BW LPG Limited Q1 FY2026 earnings call

### New Building Program - Signed a contract for eight 90,000 cubic meter Panamax new buildings with HHI, with an average price of ~$117.5 million per vessel, subject to final technical specification approval - Deliveries are scheduled from the start of 2029 to the second quarter of 2030, which will reduce the average age of BWLPG's current fleet by approximately three years - The Panamax design is the most flexible option, future-proofing the company's fleet composition; 30% of the total new building price will be paid within the next six months, with multiple financing options currently under evaluation - The order was placed after new building prices eased from previous peak levels of ~$125 million per vessel, while shipyard capacity is expected to remain constrained amid ongoing inflationary pressure - The delivery timeline aligns with the peak of the global order book in 2027-2028, and coincides with the expected ramp up of additional US and Middle East LPG export capacity

### Market Dynamics - Q1 2026 saw significant geopolitical volatility from the ongoing Middle East conflict, which has effectively closed the Strait of Hormuz and disrupted Middle East LPG exports, reshaping global trade flows - The disruption shifted nearly all Asian and Indian LPG imports to the US Gulf, increasing voyage distances and absorbing excess global shipping capacity, driving historically high VLGC freight rates - US LPG production and export capacity is growing faster than expected as US exporters ramp up to replace lost Middle East volumes, leading to a sharp upward revision to 2026 North American LPG export forecasts - Congestion in the Panama Canal has increased due to competition from multiple shipping segments for limited transit slots, pushing more VLGCs to sail via the Cape of Good Hope, further extending voyage distances and tightening available capacity - The current global VLGC fleet stands at 429 vessels, with 130 vessels on the order book stretching to 2030; 9% of the operating fleet is over 25 years old, supporting gradual supply balance amid new deliveries

### Financial Position - Net leverage ratio decreased to 26.3% at end-Q1 2026, down from 28.4% at end-2025, driven by scheduled principal repayments - Total liquidity at end-Q1 was $680 million, consisting of $176 million in cash and $442 million in undrawn credit facilities, sufficient to support the new building program - Product Services trade finance utilization was $161 million, equal to 22% of available credit lines, leaving ample headroom for future trading activity - Q1 2026 operating expense (OPEX) was $7,300 per day, lower than prior guidance; full-year 2026 all-in cash break-even is estimated at $24,500 per day, slightly increased from prior guidance to include pre-delivery funding costs for new buildings - The board of directors declared a dividend of $0.67 per share: $0.56 per share representing 100% payout of Q1 2026 shipping profits (above the standard 75% dividend policy target), and $0.11 per share representing the 2025 final dividend from BW Product Services

### Operational Updates - Most dry docking activity for 2026 is complete after 257 dry docking days in Q1; off-hire days are expected to fall to ~105 days in Q2 2026 - Three long-term time charters were fixed recently: BW Brage (5-year) and BW Gemini (3-year) in the low $40,000 per day range, and BW Pampero (1-year) at high $60,000 per day for delivery in August - Two of three India-flagged vessels transited the Strait of Hormuz safely in April; one India-flagged vessel remains inside the Persian Gulf on active time charter

1. Shipping Segment: Reported a Time Charter Equivalent (TCE) of $51,300 per calendar day and $55,500 per available day, with 92% fee utilization after deducting off-hire and waiting time. Q1 profit after minority interests was $164 million, equal to an EPS of $1.08. For full-year 2026, the secured time-charter and FFA hedged portfolio is expected to generate approximately $245 million. Total company net profit after tax for Q1 2026 was $187 million, including $9 million profit from BWLPG India. Revenue contribution is majority from shipping operations, which makes up ~52% of net profit. 2. BW Product Services (Trading Segment): Reported a realized loss of $10 million in Q1 2026, plus a $145 million unrealized mark-to-market gain on cargo positions offset by an $8 million decrease on paper positions. After expenses, the segment posted a net profit after tax of $98 million for the quarter, contributing ~48% of total company net profit. Net asset value at quarter end was $150 million, excluding an additional $69 million in unrealized value for physical shipping positions based on internal valuation.

- For Q2 2026, 85% of available vessel days are already fixed at an average TCE of ~$81,000 per day, including 40% of available days fixed at $44,000 per day via time-charter coverage; this level is well above the all-in cash break-even of $24,500 per day - Off-hire days are expected to decrease to approximately 105 days in Q2 2026, down from 257 dry docking related off-hire days in Q1 - For full-year 2026, 42% of the fleet portfolio is already secured via fixed-rate time charters (at $44,800 per day) and FFA hedges (at $48,100 per day) - Management expects a large portion of BW Product Services' Q1 2026 unrealized mark-to-market gain to be realized by the end of Q2 2026 - BWLPG's long-term target coverage ratio for time charters is approximately 40%; management expects to increase 2027 coverage toward this target as long as market rate levels remain attractive

- Geopolitical risk from the ongoing Middle East conflict: the timing of the reopening of the Strait of Hormuz and the full recovery of Middle East LPG export infrastructure is highly uncertain, with recovery expected to take at least a year even after reopening, creating volatility for trade flows and freight rates - Panama Canal congestion risk: limited transit slots and growing competition from multiple shipping segments have already driven extreme volatility in auction prices for slots; an 80% projected chance of El Niño in 2026 could lower water levels and worsen congestion, pushing more vessels to longer alternative routes and increasing market volatility - New building market risk: shipyard capacity is expected to remain constrained for the foreseeable future, creating ongoing inflationary pressure on new building costs - BW Product Services trading risk: unrealized mark-to-market valuations fluctuate with market conditions, and future valuations may see downward corrections from current elevated peak levels; value at risk (VAR) is expected to increase as the segment ramps up multi-year term contracts through 2027 - One BWLPG India-flagged vessel remains trapped inside the Persian Gulf, creating operational and counterparty risk related to the ongoing time charter

Q: BW Product Services had a very strong Q1 driven by mark-to-market gains, and FOB premiums have since narrowed. Have you locked in these profits, and what should we expect for future results? A: Product Services' business model already uses hedging via the paper market to lock in margins. Management expects most of the large Q1 unrealized gain to be realized in Q2 2026, with some realization extending into Q3. Because valuations started at a very high peak, a downward correction in future mark-to-market valuations is natural and should be expected.

Q: The vessel stuck inside the Persian Gulf is on time charter. When does the contract end, and what happens if the vessel is still trapped when the contract expires? Will BWLPG still get daily hire? A: The vessel has cargo on board, and the charterer intends to sell and discharge the cargo before redelivery. The vessel is still officially on active time charter currently. Management expects the vessel can transit safely once the Strait of Hormuz reopens to discharge its cargo, and did not provide further details on contingency arrangements.

Q: What is BWLPG's target time charter coverage ratio for 2027, and will it approach the 40% level seen in 2026? A: BWLPG's explicit long-term target is to hold at least ~40% of available capacity covered by time charters. Management expects to increase coverage for 2027 as the year approaches, but will only add coverage at rate levels management finds attractive. The target will not be hit regardless of market price levels.

Q: Why is 2027 Middle East LPG export volume forecast lower than 2025 levels, after the 2026 disruption? A: Management expects it will take at least a year, and potentially longer, to complete full repairs of damaged production and export infrastructure in the Middle East after the conflict ends. This gradual repair timeline means export volumes will not return to pre-conflict 2025 levels until after 2027, leading to the lower forecast.