Welcome to BW LPG's Second Quarter 2024 Financial Results Presentation. Bringing you through the presentation today are CEO, Kristian Sorensen; and CFO, Samantha Xu. We are pleased to answer questions at the end of the presentation. Before we begin, we wish to highlight the legal disclaimers shown on the current slide. This presentation, held on Zoom, is also recorded. I now turn the call over to Kristian.

Thank you, Lisa, and hi, everyone, and welcome to our 2024 Q2 presentation. Thank you for taking time to join us today as we present our financial results and recent events. It's been an eventful period for our company. So, let's turn to slide four. Before we talk about the more recent events, let's focus on the Q2 numbers, where we are pleased to report another good quarter for our fleets, with time charter equivalent in line with our guiding of $49,000 per day. We're also happy to report another profitable quarter for our trading activity in product services, with net account profit just below $16 million. As you will see from slide 16, with our usual waterfall illustration of product services performance, there was a $29 million profit from realized positions, which were offset against an unrealized net loss from physical and paper hedging positions. Following our good results, our Board declared a dividend of $0.58 per share, which corresponds to a 100% payout of our shipping NPAT of $0.48 plus $0.10 top-up from product services. The biggest news is the subsequent event of last week, where we announced the acquisition of 12 Avance Gas VLGCs for a total transaction price of $1,050 million. This transaction is a major milestone, and shows our capacity to strike transactions with big scale and strategic significance. It also propels BW LPG forward as the leading VLGC shipping and LPG value chain player. On the next slide, we will look at the highlights of the transaction, which was enabled by our successful listing on the New York Stock Exchange, which has boosted the liquidity and robustness of our shares. Looking at the market outlook, we are currently in the market, which is on its way back from the summer doldrums, with the spot rates bottomed out around $30,000 per day from the U.S. Gulf because of disruptions in the terminal shifting program after Hurricane Beryl. Demand in the consuming markets of Suez continued showing robust growth, and the FFA market is pricing December liftings around $50,000 per day. More about the market developments later in the presentation, let's turn to page five for a repeat of last week's announcements. For us, as a company, we have historically had a clear preference for growing our fleet with vessels on the water without adding capacity to the global fleet. We did so when we acquired the Maersk VLGC fleet in 2013, as well as Aurora LGP fleet three years later. So, first, this transaction was of the same scale and strategic magnitude where we, overnight, create a much bigger footprint commercially, and a much larger company for the capital market to invest in. Through the transaction, our larger fleet will give us commercial advantages of scale, more flexibility, and market power. Moreover, the acquired 12 vessels will contribute to renewing our fleets, and we will own and operate 53 VLGCs by the start of 2025, where all 22 are dual-fuel. However, to do this transaction at this point in the cycle, it was essential for us to use our shares as currency in a way that is accretive to our shareholders. Out of the total purchase price of $1,050 million, of which $500 million in debt, we will effectively fund 60% of the net asset value by issuing 19.282 million new shares at $17.25, equaling $333 million. Avance Gas will have a 40 calendar day lockup period for the shares received when the vessels are delivered ship-by-ship in the fourth quarter. Consequently, we are increasing our total shares outstanding by 15%, while adding more than 40% earnings power through the expansion of our own fleets. The balance of the net asset value in the transaction is to be financed by cash at hand and drawing down our current revolvers. The transaction is fully funded and financed with BW Group providing us with a revolving unsecured shareholder loan of up to $350 million, allowing us to comfortably take over the 10 Avance vessels with bank loans and swiftly refinance. The sale leaseback facility currently financing two other vessels will be innovated soon. On a like-for-like basis post transaction, our liquidity will remain at a healthy level of $343 million before any refinancing effect to optimize the liquidity position. The net leverage ratio is expected to increase to 30% to 35%, a healthy and more optimal level than the 7% to 12% range we have reported the last two quarters. Based on a positive market view, this illustrates the attractiveness and accretiveness in this fleet acquisition, which expands our market-leading business platform while we maintain a robust balance sheet. Let's turn to the next slide to look at the latest market developments. After a slow couple of months over the summer, the U.S. exports have picked up from the delays caused by Hurricane Beryl and the export volumes from the enterprise and target terminals in U.S. Gulf are catching up with the backlog. The most recent report from Gibson Shipbrokers shows an uptick of 10 VLGC export cargoes from July to August, meaning the number of VLGC loadings in the U.S., including the East Coast will arrive at 104 for the month of August. The price differential between the U.S. and the Far East is currently around $230 per ton, leaving room for higher freight rates on the back of tighter availability of ships, as we have seen over the last few weeks. Heading into the winter season, the forward market is pricing the Houston to Chiba benchmark leg at around $50,000 per day. And this is without any Panama Canal delays for VLGCs, indicating an upside on the rates should the canal become more congested. If you look further out on the horizon, there are firm expansion plans from the three big terminals on the U.S. Gulf Coast starting in the second half of next year. We view these $1 billion investments as positive for shipping demand when coupled with continued demand growth in the Asian markets. In the Middle East, the annual export volumes are pretty much stable with a seasonal reduction in export volumes over the summer due to maintenance and higher domestic consumption. According to Gibson's, the number of VLGC cargoes has fluctuated between 55 to 60 per month since May. What is interesting is that around 50% of these volumes end up in the increasingly important Indian market, which leaves the import markets further east in Asia more dependent on cargoes from the U.S., which in turn is supporting shipping. For a period of time, there have been mixed signals from the overall Chinese economy, but the Chinese import demand for LPG and, in particular, propane continues to grow on the back of scheduled PDH plant expansions. As a final comment on the status of the LPG market, there's a lot of focus on the demand growth in China and the Indian subcontinent while the rise of the Southeast Asian market is overlooked by many observers. This region with a growing population and prosperity imported around 13 million tons of LPG last year and is surfacing as a considerable consumer of LPG, which also sources significant volumes from the U.S. Looking at the supply side of the VLGC market, we have entered a period of modest fleet growth for the next 18 months. In addition, if you look at the fleet profile for vessels 15 years and younger, there are 35 VLGCs going into drydock this year, while the number increases to 65 next year, which under normal circumstances will reduce global fleet capacity. And with that, I leave the floor to you, Samantha.

