Hi, everyone, a warm welcome to BW LPG's Third Quarter 2024 Results. The presentation today will be given by our CEO, Kristian; and our CFO, Samantha. Afterwards, we will open up for a question-and-answer session. Before we begin, I would like to highlight the legal disclaimers displayed on the current slide. Please also note that today's call is being recorded. I will now give the word to Kristian.

Hi, everyone, and thank you for taking time to join us today as we present our financial results and recent events. It's been another eventful quarter for our company, so let's turn to Slide 4 for the highlights and our market outlook. Our Time Charter income per available day ended at $46,800, somewhat lower than the previous quarter, but above our guiding of $43,000 per day. The market went through a roller coaster during the quarter with rates fluctuating in the range from low $20,000 per day and back into the $50,000 per day within a short period of time. In addition to a great job done by our chartering team by navigating through the ups and downs, we are pleased to see that our downside protection through our Time Charter portfolio and FFAs took out quite a lot of this volatility. We're also very happy with the new ships starting to enter our fleet, and as of today, we have 5 out of the 12 acquired Avance Gas ships safely delivered. As explained in this slide, another four ships are expected to be delivered, which share issued in time with right to receive dividends for Q3. The Board has declared a dividend of $0.42 per share, which translates to 100% payout of the NPAT from our shipping activities. Moving on to Product Services and as per our trading update in October, our trading activities benefited from a considerable uptick in the 12-month forward mark-to-market valuation of the trading portfolio, reflected in a net accounting profit of $58 million. Although we are glad to see that the forward trading portfolio is becoming more valuable, the volatility in the trading market may drive the portfolio valuation up or down before the positions are realized. And it's important to understand that it…

Thank you, Kristian, and hello, everyone. Coming to Slide 11, we're very pleased to share that we delivered a solid shipping performance in a volatile quarter. For Q3, we achieved a 98% fleet utilization and a TCE of $46,500 per calendar day or $46,800 per available day. Maintaining a healthy Time Charter and FFA portfolio has been a key for success. In this quarter, the portfolio represents about 45% of our shipping exposure. For the fourth quarter, we have fixed 90% of the available days at about $36,000 per day. Looking at 2024, our Time Charter out fleet generates a profit of around $31 million over our Time Charter in fleet. The remaining of our fixed Time Charter out portfolio is estimated to generate $69 million for the year '24. Next slide please. As shared in our earlier trading update, Product Services booked a strong quarter and yield a net profit of $58 million. The result was contributed by gross profits of $71 million, after netting of G&A and tax provisions. The gross profit includes an unrealized mark-to-market gain of $86 million, which consists of open cargo positions and hedges. This is offset by $14 million of a realized trading loss. The unrealized gain is expected to be realized in the future periods, although some volatilities are expected to impact the final realized result to be higher or lower. At the end of Q3 '24 Product Services book equity position arrived at $128 million. We would also like to highlight that the reported book equity does not include the unrealized physical shipping position of $17 million, which was based on our internal valuation. You can recall, we have announced a multiple-year term contract with our Enterprise Products Partners back in Q2. The related fiscal volume has started to phase in…

Thank you, Samantha. We would now like to open the call for your questions. [Operator Instructions] Yes, Petter Haugen, you have raised your hand. The floor is yours.

Thank you. Good afternoon. Quick question on the process of taking those vessels from Avance. To what extent should one expect cost to come in earlier than revenues? Is it more or less back-to-back or should we, for instance, use a month of sort of overlap here? Yeah, that's the first question.

Thanks, Petter. I can just start off with saying that, of course, we pay for the ships now and you know, when you fix the ships for the next voyage, we will not get, we are not able to invoice before the vessel is about to discharge as per normal shipping practice. So there will be like normal a delay, you can say, because we are not able to invoice our charters before the voyage that the ships have performed is finished.

Okay. So, yeah, I understand there will obviously be a cash flow effects here, but in terms of your P&L bookings, I suppose that.

Okay. Samantha, I don't know if you -- would you like to say anything about that or?

