Dorian LPG Ltd. (NYSE: LPG) (the “Company,” “Dorian LPG,” “we,” and “our”), a leading owner and operator of modern very large gas carriers (“VLGCs”), today reported its financial results for the three months and fiscal year ended March 31, 2024.

Key Recent Development

• Declared an irregular dividend totaling $40.6 million to be paid on or about May 30, 2024.

Highlights for the Fourth Quarter Ended March 31, 2024

• Revenues of $141.4 million.

• Time charter equivalent (“TCE”)⁽¹⁾ per operating day rate for our fleet of $72,202.

• Net income of $79.2 million, or $1.96 earnings per diluted share (“EPS”), and adjusted net income⁽¹⁾ of $77.6 million, or $1.91 adjusted diluted earnings per share (“adjusted EPS”)⁽¹⁾.

• Adjusted EBITDA⁽¹⁾ of $105.0 million.

• Declared and paid an irregular dividend totaling $40.6 million.

Highlights for the Fiscal Year Ended March 31, 2024

• Revenues of $560.7 million.

• TCE⁽¹⁾ per operating day rate for our fleet of $65,986.

• Net income of $307.4 million, or $7.60 EPS, and adjusted net income⁽¹⁾ of $307.4 million, or $7.60 adjusted EPS⁽¹⁾.

• Adjusted EBITDA⁽¹⁾ of $417.4 million.

• Declared and paid four irregular dividends totaling $162.2 million.

• Entered into the 2023 A&R Debt Facility (amending and restating the 2022 Debt Facility) to upsize the revolving credit facility amount to $50.0 million and added a new, uncommitted accordion term loan facility, in an aggregate principal amount of up to $100.0 million.
• Entered into an agreement for a newbuilding Very Large Gas Carrier / Ammonia Carrier expected to be delivered in the third calendar quarter of 2026 for which we made the first $23.8 million installment payment in January 2024.

John Hadjipateras, Chairman, President, and Chief Executive Officer of the Company, commented, “We generated a record-breaking fiscal year 2024 TCE of nearly $66,000 per operating day, yielding our highest ever net income and a more than 30% return on equity. Including the $1.00 per share dividend recently declared, we will have returned over $730 million to shareholders since our IPO. The challenges from market volatility and geopolitical events continued in the last quarter as we remain focused on the quality of our service to customers and the strength of our balance sheet. I am grateful to and commend our seafarers and shore staff for their commitment to our mission to provide safe, reliable, clean, and trouble-free transportation.”

Fourth Quarter Fiscal Year 2024 Results Summary

Our net income amounted to $79.2 million, or $1.96 per share, for the three months ended March 31, 2024, compared to net income of $76.0 million, or $1.89 per share, for the three months ended March 31, 2023.

Our adjusted net income amounted to $77.6 million, or $1.91 per share, for the three months ended March 31, 2024, compared to adjusted net income of $78.1 million, or $1.94 per share, for the three months ended March 31, 2023. We have adjusted our net income for the three months ended March 31, 2024 for an unrealized gain on derivative instruments of $1.7 million and we adjusted our net income for the three months ended March 31, 2023 for an unrealized loss on derivative instruments of $2.1 million. Please refer to the reconciliation of net income to adjusted net income, which appears later in this press release.

The $0.5 million decrease in adjusted net income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 is primarily attributable to increases of $5.5 million in charter hire expenses, $1.9 million in depreciation and amortization, $1.4 million in vessel operating expenses, $1.0 million in general and administrative expenses, and $0.5 million in interest and finance costs, partially offset by increases of $7.8 million and $1.4 million in revenues and interest income and a decrease of $0.6 million in voyage expenses.

The TCE rate for our fleet was $72,202 for the three months ended March 31, 2024, a 6.0% increase from the $68,135 TCE rate for the same period in the prior year, as further described in “Revenues” below. Please see footnote 7 to the table in “Financial Information” below for other information related to how we calculate TCE. Total fleet utilization (including the utilization of our vessels deployed in the Helios Pool) decreased from 95.7% for the three months ended March 31, 2023 to 87.7% for the three months ended March 31, 2024.

