BW LPG (NYSE:BWLP) reported fourth-quarter 2025 results that management said came in above guidance, while also addressing a rapidly escalating security situation in the Middle East that has introduced fresh uncertainty into global LPG shipping markets.
Fourth-quarter results topped guidance
Chief Executive Officer Kristian Sørensen said BW LPG delivered time charter equivalent (TCE) income of $50,300 per available day and $48,100 per calendar day, above the company’s prior guidance of $47,000 per day for the quarter. Profit after minority interests was $104 million, equal to $0.69 in EPS.
Dividend declared; trading profits to be considered separately
The board declared a quarterly dividend of $0.57 per share. Management said this represented 100% of shipping net profit after tax (NPAT) for the quarter, exceeding the company’s dividend policy guidance of a 75% payout of shipping profit.
During the Q&A, Xu clarified that the Q4 dividend did not include any contribution from BW Product Services (the trading arm). She said BW Product Services’ board has already reviewed and approved a dividend proposal for 2025, which would be considered as part of the company’s overall dividend capacity in future quarters in 2026.
Middle East conflict: operational focus on safety and routing
Sørensen said the company’s “first priority” amid the Middle East escalation is the safety of colleagues and crews, alongside protecting the company’s interests. BW LPG has three Indian-flagged vessels in the Arabian Gulf—BW Elm, BW Tyr, and BW Loyalty—including two on time charter and one in drydock. Management said financial impact had been minimal so far, limited to the drydocked vessel where nighttime work was suspended.
On commercial operations, BW LPG said it also has other vessels on time charter idling outside the Arabian Gulf while assessing security conditions in the Strait of Hormuz. Sø rensen said the company’s next open spot vessel for Arabian Gulf loading could be available in the last part of March, “unless we decide to ballast them to the U.S. Gulf,” depending on how the situation develops.
In response to analyst questions, Sørensen said BW LPG had been informed that ships could not currently be insured to pass into the Arabian Gulf via the Strait of Hormuz, noting conditions were changing day by day. He added that, as far as the company could see, there were no conventional fleet ships shuttling in and out of the Arabian Gulf at that time.
When asked about Iranian exports, Sørensen said BW LPG did not have a full overview, citing unconfirmed reports that ships could still be planned to export LPG via convoys to China, though he cautioned this could be rumor. He also said there was no firm news about naval convoys being established for other exporters.
Market drivers: inventories, trade flows, and infrastructure
Management said VLGC market conditions in late 2025 and early 2026 “positively surprised” due in part to strong U.S. propane fundamentals. Sørensen said U.S. propane inventories ended 2025 at 100 million barrels, compared with 85 million barrels at the end of 2024, driven by strong U.S. production. He said high inventories contributed to downward pressure on U.S. LPG prices and supported a wide U.S.–Far East arbitrage, which tends to support higher freight rates.
BW LPG also pointed to geopolitical and infrastructure factors that contributed to strength in recent months, including:
- A U.S.–China trade truce in late October that management said helped revive U.S.–China LPG trade.
- Increased VLGC loadings at the Nederland terminal in the U.S. Gulf following a 2025 expansion.
- Market participants fixing vessels further forward ahead of the Middle East conflict, tightening vessel availability and lifting spot rates.
On trade flows, management said Chinese VLGC imports from North America and the Middle East fell 3% in 2025 year-over-year, influenced by periods of heightened trade tensions. BW LPG said Chinese imports were rising again at the start of 2026 and suggested the Middle East conflict could lead to more U.S. cargoes ending up in China if Middle East supply is disrupted.
The company also highlighted India’s increased role in global LPG trade. Management said Far East LPG volumes declined 2% year-over-year in 2025, while India’s imports grew 10%, driven by higher U.S. cargo flows that increase ton-miles versus traditional Middle East sourcing. Sørensen said about 2 million tons of Indian LPG imports are contracted from the U.S. for 2026, and noted government subsidies and expected pipeline infrastructure improvements supporting retail demand and distribution.
Outlook: high coverage in Q1, drydockings, and fleet supply
For the first quarter of 2026, BW LPG guided to about $54,000 per day fixed for 94% of available days, which management said was well above an all-in cash break-even of $23,400 per day. Xu said this includes index-linked time charter contracts that can participate in spot upside. Management also said first-quarter time charter coverage was 42% of available days at $44,200 per day.
BW LPG said it will continue an active drydocking program in 2026, with 13 vessels scheduled for drydocking, mostly in Q1. The company expects 193 off-hire days in the first quarter due to drydocking. In the Q&A, management said it evaluates whether to shift drydockings to capture stronger rates, but noted scheduling constraints and that Q1 is typically the weakest quarter seasonally, even though that pattern did not hold this year.
On longer-term coverage, management said BW LPG had secured three-year time charter-out contracts for two VLGCs—BW Tucana and BW Yushi—and said this increased full-year 2026 fixed-rate time charter-out coverage to 36% at an average of $43,700 per day. Xu added that for full-year 2026, BW LPG has secured 40% of its portfolio with fixed-rate time charters and FFA hedges at $43,747.900 per day, with an expected time charter-out portfolio contribution of around $197 million.
In discussing fleet supply, management said the VLGC fleet stands at 421 vessels, with an orderbook of 105 VLGCs extending through the end of 2028. BW LPG noted that about 10% of the fleet is older than 25 years. Management said Panama Canal constraints continue to divert some VLGCs around South Africa, affecting effective capacity and ton-mile demand.
Xu said BW LPG ended Q4 with $630 million of liquidity, consisting of $226 million in cash and $387 million of undrawn credit facilities. She also said the company voluntarily cancelled two ship financing facilities, including a $36 million repayment and a $260 million undrawn revolving facility, which she said reduced funding costs and lowered cash break-even.
About BW LPG (NYSE:BWLP)
BW LPG (NYSE: BWLP) is a pure‐play owner and operator of liquefied petroleum gas (LPG) carriers. The company’s core business centers on the maritime transportation of LPG, predominantly propane and butane, under both time‐ and voyage‐charter arrangements. Its fleet comprises pressurized and semi‐refrigerated vessels designed to meet the specific requirements of LPG producers, traders and end‐users around the world.
Headquartered in Singapore, BW LPG serves a global customer base, with commercial offices in key energy hubs including Houston, London, Dubai and Tokyo.
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