BW LPG Limited

is that the shipping industry as a whole has accelerated change and adopted a number of new technologies. We're also quite proud of the steps BWLPG has taken as we move closer to a zero carbon future. Please go to slide four. We published our 2021 annual report and sustainability report earlier today with the theme Ship Smarter with LPG. Behind the great presentation of data are hours of hard work by colleagues. Reports are now available for download on our website, and we hope investors and analysts will find them insightful. When reading the reports, you'll find that we can ship smarter because we have 2,000 talented and dedicated professionals. We can ship smarter because we actively use new technology to reduce our carbon footprint and make our operations more efficient. And we can ship smarter because we remain agile and make active decisions to optimize our assets through the cycles. With these initiatives and more, we stay the course in a challenging year. Let me next give you some key highlights. In the fourth quarter, we reported $31,000 per day for our VLGC fleet per calendar day with a 4% technical off-hire. Commercially, we achieved $32,400 per available day with a consistently high commercial utilization of 97%. And this performance translated to a net profit after tax of $63 million or an earnings per share of 45 cents. And for the fourth quarter, we'll be distributing a dividend of 18 cents per share, amounting to a total of $25 million. Moving on to the highlights for the quarter, We now report the highest available equity to date at $453 million and a further decline in net leverage ratio to 35%. We are retrofitted a further two vessels with LPG dual fuel propulsion, which brings the total up to 12 vessels on the water, with a combined runtime of 16,000 hours on LPG. That's a great experience for us to have. We concluded the sale and delivery of BW Sakura in December and BW Niigata in February. The sales generated $72 million in liquidity and a net book gain of $14 million. This is, again, in line with our spoken strategy. Our existing $221 million facility was subsidized with the $40 million sustainability-linked loan to finance the retrofit of four dual-fuel LPG propulsion reference. In addition, $70 million under this term loan facility was converted to revolving credit facility. After the end of the fourth quarter, Moss Capital subscribed for $50 million of new shares in BW India. We're very excited to welcome Moss as a shareholder, and we look forward to working with them going forward. BWLPD now holds approximately 67% of the equity in BW India. Switching gears to our market outlook, it's difficult to not recognize that the situation in Ukraine can continue to have a dramatic impact on energy markets, energy flows, and shipping. For the moment, this geopolitical uncertainty greatly obscures any near-term market outlook, as unforeseen events such as shocks to the bunker price, rapid changes in trading patterns, or unexpected LPG inventory management can trigger intense volatility and spot rates. For 2030 and onwards, though, we find the outlook to be quite healthy, despite uncertainties, both from a heavy new building order book and the implementation of IMO-EEXI regulations. Niels will talk more about this later. Returning quickly to page number five. Six, I'm sorry. The VLGC market firmed up somewhat during the fourth quarter compared to the preceding quarter. We generated annualized return on equity of 19%. with an annualized return on capital employed of 13%. For the full year of 2021, we delivered return on equity of 14% and a 10% return on capital employed. Our operational and free cash flows were $20 and $47 million respectively for the quarter, maintaining our flexibility and enabling us to continue to return cash to our shareholders. And finally, as previously highlighted, Our net leverage ratio continued down from 36% at the end of the third quarter to now 35% at the end of Q4. Next up, Niels will now take you through the market review and the commercial update.

