BW LPG Limited (OSE: BWLPG, NYSE: BWLP) has successfully placed a $300 million offering of senior unsecured convertible bonds due in 2031. The company intends to use the net proceeds to partly finance a newbuild program for eight Panamax Very Large Gas Carriers (VLGCs) with Hyundai Heavy Industries, alongside general corporate purposes.

Bond Terms and Structure

The bonds are issued at par with a denomination of $200,000 each. They bear a fixed interest rate of 2.25% per annum, payable semi-annually in arrears in equal instalments in March and September of each year, commencing on March 9, 2027. Settlement and delivery took place on September 9, 2026.

Conversion Mechanics

The initial conversion price was set at $30.4870 per share, corresponding to a conversion premium of 40% over the reference share price. This reference price is based on the placing price of an existing share determined in the Concurrent Delta Placement, adjusted downwards by the amount of BW LPG’s cash dividend of $0.95 per share payable on or around September 16, 2026, with the ex-dividend date on September 7, 2026. The conversion price includes customary adjustments and dividend protection adjustments.

Holders may require early redemption at par on the third anniversary of the issue or upon specific events such as a change of control, a free float event, or delisting. The company holds an option to redeem all bonds at par on or after September 30, 2029, if the parity value of the underlying shares meets certain thresholds (equal to or exceeds $260,000 for 20 dealing days) or if 20% or less of the aggregate principal remains outstanding.

Concurrent Delta Placement

Concurrently with the bond placement, the sole placement agent organized a placement of existing shares solely outside the United States. This Concurrent Delta Placement allowed certain bond subscribers to sell shares in short sales to hedge market risk. The company did not receive any proceeds from this share sale.

The bonds were offered via an accelerated bookbuild solely to institutional investors that are not U.S. persons outside the United States in reliance on Regulation S under the Securities Act, as well as outside of Australia, Canada, Japan, South Africa, and any other jurisdiction where prohibited.

BW LPG Limited reported Q2FY26 earnings per share (EPS) of US$0.79, missing the analyst consensus estimate of US$1.19 by 33.61%. This represents a 243.48% increase from US$0.23 per share in the same period last year.

Quarterly sales reached US$340.790 million, beating the analyst consensus estimate of US$311.088 million by 9.55%. This marks a 47.82% increase over sales of US$230.537 million in the corresponding period last year.

The company also confirmed key dates for its US$0.95 per share cash dividend, including a September 16 payment date. The Board approved the dividend on August 27, 2026. For shares registered with Euronext VPS on the Oslo Stock Exchange, the dividend is NOK8.8914 per share. The record date for both Oslo and New York Stock Exchange listings is September 8, 2026. The last trading day to include the right to receive the dividend is September 4, 2026. Ex-dates are September 7, 2026 for Oslo and September 8, 2026 for New York.

Financial performance at a glance

BW LPG posted a consolidated Net Profit After Tax (NPAT) of US$138 million in Q2FY26, yielding an annualised return on equity of 27%. Liquidity remained robust at US$773 million, while the net leverage ratio improved to 23.5% from 26.3% as of March 31, 2026. The declared dividend represents 100% of Shipping NPAT for the quarter.

Time charter equivalent (TCE) income for shipping concluded at US$74,000 per available day and US$71,600 per calendar day. These figures reflect IFRS 15 and FFA negative adjustments of US$16.4 million and US$12.0 million respectively. Time charter coverage stood at 53% of available days at US$64,000 per day.

Product services performance

BW Product Services generated a realised trading gain of US$127 million during the quarter. However, reported trading results reflected a gross loss of US$18 million and a loss after tax of US$31 million. This was primarily due to a non-cash unrealised mark-to-market valuation change of negative US$145 million on open positions.

Q3FY26 TCE guidance and fleet coverage

For Q3FY26, the company has fixed approximately 92% of available fleet days at an average rate of approximately US$88,000 per day. This includes fixed time charter coverage of 41% at US$44,300 per day. The TCE guidance excludes potential IFRS 15 and FFA impact. For the second half of FY26, BW LPG has secured 41% of fleet capacity on fixed-rate time charters at US$44,100 per day, with an additional 4% through FFA hedges at an average rate of US$48,000 per day.

Subsequent events: vessel sales and new charter

Following the close of the quarter, BW LPG announced several asset transactions and a new time charter agreement:

BW Elm and BW Birch were sold as second-hand vessels at a value equivalent to a newbuilding price of approximately US$248 million on a combined basis. BW Levant was acquired as part of the 2024 Avance Gas transaction.

Market conditions and cargo movements

The first half of 2026 was among the most volatile periods on record for the VLGC market. The closure of the Strait of Hormuz following the outbreak of war in the Middle East caused significant disruption to regional LPG pricing and global VLGC trade patterns. LPG importers shifted procurement towards the US, driving export terminal fees sharply higher while VLGC freight rates weakened. As additional US export capacity came online, vessel availability emerged as the primary bottleneck in the LPG value chain.

Key cargo movement shifts during the first half of 2026 included:

• US LPG exports carried by VLGCs rose 16% year-on-year
• US LPG exports to India surged 212% compared with the first half of 2025
• US exports to China for the first six months of 2026 increased 2% year-on-year
• Middle East LPG exports carried by VLGCs declined 46% year-on-year
• Far East LPG imports fell 18%, with China down 26%, Japan down 1%, and South Korea down 7%
• Southeast Asia VLGC LPG imports declined 1%, with US-sourced imports up 31%

Declining water levels at the Panama Canal prompted transit restrictions through the original locks and higher auction fees for the new locks, pushing more VLGCs to sail via the Cape of Good Hope and reducing effective vessel supply.

Fleet and orderbook

During 2026, 27 VLGCs have been delivered, with a further 13 vessels expected by year-end. The orderbook stands at 155 VLGCs, equivalent to 35% of the existing fleet, with deliveries scheduled through the fourth quarter of 2030. Approximately 9% of the existing fleet is 25 years of age or older. Average PDH operating rates in China recovered to levels above 70%, and nine additional PDH plants are scheduled to start up in 2027, followed by another six in 2028 and beyond.

What the Numbers Show

While top-line revenue growth of 47.82% significantly beat analyst expectations, the bottom-line EPS miss of 33.61% highlights margin pressure. The divergence between strong sales performance and lower-than-expected profitability suggests that cost structures or non-operating items impacted net earnings despite robust operational volume.