管理層發言
Good morning, and welcome to the Dorian LPG Third Quarter 2026 Earnings Conference Call. As a reminder, this conference is being recorded. Additionally, a live audio webcast of today's conference call is available on Dorian LPG's website, which is www.dorianlpg.com. I would now like to turn the conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.
Thank you, Raisa. Good morning, everyone, and thank you all for joining us for our third quarter 2026 results conference call. With me today are John Hadjipateras, Chairman, President and CEO of Dorian LPG Limited; John Lycouris, Head of Energy Transition; and Tim Hansen, Chief Commercial Officer. As a reminder, this conference call webcast and a replay of this call will be available through February 12, 2026. Many of our remarks today contain forward-looking statements based on current expectations. These statements may often be identified with words such as expect, anticipate, believe, or similar indications of future expectations. Although we believe that such forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors as well as general economic conditions. Should one or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those we express today. Additionally, let me refer you to our unaudited results for the period ended December 31, 2025, that were filed this morning on Form 10-Q. In addition, please refer to our previous filings on Form 10-K, where you'll find risk factors that could cause actual results to differ materially from those forward-looking statements. Finally, I would encourage you to refer to the investor highlight slides posted this morning on our website during our remarks. With that, I'll turn over the call to John Hadjipateras.
Thanks, Ted. Good morning, and thank you for joining us. Before my colleagues provide you with detailed comments on our financial results, our market outlook, and our operational progress, I'd like to highlight the following: our dividend declared last week of $0.70 per share totaling $29.9 million will be our 18th dividend payment, bringing total dividends distributed to over $725 million and total capital of $961 million returned to shareholders since our IPO. The VLGC market remained strong in the fourth calendar quarter with spot earnings well above long-term mid-cycle despite some volatility. Indeed, as we speak, demand and freight rates continue to be strong. Last quarter, global liftings were up 3% year-over-year, measuring 36.8 million tons. The new record level of LPG exports highlights the attractiveness of LPG as an energy source for domestic, commercial and industrial uses. Tim will elaborate on the VLGC market and our outlook. On the operational side, we completed 12 dry dockings this past year and have one more scheduled for this month, which will bring to completion the docking cycle for our fleet. After this last docking cycle, most of our ships will have been fitted with energy-saving devices and silicone paint, resulting in meaningful cost savings and emission reductions. We have a 93,000-cubic meter VLAC new-building delivering in March from Hanwha in South Korea. John L. will give you more information on the progress made in our docking program, ammonia retrofits, and new-building delivery as well as the regulatory environment. Ted will now present our quarterly financial overview. Ted?
Thanks, John. Today, I will discuss our unaudited third quarter results, capital allocation, and our financial position and liquidity. For details on our third quarter results, please refer to the investor highlight slides posted this morning on our website. I will be using terms like TCE, available days, and adjusted EBITDA, and you can find their definitions in our filings. In terms of our chartering results for the third quarter, we achieved a TCE per available day of $50,333. October was our strongest month, followed by a slight decline in November and early December. Tim will provide further insights on the current improved rate environment. The Helios Pool conducts all our spot trading, and its results best reflect our spot chartering performance. For the December 31 quarter, the Helios Pool recorded a TCE of $50,500 per day from its spot and COA voyages. You can find on Page 4 of our investor highlights that we have three vessels on time charters in the pool, which gives us about 90% spot exposure for the 29 vessels in the Helios Pool. We will share forward booking information later this quarter to aid the investment community, as managing rate volatility is better accomplished with more booked data. Our daily OpEx for the quarter was $9,558, excluding expenses related to dry docking, which remained largely unchanged from the previous quarter. We are pleased with the reduced OpEx, excluding dry docking, over the last two quarters. Our time chartered-in expense for the TCN vessels reached $18.2 million, in line with our guidance, translating to an average charter hire of around $33,000 per day, reflecting full quarter contributions from the Crystal Asteria and the BW Tokyo. The Tokyo is jointly chartered with MOL Energia and is deployed in the Helios Pool, so we report 100% of the revenues and time charter expenses in our financials. The new profit-sharing expense on our income statement represents 50% of the net chartering result owed to our partner. For the March quarter, we anticipate TCN expenses to remain in the $18 million to $19 million range. Our total G&A for the quarter was $10.8 million, with cash G&A, which excludes non-cash compensation, at about $8.7 million. This $8.7 million included around $2 million in quarterly expense related to our cash incentive plan, keeping our core G&A steady at roughly $6.7 million. Our adjusted EBITDA for the quarter was reported at $74.2 million, and