Vessel operating expenses per day increased to $10,699 during the three months ended March 31, 2024 from $10,528 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 earned by our vessels, were $141.4 million for the three months ended March 31, 2024, an increase of $7.8 million, or 5.8%, from $133.6 million for the three months ended March 31, 2023. The increase was primarily attributable to increases in average TCE rates and fleet size, partially offset by a decrease in fleet utilization. TCE rates of $72,202 for the three months ended March 31, 2024 increased by $4,067 from $68,135 for the three months ended March 31, 2023. Our available days increased from 2,034 for the three months ended March 31, 2023 to 2,228 for the three months ended March 31, 2024 due to additional vessels in our fleet. Fleet utilization decreased from 95.7% during the three months ended March 31, 2023 to 87.7% during the three months ended March 31, 2024.

Charter Hire Expenses

Charter hire expenses for vessels time chartered-in from third parties were $12.7 million for three months ended March 31, 2024 compared to $7.2 million for the three months ended March 31, 2023. The increase of $5.5 million, or 75.9%, was mainly cause by an increase in time chartered-in days from 241 for the three months ended March 31, 2023 to 364 for the three months ended March 31, 2024.

Vessel Operating Expenses

Vessel operating expenses were $20.4 million during the three months ended March 31, 2024, or $10,699 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. This was a slight increase of $1.4 million, or 7.8%, from $19.0 million, or $10,528 per vessel per calendar day, for the three months ended March 31, 2023. The increase was partially due to an increase in operating expenses per vessel per calendar day along with an increase of calendar days for our fleet from 1,801 during the three months ended March 31, 2023 to 1,911 days during the three months ended March 31, 2024 resulting from the delivery of our dual-fuel VLGC Captain Markos in March 2023. The increase of $171 per vessel per calendar day, from $10,528 for the three months ended March 31, 2023 to $10,699 per vessel per calendar day for the three months ended March 31, 2024 was primarily driven by non-capitalizable drydock-related operating expenses. Excluding those amounts, daily operating expenses decreased by $257 from the three months ended March 31, 2023, which was mainly due to a decrease of $237 per vessel per calendar day for crew related costs.

Depreciation and Amortization

Depreciation and amortization was $17.6 million for the three months ended March 31, 2024, an increase of $1.9 million, or 12.1%, from $15.7 million for the three months ended March 31, 2023, primarily resulting from the delivery of our Dual-fuel ECO VLGC Captain Markos in March 2023.

General and Administrative Expenses

General and administrative expenses were $8.5 million for the three months ended March 31, 2024, an increase of $1.0 million, or 13.2%, from $7.5 million for the three months ended March 31, 2023. This increase was mainly attributed to an increase of $1.2 million in stock-based compensation expense (largely due to higher stock price on the grant date in fiscal year 2024 compared to fiscal year 2023), partially offset by a reduction of $0.2 million in other general and administrative expenses.

Interest and Finance Costs

Interest and finance costs amounted to $9.7 million for the three months ended March 31, 2024, an increase of $0.5 million, or 5.1%, from $9.2 million for the three months ended March 31, 2023. The increase of $0.5 million during the three months ended March 31, 2024 was mainly due to a decrease of $0.4 million in capitalized interest and an increase of $0.3 million in interest incurred on our long-term debt, partially offset by decreases of $0.1 million in amortization of financing fees and $0.1 million of loan expenses. 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. Average indebtedness, excluding deferred financing fees, decreased from $630.8 million for the three months ended March 31, 2023 to $619.9 million for the three months ended March 31, 2024. As of March 31, 2024, the outstanding balance of our long-term debt was $610.5 million.

Unrealized Gain/(Loss) on Derivatives

Unrealized gain on derivatives amounted to approximately $1.7 million for the three months ended March 31, 2024, compared to loss of $2.1 million for the three months ended March 31, 2023. The $3.8 million favorable change is primarily attributable to changes in forward SOFR yield curves and reductions in notional amounts.

Realized Gain on Derivatives

Realized gain on derivatives was $1.8 million for the three months ended March 31, 2024 and was relatively unchanged from the three months ended March 31, 2023.

