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DORIAN LPG LTD. (LPG)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY25 revenue and earnings significantly contracted year over year and missed Wall Street consensus: revenue $75.9M vs $79.0M consensus; adjusted EPS $0.25 vs $0.45; adjusted EBITDA $36.6M vs $40.4M, driven by lower spot rates and a heavy drydock schedule, partly offset by lower bunker costs . EPS, revenue, and EBITDA consensus from S&P Global; values marked with * are from S&P Global.
  • Sequentially, results softened vs Q3 on revenue ($80.7M → $75.9M) and adjusted EBITDA ($45.2M → $36.6M) as the quarter absorbed weaker February freight and drydock OpEx .
  • Forward indicators improved: management has fixed ~79% of June-quarter pool days at roughly $42,000/day and highlighted constructive 2025 supply-demand with limited newbuild deliveries and rising ton-miles from trade re-routing amid tariffs .
  • Capital returns continue but moderated: irregular dividend of $0.50/sh in May (down from $0.70 in Feb), reflecting balanced capital allocation given drydock cadence and market volatility; Board decisions are dynamic with improving rate outlook into June-quarter noted on the call .

What Went Well and What Went Wrong

  • What Went Well

    • Forward bookings and rate setup into June-quarter: “we have fixed 79% of the pool’s available days in the quarter at a TCE of roughly $42,000 per day,” signaling a better near-term pricing environment .
    • Liquidity and leverage: cash of ~$317M at March 31; debt ~$557.4M; debt-to-cap 34.8% and net debt-to-cap ~15%, supporting flexibility for dividends, debt amortization, and vessel progress payments .
    • Strategic optionality and efficiency: ongoing installation of energy-saving devices; 16 scrubber-fitted and 4 dual-fuel LPG vessels; second vessel upgraded to carry ammonia (third planned in 4QCY25), enhancing commercial optionality as ammonia markets develop .

  • What Went Wrong

    • Freight rate pressure and TCE decline: fleet TCE fell 44% YoY to $35,324/day as spot rates were weaker in February; Baltic benchmark averaged $51,715 vs $68,429 YoY; revenue fell 46% YoY .
    • Cost headwinds from drydocking: daily OpEx rose to $12,671 including ~$1,017/day non-capitalizable drydock costs; non-capitalizable drydock OpEx totaled ~$3.2M in the quarter, pressuring margins .
    • Derivatives swung negative: unrealized loss of ~$2.6M vs prior-year gain, reducing adjusted results; realized derivative gains also fell YoY .

Financial Results

Key P&L metrics (actuals; USD):

MetricQ2 2025Q3 2025Q4 2025
Revenue ($M)$82.43 $80.67 $75.89
Diluted EPS (GAAP)$0.22 $0.50 $0.19
Adjusted EPS$0.35 $0.43 $0.25
Adjusted EBITDA ($M)$46.15 $45.24 $36.62

Margins (S&P Global)*:

MarginQ2 2025Q3 2025Q4 2025
EBITDA Margin %44.30%*49.23%*41.28%*
Net Income Margin %11.45%*26.55%*10.92%*

Q4 FY25 vs estimates (S&P Global)*:

MetricQ4 2025 ActualQ4 2025 ConsensusSurprise
Revenue ($M)$75.89 $79.04*-$3.15M
Adjusted EPS$0.25 $0.45*-$0.20
EBITDA ($M)$36.62 $40.45*-$3.83M

Year-over-year (Q4 FY25 vs Q4 FY24):

MetricQ4 2024Q4 2025YoY Change
Revenue ($M)$141.39 $75.89 -46%
Diluted EPS (GAAP)$1.96 $0.19 -$1.77
Adjusted EPS$1.91 $0.25 -$1.66
Adjusted EBITDA ($M)$105.05 $36.62 -$68.43

KPIs and balance sheet:

KPIQ2 2025Q3 2025Q4 2025
Fleet TCE ($/day)$37,010 $36,071 $35,324
Available Days2,207 2,210 2,099
Daily Vessel OpEx ($/day)$10,114 $11,097 $12,671
Cash & Cash Equivalents ($M)$348.63 $314.53 $316.88
Long-term Debt ($M)$579.01 total (incl current) $565.91 total (incl current) $557.4 outstanding
Debt/Book Cap; Net Debt/Cap—34.8%; ~15% 34.8%; ~15%

