(Energy Analytics Institute, 10.Oct.2024) — BW LPG Limited provided an update on the performance from its BW Product Services’ segment during the third quarter 2024.
For the quarter ended 30 Sep. 2024, BW Product Services reported an estimated gross profit of $71mn, which was mainly a result of $86mn of unrealized marked to market value of open cargo contracts and hedging transactions, realized trading gains of $16mn, offset by hedging loss of $31mn on the realized positions, BW LPG said 10 Oct. 2024 in an official statement.
BP LPG said the open cargo value is reflected in the overall trading book value and will be gradually revalued and realized in the next 12 months, as per standard methodology.
After general and administrative expenses and income taxes, BW Product Services reported an estimated net profit of $60mn for the quarter. And, the average Value-At-Risk (VAR) for the quarter was $5mn, the company said.
“As freight rates came under pressure in August and September, more of the profit in the US-Far East LPG value chain moved to terminals and term cargo owners,” BP LPG CEO Kristian Sørensen said.
“Today’s trading update demonstrates how our business model benefits from increased value creation in wider parts of the LPG value chain during times of softer freight rates,” Sørensen said. “It is however important to note that the high accounting profit does not represent an immediate uplift to the company’s dividend capacity as it stems from MtM valuation of unrealised positions which will fluctuate as we move towards realisation of these positions.”
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