total cash interest expense was $6.8 million. Our current debt cost is about 5%, reflecting the hedged and fixed nature of our debt. We ended the quarter on December 31, 2025, with $294.5 million in free cash, up about $25 million from the previous quarter, which is a strong outcome given that we paid a dividend and made a new-building installment during this time. As announced last week, we will pay a dividend of $0.70 per share, totaling approximately $30 million, on or around February 24, 2026, to shareholders of record as of February 9, 2026. By the end of the quarter, our debt balance was $516 million, resulting in a debt-to-total book capitalization of 32.2% and a net debt-to-total capitalization of 13.8%. With an undrawn $50 million revolver and a $100 million accordion feature within our loan agreement, coupled with our robust free cash position and one debt-free vessel, we are well-prepared for fleet growth, renewal, or any challenges that may arise. We expect our cash cost per day over the coming year to be about $27,000, excluding capital expenditures for dry docking and scrubbers. During this quarter, we completed three dry dockings and anticipate one more to end on March 31, which will finalize the dry-docking program for our vessels built from 2014 to 2016. As John mentioned, we expect to take delivery of our new ammonia-capable VLGC at the end of March 2026, planning to pay about $62 million in cash at closing, with plans to enter into a loan facility to finance that payment. The irregular dividend we declared last week of $0.70 per share brings our total to $17.65 per share in irregular dividends since September 2021. While some investors and analysts argue these dividends are no longer irregular, we emphasize they are indeed irregular and dependent on our board's discretion. VLGC rates are also irregular, so we believe our dividend policy should reflect that. Since June 30, 2021, prior to our first irregular dividend, we have approximately $754 million in net income, and considering the upcoming dividend, we will have returned about $725 million in total dividends. Overall, we have returned over $960 million in cash to our investors since our IPO, and we will continue to balance dividends, debt reduction, and fleet investment strategically. Now, I'll turn it over to Tim Hansen.
Thank you, Ted, and good day, everyone. For the quarter ending December 31, 2025, the global seaborne LPG trade increased again to a new quarterly record. It was reported to be more than 37 million tons for the first time. North American exports contributed significantly, hitting a new quarterly export record of more than 18.5 million tons. The Middle East exports were the second-highest quarterly export volume on record. The expanded seaborne trade witnessed over the quarter speaks to the attractiveness of LPG as a commodity, but the whole freight markets were challenged by external factors. The key external factors impacting the freight markets were lower-than-anticipated Saudi contract prices for October and the retaliatory port service fees implemented in China. Starting with the lower-than-anticipated Saudi contract prices, it should be remembered that the Saudi CP influences the pricing of the Far East Index, or FEI, and therefore, impacts product price economics. The Saudi CP for October was lowered to be price competitive against U.S. exports for a tender into India and to demonstrate some commercial flexibility on the parts of Saudi Aramco. The price decrease was unexpected because the Saudi CP is historically in a contango throughout the fourth calendar quarter of any year, and Far East imports increase in anticipation of winter heating demand. The drop in the Saudi CP and Far East Index created an uncertain trading environment for a few weeks and narrowed the arbitrage, slowing and weakening the freight markets. Amidst the slower freight market activity, the port service fees announced in China impacted U.S.-related vessels on the 10th of October. The timing was key as the announcement fell on a Friday before a 3-day weekend with the implementation happening on the 14th of October to match the USTR Section 301 port service fees. The immediate impact was for vessels with cargo on board and en route to China, setting in motion discussions and rerouting of some vessels as additional costs would be incurred and there were ambiguities as to the scope of the impacted vessels. The shock of sudden cost negativity impacted the market and had a knock-on effect on the wider Far East cargo market by prompting owners with vessels scheduled to load in the Arabian Gulf and U.S.-target cargoes not bound for China to price those aggressively. Normalcy returned to the market at the end of October when the U.S.-China Summit in Busan found an agreement to suspend the port service fees for both countries until the 9th of November 2026, and the market corrected upwards again. The third calendar quarter demonstrated VLGC players responding with agility when the USTR Section 301 port services were announced, and the fourth calendar quarter reaffirmed this. Once the backlog of unfixed vessels was cleared through November, the freight market improved through December to capture value from the West to East arbitrage that returned to normal levels. The quarter ending December 31, 2025, ultimately traded amid a lower average Baltic Index than the quarter prior, but found upwards momentum heading into 2026. For 2026, a total of roughly 36 VLGCs, including one of our own, will require absorption in the market. Geopolitical impact on world markets seems likely, but the agility of the VLGC market and the fundamental attractiveness of LPG as a commodity support the belief that the risk can be mitigated and upside successfully captured.
