Dorian LPG Ltd. Announces First Quarter Fiscal Year 2024 Financial Results
- Dorian LPG reports strong financial results for Q1 FY2024, with net income of $51.7 million and adjusted net income of $48.9 million. Revenues increased by $34.8 million, driven by higher TCE rates and fleet utilization. The company declared an irregular cash dividend of $40.4 million. The addition of a dual-fuel ship to the fleet reflects a diligent approach to fleet renewal.
- None.
Key Recent Developments
- Declared an irregular cash dividend totaling
$40.4 million - Time chartered-in a dual-fuel Panamax VLGC for seven years, with two consecutive one-year charterer's option periods and purchase options in years seven through nine.
- Fixed the interest rate on the Cougar Japanese Financing Arrangement at
6.34% effective August 2023.
Highlights for the First Quarter Fiscal Year 2024
- Revenues of
$111.6 million - Time Charter Equivalent ("TCE")(1) rate per operating day for our fleet of
$51,156 - Net income of
$51.7 million $1.28 $48.9 million $1.21 - Adjusted EBITDA(1) of
$74.8 million - Declared and paid an irregular cash dividend totaling
$40.4 million
(1) | TCE, adjusted net income, adjusted EPS and adjusted EBITDA are non- |
John C. Hadjipateras, Chairman, President and Chief Executive Officer of the Company, commented, "The first quarter results reflected a firm market, as strong demand continues to absorb new-building deliveries. Our board declared an irregular dividend, once again highlighting our commitment to disciplined capital allocation consistent with a strong balance sheet. The addition of the "Cristobal," one of four dual-fuel ships to join our fleet, reflects a diligent approach to fleet renewal. It is appropriate to acknowledge that our fine results would not have been possible without our dedicated seafarers and our shoreside staff who strive to provide our customers the best, safe, reliable, clean and trouble free transportation service."
First Quarter Fiscal Year 2024 Results Summary
Net income amounted to
Adjusted net income amounted to
The
The TCE rate per operating day for our fleet was
Vessel operating expenses per day increased to
Revenues
Revenues, which represent net pool revenues—related party, time charters and other revenues, net, were
Charter Hire Expenses
Charter hire expenses for the vessels chartered in from third parties were
Vessel Operating Expenses
Vessel operating expenses were
General and Administrative Expenses
General and administrative expenses were
Interest and Finance Costs
Interest and finance costs amounted to
Unrealized Gain on Derivatives
Unrealized gain on derivatives amounted to
Realized Gain/(Loss) on Derivatives
Realized gain on derivatives amounted to
Fleet
The following table sets forth certain information regarding our fleet as of July 27, 2023. | ||||||||||||||||
Scrubber | Time | |||||||||||||||
Capacity | ECO | Equipped | Charter-Out | |||||||||||||
(Cbm) | Shipyard | Year Built | Vessel(1) | or Dual-Fuel | Employment | Expiration(2) | ||||||||||
Dorian VLGCs | ||||||||||||||||
Captain John NP | 82,000 | Hyundai | 2007 | — | — | Pool(4) | — | |||||||||
Comet | 84,000 | Hyundai | 2014 | X | S | Pool(4) | — | |||||||||
Corsair(3) | 84,000 | Hyundai | 2014 | X | S | Time Charter(6) | Q4 2024 | |||||||||
Corvette | 84,000 | Hyundai | 2015 | X | S | Pool(4) | — | |||||||||
Cougar(3) | 84,000 | Hyundai | 2015 | X | — | Pool-TCO(5) | Q1 2025 | |||||||||
Concorde | 84,000 | Hyundai | 2015 | X | S | Time Charter(7) | Q1 2024 | |||||||||
Cobra | 84,000 | Hyundai | 2015 | X | — | Pool(4) | — | |||||||||
Continental | 84,000 | Hyundai | 2015 | X | — | Pool-TCO(5) | Q4 2023 | |||||||||
Constitution | 84,000 | Hyundai | 2015 | X | S | Pool(4) | — | |||||||||
Commodore | 84,000 | Hyundai | 2015 | X | — | Pool-TCO(5) | Q1 2024 | |||||||||
Cresques(3) | 84,000 | Daewoo | 2015 | X | S | Pool-TCO(5) | Q2 2025 | |||||||||
Constellation | 84,000 | Hyundai | 2015 | X | S | Pool(4) | — | |||||||||
Cheyenne | 84,000 | Hyundai | 2015 | X | S | Pool-TCO(5) | Q4 2023 | |||||||||
Clermont | 84,000 | Hyundai | 2015 | X | S | Pool-TCO(5) | Q4 2023 | |||||||||
Cratis(3) | 84,000 | Daewoo | 2015 | X | S | Pool(4) | — | |||||||||
Chaparral(3) | 84,000 | Hyundai | 2015 | X | — | Pool-TCO(5) | Q2 2025 | |||||||||
