Bumper payout for BW LPG

BW LPG has paid out over $100m in dividend after a remarkable VLGC market helped jack up its bottom line.

Oslo-listed BW LPG racked up a profit of $72.4m in the second quarter to take its profit for the first six months of the year to $103.2m.

This comfortably beat the $34.6m gain for the second quarter of 2013 which took its first half 2013 profit to $20.9m.

Earnings per share of $0.53 were a cent ahead of what analysts charted.

BW LPG is paying $0.76 per share for the first half, which translates to $103.6m.

Bjorn Kristian Roed, an analyst at Danske Bank, says the dividend is well ahead of the $0.34 consensus expectation.

“With figures in line with expectations, we expect the aggressive dividend to lift the shares higher today,” Roed said.

BW LPG explains the “exceptional earnings performance” and a strong balance sheet motivated the higher payday for investors.

Its VLGCs raked in $45,200 daily in the second quarter, while its LGCs contributed $30,800 daily.

“Deliveries of newly-built VLGCs are progressing, but not yet outstripping the significant increases in tonne-mile demand,” the owner’s quarterly report said.

“As such there is reason to anticipate a continued firm market through 2014 and into 2015.”

It added: “By late 2015 the rate of new VLGC deliveries will be high, and there is potential for VLGC supply to outstrip tonne-mile demand, which could drive a rationalization in day rates for a period of time. B

“Beyond that time, supply / demand balance will be subject to incremental newbuild ordering, albeit the outlook for continued growth in LPG exports from the US continues to be positive in 2017 and beyond.”