Welcome to BW LPG's fourth quarter and full year 2021 financial results presentation. Bringing you through the presentation today are Anders Onarheim, CFO Elaine Ong, EVP Commercial Niels Rigault, and EVP Technical and Operations Pontus Berg. We're pleased to answer questions at the end of the presentation. Should you have any, please type them into the chat box in your Zoom panel. You may also use the raise hand option. Before we begin, we wish to highlight the legal disclaimers shown in the current slide. This presentation, held on Zoom, is also recorded. I now turn the call over to BW LPG CEO, Anders Onarheim.
Thank you, Iver, and welcome to our Q4 and financial year 2021 results presentation for the year ended 31st of December 2021. As you heard, I'm joined today by Elaine, Niels, and Pontus. 2021 was certainly an eventful year. VLGC rates ranged from $100,000 per day down to $6,000 per day. We also experienced new variants of COVID coming, this, of course, leading to continued difficulties on the crew side. Just as we were starting to see light at the end of the tunnel and a more normalized world, the situation in Ukraine has created significant geopolitical turmoil. While it is still too early to conclude what the effects will be for VLGC shipping, the uncertainty has certainly dramatically increased.
Still, my colleagues and I believe that there are several reasons to be optimistic for our shipping business over the medium and long term. LPG is one of the cleanest and most versatile energy sources currently available, and we see continuous strong demand both in the Far East, India, and Europe. Healthy production is also expected for both in the U.S. and Middle East, so need for shipping will prevail. Of course, one of the less negative effects of COVID is that the shipping industry as a whole has accelerated change and adopted a number of new technologies. We're also quite proud of the steps BW LPG has taken as we move closer to a zero carbon future. Please go to slide four. We published our 2021 annual report and sustainability report earlier today with the theme Ship Smarter with LPG.
Behind the great presentation of data were hours of hard work by colleagues. The reports are now available for download on our website, and we hope investors and analysts will find them insightful. When reading the reports, you will find that we can ship smarter because we have 2,000 talented and dedicated professionals. We can ship smarter because we actively use new technology to reduce our carbon footprint, make our operations more efficient. We can ship smarter because we remain agile and make active decisions to optimize our assets through the cycles. With these initiatives and more, we stayed the course in a challenging year. Let me next give you some key highlights. In the fourth quarter, we reported $31,000 per day for our VLGC fleet per calendar day with a 4% technical off-hire.
Commercially, we achieved $32,400 per available day with a consistently high commercial utilization of 99.7%. This performance translated to a net profit after tax of $63 million on earnings per share of $0.45. For the fourth quarter, we'll be distributing a dividend of $0.18 per share, amounting to a total of $25 million. Moving on to the highlights for the quarter. We now report the highest available liquidity to date at $453 million, and a further decline in net leverage ratio to 35%. We have retrofitted a further two vessels with LPG dual fuel propulsion, which brings the total up to 12 vessels on the water, with a combined run time of 16,000 hours on LPG. That's a great experience for us to have.
We conclude the sale and delivery of BW Sakura in December and BW Niigata in February. The sales generated $72 million in liquidity and a net book gain of $14 million. This is again in line with our spoken strategy. Our existing $221 million facility was upsized with the $40 million sustainability-linked loan to finance the retrofit of four dual fuel LPG propulsion vessels. In addition, $70 million under this term loan facility was converted to a revolving credit facility. After the end of the fourth quarter, Maas Capital subscribed for $50 million on new shares in BW India. We're very excited to welcome Maas as a shareholder, and we look forward to working with them going forward. BW LPG now holds approximately 67% of the equity in BW India. Switching gears to our market outlook.
It's difficult to not recognize that the situation in Ukraine can continue to have a dramatic impact on energy markets, energy flows, and shipping. For the moment, this geopolitical uncertainty greatly obscures any near-term market outlook, as unforeseen events, such as shocks to the bunker price. Rapid changes in trading patterns or unexpected LPG inventory management can trigger intense volatility in spot rates. For 2023 and onwards, though, we found the outlook to be quite healthy despite uncertainties, both from a heavy new building order book and the implementation of IMO EEXI regulations. Niels will talk more about this later. Returning quickly to page number five. six, I'm sorry. The VLGC market firmed up somewhat during the fourth quarter compared to the preceding quarter. We generated annualized return on equity of 19%, with an annualized return on capital employed of 13%.
