Dorian LPG Ltd. Q3 FY2026 earnings call

Dividend Information: Declared a $0.70 per share dividend totaling $29.9 million, marking the 18th dividend payment, with total dividends distributed over $725 million and $961 million in capital returned to shareholders since IPO. ### VLGC Market: Strong in the fourth calendar quarter with spot earnings above long-term mid-cycle, global liftings up 3% year-over-year to 36.8 million tons, and new record LPG exports highlighting LPG's attractiveness. ### Operational Progress: Completed 12 dry dockings in the past year, with one more scheduled, and most ships to be fitted with energy-saving devices and silicone paint for cost savings and emission reductions. To take delivery of a 93,000-cubic meter VLAC new-building from Hanwha in South Korea in March. ### Financials: Third quarter chartering results, TCE per available day, OpEx details, adjusted EBITDA, cash position, debt metrics, and plans for fleet growth, renewal, and dividend policy balancing dividends, deleveraging, and fleet investment.

For the third quarter, Dorian LPG achieved a TCE per available day of $50,333. The Helios Pool earned a TCE of $50,500 per day for its spot and COA voyages. Daily OpEx for the quarter was $9,558 (excluding dry docking-related expenses). Reported adjusted EBITDA for the quarter was $74.2 million. The company closed the quarter with $294.5 million of free cash, a debt balance of $516 million, with debt-to-total book capitalization at 32.2% and net debt-to-total cap at 13.8%. The VLGC market saw global liftings up 3% year-over-year to 36.8 million tons in the last quarter, with spot earnings strong in the fourth calendar quarter despite some volatility. Revenue contribution from VLGC operations is a key segment, with spot trading through the Helios Pool being a significant measure of performance.

Forward Booking: Will provide forward booking information later in the quarter as rate volatility is best managed with more quarter booked. ### Market Outlook: Tim Hansen is positive for 2026, expecting the rest of the year to be strong with continued strong activity in the VLGC market. ### New-Building Financing: Expect to enter into a loan facility to finance the $62 million cash payment for the new-building to be delivered in March 2026. ### Dividend Policy: Emphasizes irregular dividends subject to Board discretion as VLGC rates are not regular, with net income since June 2021 around $754 million and over $725 million in dividends returned to shareholders since then.

Market Volatility: VLGC rates are volatile, which can impact dividend policy and financial results. ### Geopolitical Factors: Geopolitical events can affect the world market for LPG and VLGCs, potentially impacting freight markets and cargo flows. ### Regulatory Changes: Delayed IMO changes provide more time for input and review but also uncertainty regarding future regulatory requirements for emissions and other aspects, which could impact fleet operations and costs.

Q: Broadly on the market, what's driving the counter-seasonal strength in spot rates?

A: Tim Hansen said it was a spur from lack of activity in November carrying over into the first quarter, with production levels keeping on increasing and surprising to the upside, including U.S. terminals being able to get cargoes out.

Q: Any specifics on the deployment of the fleet, like the Chaparral put on TCE into 2027?

A: Tim Hansen mentioned they don't give out specific rates but it was a deal done in October/November for a little more than a year's charter, and the market has since surprised on the upside in the spot market.

Q: Despite solid rates, why hasn't there been a significant increase in the average speed of the overall VLGC fleet?

A: Tim Hansen said most non-LPG fuel ships are capped by environmental regulations and reductions of power done years back, with maybe 1-1.5 Knots leeway, and older ships can't speed up much.

Q: Could you talk further on energy saving devices and their impact on consumption and IRR?

A: John Lycouris said energy-saving devices usually provide around 5% improvement in energy savings, silicone paints also provide similar, with a generally quick payback within a year, though payback on scrubbers is longer.