Copernicus(3) | 84,000 | Daewoo | 2015 | X | S | Pool(4) | — | |||||||||
Commander | 84,000 | Hyundai | 2015 | X | S | Pool(4) | — | |||||||||
Challenger | 84,000 | Hyundai | 2015 | X | S | Pool-TCO(5) | Q3 2026 | |||||||||
Caravelle(3) | 84,000 | Hyundai | 2016 | X | — | Pool(4) | — | |||||||||
Captain Markos(3) | 84,000 | 2023 | X | DF | Pool(4) | — | ||||||||||
Total | 1,762,000 | |||||||||||||||
Time chartered-in VLGCs | ||||||||||||||||
Future Diamond(8) | 80,876 | Hyundai | 2020 | X | S | Pool(4) | — | |||||||||
Astomos Venus(9) | 83,309 | Mitsubishi | 2016 | X | — | Pool(4) | — | |||||||||
HLS Citrine(10) | 86,090 | Hyundai | 2023 | X | DF | Pool(4) | — | |||||||||
HLS Diamond(11) | 86,090 | Hyundai | 2023 | X | DF | Pool(4) | — | |||||||||
Cristobal(12) | 86,980 | Hyundai | 2023 | X | DF | Pool(4) | — | |||||||||
_____________________________ | |
(1) | Represents vessels with very low revolutions per minute, long-stroke, electronically controlled engines, larger propellers, advanced hull design, and low friction paint. |
(2) | Represents calendar year quarters. |
(3) | Operated pursuant to a bareboat chartering agreement. |
(4) | Pool" indicates that the vessel operates in the Helios Pool on a voyage charter with a third party and we receive a portion of the pool profits calculated according to a formula based on the vessel's pro rata performance in the pool. |
(5) | Pool-TCO" indicates that the vessel is operated in the Helios Pool on a time charter out to a third party and we receive a portion of the pool profits calculated according to a formula based on the vessel's pro rata performance in the pool. |
(6) | Currently on a time charter with an oil major that began in November 2019. |
(7) | Currently on time charter with a major oil company that began in March 2019. |
(8) | Currently time chartered-in to our fleet with an expiration during the first calendar quarter of 2025. |
(9) | Currently time chartered-in to our fleet with an expiration during the third calendar quarter of 2023. |
(10) | Vessel has a Panamax beam and is currently time chartered-in to our fleet with an expiration during the first calendar quarter of 2030 and purchase options beginning in year seven. |
(11) | Vessel has a Panamax beam and is currently time chartered-in to our fleet with an expiration during the first calendar quarter of 2030 and purchase options beginning in year seven. |
(12) | Vessel has a Panamax beam and shaft generator and is currently time chartered-in to our fleet with an expiration during the third calendar quarter of 2030 and purchase options beginning in year seven. |
Market Outlook & Update
Despite additional announcements by OPEC+ to further cut crude oil production, the average Brent Oil ("Brent") and West Texas Intermediate ("WTI") price fell over the quarter, averaging around
Healthy LPG supply in the second calendar quarter of 2023 resulted in prices of propane dropping in all major regions. In the
The lower prices of propane and butane were also observed in major importing regions of the Far East and
As a result of lower feedstock costs, LPG petrochemical margins significantly improved. PDH margins in the East were maintained at a similar level to those seen towards the end of the first calendar quarter of 2023 and as a consequence, Chinese imports rose throughout the second calendar quarter and are expected to be nearly 3 million metric tons higher than the first calendar quarter of 2023. Not all of the increased imported volume was consumed in petrochemical applications, with inventory and retail demand also increasing. Two new PDH plants started operations in
On average, the second calendar quarter of 2023 saw cracker margins improve for utilizing LPG as a feedstock over the previous quarter. Negative margins for naphtha in the Far East and in
The Baltic VLGC index strengthened further in the second calendar quarter of 2023 from an average of around
A further 13 new VLGCs were added to the worldwide fleet during the second calendar quarter of 2023 without causing a downward freight dynamic. Panama Canal delays for the VLGC fleet in the second calendar quarter of 2023 remained in line with the first calendar quarter of 2023.