Thank you, Anders. Good morning and afternoon to all of you. On slide eight, we share a view of the market. As Anders mentioned, the outlook for the new transport rate is highly uncertain. This uncertainty is already visible in the current spot market as the market participants are sitting on the fence and awaiting more clarity before making any big decisions. Seasonally speaking, the VC rates are already under pressure before the inventory buildup season and the strong increase in crude prices affecting the bunker cost. It is pushing our earnings toward OPEX level and the current spot market is around $11,000 per day. At the beginning of the year, the compliance fuel prices were at 600. Today, we're paying around 800. This gives about $8,000 per day increased bunker costs. Dirty heavy fuel that the scurvy ships can use has a benefit of $230 per metric ton. Therefore, they have an $8,000 per day high earnings potential. LPG burning chips are also benefiting from a cheaper fuel compared to compliant fuel, but the gain today is only around $1,000 per day. So far in Q1, we have fixed approximately 79% of our available fleet days at an average rate of $42,000 per day on the discharge to discharge basis. But the median term of view is that we're facing healthy fundamentals. Yes, the current order book is significant, but it is also likely that the higher prices will stimulate increased oil and gas production. In the years ahead, we're also seeing growth in demand for LPG, especially from retail and petrochemical sector. Turning to slide nine. The seaborne LPG trade in 21 saw several encouraging developments. First, North America seaborne LPG export continued to grow. They increased by 13% for the whole year, helped by optimization of natural gas production and reduction in drilled but uncompleted wells. Middle East LPG export grew marginally in 2021 to 36 million tons. This included significant export recovery from Iran, which grew 53% to 5.3 million tons. On the import side, the most robust growth came in China and India. Chinese import grew by 23%. This was supported by new PDH plants at the start and the startup of LBG fed steam crackers. By 23, eight PDH plants are scheduled to come on stream in China. India import growth of 11% was encouraged by growing retail demand and new investments in infrastructure, allowing for more volumes to be received. On slide 10, you see EIA short-term energy outlook released in February this year. The agency expects that US LPG export will grow by 4% in 2022. driven for the most part by higher U.S. production, but also marginally lower domestic consumption compared to last year. For 23, the agency expects the trend to continue with even higher production and lower domestic demand, resulting in the net export growth forecast at 11.2%. As shown on slide 11, The current VLDC order book holds 70 vessels, according to 22% of the existing fleets. This order book is down slightly from our previous quarterly update, as the number of delivered vessels is higher than the number of ships being put on order. We still expect 42 VLDC to be delivered in 2023. For 2024, however, we expect nine VLDC deliveries, which is one more than our last quarterly updates. We have no new building orders, but we will have the largest fleet of LPG propulsion vessels ready by the end of Q1 this year. We believe this will give us a strong position in 2023 when the new regulations occurs. Please skip ahead to slide number 15. Our time charter out revenues for 2022 now stands at 99 million with the average. We're lagging a little bit on the slides here. 515. All right. Oh, I'm up. Well, I'm going to talk about our fleet position. So on time-shadowed out revenues for 22 now stands at 99 million with the average TC out rate of 32,900 per day. Our TC in cost remain low at 2,600 per day. We have 28 VLTC serving the spot market, which in our view is a comfortable position as we need the critical mass to optimize the spot earnings and help our clients. with today's inefficiencies. That's it for me. Next, Pontus Berg. Thank you, Nils. Turning to slide 16, please.

Good day, everybody. So from a technical and operational perspective, it has been another good year for supporting the business with smarter shipping. We continue our investment in technology, remaining focused on digitalizing our vessels, harnessing data and automating workflows. while augmenting these new tools with solid operational experience. And this approach is now bearing fruit. We have invested over $92 million in fleet upgrades during 2021. This to maximize the value of our assets and enable smarter operations. This includes retrofitting and other eight vessels with LPG dual fuel and another eight vessels with smart ship technology amongst other initiatives. With LPG propulsion technology on board now 12 real GCs, we can power these ships with clean and burning LPG. Available data points to a promising potential of 15 to 20% reduction in CO2 emissions. As mentioned by Anders, with over 16,000 hours in operation and counting, we have proved that retrofitting vessels with this pioneering technology works. And we encourage our fellow LPG ship owners to do the same instead of ordering new bits. We complete the use of new technology with deep operational experience and innovative thinking. In total, we saved about $10 million and reduced greenhouse gas emissions fleet-wide by about 12% last year. For example, with Alfa Aurea Smart Ship and active voyage management, we reduced fuel consumption by about 2,700 metric tons fleet-wide. This translates to about a million and a half in savings and a reduction of 8,000 metric tons in CO2 emissions. Our team closely manages new Panama Canal transits, secure Suez Canal rebates, and efficiently handle over 1,100 port calls in the year. Our innovative use of established ship-to-ship transfer practice for LPG bunker and coolant pre- and post-dry docking has reduced turnaround time, increased commercial availability, minimized emission from gas stream, and allowed us very strict control over product origin compliance, which is increasingly important in these days. We continue to invest in R&D and position the company well for new technologies that are on the horizon. Plans for our next generation VLGC is in full swing and we appreciate the support and collaboration with market leading partners and top tier suppliers. All this will not be possible without good people. COVID-19 continued to loom large through the year. The pandemic has driven up operations costs and it has been hard on our seafaring colleagues where rotations on and off ships has been affected. The good news for us is that we have managed to vaccinate about 99% of our crew on board, and only a small number have been on board significantly beyond their designated sign-off dates. We do thank the relevant port authorities and offshore and shore officers who have provided support. Vaccinating our crew go a long way to protect the livelihoods of our seafarers and our continued ability to deliver energy to world markets. Together with stringent pre-boarding and onboard management procedures, we have managed to keep cases of COVID on board very low. Our zero harm approach guides how we protect the health and safety of our crew. Safety is a top priority, of course, and a non-negotiable expectation for all. Where we saw trends in reported incidents, we ran specific initiatives to address them. Our 2021 OPEX comes in at $8,000 per day, of which nearly 5% or $380 went towards COVID-19 management measures. We continue to maintain market-leading OPEX trends for our fleet. We see this as an important priority and sound business practice. Of course, we are monitoring the situation and assessing our crew members from both Ukraine and Russia in recent difficult and ever turbulent events. We and our local manning offices have been and are in contact with both the crew on board as well as at home. With that, let me now turn over to our CFO, Lei Nong, who will walk you through the projected fleet capex and our financial position.