• Free Cash: $314.5 million as of December 31, 2024.
• Debt Balance: $570.3 million at quarter end.
• Debt to Total Book Capitalization: 34.8%.
• Net Debt to Total Capitalization: 15%.
• All-in Cost of Debt: Approximately 4.7%.
• Cash Cost per Day: Estimated at $26,000 per day for the coming year, excluding capital expenditures for dry docking.
• TCE Revenue per Available Day: Approximately $36,100 for the third quarter.
• Helios Pool TCE per Day: $33,200 for spot and COA voyages.
• Daily OpEx: $10,161 excluding drydocking related expenses.
• Total G&A for the Quarter: $7.5 million.
• Cash G&A: $5.8 million.
• Adjusted EBITDA: $45.2 million for the quarter.
• Total Cash Interest Expense: $6.9 million for the quarter.
• Dry Docking Cash Outlays Year-to-Date: Approximately $12.5 million.
• Irregular Dividend: $0.70 per share, totaling roughly $30 million.
• Total Dividends Paid Since September 2021: $15.20 per share.
• Total Cash Returned to Shareholders: Approximately $850 million.

• Warning! GuruFocus has detected 4 Warning Sign with ARCB.

Release Date: January 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Dorian LPG Ltd (NYSE:LPG) declared a $0.70 per share dividend, reflecting confidence in the market and aligning shareholder returns with market realities.
• The company achieved fuel savings higher than 10% from energy-saving devices and silicon paints, resulting in payback periods of less than a year.
• Dorian LPG Ltd (NYSE:LPG) reported a strong balance sheet with $314.5 million in free cash and a debt to total book capitalization of 34.8%.
• The company is well-positioned for future opportunities with a strong cash position and prudent debt management.
• Dorian LPG Ltd (NYSE:LPG) is preparing its fleet for emerging ammonia projects, with several vessels retrofitted to be ammonia capable.

Negative Points

• Free cash decreased sequentially from the previous quarter, reflecting cash flow challenges.
• The company faces potential geopolitical risks, including developments in Ukraine, Iran, and the Middle East, which may impact the market.
• Dorian LPG Ltd (NYSE:LPG) anticipates a 30 basis point increase in debt cost due to the roll-off of low-cost hedges.
• The freight market experienced a soft quarter without the expected winter spike, impacting revenue potential.
• High inventory levels and tepid demand for petrochemicals in the Far East limited market booms, affecting trade dynamics.

Q & A Highlights

Q: How does Dorian LPG prioritize capital allocation moving into 2025, given market uncertainties and potential moderating freight rates? A: John Hadjipateras, Chairman and CEO, stated that the company will continue with its current strategy, focusing on prudent debt management, maintaining a strong cash position, and distributing dividends. The company is well-positioned for potential market opportunities due to its debt structure and cash reserves.

Q: With 107 VLGCs on order, how does Dorian LPG view the demand for these vessels, and can the market absorb this capacity? A: John Hadjipateras expressed confidence that the increase in LPG trade and potential ammonia trade will be sufficient to absorb the new vessel deliveries expected in 2026 and 2027. He noted that the ordering boom was driven by optimism in developing ammonia trade.

Q: What percentage of available days has Dorian LPG fixed for Q1, and at what rates? A: Theodore Young, CFO, mentioned that the company has fixed just over 53% of available days for the quarter and estimates achieving a TCE in excess of $37,000 per day.

Q: How does Dorian LPG view the trade-off between share repurchases and dividend distributions, especially given the current discount to NAV? A: John Hadjipateras indicated that share repurchases are not off the table and that the company is monitoring stock prices closely, suggesting potential acceleration in share repurchase activities.

Q: How do VLECs impact the market, and are they fully contracted for ethane? A: John Hadjipateras noted that the VLEC trade is expanding independently and that these vessels are likely to be absorbed within their market, reducing the likelihood of them impacting the VLGC market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.