Currently, the VLGC orderbook stands at approximately
The above market outlook update is based on information, data and estimates derived from industry sources available as of the date of this release, and there can be no assurances that such trends will continue or that anticipated developments in freight rates, export volumes, the VLGC orderbook or other market indicators will materialize. This information, data and estimates involve a number of assumptions and limitations, are subject to risks and uncertainties, and are subject to change based on various factors. You are cautioned not to give undue weight to such information, data and estimates. We have not independently verified any third-party information, verified that more recent information is not available and undertake no obligation to update this information unless legally obligated.
Seasonality
Liquefied gases are primarily used for industrial and domestic heating, as chemical and refinery feedstock, as transportation fuel and in agriculture. The LPG shipping market historically has been stronger in the spring and summer months in anticipation of increased consumption of propane and butane for heating during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and the supply of certain commodities. Demand for our vessels therefore may be stronger in our quarters ending June 30 and September 30 and relatively weaker during our quarters ending December 31 and March 31, although 12-month time charter rates tend to smooth out these short-term fluctuations and recent LPG shipping market activity has not yielded the typical seasonal results. The increase in petrochemical industry buying has contributed to less marked seasonality than in the past, but there can no guarantee that this trend will continue. To the extent any of our time charters expire during the typically weaker fiscal quarters ending December 31 and March 31, it may not be possible to re-charter our vessels at similar rates. As a result, we may have to accept lower rates or experience off-hire time for our vessels, which may adversely impact our business, financial condition and operating results.
Financial Information
The following table presents our selected financial data and other information for the periods presented: | ||||||||
Three months ended | ||||||||
(in U.S. dollars, except fleet data) | June 30, 2023 | June 30, 2022 | ||||||
Statement of Operations Data | ||||||||
Revenues | $ | 111,562,907 | $ | 76,823,722 | ||||
Expenses | ||||||||
Voyage expenses | 298,383 | 775,545 | ||||||
Charter hire expenses | 10,546,810 | 5,402,145 | ||||||
Vessel operating expenses | 19,842,386 | 17,067,913 | ||||||
Depreciation and amortization | 16,655,317 | 15,809,778 | ||||||
General and administrative expenses | 9,218,137 | 9,413,139 | ||||||
Total expenses | 56,561,033 | 48,468,520 | ||||||
Other income—related parties | 620,433 | 591,802 | ||||||
Operating income | 55,622,307 | 28,947,004 | ||||||
Other income/(expenses) | ||||||||
Interest and finance costs | (10,403,849) | (7,958,554) | ||||||
Interest income | 1,690,220 | 408,278 | ||||||
Unrealized gain on derivatives | 2,859,274 | 2,454,234 | ||||||
Realized gain/(loss) on derivatives | 1,847,764 | (50,384) | ||||||
Other gains, net | 105,421 | 1,047,142 | ||||||
Total other income/(expenses), net | (3,901,170) | (4,099,284) | ||||||
Net income | $ | 51,721,137 | $ | 24,847,720 | ||||
Earnings per common share—basic | 1.29 | 0.62 | ||||||
Earnings per common share—diluted | $ | 1.28 | $ | 0.62 | ||||
Financial Data | ||||||||
Adjusted EBITDA(1) | $ | 74,849,872 | $ | 46,871,074 | ||||
Fleet Data | ||||||||
Calendar days(2) | 1,911 | 1,820 | ||||||
Time chartered-in days(3) | 364 | 182 | ||||||
Available days(4) | 2,219 | 2,002 | ||||||
Operating days(5)(8) | 2,175 | 1,920 | ||||||