For the full year of 2021, we delivered return on equity of 14% and a 10% return on capital employed. Our operational and free cash flows were $20 million and $47 million, respectively, for the quarter, maintaining our flexibility and enabling us to continue to return cash to our shareholders. Finally, as previously highlighted, our net leverage ratio continued down from 36% at the end of the third quarter to now 35% at the end of Q4. Next up, Niels will now take you through the market review and the commercial update.
Thank you, Anders. Good morning and afternoon to all of you. On slide eight, we share a view of the market. As Anders mentioned, the outlook for the new transport rate is highly uncertain. This uncertainty is already visible in the current spot market, as the market participants are sitting on the fence and are waiting more clarity before making any big decisions. Seasonally speaking, VLGC rates are already under pressure before the inventory build-up season. The strong increase in crude prices is affecting the bunker cost. It is pushing our earnings toward OpEx level, and the current spot market is around $11,000 per day. At the beginning of the year, the compliant fuel prices were at $600. Today, we're paying around $800. This gives about $8,000 per day increased bunker cost.
Dirty heavy fuel that the scrubber ships can use has a benefit of $230 per metric ton. Therefore, they have an $8,000 per day higher earnings potential. LPG-burning ships are also benefiting from a cheaper fuel compared to compliant fuel, but the gain today is only around $1,000 per day. So far in Q1, we have fixed approximately 79% of our available fleet days at an average rate of $42,000 per day on the discharge to discharge basis. For the medium term, our view is that we are facing healthy fundamentals. Yes, the current order book is significant, but it is also likely that the high oil prices will stimulate increased oil and gas production. In the years ahead, we're also seeing growth in demand for LPG, especially from retail and petrochemical sector. Turning to slide nine.
The seaborne LPG trade in 2021 saw several encouraging developments. First, North America seaborne LPG export continued to grow. They increased by 13% for the whole year, helped by optimization of natural gas production and reduction in drilled but uncompleted wells. Middle East LPG export grew marginally in 2021 to 36 million tons. This include a significant export recovery from Iran, which grew 53% to 5.3 million tons. On the import side, the most robust growth came in China and India. Chinese import grew by 23%. This was supported by new PDH plants at the start-up of LPG-fed steam crackers. By 2023, eight PDH plants are scheduled to come on stream in China. India import growth of 11% was encouraged by growing retail demand and new investments in infrastructure, allowing for more volumes to be received.
On slide 10, you see EIA short-term energy outlook released in February this year. The agency expects that U.S. LPG export will grow by 4% in 2022, driven for the most part by higher U.S. production, but also marginally lower domestic consumption compared to last year. For 2023, the agency expects the trend to continue with even higher production and lower domestic demand, resulting in the net export growth forecast at 11.2%. As shown on slide 11, the current VLGC order book holds 70 vessels, equating to 22% of the existing fleets. This order book is down slightly from our previous quarterly update, as the number of delivered vessel is higher than the number of ships being put on order. We still expect 42 VLGC to be delivered in 2023.
For 2024, however, we expect nine VLGC deliveries, which is one more than our last quarterly updates. We have no new building orders, but we will have the largest fleet of LPG propulsion vessels ready by the end of Q1 this year. We believe this will give us a strong position in 2023 when the new regulations occurs. Please skip ahead to slide 15. We're lagging a little bit on the slides here. Slide 15. I'm gonna talk, sort of, about our fleet position. Our time charter out revenues for 2022 now stands at $99 million, with the average TC out rates of $32,000 per day. Our TC in costs remain low at $26,000 per day.
We have 28 VLGCs serving the spot market, which, in our view, is a comfortable position as we need the critical mass to optimize the spot earnings and help our clients with today's inefficiencies. That's it for me. Next, Pontus Berg.
