Dorian LPG(US:LPG)2019-08-06 21:40Financial Performance - Revenues for the three months ended June 30, 2019, were $61,165,546, a significant increase from $27,644,282 in the same period of 2018, representing a growth of approximately 121%[95] - Adjusted EBITDA for the same period was $38,382,383, compared to $5,185,136 in the prior year, indicating a substantial improvement in operational performance[97] - Net income for the three months ended June 30, 2019, was $6,075,059, a recovery from a net loss of $20,596,558 in the same period of 2018[95] - Total revenues for the three months ended June 30, 2019, were $61.2 million, an increase of $33.6 million or 121.3% from $27.6 million in the same period of 2018[106] - Net pool revenues from related parties increased to $50.1 million, up 211.0% from $16.1 million in the prior year[106] Operational Efficiency - Fleet utilization increased to 98.4% for the three months ended June 30, 2019, up from 83.6% in the prior year, reflecting improved operational efficiency[99] - Average Time Charter Equivalent (TCE) rates rose from $16,553 to $29,671, reflecting higher spot market rates and reduced bunker prices[106] - Fleet utilization improved from 83.6% in Q2 2018 to 98.4% in Q2 2019[106] - Vessel operating expenses decreased by 3.4% to $16.1 million, with expenses per vessel per day dropping from $8,334 to $8,052[108] - General and administrative expenses fell by 15.0% to $6.7 million, down from $7.9 million in the previous year[109] Debt and Financing - As of June 30, 2019, the outstanding balance of long-term debt was $680.8 million, down from $768.8 million a year earlier[112] - Interest and finance costs decreased by 6.5% to $9.7 million, attributed to lower average indebtedness[112] - Net cash used in financing activities for Q2 2019 was $16.3 million, a decrease from $17.7 million in Q2 2018, primarily due to reduced long-term debt repayments from $82.2 million to $16.0 million[124] - The company has hedged $250 million of non-amortizing principal and $184.8 million of amortizing principal of its 2015 Debt Facility to mitigate interest rate risk[138] - A hypothetical 20 basis point change in LIBOR rates would result in a $0.1 million increase or decrease in interest expense on non-hedged debt over the next 12 months[138] Capital Expenditures and Compliance - The company plans to install ballast water management systems on six VLGCs at a cost of approximately $0.8 million per vessel between July 2019 and July 2023[127] - Significant capital expenditures are required to maintain an efficient fleet and comply with regulatory standards in the LPG transportation business[125] - Compliance costs for the IMO's low sulfur fuel oil requirement may be significant, with $10.0 million in remaining contractual commitments for scrubbers as of June 30, 2019[127] Strategic Initiatives - The company currently operates a fleet of 22 VLGCs, including 19 fuel-efficient ECO-VLGCs, with a cargo-carrying capacity exceeding 80,000 cbm[86] - The company has entered into contracts for an additional ten VLGCs to be fitted with scrubbers to reduce sulfur emissions, enhancing environmental compliance[86] - The company continues to pursue a balanced chartering strategy, employing vessels on a mix of multi-year time charters and spot market voyages[90] - The company plans to continue considering strategic opportunities for vessel acquisitions, potentially financed through various funding sources[120] Impairment and Risk - Eighteen VLGCs showed indicators of impairment as of June 30, 2019, but no impairment charges were recognized for the quarter[133] - A 40% reduction in the 10-year historical average spot market rates could trigger an impairment charge of approximately $31.9 million on the eighteen VLGCs[134]