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Stamford, Conn. - February 01, 2023
Dorian LPG Ltd. (NYSE: LPG) (the "Company," "Dorian LPG," "we," "us," and "our"), a leading owner and operator of modern very large gas carriers ("VLGCs"), today reported its financial results for the three months ended December 31, 2022, and announced that its Board of Directors has declared an irregular cash dividend of $1.00 per share of the Company's common stock, returning over $40.3 million of capital to shareholders. The dividend is payable on or about February 28, 2023 to all shareholders of record as of the close of business on February 15, 2023.
Key Recent Developments
• Declared an irregular cash dividend totaling over $40.3 million.
Highlights for the Third Quarter Fiscal Year 2023
• Revenues of $103.3 million.
• Time Charter Equivalent ("TCE")(1) rate per operating day for our fleet of $52,768.
• Net income of $51.3 million, or $1.27 earnings per diluted share ("EPS"), and adjusted net income(1) of $52.0 million, or $1.29 adjusted earnings per diluted share ("adjusted EPS").(1)
• Adjusted EBITDA(1) of $76.2 million.
• Paid an irregular cash dividend of $1.00 per share of our common stock to all shareholders of record as of the close of business on November 7, 2022.
• Committed to the installation of scrubbers on three additional vessels, which are expected to be completed during calendar year 2023.
• Exercised the option to extend the time charter-in of the 2020-built Future Diamond to our fleet with an expiration during the first calendar quarter of 2025.
• Extended the time charter-out of the 2015-built Concorde and the 2014-built Corsair with expirations during the first and fourth calendar quarters of 2024, respectively.
(1) TCE, adjusted net income, adjusted EPS and adjusted EBITDA are non-U.S. GAAP measures. Refer to the reconciliation of revenues to TCE, net income to adjusted net income, EPS to adjusted EPS and net income to adjusted EBITDA included in this press release under the heading "Financial Information."
John C. Hadjipateras, Chairman, President and Chief Executive Officer of the Company, commented, "We were pleased to deliver results for the quarter led by strong TCEs. Our chartering performance drove good cash generation and solid forward bookings, which enabled us to pay a dividend of $1.00 per share, increasing our total dividends declared in the last twelve months to $5.50 per share and cumulative cash returns to shareholders of over $535 million since our IPO. We remain positive on our core business and look forward to four additional VLGCs joining our fleet during calendar year 2023 and additional earnings capacity following scrubber installations on three additional vessels. We closely monitor evolving technologies and opportunities in our sector as well as potentially attractive investments in related areas. As always, I acknowledge, with gratitude, the good work of Dorian's people working at sea and on shore".
Third Quarter Fiscal Year 2023 Results Summary
Net income amounted to $51.3 million, or $1.27 per diluted share, for the three months ended December 31, 2022, compared to $16.6 million, or $0.41 per diluted share, for the three months ended December 31, 2021.
Adjusted net income amounted to $52.0 million, or $1.29 per diluted share, for the three months ended December 31, 2022, compared to adjusted net income of $13.5 million, or $0.34 per diluted share, for the three months ended December 31, 2021. Adjusted net income for the three months ended December 31, 2022 is calculated by adjusting net income for the same period to exclude an unrealized loss on derivative instruments of $0.7 million. Please refer to the reconciliation of net income to adjusted net income, which appears later in this press release.
The $38.5 million increase in adjusted net income for the three months ended December 31, 2022, compared to the three months ended December 31, 2021, is primarily attributable to increases of $34.7 million in revenues and $1.1 million in interest income, a $2.3 million favorable change in realized gain/(loss) on derivatives, a $1.3 million favorable change in other gain/(loss) and net decreases of $0.9 million in depreciation and amortization, $0.4 million in voyage expenses and $0.3 million in vessel operating expenses, partially offset by increases of $1.2 million in interest and finance costs, $1.0 million in general and administrative expenses, and $0.3 million in charter hire expenses.
The TCE rate per operating day for our fleet was $52,768 for the three months ended December 31, 2022, a 57.5% increase from $33,508 for the same period in the prior year, driven by higher spot rates despite higher bunker prices. Please see footnote 7 to the table in "Financial Information" below for information related to how we calculate TCE. Total fleet utilization (including the utilization of our vessels deployed in the Helios Pool) decreased from 98.5% during the three months ended December 31, 2021 to 97.8% during the three months ended December 31, 2022.
Vessel operating expenses per day increased to $9,739 for the three months ended December 31, 2022 compared to $9,423 in the same period in the prior year. Please see "Vessel Operating Expenses" below for more information.