Thank you, Niels. Turning to slide 16, please. Good day, everybody. From a technical and operational perspective, it has been another good year for supporting the business with smarter shipping. We continue our investment in technology, remaining focused on digitalizing our vessels, harnessing data and automating workflows, while augmenting these new tools with solid operational experience, and this approach is now bearing fruit. We have invested over $92 million in fleet upgrades during 2021. This to maximize the value of our assets and enable smarter operations. This includes retrofitting another eight vessels with LPG dual fuel and another eight vessels with smart ship technology, among other initiatives. With LPG propulsion technology on board now 12 VLGCs, we can power these ships with cleaner burning LPG. Available data points to a promising potential of 15%-20% reduction in CO2 emissions.
As mentioned by Anders, with over 16,000 hours in operation and counting, we have proved that retrofitting vessels with this pioneering technology works, and we encourage our fellow LPG ship owners to do the same instead of ordering new builds. We complement the use of new technology with deep operational experience and innovative thinking. In total, we saved about $10 million and reduced greenhouse gas emissions fleet-wide by about 12% last year. For example, with our four smart ships and active voyage management, we reduced fuel consumption by about 2,700 metric tons fleet-wide. This translates to about $1.5 million in savings and a reduction of 8,000 metric tons in CO2 emissions. Our team closely manages New Panama Canal transits, secures Suez Canal rebates, and efficiently handled over 1,100 port calls in the year.
Our innovative use of established ship-to-ship transfer practice for LPG bunker and coolant pre- and post-dry docking has reduced turnaround time, increased commercial availability, minimized emission from gas stream, and allowed us very strict control over product origin compliance, which is increasingly important in these days. We continue to invest in R&D and position the company well for new technologies that are on the horizon. Plans for our next generation VLGC is in full swing, and we appreciate the support and collaboration with market-leading partners and top-tier suppliers. All this will not be possible without good people. COVID-19 continued to loom large through the year. The pandemic has driven up operations costs, and it has been hard on our seafaring colleagues, where rotations on and off ships has been affected.
The good news for us is that we have managed to vaccinate about 99% of our crew on board, and only a small number have been on board significantly beyond their designated sign-off dates. We do thank the relevant port authorities and offshore and shore offices who have provided support. Vaccinating our crew go a long way to protect the livelihoods of our seafarers and our continued ability to deliver energy to world markets. Together with stringent pre-boarding and onboard management procedures, we have managed to keep cases of COVID on board very low. Our zero harm approach guides how we protect the health and safety of our crew. Safety is a top priority, of course, and a non-negotiable expectation for all. Where we saw trends in reported incidents, we ran specific initiatives to address them.
Our 2021 OpEx comes in at $8,000 per day, of which nearly 5% or $380 went towards COVID-19 management measures. We continue to maintain market-leading OpEx trends for our fleet. We see this as an important priority and sound business practice. Of course, we are monitoring the situation and assessing our crew members from both Ukraine and Russia in recent difficult and ever-turbulent events. We and our local manning offices have been and are in contact with both the crew on board as well as at home. With that, let me now turn over to our CFO, Elaine Ong, who will walk you through the projected fleet CapEx and our financial position.
Thank you, Pontus, and a very good day to all of you. Let me begin with a few comments on the capital spend table here on slide 16. In 2021, we spent a total of $92 million on fleet upgrades. Of this, $85 million was on retrofitting our vessels with dual fuel propulsion engines, and approximately $7 million on smart ship technology and ballast water treatment systems. To date, we have 12 LPG powered VLGCs on the water, with three more on the way. 19 VLGCs are equipped with smart ship technology. We plan to spend a further $31 million on fleet upgrades this year, most of which relate to the retrofitting of our remaining three vessels. The financing for these vessels is already in place with the upsizing of our existing $221 million facility, which Anders mentioned earlier.
