Welcome to BW LPG's Third Quarter 2022 Financial Results Presentation. Bringing you through the presentation today are CEO, Anders Onarheim; Deputy CEO and Head of Strategy, Kristian Sorensen; CFO, Elaine Ong; EVP Commercial, Niels Rigault; and EVP Technical and Operations, Pontus Berg. We are pleased to answer questions at the end of the presentation. [Operator Instructions]. Before we begin, we wish to highlight the legal disclaimers shown in the current slide. This presentation held on Zoom is also being recorded. I'll now turn the call over to our CEO, Anders Onarheim.

Thank you, . Reflecting a truly international need for shipping and also BW LPG, we speak to you from 3 locations today. Kristian and myself from Oslo, Elaine and Pontus from Singapore and Niels from New Delhi, India. Our Indian subsidiary, BW LPG India is welcoming our stakeholders at LPG Week, an event organized by the World LPG Association. Since we cannot bring everyone on board a vessel, we've harnessed down in India with a technology to bring a vessel to you. So if you are in India, come by to see a virtual reality model of BW Cedar, an Indian flag VLGC managed by our partner, Synergy Group. It has been a busy quarter for the team BW LPG. Our acquisition of Vilma Oil's LPG trading operation that was announced last quarter has been approved now by the Spanish regulatory authority. We've had solid financial results, and we're also well prepared for the upcoming environmental regulations. Geopolitical and economic uncertainties continue to cloud the outlook of the market. We're working hard to contribute to energy security by delivering LPG safely and sustainably around the world. With increasing demand for natural gas, we're also seeing a growing awareness of the possibilities for LPG in many ways. In many ways, we're surfing this wave of increased production of oil and gas. More on this later. Some key highlights and figures for the quarter. Our average day rate was $38,200 per available days during the quarter, with a very good 98% commercial utilization. This compares very favorably to our colleagues in the industry, and I think it really underlines the importance of having the critical mass in the fleet. We have ample liquidity of $365 million, and a net leverage ratio of 25%. 93% of our floating interest debt is hedged at…

Thank you, Kristian. We're currently experiencing a very strong LPG shipping market. And as is often the case, there are multiple elements contributed to this happening. Strong demand for natural gas in Europe has certainly contributed to the high gas prices and consequently, higher exports out of the U.S. also for LPG. The very large increase in LNG exports out of the U.S. have also contributed to the longer waiting times for Panama Canal transits. Today, we're seeing in excess of 20 days. And even if there are more U.S. originated voyages going to Europe instead of Asia, and thus, the negative ton-mile impact of this is offset by increased Middle East exports. For the very near term, we continue to enjoy a highly favorable spot rate environment and with a vessel shortage of cargoes coming out of the Middle East, Gulf and other shipping inefficiencies. So spot rates could see continued support for a good period going forward. At the same time, I think it's healthy to remind ourselves that rates well above $100,000 per day, they tend not to last forever. And we expect continued volatility also in this market even though the underlying fundamentals look quite good. With that being said, I'll hand the floor over to Niels, who'll talk more about the outlook and our commercial performance. Niels?

Thank you, Anders, and good evening from India. Please turn to Slide 7. So we continue to have a positive view towards '23, even with the high newbuilding deliveries. The main reasons are, as Anders mentioned, the expectation for solid growth in both the U.S. and the Middle East exports. We also see a recovery in Chinese LPG demand, supported by new PDH plants coming on stream with expected recovering margins. And we should not forget about fleet inefficiencies such as the Panama Canal. Regulations such as EEXI will have an impact on the speed of the VLGC fleets, and Pontus will talk more about the effects. The VLGC market will also face a heavy dry docking schedule next year. 67 VLGC to be dry-docked, which is about the double compared to this year. Let's look closely on the third quarter and turn to Slide 8. For the third quarter, U.S. exports were steady compared to last year. Middle East, on the other hand, grew by substantial 23% compared to the same quarter last year. This growth was led by Saudi Arabia, Iran and Emirates. The majority of these export found a home in Asia, mainly China and India. China actually increased their imports despite continued lockdown measures in place. While Indian imports were down during the quarter, we expect the full year to show growth due to the strong activity in October and November. European imports from the U.S. continued to grow, up by 143% in Q3 compared to last year. Let's dive a little bit into what '23 will look like from a supply and demand perspective. Slide 9 shows the expected export growth from the main LPG hubs, more than 10% growth in the U.S. and more than 5% growth out of the Middle East. On Slide 10, and on the graph to the left, we have illustrated how we expect the new VLGC delivery next year to be absorbed by both demand growth and market inefficiencies. We expect increased export will absorb approximately 45% of the new vessel capacity. In addition, we also expect Panama Canal delays to continue. And with the introduction of new regulation it could potentially absorb newbuilding fleet's supply of about 30%. As a result, we expect a firm freight market for next year. But since inefficiencies plays a large part of it, we will continue to expect a very volatile market going forward. However, we are -- with our critical mass in the spot market, we are ready to face this challenge. For my last slide before handing over to Pontus, please turn to Slide 12. Anders has already touched on the rate figures, so I only add that we have booked 80% of our Q4 available days at an average rate of $50,000 per day. And that we have covered 17% for '23 at $34,100 time charter days. And with that, I will like to hand over the floor over to Pontus. Thank you.