Revenues
Revenues, which represent net pool revenues—related party, time charters and other revenues, net, were $103.3 million for the three months ended December 31, 2022, an increase of $34.7 million, or 50.6%, from $68.6 million for the three months ended December 31, 2021 primarily due to an increase in average TCE rates, partially offset by a decrease in fleet utilization. Average TCE rates increased by $19,260 per operating day from $33,508 for the three months ended December 31, 2021 to $52,768 for the three months ended December 31, 2022, primarily due to higher spot rates despite higher bunker prices. The Baltic Exchange Liquid Petroleum Gas Index, an index published daily by the Baltic Exchange for the spot market rate for the benchmark Ras Tanura-Chiba route (expressed as U.S. dollars per metric ton), averaged $119.106 during the three months ended December 31, 2022 compared to an average of $59.252 for the three months ended December 31, 2021. The average price of very low sulfur fuel oil (expressed as U.S. dollars per metric ton) from Singapore and Fujairah increased from $609 during the three months ended December 31, 2021, to $676 during the three months ended December 31, 2022. Our fleet utilization decreased from 98.5% during the three months ended December 31, 2021 to 97.8% during the three months ended December 31, 2022.
Charter Hire Expenses
Charter hire expenses for the vessels chartered in from third parties were $5.2 million and $4.9 million for the three months ended December 31, 2022 and 2021, respectively. The increase of $0.3 million, or 6.1%, was mainly caused by an increase in the number of chartered-in days from 169 for the three months ended December 31, 2021 to 184 for the three months ended December 31, 2022.
Vessel Operating Expenses
Vessel operating expenses were $17.9 million during the three months ended December 31, 2022, or $9,739 per vessel per calendar day, which is calculated by dividing vessel operating expenses by calendar days for the relevant time-period for the technically-managed vessels that were in our fleet. The decrease of $0.3 million, or 1.6% from $18.2 million for the three months ended December 31, 2021 was due to a reduction of calendar days for our fleet from 1,932 during the three months ended December 31, 2021 to 1,840 during the three months ended December 31, 2022, driven by the sale of Captain Nicholas ML prior to the three months ended December 31, 2022. The increase of $315 per vessel per calendar day, from $9,423 for the three months ended December 31, 2021 to $9,739 per vessel per calendar day for the three months ended December 31, 2022 was primarily the result of increases of $115 per vessel per calendar day in operating expenses related to lubricants, $110 per vessel per calendar day in operating expenses related to repairs and maintenance, and spares and stores, and $65 per vessel per calendar day in operating expenses related to crew wages and related costs, for the three months ended December 31, 2022.
General and Administrative Expenses
General and administrative expenses were $6.9 million for the three months ended December 31, 2022, an increase of $1.0 million, or 18.4%, from $5.9 million for the three months ended December 31, 2021. This increase was driven by $0.2 million in financial support for the families of our Ukrainian and Russian seafarers affected by the events in Ukraine and increases of $0.4 million and $0.4 million in stock-based compensation and other general and administrative expenses, respectively, for the three months ended December 31, 2022.
Interest and Finance Costs
Interest and finance costs amounted to $8.6 million for the three months ended December 31, 2022, an increase of $1.2 million, or 16.5%, from $7.4 million for the three months ended December 31, 2021. The increase of $1.2 million during this period was mainly due to an increase of $3.1 million in interest incurred on our long-term debt, partially offset by a decrease of $1.5 million in amortization of financing costs resulting from the refinancing of Commander and Constellation during the three months ended December 31, 2021, and an increase in capitalized interest of $0.3 million. The increase in interest on our long-term debt was driven by an increase in average interest rates due to rising SOFR on our floating-rate long-term debt, and an increase in average indebtedness, excluding deferred financing fees, from $576.0 million for the three months ended December 31, 2021 to $645.0 million for the three months ended December 31, 2022. The increase in average indebtedness is due to the 2022 Debt Facility refinancing prior to the three months ended December 31, 2022. As of December 31, 2022, the outstanding balance of our long-term debt, net of deferred financing fees of $6.3 million, was $629.3 million.
Unrealized Gain/(Loss) on Derivatives
Unrealized loss on derivatives amounted to $0.7 million for the three months ended December 31, 2022, compared to a gain of $3.1 million for the three months ended December 31, 2021. The $3.8 million swing is attributable to reductions in notional amounts and an unfavorable change in forward SOFR yield curves (forward LIBOR curves in the prior period).
Realized Gain/(Loss) on Derivatives
Realized gain on derivatives amounted to $1.4 million for the three months ended December 31, 2022, compared to a realized loss of $0.9 million for the three months ended December 31, 2021. The favorable $2.3 million difference is due to an increase in floating SOFR resulting in the realized gain on our interest rate swaps.
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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-two modern VLGCs. Dorian LPG has offices in Stamford, Connecticut, USA; Copenhagen, Denmark; and Athens, Greece.
Dorian LPG Ltd. press release