Thank you, Tim. At Dorian LPG, we are dedicated to improving energy efficiency and promoting sustainability in our operations and vessels. We currently operate 16 vessels equipped with scrubbers and 5 dual-fuel LPG vessels. Scrubbers effectively remove sulfur oxides from fuel oil and significantly cut down on particulate matter and black carbon emissions. In the third fiscal quarter of 2026, our vessel savings reached $1,116,000, equating to about $933 per calendar day after accounting for all scrubber operating expenses. The reduction in oil prices and the absence of geopolitical events led to decreased bunker prices, which in turn resulted in lower savings from the scrubbers. The fuel price difference between high-sulfur fuel oil and very-low-sulfur fuel oil averaged $57 per metric ton, while the difference for LPG compared to very-low-sulfur fuel oil was approximately $104 per metric ton, making LPG an attractive option for our dual-fuel vessels. During the last quarter, three vessels underwent a special survey and dry docking, including one that has been upgraded for ammonia cargo. With the completion of the dry docking for our last C-type vessel this month, we have finished the dry docking cycle for all our 2014 and 2016 built vessels. Next month, we will receive the Hanwha Ocean 93,000-cubic meter new-building, which combines the features of both a VLGC and a VLAC, joining the Dorian LPG fleet. This LPG dual-fuel vessel is equipped with a hybrid scrubber and Alternative Marine Power. The average Efficiency Ratio, or AER, quantifies the carbon intensity of our vessels' operations. For the full year 2025, the average AER for the Dorian LPG fleet was 6.24%, which is 10.4% lower than the IMO target of 6.96% for 2025. In late 2025, the IMO's Marine Environmental Protection Committee held a second extraordinary session and decided to postpone the approval of changes to MARPOL Annex VI by one year. Despite this postponement, Dorian is fully committed to investing in fuel efficiency, enhancing performance, and reducing greenhouse gas emissions. We see the delay in IMO changes as a positive development that allows for more time for input and review on various technical matters, capabilities, procedures, and implementation details. It also provides our industry with time to prepare and set realistic expectations for net-zero framework guidelines and the gradual adoption of alternative fuel. The MEPC 84 session is planned for the spring of 2026, where we expect a focus on finalizing key implementation guidelines that will clarify the net-zero framework and consider additional proposals. We are confident that our company and fleet are well-positioned and fully ready to comply with upcoming regulatory changes. I will now hand it over to John Hadjipateras for his final comments.
Thanks, John. And we'd love to open up for questions if anyone who has joined us would like to ask any questions. Operator, please.
分析師問答
We'll take our first question from Omar Nokta with Clarksons Securities.
I do have a couple of questions, maybe one on the market, and I just wanted to get into Dorian specifically. But maybe broadly on the market. I know, Ted, you mentioned you'll wait a bit to give us guidance on how the quarter's bookings are looking. But just in general, what we've seen here in the spot market, rates seem to be quite strong. They're at 2-plus year highs. And it's interesting in terms of how this is happening and somewhat defying the typical seasonal norms. And so, I just wanted to ask from your perspective, what's been driving this kind of counter-seasonal strength? And then from that sense, what do you think that then means for how the year is going to look in general?
Thanks for that question. Is this Omar? I didn't catch the introduction.
Yes, it's Omar.
Omar, congratulations on your new position. I'm happy to have you back in the industry. Tim, can you take that question, please?
