In 2019, the LPG shipping market turned positive again after several years of poor earnings. The year started on a weak footing, but saw an improvement in the second quarter spurred by strong US LPG production growth, lower pricing of LPG and strong demand in China and India.
BW LPG’s performance reflected the stronger market environment. We saw revenue rise 57% year-on-year to reach US$817 million, while net profit came in at US$274 million compared to a loss of US$72 million in the previous year. From the second quarter we restarted dividends to shareholders, with a total of US$0.85 per share for all of 2019. In addition to the effect of the market, these results stem from an efficient and high quality fleet, cost-effective operations, and a robust balance sheet. And from the dedication and hard work of our seafarers and shore staff around the world.
Corporate actions included the completion of a competitive seven year US$458 million refinancing, leaving the Company with no major maturities before 2026; and the sale of our last two Large Gas Carriers (LGCs) as we found them to have less trading flexibility than our main fleet of Very Large Gas Carriers (VLGCs). To support fleet utilisation and profitability, we launched BW LPG Product Services in February 2019. This low-risk, fully integrated product delivery service represents a valuable addition to our business, where we purchase LPG and deliver it directly to our customers as an end-to-end service.
On the Environment, Social and Governance (ESG) front, we worked hard to reduce our impact on the environment. We prepared our fleet to be fully compliant with IMO 2020 regulations for the industry to change to low sulphur fuels on 1 January 2020. We are investing in digitalisation through our SmartShips initiative to improve the efficiency of our fleet through real-time data and monitoring of performance and fuel efficiency. We remain focused on safety, and are encouraged to see our lost time injury rate at very low levels even as we continue to strive for zero.
Significantly, we are pioneering the conversion of 12 ships to LPG as fuel for propulsion. These vessels, due for completion in 2020 and 2021, will emit up to 97% less sulphur and 20% less nitrogen than heavy fuel oil. They will reduce emissions of particulate matter by up to 90% and carbon emissions by up to 25%. Although it requires significant upfront investment, the returns are positive in both financial and environmental terms, and demonstrate our commitment to action on ESG.
On the organisational front, Martin Ackermann stepped down as CEO of BW LPG at the end of December 2019. On behalf of the Board of Directors, I would like to thank him for his contributions over the past five years. Anders Onarheim, a long-standing member of the Board, is now interim CEO of the Company.
"We believe in the future of LPG and its potential to improve the lives of people around the world."
ANDREAS SOHMEN-PAO
Chairman of the Board
Looking ahead, global concerns are mounting – continued geopolitical tensions, political strife leading to violent protests in a number of countries, significant environmental disasters, and a viral epidemic starting in the new year. We must all strive to improve the state of the world around us. In that regard, energy is a key enabler of progress and prosperity, especially where we can deliver it in a clean and responsible fashion. While all carbon-based forms of energy impact the environment, LPG represents a cleaner fuel that will enable us to address the energy needs of the world while reducing the effects of particulate matter and greenhouse gases. It directly saves lives where it is substituting for wood, charcoal and other harmful fuel sources.
As we continue to pursue good shareholder returns to ensure the sustainability of the Company, we will also take action to ensure the sustainability of the planet.
