BW LPG CEO's Share Purchase Signals Confidence in Company's Future
Monday, Dec 23, 2024 4:14 am ET
4min read BW LPG Limited, a leading owner and operator of Very Large Gas Carriers (VLGCs) for liquefied petroleum gas (LPG), recently announced a mandatory notification of trade. The company's CEO, Kristian Sørensen, purchased 1,000 shares in BW LPG, indicating a vote of confidence in the company's future prospects. This transaction comes amidst a series of strategic moves by BW LPG, including the acquisition of 12 modern VLGCs from Avance Gas Holdings Ltd and the successful delivery of several vessels from this acquisition.
BW LPG's strong financial performance in 2023, with revenue increasing by 89.16% and earnings up by 106.67%, further supports the CEO's decision to invest in the company. The company's robust balance sheet, double-digit yields, and top-notch fleet contribute to its attractiveness as an investment. Despite recent volatility in freight rates, BW LPG remains an attractive long-term option due to secular LPG export growth and a strong balance sheet.
Avance Gas vessel deliveries commenced on 1 November 2024, with a total of nine ships expected to be delivered in time to receive Q3 dividends. These deliveries represent a share issuance of 14.4 million shares, increasing the total shares outstanding eligible for Q3 dividend from 132.3 million to 146.7 million. When all twelve ships are delivered, total shares outstanding will amount to 151.6 million. This expansion of BW LPG's fleet will enhance its capacity and utilization, potentially leading to increased revenue and earnings.
The share issuance related to Avance Gas vessel deliveries increased BW LPG's total shares outstanding from 132.3 million to 146.7 million. This dilution reduced earnings per share (EPS) by approximately 10.8% (from $0.79 to $0.71) based on Q3 2024 NPAT of $120 million.
Avance Gas vessel deliveries, commencing 1 November 2024, are expected to deliver nine ships by the end of the quarter, increasing total shares outstanding eligible for Q3 dividend from 132.3 million to 146.7 million. This share issuance represents a 14.4 million share increase. When all twelve ships are delivered, total shares outstanding will amount to 151.6 million. BW LPG declared a Q3 2024 cash dividend of US$0.42 per share, representing a 100% payout ratio of Shipping NPAT, amounting to US$61.6 million based on 146.7 million shares outstanding. This results in an annualised dividend yield of 14%.
BW LPG's CEO's share purchase, along with the company's strong financial performance and strategic fleet expansion, signals a positive outlook for the company's future. Investors may want to consider the potential benefits of aligning with BW LPG's strategic vision as the company continues to grow and adapt to the changing energy landscape.
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