BW LPG profit halves in third quarter
The reduction in LPG prices by Saudi Arabia’s Aramco contributed to the weaker result
Shipping performance for BW LPG still performed well in the third quarter, but product services posted a loss thanks to forward contracts losing value
BW LPG saw its profit decrease by more than 50% in the third quarter of 2025, despite a strong performance from its shipping segment.
Profit after tax in 3Q25 was $56.8m, down from $120.5m in the third quarter of 2024, a decrease of 53%.
Pure shipping income actually increased by 39% in the third quarter to $201.8m, as VLGC rates averaged $51,300 per day and BW LPG achieved 92% fleet utilisation.
The reduction in net profit can therefore be attributed to a poor result from the company’s product services division, its trading arm.
“Negative mark-to-market valuation adjustment of the forward portfolio”, that is, a fall in value of cargoes on the books, caused net loss of $29m after tax. The price cut by Saudi Arabia’s Saudi Aramco earlier in the quarter was cited by BW as a key reason behind the division’s loss.
Looking ahead, BW remains bullish on the LPG market.
US construction continued to expand and a recently signed deal by Indian importers for US LPG and renewed supply contracts with Indonesia were likely to boost tonne-miles, it said. Middle Eastern exports are also expected to rise “meaningfully” driven by higher oil output and commissioning of new gas processing facilities in the UAE and Saudi Arabia.
A cooling of tensions between the US and China means inefficiencies in the VLGC fleet are “expected to diminish” as trading restrictions on both US and China-linked fleets have been lifted. BW LPG said it expects to see a “modest” increase in available VLGC capacity as a result.