Fleet utilization(6)(8) | 98.0 | % | 95.9 | % | ||||
Average Daily Results | ||||||||
Time charter equivalent rate(7)(8) | $ | 51,156 | $ | 39,608 | ||||
Daily vessel operating expenses(9) | $ | 10,383 | $ | 9,378 | ||||
_______________________ | |
(1) | Adjusted EBITDA is an unaudited non- |
Adjusted EBITDA has certain limitations in use and should not be considered an alternative to net income/(loss), operating income, cash flow from operating activities or any other measure of financial performance presented in accordance with | |
The following table sets forth a reconciliation of net income to Adjusted EBITDA (unaudited) for the periods presented: | |||||||
Three months ended | |||||||
(in U.S. dollars) | June 30, 2023 | June 30, 2022 | |||||
Net income | $ | 51,721,137 | $ | 24,847,720 | |||
Interest and finance costs | 10,403,849 | 7,958,554 | |||||
Unrealized gain on derivatives | (2,859,274) | (2,454,234) | |||||
Realized (gain)/loss on interest rate swaps | (1,847,764) | 50,384 | |||||
Stock-based compensation expense | 776,607 | 658,872 | |||||
Depreciation and amortization | 16,655,317 | 15,809,778 | |||||
Adjusted EBITDA | $ | 74,849,872 | $ | 46,871,074 | |||
(2) | We define calendar days as the total number of days in a period during which each vessel in our fleet was owned or operated pursuant to a bareboat charter. Calendar days are an indicator of the size of the fleet over a period and affect both the amount of revenues and the amount of expenses that are recorded during that period. |
(3) | We define time chartered-in days as the aggregate number of days in a period during which we time chartered-in vessels from third parties. Time chartered-in days are an indicator of the size of the fleet over a period and affect both the amount of revenues and the amount of charter hire expenses that are recorded during that period. |
(4) | We define available days as the sum of calendar days and time chartered-in days (collectively representing our commercially-managed vessels) less aggregate off hire days associated with scheduled maintenance, which include major repairs, drydockings, vessel upgrades or special or intermediate surveys. We use available days to measure the aggregate number of days in a period that our vessels should be capable of generating revenues. |
(5) | We define operating days as available days less the aggregate number of days that the commercially-managed vessels in our fleet are off‑hire for any reason other than scheduled maintenance (e.g., commercial waiting, repositioning following drydocking, etc.). We use operating days to measure the number of days in a period that our operating vessels are on hire (refer to 8 below). |
(6) | We calculate fleet utilization by dividing the number of operating days during a period by the number of available days during that period. An increase in non-scheduled off hire days would reduce our operating days, and, therefore, our fleet utilization. We use fleet utilization to measure our ability to efficiently find suitable employment for our vessels. |
(7) | Time charter equivalent rate, or TCE rate, is a non- |
The following table sets forth a reconciliation of revenues to TCE rate (unaudited) for the periods presented: | ||||||||
Three months ended | ||||||||
(in | June 30, 2023 | June 30, 2022 | ||||||
Numerator: | ||||||||
Revenues | $ | 111,562,907 | $ | 76,823,722 | ||||
Voyage expenses | (298,383) | (775,545) | ||||||
Time charter equivalent | $ | 111,264,524 | $ | 76,048,177 | ||||
Pool adjustment* | 895,272 | (514,015) | ||||||
Time charter equivalent excluding pool adjustment* | $ | 112,159,796 | $ | 75,534,162 | ||||
Denominator: | ||||||||
Operating days | 2,175 | 1,920 | ||||||
TCE rate: | ||||||||
Time charter equivalent rate | $ | 51,156 | $ | 39,608 | ||||