It's unusual for the first quarter to actually get stronger as we progress, but in the last quarter of 2025, there were many uncertainties that caused people to hold back on their activities. This resulted in fewer cargoes being lifted and some fog in the U.S. Once the uncertainties were resolved, the fog cleared, and people adjusted to the Saudi pricing, the market rebounded. The lack of activity in November likely contributed to the strong start of the first quarter. Additionally, production levels have been consistently increasing and even exceeding expectations. We have observed more cargoes being managed efficiently at U.S. terminals, leading to timely departures. We believe production will continue to rise and hopefully surpass previous levels, indicating a positive outlook for the rest of the year. We are optimistic about 2026.
Okay. And then just maybe a follow-up just in terms of how you've been deploying the fleet. You've obviously got a good amount of spot exposure via the pool. I did notice that one of the ships, I think the Chaparral maybe has been put on a TCE into 2027. Anything you're able to share on what that rate looks like? I know you tend to not give specifics, but anything you can give or perhaps maybe in relation to what that would be earning relative to the other ships on charter?
I'll let Tim again answer because I think probably, we have a P&C clause. But Tim and Ted can also tell you what we can tell you, put it that way. Tim, do you want to start and then Ted can take over?
Yes. As you mentioned, we don't give out the rates. It is reported in the market. It was a deal that was done back in October, November and just going on charter this quarter for a little more than a year's charter. So, we do our charter like more opportunistically when we see possibilities. Of course, the market has since then surprised us on the upside in the spot market, but we think it's at levels compared to the earnings we do in the spot market over the last quarter.
But Ted, maybe this is a good time to say something about guidance.
Well, yes, I think revisiting the topic of guidance, as we mentioned, it's likely more beneficial to provide overall forward bookings information later in the quarter due to the significant volatility in the sector, as Tim pointed out. The information available later will likely be more accurate. I believe Tim provided a solid overview. Additionally, I find it interesting that the business in Brazil has been reported, as it highlights Brazil's potential as a growth market.
Got it. That's quite helpful. And then just a final one, maybe for you, Ted, just on the new-building that you're taking delivery of here in the next few weeks. It looks like I think from the filing, there's $62 million left to spend. You have $294 million of cash, so quite a bit of flexibility to do what you want. But do you have any specifics on how you plan to fund that vessel? Will you borrow or just pay cash?
Yes. I alluded to it briefly in our remarks. We do plan to finance the rest of the payment, and more detail will be forthcoming when we get there.
Our next question comes from Climent Molins with Value Investor's Edge.
Just kind of a follow-up on Omar's first question. Despite rates being very solid, so far, we haven't seen a significant increase in the average speed of the overall VLGC fleet. To what extent do you believe the fleet can speed up if rates remain solid? Older vessels are, let's say, capped by the environmental regulations. But to what extent could the ECO portion of the fleet speed up?
That's another one for Tim. A very good question.
Yes, there is some potential for increasing speed. However, most of the non-LPG fuel ships, particularly the ECO types from 2015, are still limited by environmental regulations and power reductions implemented in the past. There might be an increase of about 1 or 2 knots, or around 1.5 knots at most. For the older ships, there is essentially no room for improvement in speed. While we may be able to go faster during the summer months if the market is strong, we have also experienced quite a bit of bad weather this winter, making it challenging to increase speed even if we had the capacity.
That's helpful. And as a follow-up, in your prepared remarks, you talked about the energy-saving devices you've installed on your vessels, resulting in meaningful savings. Could you talk a bit further on what kind of improvements that has resulted relative to previous consumption levels? And what kind of IRR are these investments generating? I know like giving an exact figure may not be easy, but any color would be helpful.
Yes. John will answer that. I think we've mentioned something specific, and he could give you as an illustration, perhaps, the payback on scrubbers. That should give you a bit of color on the whole picture.
Yes. The energy-saving devices that we use and we mentioned usually provide an improvement of around 5%. And that's the ballpark figure for most of the energy-saving devices in most of the ships. Silicone paints also provide a similar kind of number, about 5% improvement in the energy savings. So the payback is generally pretty fast. It is generally within a year. So I think that answers your question.
That, of course, does not apply to scrubbers specifically. The payback on scrubbers is a bit longer than that. But most of the other devices are low cost, those producing the 5%, low cost. So that's why we have a quick payback.
It appears we have no further questions at this time. I'll turn the program back to the speakers for any additional or closing remarks.
Thank you all for joining us, and have a good summer.
This concludes today's program. Thank you for your participation, and you may disconnect at any time.