BW LPG Trading Arm Posts Strong Q4 Profit Amid Market Volatility

SINGAPORE – January 16, 2026 – BW LPG Limited, the world's leading owner and operator of Very Large Gas Carriers (VLGCs), has demonstrated significant financial strength beyond its core shipping operations, reporting a robust performance from its in-house trading division for the final quarter of 2025. The company's Product Services segment announced a net profit of approximately USD 23 million for the quarter ending December 31, 2025, signaling a powerful close to the fiscal year.

This impressive result stems from a gross profit of approximately USD 27 million, which the company detailed was composed of two key elements: a USD 12 million realized gain from its portfolio of cargo, freight, and hedging activities, and a positive unrealized mark-to-market valuation of USD 15 million on its open contracts. The update brings the full-year realized trading result for 2025 to approximately USD 66 million before administrative expenses and taxes, underscoring the growing importance of the trading arm to BW LPG's overall financial health.

Thriving in a Dynamic LPG Market

The strong performance of BW Product Services did not occur in a vacuum. It was achieved against the backdrop of a complex and often volatile global LPG market in late 2025. The quarter was characterized by surging demand from Asia, particularly from the petrochemical sectors in China and residential programs in India. This demand was met by a steady stream of exports from the United States, which has solidified its position as the world's top LPG producer thanks to its shale gas boom.

While this supply-demand dynamic provided opportunities, the market was also fraught with uncertainty. VLGC freight rates, a critical component of the LPG value chain, experienced significant fluctuations. Although rates showed periods of strength, sometimes exceeding $50,000 per day, the market was also described by analysts as being affected by vessel oversupply and fragile fundamentals. Geopolitical tensions and macroeconomic headwinds added further layers of complexity, making successful navigation of the market a significant challenge.

In this environment, BW LPG's ability to generate a substantial realized gain from trading highlights the sophistication of its market approach. While some competitors in the shipping sector reported struggles with fluctuating freight rates in preceding quarters, BW LPG's integrated model appears to have provided a crucial buffer and an alternative profit center.

The Power of an Integrated Strategy and Disciplined Risk

The fourth-quarter results offer a clear window into BW LPG’s successful integrated business model, which combines its massive shipping fleet with a savvy, in-house trading division. This structure allows the company not only to transport LPG but also to actively participate in the commodity market, capturing value beyond simple freight charges. By managing its own cargo, freight, and hedging transactions, the Product Services segment can optimize fleet utilization and capitalize on arbitrage opportunities created by regional price differences.

CEO Kristian Sørensen emphasized the strategic discipline guiding these operations. “We are pleased to report a strong finish to fiscal year 2025 for our Product Services segment,” he stated, pointing to the full-year trading result as a key achievement.

Crucially, this profitability was not achieved through reckless speculation. The company reported an average Value-At-Risk (VAR) of approximately USD 3 million for the quarter. The VAR figure is a key risk management metric that estimates potential losses on a portfolio over a set time. A relatively low VAR, especially in relation to the profits generated, suggests a well-managed and controlled risk exposure. This indicates that the company's use of hedging instruments for both cargo and freight was effective in mitigating downside risk while capturing upside potential. The combination of a $12 million realized gain and a $15 million positive mark-to-market valuation on open positions further attests to a trading strategy that was well-positioned for the quarter's market conditions.

Setting the Stage for 2026 and Shareholder Returns

The strong financial update from the Product Services segment does more than just bolster the 2025 annual results; it sets a confident tone for BW LPG as it sails into 2026. The performance reinforces the value of revenue diversification, demonstrating an ability to generate significant profits even when the core shipping market faces headwinds. This resilience is a key factor for investors assessing the company's long-term stability and growth potential.

The company's announcement directly linked its performance to shareholder value, noting that "the overall dividend capacity will be determined by net profit after tax, cash flow and other commercial considerations." Given BW LPG's established history of robust dividend payouts—having returned over 74% of earnings to shareholders since its 2013 IPO and an exceptional 123% in 2024—the USD 23 million net profit from this segment is a significant positive contributor to that calculation.

Looking ahead, the company has signaled its intention to continue this successful approach. "As we transition into fiscal year 2026, we remain committed to maintaining a well-balanced trading portfolio, guided by disciplined risk management as we navigate the ongoing macroeconomic and geopolitical uncertainty and market volatility,” Sørensen concluded. This commitment to a balanced and risk-aware strategy, now proven by a strong track record, provides a degree of assurance to the market that BW LPG is well-equipped to handle the challenges and opportunities of the coming year. The full financial report for Q4 2025, scheduled for release on March 3, 2026, will be closely watched for further details on how this trading success integrates with the company's overall performance.