Thank you, Kristian, and hello, everyone. So, let's have a closer look at the shipping performance. For the second quarter of 2024, we delivered a TCE of $48,000 per calendar day and $49,700 per available day, a continued solid performance on shipping. We have a healthy coverage through our time charter and FFA portfolio, which represents about 39% of our shipping exposure. For the third quarter, we have fixed 86% of the available days at about $43,300 per day. For 2024, our time charter outfit generates a profit of around $27 million over the time charter in-fleet. The remaining of our fixed time charter out portfolio is estimated to generate $68 million for year '24. Coming to product services, we're pleased to share that we delivered another quarter of a strong performance. In Q2, product services yielded a net profit of $16 million contributed by a gross profit of $25 million after netting of G&A and tax provisions. After deducting share capital returns concluded in Q2, the net asset value ended in June at $69 million. The gross profit of $25 million includes a realized gain of $29 million as mentioned, offset by $5 million of unrealized or cargo and derivative loss. Due to increased fiscal forward volume from the new multi-year term contract with enterprise products partners being phased in and included in the 12-month rolling mark-to-market valuation, we may see larger movements in unrealized positions in future quarters as cargo prices fluctuate. The reported net profit does not include the $31 million unrealized physical shipping position based on our internal valuation. For Q2, we reported an average of $5 million on a well-balanced trading book, including cargoes, shipping, and derivatives. Going on to our financial highlights, on the back of good performance from both shipping and product services segments, we reported a net profit after tax of $85 million in Q2, including a profit of $12 million from BWLPG India and $16 million from product services. Profit attributable to equity holders of the company was $77 million for the quarter, which translated to an earnings per share of $0.58. This means an annualized earnings yield of 12% when compared against our share price at the end of June. We reported a net leverage ratio of 12% in Q2 and increased from 7% reported at the end of March, mainly driven by changes in our cash position. As we progressively take delivery of the newly acquired 12 VLGCs, which are mostly estimated to be delivered in Q4, we expect that our net leverage ratio will gradually increase to an approximation of 30% to 35% range, as we slowly draw down on our revolving credit facilities. For Q2, the Board declared a dividend of $0.58 per share, which is a 100% payout of the company NPAT or 121% of Shipping NPAT. This reassures our continuous commitment to return value to our shareholders as we deliver growth to our business. The balance sheet ended the quarter with shareholder equity of $1.6 billion and our annualized Q2 return on equity and on capital employed were 21% and 17% respectively. Year-to-date OpEx per day arrived at $8,600, a slight reduction from last quarter. For '24, we expect our own fleet's operating cash break even to be about $17,800 and $22,300 for the whole fleet, including the time charters. As you can see, we continue to have a healthy repayment profile with an outstanding shipping loan of $230 million, of which BWLPG India's term loan of $127 million is only due to be refinanced in 2026, a very manageable position. On the liquidity side, we ended Q2 with a strong position of $578 million, which paved the way for the announced Avance gas fleet acquisition. The vessels' delivery will be carried out from the 15th of September to the end of December. By the time when all the vessels have been delivered, our liquidity is expected to remain healthy at a level of $343 million, with the estimate that $235 million is drawn from our current revolvers. We also expect to gradually draw down the revolving shareholder loan of $350 million, in part or in full, to fund the vessels' delivery. The shareholder loan makes sure the transaction can progress swiftly and that we can refinance with improved terms post-vessel delivery. We expect a net free refinancing to be initiated as soon as possible while working on other refinancing projects to optimize the balance sheet. We're confident to maintain a healthy leverage and financing structure, as well as a sustainable repayment profile with a growth fleet. On the product service side, trade finance draws stood at a moderate level of $159 million, or 20% of our available credit line, leaving a healthy headroom for growth. With that, I would like to conclude my updates. I'm back to you, Lisa.