Fiscal Year 2024 Results Summary

Our net income amounted to $307.4 million, or $7.60 per share, for the year ended March 31, 2024, compared to net income of $172.4 million, or $4.29 per share, for the year ended March 31, 2023.

Our adjusted net income amounted to $307.4 million, or $7.60 per share, for the year ended March 31, 2024, compared to adjusted net income of $169.7 million, or $4.22 per share, for the year ended March 31, 2023. We have adjusted our net income for the year ended March 31, 2023 for an unrealized gain on derivatives of $2.8 million and we have adjusted our net income for the year ended March 31, 2024 for an unrealized gain on derivative instruments of less than $0.1 million and Please refer to the reconciliation of net income to adjusted net income, which appears later in this press release.

The favorable change of $137.7 million in adjusted net income for the year ended March 31, 2024 compared to the year ended March 31, 2023 is primarily attributable to increases in revenues of $171.0 million, interest income of $5.7 million a favorable change of $3.7 million in realized gain on derivatives, and a decrease of $0.9 million in voyage expenses. These were partially offset by increases of $20.5 million in charter hire expenses from our chartered-in VLGCs, $9.0 million in vessel operating expenses, $6.9 million in general and administrative expenses, $5.3 million in depreciation and amortization, and $2.7 million in interest and finance costs.

The TCE rate for our fleet was $65,986 for the year ended March 31, 2024, a 30.8% increase from the $50,462 TCE rate from the prior year, as further described in “Revenues” below. Please see footnote 7 to the table in “Financial Information” below for other information related to how we calculate TCE. Total fleet utilization (including the utilization of our vessels deployed in the Helios Pool) decreased from 95.0% in the year ended March 31, 2023 to 93.9% in the year ended March 31, 2024.

Vessel operating expenses per day increased to $10,469 in the year ended March 31, 2024 from $9,793 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 $560.7 million for the year ended March 31, 2024, an increase of $171.0 million, or 43.9%, from $389.7 million for the year ended March 31, 2023. The increase is primarily attributable to increased average TCE rates and fleet size, partially offset by a slight decrease in fleet utilization. Average TCE rates of $65,986 for the year ended March 31, 2024 increased by $15,524 from $50,462 for the year ended March 31, 2023, primarily due to higher spot rates and lower 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 $104.948 during the year ended March 31, 2024 compared to an average of $87.009 for the year ended March 31, 2023. The average price of very low sulfur fuel oil (expressed as U.S. dollars per metric ton) from Singapore and Fujairah decreased from $773 during the year ended March 31, 2023, to $623 during the year ended March 31, 2024. Our available days increased from 8,053 for the year ended March 31, 2023 to 9,003 for the year ended March 31, 2024 due to three additional vessels in our fleet. Our fleet utilization decreased from 95.0% during the year ended March 31, 2023 to 93.9% during the year ended March 31, 2024.

Charter Hire Expenses

Charter hire expenses for the vessels chartered in from third parties were $43.7 million for the year ended March 31, 2024 compared to $23.2 million for the year ended March 31, 2023. The increase of $20.5 million, or 88.3%, was mainly caused by an increase in time chartered-in days from 791 for the year ended March 31, 2023 to 1,512 for the year ended March 31, 2024, partially offset by a slight decline in time charter hire expense per day.

Vessel Operating Expenses

Vessel operating expenses were $80.5 million during the year ended March 31, 2024, or $10,469 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. This was an increase of $9.0 million, or 12.5%, from $71.5 million, or $9,793 per vessel per calendar day, for the year ended March 31, 2023. The increase was partially due to an increase in operating expenses per vessel per calendar day along with an increase of calendar days for our fleet from 7,301 during the year ended March 31, 2023 to 7,686 days during the year ended March 31, 2024 resulting from the delivery of our Dual-fuel ECO VLGC Captain Markos from Kawasaki Heavy Industries in March 2023. The increase of $676 per vessel per calendar day, from $9,793 for the year ended March 31, 2023 to $10,469 per vessel per calendar day for the year ended March 31, 2024 was primarily the result of increases per vessel per calendar day of $391 for spares and stores, $231 for repairs and maintenance, and $191 for miscellaneous operating expenses, partially offset by a decrease of $166 per vessel per calendar day for crew related costs. Of the $676 per day increase in daily operating expense, $307 per vessel per calendar day was related to non-capitalizable drydock-related operating expenses. Excluding those amounts, daily operating expenses increased by $369 from the year ended March 31, 2023.