Thank you very much, Niels, and good evening to all of you from Singapore. So the team continues to keep our focus on best-in-class operations. As we put the final touches to ensure full compliance with upcoming environmental regulations. To date, we have conducted close to 600 port calls and Panama Canal transits, and the team continues to target just-in-time arrivals to save bunkers, reduce emissions and serve our customers' interests best possible. Year-to-date, we have consumed 22,340 tonnes of LPG fuel saving over USD 6 million in fuel costs versus compliant fuel. We have also reduced our CO2 emissions by over 12,000 tonnes. Combining high-tech ships with smart operations, we are in a strong position to meet the new green regulations coming into force next year. Turning to next slide. The key message we wish to leave you with is that come 1st January 2023, it remains business more or less as usual for BW LPG. All our vessels will be able to fulfill their commercial obligations. With available data, we can, however, see that 50% of the current world VLGC fleets will need to slow down in various degrees as a direct result of the EEXI regulations coming into force. EEXI, or Energy Efficiency eXisting ship Index, determines the efficiency of the design of current vessels on the water. If the efficiency of the vessel does not meet the required baseline, mitigation methods such as engine power reduction, i.e., slowdown, or using less carbon intense fuels such as LPG will be needed. CII, our Carbon Intensity Indicator, is an operational grade indication on how efficiently a ship conducts the voyages. Every year, from 2023, our vessel would be rated from A to E, where E or derating for 3 consecutive years imposed the need for a plan to be approved by on how to achieve C rating or better. The easiest and cheapest way to achieve C-Class or better if you are E or D is to reduce the engine power and thus slow down your vessel, else one would be looking at various retrofits such as sails, [indiscernible] or CO2-efficient fuel conversions, again, such as LPG, for example. It do remain to be seen how these new regulations will impact the overall business in the months to come. However, our fleet remains operable and all vessels will be able to fulfill their commercial obligations. And in particular, our 15 LGIP vessels will maintain maximum service speed for the foreseeable future. On this note, over to you, Elaine.

Thanks, Pontus, and a very good day to all of you. I'll walk you through the key financial highlights from our third quarter. Starting with our per day statistics, our VLGC fleet generated $37,200 per calendar day during the quarter. Daily vessel OpEx came in above budget at $7,900 per day, largely due to higher manning expenses, escalating cost of lubricants with high oil price and inflationary pressures on the cost of stores and spares. For 2022, our operating cash breakeven for our total fleet, including our chartered-in vessels, is at $22,800 per day. EBITDA for the quarter was $93 million, which represents an EBITDA margin of 71%. And we ended the quarter with a net profit of $46 million. This translates into an earnings per share of $0.32. With our net leverage ratio at 25% this quarter, our Board has declared an interim dividend of $0.25 per share, equating to a payout ratio of 77% of NPAT. At 30th September, we had $133 million of cash, $2.2 billion in total assets, of which $1.6 billion relates to the carrying value of our vessels. Our positive free cash flow of $58 million this quarter was derived mainly from our strong operating cash flows, as there were minimum CapEx since our LGIP retrofit program was already completed in the previous quarter. Our return on equity and capital employed this quarter were 10% and 13%, respectively. We ended the quarter with a total equity of $1.5 billion, which translates to NAV per share of $10.50. Here on Slide 16 is an update on our financing structure and debt repayment profile. During the quarter, we drew down on our $198 million Indian debt facility for the BW Loyalty. She was the last of 8 vessels going into our Indian subsidiary. Our outstanding bank debt was at $442 million at the end of September. Our gross debt currently stands at $609 million. This includes $64 million in advances drawn on our trade finance facilities and $106 million in lease liabilities from our time charter in vessels. With a cash balance of $122 million, net of $11 million held in broker margin accounts and $243 million undrawn revolving credit facilities, we ended the quarter with $365 million of available liquidity and a net debt of $487 million. In today's rising interest rate environment, our interest rate hedges have sheltered us from the recent rate hikes as over 90% of our long-term debt is now hedged at a fixed rate of 2.1% before margin for the next 5 years. On this note, let me open the floor for questions. Back to you, Glen.