These last three conversions will mark the completion of our multi-year $130 million investment to retrofit 15 of our vessels with LPG dual fuel propulsion technology. These retrofitted vessels are an important and tangible step forward in our journey towards a zero carbon future. Let me now provide some color on our reported financial results. Net profit for the quarter was $63 million, bringing our full year NPAT to $186 million. Included in our fourth quarter NPAT of $63 million are two non-recurring items that I would like to highlight. The first stems from a $2.7 million gain realized from our disposal of the BW Sakura for further trading. The second relates to a $32 million write back of vessel impairment previously taken on our vessels back in 2016.
Over the past years, we have seen broker-based valuation strengthen, hence we're now able to recover most of the vessels' impairments previously taken. If we exclude the non-recurring items, our net profit for the fourth quarter will be $28 million. Let me comment briefly on our EBITDA. EBITDA for the fourth quarter came in at $79 million, bringing our full year EBITDA to $312 million. This translate into a strong EBITDA margin of 68% for the quarter and 67% for the full year 2021. Our fourth quarter EBITDA of $79 million stems from $117 million of TCE income, net of a $5 million impact related to the effects of IFRS 15. This was largely driven by higher fleet utilization for the quarter at 96%, with fewer vessels at the yard undergoing retrofitting despite the lower VLGC spot rates earned during the quarter.
This is partially offset by higher than expected vessel operating expenses during the quarter at $7,700 per day, reflecting increased crewing costs associated with the lingering pandemic. Let me now highlight a few things on our balance sheet. At the end of December, our available liquidity at $453 million was at the highest level since our listing back in 2013, and our net leverage ratio at 35% is at the lowest level in seven years. In 2021, we generated $307 million in operating cash flows and $330 million in free cash flows. Our strong cash flow has allowed us to aggressively pay down our debt while continuing to return cash to our shareholders.
Including the $0.18 per share of dividends just declared for the fourth quarter, we will have paid a total of $77 million in dividends for 2021, equivalent to $0.56 per share. This translates to a payout ratio of 51% of NPAT, excluding the non-cash write back of impairments. Looking forward into 2022, we expect our operating cash break even for our total fleet, including our chartered-in vessels, to be at $21,000 per day this year. A quick update on our financing structure and debt repayment profile. Our net debt position at the end of the quarter was $745 million, and we will have no major balloon payments due in the next five years. In December, we upsized our $221 million facility with a $40 million sustainability-linked loan to finance a retrofitting of four dual fuel LPG propulsion engines.
This is our first sustainability linked facility aligned with Poseidon Principles and demonstrates BW LPG's continued access to highly competitive funding and commitment to decarbonize shipping. At the same time, we also converted $70 million of this same term loan facility to a revolving credit facility. This gives us financial flexibility in allowing us to accelerate the repayment of our debt with our strong free cash flows while still maintaining a liquidity line should we need to draw on it in the future. On this note, I would like to open up the call for questions.
We will begin our Q&A session now. Should you have questions, please type them into the Zoom chat box. You can also click on the Raise Hand button to ask your questions verbally. Please note that all participants have been automatically muted, so please unmute yourself before speaking. We will pause for a few minutes to take questions. Should you have any questions, please type them into the Zoom chat box or raise your hand to ask the question verbally.
Okay. We can take some questions from the participants that have raised their hands, Lisa?
Please go ahead, Brian.
Hi. Thanks for taking my question. Just curious if you can give a quick comment about, you know, just the global, you know, energy crunch in Europe right now and how potentially LPG. You could see a pull for, you know, U.S. or Middle Eastern LPG head towards Europe, and you could see, you know, ultimately an increase in demand and tightening of LPG shipping supply. Thanks.
Yeah. I will start and then I'll let Niels answer that question also. You know, clearly we, as we mentioned, we do expect to see you know, some changed trading patterns here, given all the you know, all the activity we're seeing. I think we can expect that Europe will be perhaps more of a destination for the LPG than it has been previously. Niels, why don't you give a little bit more flavor on that?
Yes. Again, I mean, the Russian LPG export is to Europe, it's not very big. I mean, I think the seaborne trade is mainly done on smaller ships. It's around 50-70,000 tons per month. In total, the LPG export out of Russia is 300,000 tons per month. Obviously, if Europe needs to substitute that LPG, it could come from north of Norway or from the Mediterranean or the U.S. That's in VLGC terms, it's around seven VLGCs. That will be, if it's coming from the U.S., that will be approximately 50% increase of LPG coming from the U.S. to Europe.
