Our Time-Charter Equivalent (TCE) income increased to US$551 million in 2020 from US$547 million in 2019, driven by higher freight rates and stronger commercial utilisation, in part offset by an increase in technical off-hire days because of a larger number of vessels being in dry dock and for LPG propulsion upgrades. These numbers equate to VLGC TCE earnings of US$36,400 per calendar day in 2020 vs US$35,000 per calendar day in 2019. Our commercial results improved even further with the achieved day rate based on available days increasing to US$37,900 in 2020 from US$35,400 in 2019. The improvement in commercial results was driven by a higher commercial utilisation increasing to 98% in 2020 from 95% in 2019, in addition to a stronger freight rate market.
BW LPG reported a net profit after tax (NPAT) of US$244 million in 2020 versus US$274 million in 2019, with a decline in ROCE and ROE to 12% and 20% respectively in 2020, from 14% and 25% respectively in 2019. The decrease in NPAT and returns from 2019 were mainly driven by the higher write-back of vessel values in 2019 of US$38 million as compared to US$12 million in 2020, and higher vessel depreciation in 2020 due to the revision in the vessels’ useful life from 30 years to 25 years with effect from 1 January 2020.
Vessels and related assets, as well as external debt financing, are held in subsidiary companies within BW LPG. The investment holding company’s balance sheet includes primarily receivables from subsidiaries as well as shareholders’ equity, trade payables and accrued expenses. Total assets are US$1,072 million, shareholders’ equity is US$1,071 million, and total liabilities are US$0.4 million. Income is solely from dividends from our subsidiary of US$150 million. Expenses of US$4 million consists of overhead and other costs related to the operations of the investment holding company as a listed entity.
Safety is a fundamental and non-negotiable priority at BW LPG and the Board is conscious that safety performance is a continuous process. BW LPG has active programmes in place to encourage a “Zero Harm” safety culture on shore and at sea. In 2020, our LTIF (Lost Time Injury Frequency per million working hours) rate was 0.14 and our TRCF (Total Recordable Case Frequency) rate in 2020 was 0.86, both of which were better than comparable industry performance.
We are pleased to present our inaugural standalone sustainability report, which has been prepared in accordance to the Global Reporting Initiative (“GRI”) Sustainability Reporting Standards, core option. The report discusses our performance in the context of our activities relating to environmental, social and governance considerations for FY2020. A key deliverable in 2020 was the successful retrofitting of BW Gemini, BW Leo and BW Orion, the world’s first Very Large Gas Carriers to be propelled by cleaner burning LPG. In total, we are committing over US$130 million to retrofit 15 of our VLGCs with pioneering LPG dual-fuel propulsion technology, playing our part to decarbonise our operations, maximise the value of our assets, and not add unneeded tonnage with related carbon footprint.
In a year where global borders were shut, the Board held four meetings virtually in 2020. Mr John Harrison and Mr Andreas Beroutsos stepped down as Vice-Chairman and Director of the Board respectively. We thank Mr John Harrison and Mr Andreas Beroutsos for their leadership during their tenure with BW LPG.
BW LPG is exposed to various market, operational, and financial risks. The most significant risks are set out in the IPO (Initial Public Offering) prospectus issued in November 2013. That document and other information on risks are available on the Company’s website at www.bwlpg.com. BW LPG employs an enterprise-wide risk assessment process to analyse and evaluate risk exposures and to allocate appropriate resources to risk mitigation activities. BW LPG’s risk mitigation activities consider the unpredictability of shipping and financial markets. BW LPG’s main risks relate to the inherently cyclical nature of the shipping industry and the consequent inherent volatility of financial performance; the potential for oversupply of shipping capacity to negatively impact freight rates and asset values; and the dependence on continued export volumes of relevant hydrocarbons to maintain demand for shipping.
In light of BW LPG’s liquidity position, balance sheet strength, assets, employment, and continuing cash flow from operations, the Board confirms that the going concern assumption, upon which BW LPG’s accounts are prepared, continues to apply.