TCE rate excluding pool adjustment* | $ | 51,568 | $ | 39,341 | ||||
* Adjusted for the effect of reallocations of pool profits in accordance with the pool participation agreements due to adjustments related to speed and consumption performance of the vessels operating in the Helios Pool. | |
(8) | We determine operating days for each vessel based on the underlying vessel employment, including our vessels in the Helios Pool, or the Company Methodology. If we were to calculate operating days for each vessel within the Helios Pool as a variable rate time charter, or the Alternate Methodology, our operating days and fleet utilization would be increased with a corresponding reduction to our TCE rate. Operating data using both methodologies is as follows: |
Three months ended | ||||||||
June 30, 2023 | June 30, 2022 | |||||||
Company Methodology: | ||||||||
Operating Days | 2,175 | 1,920 | ||||||
Fleet Utilization | 98.0 | % | 95.9 | % | ||||
Time charter equivalent rate | $ | 51,156 | $ | 39,608 | ||||
Alternate Methodology: | ||||||||
Operating Days | 2,218 | 1,988 | ||||||
Fleet Utilization | 100.0 | % | 99.3 | % | ||||
Time charter equivalent rate | $ | 50,164 | $ | 38,254 | ||||
We believe that the Company Methodology using the underlying vessel employment provides more meaningful insight into market conditions and the performance of our vessels. | |
(9) | Daily vessel operating expenses are calculated by dividing vessel operating expenses by calendar days for the relevant time period. |
In addition to the results of operations presented in accordance with
Three months ended | ||||||||
(in | June 30, 2023 | June 30, 2022 | ||||||
Net income | $ | 51,721,137 | $ | 24,847,720 | ||||
Unrealized gain on derivatives | (2,859,274) | (2,454,234) | ||||||
Adjusted net income | $ | 48,861,863 | $ | 22,393,486 | ||||
Earnings per common share—diluted | $ | 1.28 | $ | 0.62 | ||||
Unrealized gain on derivatives | (0.07) | (0.06) | ||||||
Adjusted earnings per common share—diluted | $ | 1.21 | $ | 0.56 | ||||
The following table presents our unaudited balance sheets as of the dates presented: | |||||||
As of | As of | ||||||
June 30, 2023 | March 31, 2023 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 155,548,745 | $ | 148,797,232 | |||
Trade receivables, net and accrued revenues | 4,373,141 | 3,282,256 | |||||
Due from related parties | 67,737,508 | 73,070,095 | |||||
Inventories | 2,377,543 | 2,642,395 | |||||
Prepaid expenses and other current assets | 11,425,045 | 8,507,007 | |||||
Total current assets | 241,461,982 | 236,298,985 | |||||
Fixed assets | |||||||
Vessels, net | 1,250,577,538 | 1,263,928,605 | |||||
Other fixed assets, net | 48,213 | 48,213 | |||||
Total fixed assets | 1,250,625,751 | 1,263,976,818 | |||||
Other non-current assets | |||||||
Deferred charges, net | 11,196,123 | 8,367,301 | |||||
Derivative instruments | 12,137,819 | 9,278,544 | |||||
Due from related parties—non-current | 24,200,000 | 20,900,000 | |||||
Restricted cash—non-current | 76,220 | 76,418 | |||||
Operating lease right-of-use assets | 152,309,717 | 158,179,398 | |||||
Available-for-sale securities | 11,307,104 | 11,366,838 | |||||
Other non-current assets | 364,483 | 469,227 | |||||
Total assets | $ | 1,703,679,199 | $ | 1,708,913,529 | |||
Liabilities and shareholders' equity | |||||||
Current liabilities | |||||||
Trade accounts payable | $ | 11,267,768 | $ | 10,807,376 | |||
Accrued expenses | 6,916,466 | 5,637,725 | |||||
Due to related parties | 242,778 | 168,793 | |||||
Deferred income | 278,128 | 208,558 | |||||
Current portion of long-term operating lease liabilities | 23,562,139 | 23,407,555 | |||||
Current portion of long-term debt | 53,217,116 | 53,110,676 | |||||
Dividends payable | 1,146,934 | 1,255,861 | |||||
Total current liabilities | 96,631,329 | 94,596,544 | |||||
Long-term liabilities | |||||||