Thank you, Samantha. We will open the floor for questions now. Should you have questions, please type them into the Q&A channel. You can also click the raise hand button to ask your question verbally. Please note that participants have been automatically muted. Please press unmute before speaking. We have one question from Petter. Petter, please go ahead.

Good afternoon. Yes, this is Petter Haugen from ABG, asking. In terms of the cost side of taking over those 12 VLGCs, could you give some specific guidance on just how we should model that going into Q3 and further into Q4, potentially also impacts in Q1?

Hi, Petter. Cost side, can you be a bit more specific about what you are thinking of?

In regard to inspections and related processes, I would expect that the handover will take longer than the usual turnaround time. Additionally, if there are any planned non-revenue days required for the transaction or if it incurs no costs, that would be excellent.

The process involves standard sale and purchase terms in shipping, where the vessels are inspected underwater and delivered simultaneously with payment. Once that occurs, the vessels are in our possession. There is no difference between this transaction and a typical sale and purchase transaction in that regard.

Yes, I understand. But in terms of the revenue days in this time period, so are you capable of fixing prior to the inspection and the delivery, or effectively not having most revenue days when taking over the ships?

Well, the ships are on for advance costs until we have taken delivery. And they can deliver the ship typically in Asia, and then we balance the ship into the Middle East, and a lot of it goes back to the U.S. Gulf. So, it depends on the position of the ship. But all the costs for the vessel up until delivery to BWLPG are, as per normal, sale and purchase transactions for the sellers at the seller's expense. Of course, the inspection is on a regular, let's say, procedure around that is at our cost, but there is no material cost to be considered on our side.

Okay, that's helpful. Thank you. And if I just follow up on a quick one on the market's outlook, so this time you talk about the future growth for the next three years, which is at least in what I can read, longer than what you normally have guided for. Could you shed some light on what sorts of considerations you have been making to make statements now going into '26? And perhaps also shed some light on why you think U.S. LPG export growth is going to be in the high single-digit territory also in the coming few years?

Yes, sure. I mean, we usually take our view, have a view two to three years out in time based on our own data collection. And I think the way we see, and I said this before, the way we see that the big terminals and the big players in U.S. Gulf are gearing up and investing, and also guiding on their volumes is, on top of our own data gathering, supporting this. So, we source our data from various sources. And of course, we also take a look at what the big infrastructure players in the U.S. Gulf are planning for because this is obviously having a big impact on the capacity and what they also see as the potential for exports going forward.

Thank you, Petter. Eirik, you're next. Please go ahead.