Yeah, maybe just from, well, commercial side that Kristian has just explained maybe a little bit from a financing perspective. As the vessel is being delivered, we will be drawing down our financial facilities to finance each of the vessels. I think the details, Petter, you can very well refer to the earlier deal structure so to get a sense of how much each needs to be draw down. I won't be able to give you absolute numbers. The delivery is spread across the November to end of December. Additionally, you would know that the depreciations will come in as we take ownership as well.

Yes, naturally. Yeah. Okay. Thank you. Just one more from me then. Because from the asset market, it seems as if prices are still holding up to, well, more or less the same levels that we saw in the first half of the year as well. If you were to do something on the newer side now, how do you think that is going to compare to the Avance transaction? Is it sort of any data points that we could use to either mark the current resale price up or down from the Avance transaction?

I think the market for the assets and let's say sale and purchase market is pretty much unchanged for the new ships since last quarter. So I think there is no real change from the last, I would say, six to eight months in terms of valuation for newer ships or new buildings. If that answers your questions.

It does, Kristian. Thank you. That was all from me.

Okay.

Thank you, Petter. Jorgen Lian, you've raised your hand. Please go ahead.

Thank you. Hello, Kristian, Samantha. You are now taking on a bit more debt as part of the VLGC acquisition from Avance and you have a pretty rigid net leverage ratio dividend policy. So just any question or any more information about what we potentially need to account for to adjust the net leverage for the short-term effects that you mentioned, Samantha, or is that sort of set in stone and how to think about dividend payouts going forward?

Well, I can start off by saying that the dividend policy is what it is, but it's always up to the Board to finally declare the dividend. So it's not, I mean, there's no change in that respect. So I wouldn't -- it's hard for the management to comment any further on the future dividend payouts. But the dividend policy is what it is.

All right. And Samantha I don't know if you have anything to add on or if that's then irrelevant in terms of the net leverage ratio where you talked about short-term events or short-term impacts from Product Services?

Yeah, I think, Jorgen, you are referring to my comments about THE Q3. The elements that are driving up the leverage ratio. I have to mention a couple of things that for example that the Product Services are drawing on the trade finance and the margin finance, et cetera. As you know very well that's a reflection of a slight, how to say, a slight of time of the number of cargoes they're carrying on our balance sheet that would change by days. So that's what I meant as a temporary effect, similarly for the purchase of a BW Kizoku as well. So that's due to the accounting rules that we have to gross it up, which drive up the leverage ratio. Once we take over of the vessel and then it would just be normal asset.

All right. Thank you. And then finally for me on the Product Services part of the business and just to make sure that we understand correctly, but the way you book this is sort of on a 12-month forward-looking basis, right. So when we're talking about length in the unrealized positions, that would be sort of a fair working assumption.

Yes. So the positions are -- the forward positions are spread as we always have over a 12-months forward rolling period. That's right.

Okay. Thank you.

Thank you, Jorgen. Then we have raised hand from Climent Molins. The floor is yours.

Hi. Good afternoon. Thank you for taking my questions. I wanted to start by asking about the Q3 TCE. Considering the guidance you provided alongside Q2 earnings, it seems the low-to-discharge accounting has a positive impact on earnings. Could you talk a bit about that? And secondly, do you expect low-to-discharge accounting to once again have an impact on Q4 earnings relative to the guidance you provided?

Are you now referring to the IFRS adjustment?

Exactly. Yeah.

Yeah. So I can say on the general basis and then Samantha can also fill in here that when the market is going up, there is -- the mechanism is that there is a negative IFRS adjustment. When the market is going down, you have a positive IFRS adjustment. So that is the way IFRS is smoothening out the fluctuations during the year. So that's just to kind of explain the mechanism on a general basis. Then, Samantha, if you could just comment on the IFRS adjustment for this quarter specifically?

Yes. So I think Kristian you captured most of the elements impacting IFRS 15. So it also, of course, has something to do with when the cargo is -- when the vessel is being -- have a latent or in a last voyage. In such a case often we are not able to give a forward-looking estimate. It can only after we have closed a quarter, we know exactly what's the impact. So I would say to answer your question is that, yes, there will be impact. As for the quantum as well as the direction, it's hard to give you advice over there, Climent.