Depreciation and Amortization

Depreciation and amortization was $68.7 million for the year ended March 31, 2024, an increase of $5.3 million, or 8.3%, from $63.4 million for the year ended March 31, 2023, primarily resulting from the full year effect of the delivery of our Dual-fuel ECO VLGC Captain Markos in March 2023.

General and Administrative Expenses

General and administrative expenses were $39.0 million for the year ended March 31, 2024, an increase of $6.9 million, or 21.6%, from $32.1 million for the year ended March 31, 2023, primarily driven by increases of a) $4.1 million in stock-based compensation expense (largely due to higher stock price on the grant date in fiscal year 2024 compared to fiscal year 2023), b) $1.8 million in cash bonuses, and c) $1.5 million in employee-related costs and benefits, partially offset by a reduction of $0.5 million in other general and administrative expenses.

Interest and Finance Costs

Interest and finance costs amounted to $40.5 million for the year ended March 31, 2024, an increase of $2.7 million from $37.8 million for the year ended March 31, 2023. The increase of $2.7 million during the year ended March 31, 2024 was driven by increases of $6.6 million in interest incurred on our long-term debt and a decrease of $1.4 million in capitalized interest, partially offset by decreases of $4.4 million in amortization of financing costs and $0.9 in loan expenses and bank charges. 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, partially offset by a decrease in average indebtedness, excluding deferred financing fees, from $649.0 million for the year ended March 31, 2023 to $639.9 million for the year ended March 31, 2024. As of March 31, 2024, the outstanding balance of our long-term debt, excluding deferred financing fees, was $610.5 million.

Unrealized Gain on Derivatives

Unrealized gain on derivatives amounted to less than $0.1 million for the year ended March 31, 2024 compared to $2.8 million for the year ended March 31, 2023. The $2.8 million difference is primarily attributable to changes in forward SOFR yield curves and reductions in notional amounts.

Realized Gain on Derivatives

Realized gain on derivatives was $7.5 million for the year ended March 31, 2024, compared to $3.8 million for the year ended March 31, 2023. The favorable $3.7 million difference is largely due to an increase in floating SOFR resulting in the realized gain on our interest rate swaps.

Fleet

The following table sets forth certain information regarding our fleet as of May 17, 2024. We classify vessel employment as either Time Charter, Pool or Pool-TCO.

Market Outlook Update

The largest change in the LPG market in the first quarter of calendar year 2024 (“Q1 2024”) occurred in the U.S., where cold weather in January and February increased domestic demand for propane and, at one point, also limited production growth. As a result, propane prices rose from an average of 36% of West Texas Intermediate (“WTI”) in the fourth quarter of calendar year 2023 (“Q4 2023”) to nearly 50% in February 2024. U.S. LPG exports remained above 5 million metric tons (“MM MT”) per month, leading inventory levels to fall from above the 5-year average levels to around the average level seen over the last 5 years.

This rise in U.S. Mt Belvieu prices, at the same time as limited change in Far Eastern prices due to milder winter conditions and continued subdued petrochemical demand, as reported by industry consultants NGLStrategy, in Q1 2024, led to a narrowing of the U.S.-Asia arbitrage. Freight rates were consequently squeezed, with the average Baltic Freight rate falling from over $132 per metric ton in Q4 2023 to $68 per metric ton in Q1 2024. At times, the AG-Japan rate fell below $60 per metric ton.

With the rising temperatures seen towards the second half of the quarter in the U.S., production levels have continued to grow, with NGLs remaining optimized for U.S. producers where possible. Subsiding domestic demand as a result of the milder temperatures, afforded higher availability of product for export and inventory levels to build. As a result, Mt Belvieu propane prices have fallen from the high seen in February 2024 where prices reached an average of $473 per metric ton, to an average of 41% of WTI in March 2024, or $419 per metric ton.