Hi, I have a question. You've recently taken on some coverage, but with the addition of another 12 vessels, you seem to be unhedged for 2025 and 2026. As you are increasing your financial leverage, should we anticipate a more aggressive approach to time charters as we approach peak season, or will you be satisfied with 15% coverage given the larger fleet?

Yes. While I can't make any promises or guarantees, as I've mentioned before, we are content with the coverage we've had over the past few years, which has generally been around 35 percent, sometimes a bit higher. We prefer to have exposure to the markets, but we also want to maintain some downside protection, typically in the range of 30% to 40% of our fleet capacity. That's about all I can share for now, but I hope that answers your question.

Yes, that's good. And just to follow up on the cost question, but more so on your efficient G&A, should we expect, I mean, the addition of Avance, those vessels, will it do a lot to your organization, or is it just something you'll swallow with the team you have now?

Yes. We are able to absorb that basically with the team now. So, there are no plans to increase the number of people or the G&A in any way.

Excellent. Thank you very much.

Hopefully to the contrary.

We have another question from Johanna. Johanna, please go ahead.

Hello. Thank you. I'm Johanna, a reporter for August Media. I'm curious to know how BWC is the new announcement from Panama Canal for long-term slot reservation. So, I would like to understand how BW thinks that will impact the market and how it will, if it's interested in securing some slots as well. Thank you.

Thanks for the question. We have actually spent quite a bit of time trying to decipher this, and what it means for us. And the conclusion is that I don't think we'll bid for this tender. I think it's more designed for container ships and the likes, which are shuttling back and forth, the way we see it.

If I can, just a follow-up, because that is going to use up about 40% of those lots there; they go for auctions. So, can we expect that to be included in some there would be more or less vessels, or less slots around for auctions? So, is that a factor at play here?

The Panama Canal is primarily designed for container ships, and LNG carriers are favored over VLGCs. Therefore, the situation in the Panama Canal significantly affects our market, but due to market dynamics, it is challenging for us to justify participating in a tender where slots are booked. Currently, the charters are auctioned for discharge in Europe or to other regions after loading in the U.S. As it stands, we believe it's more advantageous to engage in the spot market in the Panama Canal.

Okay, thank you.

Thank you. Axel, please go ahead.

Yes. Thank you, Axel Styrman from Kepler Cheuvreux. It's a question related to the product services division. Do you have any plans to ramp up the activity now as you grow the VLGC fleet to such a big scale as you're doing?

Well, we announced an extension of the enterprise contract last quarter. So, there are no plans to further expand on the contract basis more than we already have announced.

We will now move on to questions from the Q&A channel. Kaja, over to you.

Yes. So, we have one question here from the audience asking if you could elaborate on how much additional free cash flow earnings you expect to generate from the larger fleet post acquisition and the long run dividend per share, assuming TCE remains approximately at current levels.

Yes, thanks for the question. I think, first of all, adding 12 vessels to the fleet is definitely increasing the revenue generation potential. We expect that this fleet to perform at a similar level of our existing fleet as well as on the cost front as well. So, I think that would likely give you a very good guidance in terms of, based on our cash breakeven and the market where it's trending, our guidance on the coverage, etc. will probably give you a very good idea of where the free cash flow will likely land following the market fluctuations. And as for a dividend perspective, well as we have shared many times, this is at the board's discretion. We would largely follow the dividend policies while maintaining to distribute values back to the shareholders as much as possible. I hope that answers your question.

Yes. And then, we'll go over to a question from Dasha here, asking in terms of terminal export capacity, is it pre-booked, or do you pay spot for terminal pricing?

I can just answer. In general, if you enter a term contract with the export terminals in the U.S. Gulf, you have a pricing mechanism which is agreed on a case-by-case basis depending on the negotiations with the terminal, which again boils down to flexibility, volume, duration, and so on. And if you play the spot market, then of course, you are exposed to the supply and demand there and then when you want to buy the cargo. So, this is quite normal, I think, as in any other market.

Dasha is following up with a second question. What are the specific projects and expansions you're looking at which should increase LPG export capacity in the U.S., Canada?

Yes. If you look at our slide, we are discussing enterprise energy transfer. In Canada, there are plans to increase exports from the West Coast. There is a significant list of expansion plans for terminal infrastructure in the U.S. and Canada in the coming years. Argus noted these plans in their latest monthly review, highlighting various confirmed expansion initiatives in the U.S. Gulf. Companies are being quite transparent about this since they are publicly traded.