Thank you, Elaine. We will begin our Q&A session now. [Operator Instructions].

So if it was -- I never experienced that we've been that crystal clear before. I guess everybody thought it was a good quarter. So no difficult questions. Of course, we like if you have -- want to challenge us, but if -- we're not going to hold you if -- oh, actually, someone is going to ask question here. So now I'm glad I kept this going.

Okay. Should I just shout out. This is Petter Haugen from ABG calling.

Yes, come on Petter.

The slide showing the observation of the 45 vessels delivered next year, could you give some more color to what you put into that, in particularly, Panama Canal sort of outflow of 3 of those 45 vessels, what is the assumptions here? And I guess the final question is that there is still an oversupply, I can see. It's sort of 6 vessels too many in the order book. And what would be the consequence of that as sort of the latter part of the question?

Yes. Niels, do you want to have a crack at that?

Yes. I mean the sound was not super good from India. But you talked about the Panama Canal for next year and our expectation?

Yes, and how those 3 vessels, which is taken out of the newbuilding order book, how -- so I suppose that's an increase from current levels in terms of additional waiting time.

Yes. No, no, it's correct. I mean obviously, there are some assumptions we need to take from here. But we see now clearly that the Panama Canal getting more and more congested. And right now, obviously, it's Christmas season. So now it's really the waiting time is booming. And you can clearly see that also that on the auctions, the Panama Canal have opened up for ships to pass it, has exploded. So some people have paid up to $2 million just to pass the Panama Canal. And we expect, obviously, the market to normalize when we get to the normal -- well, the season, but we also expect increased traffic to the Panama Canal like the LNG from the U.S. Was that answering your question?

Yes. It did. So it's still an increase from the levels we've seen then in 2022?

Yes. Yes, correct.

But the sort of the final part here, you leave some, I don't know, it's 6 ships is it, which is sort of growth, which is not observed. So right now, as far as I can tell and perhaps you can enlighten me on that as well, the 1-year TCE market is at some $36,000 per day and current spot rates are at $130,000 per day. So will those sort of surplus 6 ships mean that the 2023 rates will be sort of considerably lower than what we've seen as the year-to-date average?

I mean, it will definitely come down from the record levels we have today. But if you look at the forward market, let's say, the FFA market, you could actually lock in your Cal23 at around low $40,000 per day. And if you add on the benefit of, for instance, burning LPG, which has a delta of about $6,000, you suddenly come up with LPG propulsion ships doing in the mid to high $40,000 per day, and that's what the market expects. So yes, it's down by the -- from the $100,000 we currently see now, but -- and it will be volatile, as I said. But at least the market anticipates that the market will be around the $40,000 next year.

Then, of course -- Petter, of course, we've seen various sort of estimates on the one, how these inefficiencies and the regulations will affect the market. I mean -- I think you know as we are normally fairly conservative in our approach. And so -- and obviously, we -- as Niels said, we expect it to be volatile and everything, but there's no question that our view of the newbuild book is much more balanced than it has been in the past. And as Niels says, I think the market is indicating to us that we will also -- and we're able to use paper market to lock-in still rates above -- well above $40,000. So I think it's -- and of course, we will always try to manage whatever market we see ahead. But again, this is our -- I think our conservative numbers, and we could, of course, see more effects both in the Panama Canal and even regulations.

Then the final question from my side then. If you were to sort of see the offers of below $40,000 also in the TCE markets, are you there to increase your coverage for 2023 at those levels? Or are you now so comfortable that you would rather save spot for the full sort of 80%-plus of the fleet, which you have open today?

I think we'll take -- and Niels you can answer more. I think we'll take a balanced approach to that. I think if we -- we are open, we're open to do some charters if we see attractive rates up between 35% and 40%, I think we would. Yes. But again, it's -- and simply because we expect the volatility to be large. We think it's good if we can get -- with the right counterparty, if we can get some good TCEs, we will always consider that. But -- yes, and of course, in India, we have -- traditionally been 35 and just below. But of course, that's also with our [indiscernible] and older ships. But even there, that market is starting to look more optimistic.

