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DORIAN LPG LTD. (LPG)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 (quarter ended Dec 31, 2024) revenues were $80.7M, diluted EPS $0.50, adjusted EPS $0.43, and adjusted EBITDA $45.2M; results reflected an improving market environment but sharply lower spot rates versus prior year .
  • Management declared an irregular dividend of $0.70 per share (~$30M), exceeding quarterly net income, citing a constructive VLGC market outlook and improving bookings; over half of next quarter’s days are fixed, with expected TCE “in excess of $37,000/day” .
  • Operational KPIs: TCE was $36,071/day (down 49.9% YoY), daily vessel OpEx was $11,097/day (up due to drydock-related expenses), and available days were 2,210 .
  • Capital allocation: debt balance ~$570.3M, all‑in debt cost ~4.7% (rising ~30 bps after hedges roll off), ~$314.5M cash; Board continues balancing dividends, debt reduction, and fleet renewal, while considering repurchases given NAV discount .
  • Near-term catalysts: improving monthly TCE trend into Nov/Dec, U.S. Gulf terminal expansions (Targa/Nederland) in 2H 2025, modest 2025 newbuild deliveries, and optionality from ammonia‑capable retrofits .

What Went Well and What Went Wrong

What Went Well

  • Improving market environment and constructive outlook: “With additional export capacity coming on line in the United States this year and a modest orderbook, we have a positive market outlook” .
  • Dividend and bookings confidence despite drydocks: “Our dividend payout in excess of the quarter’s net income reflects our constructive view of the VLGC market... our current voyage bookings reflect the improved market” .
  • Efficiency gains and decarbonization progress: management is achieving “fuel savings higher than 10%... payback periods of less than a year,” deploying AI engine monitoring, and meeting CII targets (AER 10.6% better than IMO target) .

What Went Wrong

  • Significant YoY revenue and TCE compression: revenue fell 50.5% YoY to $80.7M and fleet TCE dropped to $36,071/day (from $71,938), primarily due to lower spot rates and weaker Chinese demand .
  • Higher daily OpEx driven by drydock: vessel OpEx rose to $11,097/day (+$1,161 YoY), with ~$909/day from non‑capitalizable drydock-related expenses .
  • Lower derivative and other gains: realized gain on derivatives fell to $0.8M (from $1.9M), and other gain/(loss) turned negative, reflecting weaker hedging outcomes and market factors .

Financial Results

Quarterly performance vs prior periods and key KPIs:

MetricQ1 FY2025 (Jun 30, 2024)Q2 FY2025 (Sep 30, 2024)Q3 FY2025 (Dec 31, 2024)
Revenue ($USD Millions)$114.353 $82.433 $80.667
Net Income ($USD Millions)$51.288 $9.429 $21.362
Diluted EPS ($USD)$1.25 $0.22 $0.50
Adjusted EPS ($USD)$1.26 $0.35 $0.43
Adjusted EBITDA ($USD Millions)$77.957 $46.152 $45.243
TCE Rate ($USD/day)$55,228 $37,010 $36,071
Daily Vessel OpEx ($USD/day)$10,717 $10,114 $11,097
Available Days (days)2,275 2,207 2,210

Year-over-year comparatives (Q3 FY2025 vs Q3 FY2024):

MetricQ3 FY2024Q3 FY2025
Revenue ($USD Millions)$163.065 $80.667
Diluted EPS ($USD)$2.47 $0.50
Adjusted EPS ($USD)$2.62 $0.43
TCE Rate ($USD/day)$71,938 $36,071
Daily Vessel OpEx ($USD/day)$9,936 $11,097

Drivers and context:

  • Revenue decline vs prior year was primarily due to lower spot rates (Baltic Ras Tanura–Chiba averaged ~$55.7/MT vs ~$132.8/MT YoY) and subdued Far East petrochemical margins; lower bunker prices partially offset .
  • Chinese LPG imports slowed (Jul: 3.5 MMT → Nov: 2.3 MMT; Dec estimated 2.8 MMT), while U.S. exports were impacted by Nederland terminal force majeure before recovering .

KPIs (operations and efficiency):

KPIQ1 FY2025Q2 FY2025Q3 FY2025
Charter Hire Expenses ($USD Millions)$10.645 $9.851 $10.586
G&A ($USD Millions)$10.424 $16.459 $7.465
Interest Expense ($USD Millions)$9.518 $9.438 $8.884
Interest Income ($USD Millions)$3.729 $4.461 $3.797
Realized Gains on Derivatives ($USD Millions)$1.717 $1.654 $0.839

Notes:

  • Revenue composition is reported in aggregate (net pool revenues—related party, time charter revenues, and other revenues) without segment breakdown .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ActualChange
TCE Revenues ($USD Millions)Q3 FY2025$78.7–$80.7 TCE Revenues ~$79.716 (Time charter equivalent) Maintained (in line)
Vessel OpEx ($USD Millions)Q3 FY2025$20.4–$22.4 $21.440 Maintained (within range)
Charter Hire Expenses ($USD Millions)Q3 FY2025$9.6–$11.6 $10.586 Maintained (within range)
Cash & Cash Equivalents ($USD Millions)Q3 FY2025$313.5–$315.5 $314.532 Maintained (within range)
Long-term Debt Obligations ($USD Millions, incl. current)Q3 FY2025$569.3–$571.3 ~$570.3 debt balance at quarter-end Maintained (within range)
TCE per available day ($USD/day)Q4 FY2025—“In excess of $37,000/day” estimate (53% days fixed) Introduced
Cash cost per day (ex-capex) ($USD/day)FY2025/next 12 months—~$26,000/day (ex drydock capex) Introduced
All-in debt cost (%)From Q1 FY2026~4.7% current ~5.0% after ~30 bps hedge roll-off Raised
DividendQ3 FY2025$42.8M paid in Nov 2024 $0.70/share (~$30M) payable Feb 27, 2025 Lowered (modest reduction)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 FY2025)Trend
Freight market and spot ratesQ2: Rates reduced in Jul/Aug, rebounded late Sep; U.S. weather, terminal constraints; Panama Canal minimal delays; record U.S. exports . Q1: TCE up vs prior year; fleet utilization lower; favorable propane vs naphtha spreads .Recovery from challenges in Q3 2024; no winter spike; Western market premium; improving monthly TCE vs Oct; Helios Pool spot TCE ~$33,200/day .Stabilizing, sequential improvement into Nov/Dec.
China petrochemicals demandQ2: PDH overcapacity; margins pressured; imports under 3 MMT Aug/Sep . Q1: PDH plants started; demand rising; spreads supportive .Weaker import demand in Q4; China imports slowed to 2.3 MMT Nov; slight recovery in Dec (2.8 MMT) .Soft through Q4, tentative recovery.
U.S. exports & terminal capacityQ2: U.S. exports record 5.8 MMT Aug; strong production; terminal fees strong; Nederland force majeure impacts .U.S. exports fell to 5.5 MMT Oct, recovered to 5.7 MMT Nov; 2H 2025 ~13% capacity expansions (Targa/Nederland) .Recovery underway; structural capacity additions ahead.
Orderbook and supplyQ2: VLGC orderbook ~10% of fleet (excluding VLAC/VLEC) .VLGC orderbook (incl. VLACs) ~20% of fleet; only 11 ships delivering in 2025; average fleet age ~10.5 years .Manageable 2025 delivery pace; bigger additions in 2026–27.
Energy efficiency and decarbonizationQ1: Operational optimizations; efficiency focus .AI engine monitoring; scrubber savings ~$1.6M in Q4; AER 10.6% better than IMO targets; wind-assisted propulsion evaluation .Continued execution and savings momentum.
Ammonia cargo optionality—Ammonia-capable retrofits (one VLGC completed, two more planned); CAPTAIN JOHN NP fully ammonia capable; VLAC delivering in 2026 .Building optionality ahead of emerging projects.
Capital allocationQ1: Dividend, equity offering for fleet growth . Q2: Dividend; balanced allocation .Irregular dividend; debt cost outlook; watch buybacks given NAV discount; balanced approach .Flexible, shareholder returns + renewal.
Tariffs/macro geopolitics—Mindful of potential tariff tit-for-tat; U.S.–China LPG trade share shift supports resilience .Monitoring risk; constructive on trade flows.

Management Commentary

  • CEO: “With additional export capacity coming on line in the United States this year and a modest orderbook, we have a positive market outlook... Our dividend payout in excess of the quarter’s net income reflects our constructive view of the VLGC market over the coming months” .
  • CEO on efficiency: “We are achieving fuel savings higher than 10%... resulting in payback periods of less than a year and continuous fuel and cost emission saving” .
  • CFO: “We have fixed just over 53% of the available days [for next quarter], and we estimate... TCE in excess of $37,000 per day” .
  • CFO on capital structure: “Debt balance at quarter end of $570.3 million... current all-in cost of about 4.7%... hedges... rolling off... ~30 basis point increase... beginning in the first fiscal quarter of 2026” .
  • Strategy: prudent capital allocation, operational excellence, and expanding ammonia capability to bid on emerging projects; strong balance sheet to lead VLGC/VLAC market .

Q&A Highlights

  • Capital allocation priorities: maintain prudent debt management, cash position, and dividends; consider expansion and share repurchases given NAV discount .
  • Supply/demand absorption: management expects LPG trade growth and emerging ammonia trade to absorb 2026–27 deliveries; VLECs likely absorbed in ethane markets without flooding VLGCs .
  • Bookings and rates: reiterated >53% of next quarter days fixed with TCE expected >$37,000/day; caution that load timing and COA pricing can cause realized variances .

Estimates Context

  • Wall Street consensus estimates from S&P Global were unavailable due to access limits at time of request; therefore, explicit beat/miss vs consensus cannot be provided for revenue/EPS/EBITDA this quarter [GetEstimates error].
  • Based on company disclosures, results were broadly consistent with intra‑quarter guidance ranges (TCE revenues, OpEx, charter hire), suggesting stabilized execution amid a recovering market .

Key Takeaways for Investors

  • Sequential stabilization: monthly TCE improved from October, Q3 KPIs in line with pre-release ranges, and >53% of next quarter fixed supports near-term cash flow visibility .
  • Dividend support: $0.70 irregular dividend underscores constructive market view; Board has returned ~$850M since 2021 across dividends and buybacks and may accelerate repurchases if discount persists .
  • 2025–26 setup: terminal expansions (Targa/Nederland) in 2H 2025 and modest 2025 deliveries provide tailwinds; monitor larger orderbook into 2026–27 .
  • Cost and leverage: cash cost/day ~$26k (ex drydock capex) and all-in debt cost ~4.7% rising to 5.0% post-hedge roll-off; liquidity strong ($314.5M cash, undrawn $50M revolver) .
  • Efficiency/optionality: continued scrubber and AI monitoring savings and ammonia-capable retrofits enhance fleet competitiveness and optionality for future cargoes .
  • Macro watchpoints: Far East petrochemical margins and Chinese LPG imports modest through Q4; watch for seasonal normalization and PDH demand pick-up alongside Panama Canal dynamics .
  • Trading lens: Near term, dividend yield and improving bookings are likely supportive; medium term, execution on ammonia optionality and pace of U.S. export growth vs 2026–27 deliveries will shape valuation .