Operating profit in the LNG division amounted to $22.8M in the fourth quarter, little changed from the same period a year ago.
The smaller LNG vessel Century was idle for 55 days during the three months. In the same period in 2006 the LNG segment suffered from 45 off-hire days, mainly related to repairs of stern tube bearings on the vessel LNG River Orashi.
Depreciations decreased by $1.5M following a change in estimated useful economic life of LNG vessels from 30 to 35 years as of January 2007.
BW said operating expenses increased by $8.7M from $53M in the fourth quarter of 2006 to $61.7M, mainly due to overall higher personnel expenses and the depreciation of the dollar against the Norwegian crown.
The BW Gas income tax expense of $583.4M that swung the company into a steep loss from continuing opeations is mainly related to the transition tax after changes in the Norway's tonnage tax regime. The change implies taxation of a 10-year period of undistributed profit kept in the old tonnage tax system not previously subject to taxation.
A 33 percent portion of the transition tax will be waived by the tax authorities if an equal amount is spent on environmental investments. However, the accounting related to the environmental fund remains uncertain, BW said in its earnings statement.
The fourth quarter showed steady freight rates for the VLGC segment, an increase in the freight rates for the LGCs and a slight decrease for the MGCs compared to the same period in 2006, the company said.