Our next question comes from the line of Eirik Haavaldsen.

So just to try to understand a little bit around your cash flow priorities because obviously, this is the fourth truly fantastic year for you and your net debt levels have come down to very low levels as you show. Just -- you've sold a lot of older vessels. Are you at all starting to look at buying newer vessels? Do your TCE portfolio have purchase options attached to them, for example, or should we kind of expect you to continue pursuing vertical integration or other types of acquisitions like the Vilma?

I think there's -- yes and yes and we will look for opportunities. If we see assets that fits into our portfolio, we will not order new ships at $95 million. We think that's not a good business proposition. As we said, if we see opportunities, if we see maybe some -- with the newer regulations coming next year, there might be opportunities for us to acquire vessels at a fair price, and we could even retrofit if we get the right assets. So we are open to look for growth. But again, it has to be right for us. But we are also, I can say, we are nearing a point where -- we think having critical mass in terms of being in the spot market as we are, we're not going to sell a whole lot of more ships, that I can also say. And of course, we are -- with the Vilma, we're getting more ships into the pool. And so it has also given us more, again, increased sort of flexibility in the marketplace. So that's important. And of course, it is being with a strong balance sheet, we always have discussions also with the Board, what's the sort of right capital allocation model going forward. And that's something we will continue to do. As I said, again, we know this market is quite volatile, and we think having a strong balance sheet in a volatile market is always good, but we will continue to discuss that. And when it comes to the final question about looking for more opportunities on the value chain. Yes, we will continue to do that. We think the Vilma LPG acquisition gives us another interesting leg to stand on, both on increased earnings power, as Kristian said also, it can give us also more of a hedge in a tough market. But it will also gave us opportunity to look for other types of business that will complement the trading operation. So we will definitely continue also to look for ways to just take a larger share of the whole market.

Okay. But then as a follow-up because obviously, you have -- I mean, you have a great track record of value creation since your IPO. So when you say looking at other types of businesses and products, I mean it will always be related to LPG first, to be clear, you're not going to look for other...

Absolutely.

Yes, okay. So it's other niches, other geographical regions, stuff like that, logistics investments?

Exactly.

Okay. And then finally, just curious on the TC out, so your coverage for next year, that's physical TC out, right? That's not what you've done in the paper market?

That's mostly physical, but there's also -- there's probably some -- maybe some paper on that, but it's mostly physical.

Our next question comes from the line of Dr. Markus [indiscernible] who writes on the chat, what business volume/profit levels is expected from the Spanish acquisition? Thank you.

Kristian? Kristian Sørensen: Yes. Thanks for the question. I think it's a bit early to guide on profit levels expected. But with regards to the business volume, just to give a little bit of insight today, our current setup BW Product Services is trading about 1 million tonnes. And with the acquisition of Vilma's LPG trading activities, we will have a substantial increase in volumes and it's going to be more than doubling, but it's hard to, at this point, be kind of too specific, but it's going to be a substantial increase in the trading volume compared to what we have today. So I hope to be more specific at the next earnings release. As mentioned, we plan for reporting on BW LPG Product Services contribution to EBITDA by the next quarter.

I can also add. And we are very excited about the prospects here. And we also see that culturally, it's a good fit with the Vilma team, and they're quite experienced. And so our expectations are high, but we will do this in the right tempo.

Our next question is also from the chat from the line of [indiscernible]. He's asking, regarding the Chinese petrochemical demand outlook, could you elaborate some on your expectations on the growth in Chinese PDH capacity? Thanks.

Niels, do you want to take that?

Sure. Yes, there are a number of PDH planned, well, being built. Some of them had some delays this year, which we will see the effect next year. But in terms of number of or increased demand, it's about 5 million tonnes of propane. And also when we talk to the Chinese PDH plant owner, they also expect recovery of their margins. So yes, so we currently expect about -- an increase of about 5 million tonnes for next year.

Thank you, Niels. And we have another question now from the line of [indiscernible] also on chat, and he is asking how will you be treating the 5 Vilma vessels, as charter in or will they be part of the trading P&L.

Kristian? Kristian Sørensen: Yes. The vessels will end up in the BW LPG VLGC pool against COA voyages pack. That's probably the most specific explanation I can give.

Okay. Thank you, Kristian. We have no further questions on the chat. [Operator Instructions].

Okay. Then we thank you very much for your attention, and we look forward to your continued support. Thank you.

Thank you very much. We've now come to the end of today's presentation. Thank you for attending, and have a good night.