Long-term debt—net of current portion and deferred financing fees | 591,226,676 | 604,256,670 | |||||
Long-term operating lease liabilities | 128,760,545 | 134,782,483 | |||||
Other long-term liabilities | 1,451,940 | 1,431,510 | |||||
Total long-term liabilities | 721,439,161 | 740,470,663 | |||||
Total liabilities | 818,070,490 | 835,067,207 | |||||
Commitments and contingencies | — | — | |||||
Shareholders' equity | |||||||
Preferred stock, | — | — | |||||
Common stock, | 516,544 | 516,306 | |||||
Additional paid-in-capital | 765,159,661 | 764,383,292 | |||||
Treasury stock, at cost; 11,262,061 and 11,247,863 shares as of June 30, 2023 and | (123,249,465) | (122,896,838) | |||||
Retained earnings | 243,181,969 | 231,843,562 | |||||
Total shareholders' equity | 885,608,709 | 873,846,322 | |||||
Total liabilities and shareholders' equity | $ | 1,703,679,199 | $ | 1,708,913,529 | |||
Conference Call
A conference call to discuss the results will be held on Wednesday, August 2, 2023 at 10:00 a.m. ET. The conference call can be accessed live by dialing 1-877-407-9716, or for international callers, 1-201-493-6779, and requesting to be joined into the Dorian LPG call. A replay will be available at 1:00 p.m. ET the same day and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the replay is 13740308. The replay will be available until August 9, 2023, at 11:59 p.m. ET.
A live webcast of the conference call will also be available under the investor relations section at www.dorianlpg.com. The information on our website does not form a part of and is not incorporated by reference into this release.
About Dorian LPG Ltd.
Dorian LPG is a liquefied petroleum gas shipping company and a leading owner and operator of modern VLGCs. Dorian LPG's fleet currently consists of twenty-six modern VLGCs, including four dual-fuel LPG vessels. Dorian LPG has offices in Stamford,
Forward-Looking and Other Cautionary Statements
The cash dividend referenced in this release is an irregular dividend. All declarations of dividends are subject to the determination and discretion of our Board of Directors based on its consideration of various factors, including the Company's results of operations, financial condition, level of indebtedness, anticipated capital requirements, contractual restrictions, restrictions in its debt agreements, restrictions under applicable law, its business prospects and other factors that our Board of Directors may deem relevant.
This press release contains "forward-looking statements." Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "may," "will," "should" and similar expressions are forward-looking statements. These statements are not historical facts but instead represent only the Company's current expectations and observations regarding future results, many of which, by their nature are inherently uncertain and outside of the Company's control. Where the Company expresses an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, the Company's forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by those forward-looking statements. The Company's actual results may differ, possibly materially, from those anticipated in these forward-looking statements as a result of certain factors, including changes in the Company's financial resources and operational capabilities and as a result of certain other factors listed from time to time in the Company's filings with the
Contact Information
Ted Young; Chief Financial Officer: Tel.: +1 (203) 674-9900 or IR@dorianlpg.com
Source: Dorian LPG Ltd.
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SOURCE Dorian LPG Ltd.
FAQ
What were Dorian LPG's financial results for Q1 FY2024?
What factors contributed to the increase in revenues?
Did Dorian LPG declare a dividend?
What is Dorian LPG's approach to fleet renewal?
