VLGC giant BW LPG has painted a positive picture of the freight market despite earnings dipping from record levels at the start of 2024.
Oslo-listed BW LPG booked the highest VLGC rates in its history in 2023, setting new TCE benchmarks in the first and fourth quarters at $60,900 and $76,000 per day respectively.
VLGC rates have since enjoyed a turbulent start to 2024. Data from Jefferies places year to date spot rates at $50,300 per day, down from $72,800 per day at this point a year ago.
“Taking a slightly longer view of the VLGC market, we see a significant slowdown in fleet growth in 2024, with 21 newbuildings expected for delivery over the year,” BW LPG said in its annual report today.
“Taking into consideration the substantial LPG export expansions in both the US and the Middle East, coupled with shipyards being booked until 2027, we anticipate promising opportunities in the LPG shipping sector.”
BW LPG was one of the best-performing stocks on Oslo Stock Exchange last year. It was included in the major OBX index this month.
“After 10 successful years on the Oslo Stock Exchange, we are now setting sail towards New York and have started the process to dual-list BW LPG on the New York Stock Exchange,” new chief executive Kristian Sorensen said in the annual report.
“This will expand our investor base and improve our visibility in the US capital markets.”
“On the commercial front, we are prepared to capture opportunities from what will likely be another volatile year for the LPG segment,” said Sorensen, who was appointed CEO last October.
“On the operational front, we continue to work towards compliance with current and upcoming environmental regulations.”
BW LPG will improve its corporate reporting approach to manage environmental, social and governance issues and prepare for future disclosure requirements, according to Sorensen.
“The global energy landscape is changing and we are adapting to new market dynamics,” he said.
“Renewables and alternative clean fuels must take hold in a significant way if we are to succeed, and to succeed, consumers, industry and government must collaborate.
“In shipping, we will continue to find ways to reach net zero carbon emissions by 2050.”
This article has been updated since first publication to remove references to the CEO receiving a pay rise. While BW LPG paid more money to its chief executive in 2023, it did not provide a breakdown of how much went to Sorensen rather than the man he replaced, Anders Onarheim.