Note: Values marked with * were retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Forward TCE bookingsQ1 FY26 (quarter ending Jun 30, 2025)N/A~79% of pool days fixed at ~$/day 42,000 New disclosure
Cash operating cost/day (excl. capex)FY26~$26,000/day (Q3 call) ~$26,000/day (reiterated) Maintained
Drydock plan (vessels; cash outlay excl off-hire)FY26“4 more by Mar-25; ~$7M addl in FY25” 8 vessels; ~$12M budget in FY26 Reset for new fiscal year
Newbuilding progress paymentsFY26N/A~$12M in Sep-25 and ~$12M in Dec-25 New timing detail
Irregular dividend per shareQ3 FY25 vs Q4 FY25$0.70/sh (paid Feb 27, 2025) $0.50/sh (pay May 30, 2025) Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY25 and Q3 FY25)Current Period (Q4 FY25)Trend
Tariffs/macroQ3: Cautious on potential tariff tit-for-tat; constructive market outlook despite volatility .April escalation: China included LPG/ethane; rates briefly collapsed then stabilized; 90-day tariff reduction with 10% import tax; ton-miles up from re-routing .Volatility elevated; ton-mile supportive.
Supply chain/Panama CanalQ3: Canal at max efficiency; potential upside if congestion rises .Canal operating at maximum efficiency; limited downside risk .Neutral to positive.
Product performance/TCEQ2/Q3: TCE around $37k/$36k; improving monthly trend in Q3 .Q4 TCE $35.3k; forward bookings imply ~$42k into June-quarter .Near-term improvement expected.
Regional trendsQ3: Record U.S. exports; Chinese PDH overcapacity; warm winter dampened East demand .U.S. exports temporarily dipped in Feb; PDH margins negative; Chinese imports ~8.5 MMT in Q1’25 (below mid-’24 highs); U.S.→India/SE Asia flows rising .East demand tepid; re-routing boosts ton-miles.
Regulatory/IMOQ3: MEPC 83 focus on midterm GHG measures .IMO Net Zero framework draft approved; GFI standard from 2028; CII reduction path adopted .Regulatory clarity increasing.
Technology/efficiencyQ3: Energy-saving devices with <1-year paybacks; wind-assist evaluation .Continued OpEx savings; scrubber/double-fuel economics; ammonia cargo upgrades expanding .Execution continues.

Management Commentary

  • CEO tone and capital returns: “Our dividend of $0.50 per share…reflects our commitment to returning capital to shareholders…in a volatile geopolitical and economic environment and with a heavy drydocking schedule, we achieved good results in our financial year 2025.”
  • Market setup and outlook: “Increased production in the U.S. and the Middle East and U.S. terminal expansion, combined with just 9 new buildings for the rest of the year will support a balanced freight market and healthy earnings for 2025.”
  • CFO on liquidity and leverage: “With the debt balance at quarter end of $557.4 million, our debt to total book capitalization stood at 34.8% and net debt to total capitalization at 15%…we have a comfortable measure of financial flexibility.”
  • Commercial read-through: “We currently estimate that we have fixed 79% of the pool’s available days in the quarter at a TCE of roughly $42,000 per day.”
  • Energy transition: “We have now completed the second VLGC vessel upgrade to carry ammonia cargo…once this last vessel is completed, four VLGC vessels…will be able to carry ammonia cargoes…”

Q&A Highlights

  • Spot rate strength and trade re-routing: Management cited persistent U.S.→India/SE Asia flows and longer routes around the Cape supporting ton-miles; despite tariff gyrations, demand destruction in China has not materialized materially, underpinning recent rate firmness .
  • Dividend policy flexibility: The $0.50/sh decision preceded tariff developments; Board will reassess with evolving rate environment, balancing results, cash forecasts, and investment needs .
  • Forward visibility: Bookings at ~79% coverage for June quarter at ~$42k/day provide near-term revenue visibility, though actual realized rates can vary with loading dates and COA pricing .

Estimates Context

  • Q4 FY25 missed S&P Global consensus on all three key lines: revenue $75.9M vs $79.0M*, adjusted EPS $0.25 vs $0.45*, and EBITDA $36.6M vs $40.5M* . Values marked with * were retrieved from S&P Global.
  • Sequential estimate context: Q3 FY25 also trailed S&P consensus on EPS/EBITDA (actual adjusted EPS $0.43 vs ~$0.61*; EBITDA $45.2M vs ~$50.1*) amid softer TCE and rising drydock OpEx . Values marked with * were retrieved from S&P Global.
  • Drivers of the Q4 miss: materially lower TCE (down 44% YoY) cut revenue; heavier non-capitalizable drydock expenses and lower realized derivative gains pressured EBITDA; unrealized derivative losses also reduced GAAP earnings .

Key Takeaways for Investors

  • Near-term setup constructive despite Q4 miss: 79% of June-quarter days fixed at ~$42k/day and ton-mile tailwinds from trade re-routing support revenue trajectory into Q1 FY26 .
  • Capital returns remain a priority within a disciplined framework: $0.50/sh irregular dividend in May balanced against a heavy FY26 drydock slate (~$12M cash, excl. off-hire) and two ~$12M newbuild progress payments in Sep/Dec 2025 .
  • Balance sheet provides optionality: ~$317M cash and manageable leverage (debt/book cap 34.8%; net debt/cap ~15%) enable flexibility across dividends, debt reduction, and fleet investment/renewal .
  • Watch operating cost normalization: Drydock-related OpEx inflated Q4 daily OpEx to $12,671; excluding drydock costs, underlying OpEx was ~$11,001/day, offering scope for margin recovery as drydock cadence eases .
  • Macro sensitivities remain high: U.S.-China tariff path and PDH/steam cracker economics in Asia are key swing factors; management sees upside from inefficient trade flows and potential continued competitiveness of U.S. LPG .
  • Regulatory alignment and optionality: Fleet efficiency upgrades and ammonia capability expansion enhance employability into emerging low-carbon cargo flows and support compliance under evolving IMO frameworks .
  • Trading implication: Given the miss vs consensus and dividend step-down vs prior quarter, stock reaction hinges on confidence in forward TCE realization (~$42k/day), tariff de-escalation durability, and evidence of cost normalization in coming quarters .

Note: Values marked with * were retrieved from S&P Global.