Great. Thanks. I guess just as a quick follow-up, do you see the potential for LPG to, you know, help replace some LNG flows given that, you know, U.S. LNG and global LNG capacity might be nearing full utilization here in 2020 in the next 12 months?
I think that's clearly something that, you know, I think is possible. You know, being LPG shippers, we actually hope so too. We think LPG is a great product, and I think this will definitely at least be put in the agenda. We're starting to see what the capacity is, and I think we will certainly be watching very closely to see if there's an opportunity for us to contribute to that somewhat.
Great. Thank you for taking my questions.
Okay. Thank you very much. We have one more participant raising their hand. We'll take the question from Clement Mullins, please.
Yeah. Good morning, Clement Mullins. I'm from Value Investor's Edge. Could you provide some further commentary on investments you're making on next gen VLGCs? When do you believe these new technology vessels will be available for ordering?
Well, that's a good question, a difficult question to answer. We are spending you know time and resources you know to understand you know what technology is available. As soon as we have decided on one of those, we will let you know. I still think that is still some time out because I think there is still we see many talk about new opportunities, and we hear many looking into ammonia as fuel. But when we look at it's still does not have a material impact so far. We haven't seen any real you know real sort of business-justifying propositions.
We will of course, we will continue to look for opportunities, and we are working internally with several tracks. It's too early for us to talk about it, and I think still we are looking at least a few years out.
All right. That's helpful. Regarding BW LPG India, after the entrance of Maas Capital, what will the main priorities be? In past conference calls, you had mentioned you would look into infrastructure projects in the country. Does that remain a priority? How should we think about next steps?
I think you're right. We will continue to look for those opportunities. Right now, we're also making sure first, of course, that we integrate Maas Capital into our corporate governance and get the team on board so we can work well together. But that's still in the agenda for us to look for opportunities, you know, to take a greater share of the value chain in India. That's an important market for us. I think we said, you know, previously also, we will look for similar opportunities other places, if it makes sense.
Again, with a strong balance sheet and we see that our, you know, also with our small sort of product trading, we are seeing good opportunities to find ways to increase our both footprint in the market and our profitability.
Sounds good. That's all for me. Thank you for taking my questions, and congratulations for this quarter.
Thank you.
Okay. Thank you very much. We'll take one more question from a participant raising their hand. We'll go to Aneeb Bandara. Please unmute yourself and ask your question.
Yeah. Hi. Good evening to the panelists. My one question is specifically on the technical point of view, directed towards Mr. Pontus. With respect to the methane slip characteristics that we have, is there any further development taking place in order to minimize it more, or are there any talks of ME-GA engines coming into the picture because ME-GA, as we know, is having more methane slip when we compare to the ME-GI. Anything else has been done on that aspect? That is my question.
Hi. From our point of view, we have not looked at any ME-GI engines, and I don't see them coming into play in the LPG market either. As you know, the LGIP, the L stands for liquid, so we have the liquid injection into our cylinders compared to the gases in the ME-GI. The short answer is no, I don't believe so, and I haven't seen or even heard of any development for such thing. And yeah, I think that's the short answer.
Of course, we don't have any methane slip, you know, on our engines.
Right. Basically you are only focused on the LGIM and the LGIP models. Right? As I understand. Correct?
Yes, that is correct. Right.
Okay.
Now we are working very hard on the LGIP engines and both gaining experience and optimizing them. Then we are looking into a little bit together with the providers, the builders, what comes after the LGIP. Whatever it comes. As Anders mentioned, it's a little bit too early to speculate. Ta lk about that in public just yet.
Okay. Anyways, thank you. Thanks for the reply.
Thank you. Okay. It looks like there's no more questions. If there's no more questions, then we have come to the end of today's presentation. Thank you for attending BW LPG's fourth quarter and full year 2021 financial results presentation. More information is available on the BW LPG homepage. Have a good day and a good night.