Then we have a question from Aman here asking, we see most ship owners in LPG are opting to order new builds, very large carriers. Thus, BW LPG also have any plans or intends to focus on VLACs or ammonia trade?

Thanks for the question. Historically, we were one of the largest shipping companies in the ammonia market. The last ship we sold was in 2019, which was a large gas carrier, smaller than VLGCs. We have experience in ammonia trading. Currently, we do not have any ammonia lifting capacity on our ships, apart from those in the Indian fleet, which are currently dedicated to trading LPG from the Middle East to India. We strongly believe in the ammonia market moving forward, but we do not have any VLACs on order at this time. However, we're open to future opportunities. As I mentioned, we are familiar with trading and transporting cargoes in the ammonia sector.

And Aman is also following up on that answer. There are concerns for oversupply in LPG shipping, especially for VLGCs with 40-something VLACs scheduled for delivery in 2026. Any thoughts on how it would impact the earnings?

Like in any other shipping market, if you have overcapacity in the fleet, of course, that will impact the rates negatively. So, it depends on how the LPG volumes are expanding in the period from now up to '26-'27. And also, of course, how the much talked about ammonia projects are materializing in the same period and towards the end of this decade. So, this is, I would say, a million-dollar question. And like in any other shipping segment, of course, overcapacity is a challenge if that occurs.

Next, a question from Knut; he has two questions. The redomiciliation to Singapore, tax-wise, will the company still be assumed to be outside the exemption method according to Norwegian tax legislation? Second question, when will the new shares related to the Avance Gas transaction be issued?

I can start off with replying to number two, and then I'll leave to Samantha to reply to the first question. So, the Avance Gas will receive their shares when the ships are being delivered. So, every ship has a pre-agreed portion of shares and cash to be paid before they are delivered to us. And then, for the next question, I leave that to Samantha to reply on, please.

Yes. Maybe I would ask you to elaborate a little bit on what you mean by the exemption methods about the Norwegian tax legislation. But basically, there is no change as for the investors domicile in Norway, how the tax status has changed. Still now we have a site in Singapore. There is no withholding tax applied for dividends paid from BW LPG to the investors around the world. And as either as a dividend or in the case of a share buyback, all the proceeds will be taxable based on the investors' tax status. I hope that answers your question.

And then we have another question from Tyrone asking the fleet taken over from Avance is younger than your current fleet and probably more fuel-efficient. How will this impact your average OpEx?

Yes, we hope that it will impact positively on our OpEx. So, like you say, the fleet is a few years younger on average than our current fleet. So, that's also one of the parts we found attractive about this transaction. So, we hope that we can benefit from that and also from the scale when adding 12 more ships to our fleet.

Final call, should you have questions, please type them into the Q&A channel. You can also click the raise hand button to ask your question verbally. Please note that participants have been automatically muted. There being no questions, over to you, Kristian.

We had one question just at the end here. Is there more analyst coverage in the USA? We are working on it. So, we hope that more equity analysts in the states will take up coverage of our share and company, especially now that we are growing in size. So, that's something we are working on.

Yes, and then we have a question from Damian. How many shares of the company belong to owners, directors, and how many are traded on the New York Stock Exchange and also Stock Exchange approximately?

I think there is an overview. We report on this. So, it's something you can find on our website, or we can just send an email to our email. We can reply to you on that, if that's fine by Damian.

And then we have one question from Johanna. How has EPS been impacting the market so far?

I would say that EPS has impacted the market in the sense that there is more focus on newer vessels and, of course, the fact that we now have 22 ships with dual-fuel technology on the water by the end of the year is something that is to our advantage in that sense. So, overall, it's shifting the focus and the preference in the market slowly towards more fuel-efficient and environmentally friendly vessels with the latest technology.

No more questions.

Okay, everyone. Then I'd like to thank you all for joining us today. And thank you for your support, and we see you again next quarter.

Thank you for attending BW LPG's second quarter 2024 financial results presentation. More information on BW LPG and BW Product Services are available at www.bwlpg.com and www.bwproductservices.com respectively. Have a good day and a good night.