1m year on year.
Freight rates averaged $36,900 per day for the fleet in the first three months.
Near term VLGC rates remain strong, supported by strong exports out of the US and the Middle East. However, volatilities remain due to geopolitical developments, the company said.
Fearnley Securities called the first quarter “solid”, with Ebitda of $93m topping analysts’ forecasts.