Makes sense. Thanks for the color. And given the sale of the Cedar, should we expect net proceeds to be distributed from the India JV to the parent or is there any appetite to buy another vessel in the JV level? And secondly, could you provide an update on the infrastructure investments in India?

Yeah. So on the sale of the Cedar, it's something which will take place, the delivery will take place in Q1. So then we will decide on how to distribute the net proceeds as and when we get to that point in time. So I am -- we will get back to you in the next earnings release on how we have dealt with that. When it comes to the infrastructure investments, there haven't been any major change since last time. But we are proceeding according to plan and hope to and expect to start the first phase of the construction of the terminal on this side of the new year, all going well.

That's helpful. Thank you. That's all for me. Thank you for taking my questions.

Thank you, Climent. Appreciate your questions. Next question comes from Auguste Klem. Please go ahead.

Thank you. A question kind of following up on Jorgen's question about Product Services. Can you give some color on sort of I mean Q3 was a fantastic result in the P&L with a very large ARB and kind of more normalized rate, should we call it? Rates have been sort of flattish into Q4, while the ARB has come down. Can you talk a little bit about sort of in general, the environment this leaves for the Product Services division? Is it more difficult to extract value at this point? And secondly, seeing as it's unrealized, a large portion of the gain in Q3, which you will then realize kind of in the following quarters, there is -- is there an argument to be made for paying out more than 100% of shipping NPAT because you will have a cash flow contribution from Product Services as well? Thank you.

Thanks, Auguste. I can start with the last one. I mean, if you look at how we distributed the profits from Product Services and the capital return to us as shareholders, I think you will get kind of the answer to your last questions there. And I think with regards to, I actually have, if you can repeat your first question, Auguste, because that was -- I lost my mind here now.

That was a bit long, sorry. No, it's more about the market environment for Product Services now that the ARB has come in quite a lot, while shipping rates are more or less flattish from Q3?

Yeah, I would say it's hard to guide exactly on how Product Services is performing from week-to-week and month-to-month because they have many handles to pull. They have physical cargoes, FOB cargoes. They have outlet positions in Europe and Asia, where they have deliveries and commitments fixed on certain price mechanisms. They have derivative positions and shipping positions. So they have, I would say, a wide range of ways to create profit and value even though the market is like you say in a state where the ARB is coming down and the shipping is also kind of flattish. So I would say, on a general basis, it's hard for us to comment specifically how they may perform in a market like this, except for that they have many ways of positioning themselves depending on the prevailing market conditions. So I'm sorry, it's hard to be more specific, Auguste.

No, no, that's great. Thank you very much. And then finally just kind of a housekeeping question. G&A was down quite a lot this quarter. Any guidance there for Q4 and maybe also for depreciation as you take over the Avance vessels?

I can just start off with the G&A because I think what we are doing is that we are accruing for bonus tax, et cetera, which is based on realized profits. And that will go a little bit up and down during the year because we do this on a quarterly basis, adjusting it. So I think you have to see the G&A over the year to get the full picture of how the G&A is playing out because there are certain elements of bonus tax, et cetera, which is being adjusted from quarter-to-quarter. And Samantha, would you like to add anything there?

Yeah, I think that's correctly said. I think if you're referring to contrast with the previous year, I would say that there is no drastic changes expected as we've seen last year.

Okay. Thank you very much.

Thank you, Auguste. I don't see any more raised hands. But if there are more questions you would like to ask verbally, please raise your hands. We have, during the Q&A session, also answered a few incoming questions on the chat channel. Are there any more Q&A's you would like to raise on the chat? If not I will round off the Q&A session.

It seems like we have answered all the questions here now. So I'd like to thank everyone for joining us. And I think that concludes our third quarter 2024 result presentation. So thanks everyone for dialing in and we wish you a good rest of your day wherever you are in the world. Thank you.