Unrest in the Middle East, including Suez Canal limitations, maintained the strength in crude oil prices along with the continuation of additional voluntary production cuts in Saudi Arabia. Brent crude oil averaged $85 per metric ton in Q1 202, similar to the level seen in the third quarter of calendar year 2023 and Q4 2023.

Petrochemical demand remained subdued globally, however, naphtha margins in Europe finally returned to positive territory in February 2024 after remaining under pressure and at times heavily negative for most of 2023. Naphtha margins in Asia also improved but remained at an average of ($121) per metric ton in Q1 2024, compared to ($143) per metric ton in Q4 2023. Propane continued to be advantageous as a feedstock in flexible steam crackers for the production of ethylene in both the East and West. The propane-naphtha spread in NW Europe widened to ($146) per metric ton encouraging higher consumption of propane in steam crackers.

LPG imports for steam cracking in Asia reached 2.8 MM MT in Q1 2024 according to NGLStrategy models, an increase of nearly 200,000 tons from the previous quarter, and nearly 1 MM MT higher than seen in the first quarter of calendar 2023. LPG imports for steam cracking in NW Europe also rose in Q1 2024 by around 300,000 tons from the previous quarter. According to NGLStrategy, supply chain logistics at times saw some ethylene producers utilizing naphtha over LPG in NW Europe.

PDH margins remained under pressure with over-capacity and sluggish growth in China for olefins and polyolefins. A further two new PDH plants started operating in China in Q1 2024, however, propane demand for PDH operations in China decreased from 3.4 MM MT in Q4 2023 to 3.1 MM MT in Q1 2024.

Although a further 10 new VLGCs were added during Q1 2024, which initially exacerbated the freight market weakness caused by the narrower East West arb as note above. After declining steadily through February, VLGC rates steadily increased from March through April and May to today’s healthy levels. The average age of the global fleet is now approximately 10.7 years old. Currently the VLGC orderbook stands at approximately 45 VLGCs or 12% of the global fleet, excluding the VLAC (Very Large Ammonia Carriers) and VLEC (Very Large Ethane Carriers) orderbook which totals 84 vessels with potential capability to carry LPG as a product.

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 (unaudited) and other information for the periods presented:

In addition to the results of operations presented in accordance with U.S. GAAP, we provide adjusted net income and adjusted EPS. We believe that adjusted net income and adjusted EPS are useful to investors in understanding our underlying performance and business trends. Adjusted net income and adjusted EPS are not a measurement of financial performance or liquidity under U.S. GAAP; therefore, these non-U.S. GAAP financial measures should not be considered as an alternative or substitute for U.S. GAAP. The following table reconciles (unaudited) net income and EPS to adjusted net income and adjusted EPS, respectively, for the periods presented:

The following table presents our unaudited balance sheets as of the dates presented:

Conference Call

A conference call to discuss the results will be held on Wednesday, May 22, 2024 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 live webcast of the conference call will also be available under the investor section at www.dorianlpg.com.

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 13746707. The replay will be available until May 29, 2024, at 11:59 p.m. ET.

About Dorian LPG Ltd.

Dorian LPG is a leading owner and operator of modern Very Large Gas Carriers (“VLGCs”) that transport liquefied petroleum gas globally. Our fleet currently consists of twenty-five modern VLGCs, including twenty ECO VLGCs and four dual-fuel ECO VLGCs. Dorian LPG has offices in Stamford, Connecticut, USA; Copenhagen, Denmark; and Athens, Greece.

Visit our website at www.dorianlpg.com. Information on the Company’s website does not constitute a part of and is not incorporated by reference into this press release.

Forward-Looking & Other Cautionary Statements

The cash dividends referenced in this release are irregular dividends. 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 U.S. Securities and Exchange Commission. For more information about risks and uncertainties associated with Dorian LPG’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Dorian LPG’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. The Company does not assume any obligation to update the information contained in this press release.

Source: Dorian LPG Ltd.

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