Dorian LPG(US:LPG)2022-11-02 18:09Financial Data and Key Metrics Changes - The TCE achieved per calendar quarter was $36,858 and OpEx was $9,541, with cash G&A at $5.8 million and cash interest expense down to $6.4 million from $6.5 million, reflecting favorable hedges and fixed-rate debt [11][12][13] Business Line Data and Key Metrics Changes - LPG export and import demand increased in Q3 2022, with global exports up 5.4% year-over-year, supported by Canada and the Middle East [13] - Despite lower than expected propane demand in China, 2022 is forecasted to have about 4.7 million tons more of incremental LPG consumption compared to 2021 [15] Market Data and Key Metrics Changes - LNG prices spiking in Japan and South Korea are expected to increase LPG production over the winter, with South Korea expected to import about 800,000 metric tons of LPG [16] - The heavy fuel oil, low sulfur oil spread is currently about $260 per ton in Houston, down from $320 at the close of the last quarter [14] Company Strategy and Development Direction - The company prioritizes returns to shareholders while maintaining a strong balance sheet and commercial flexibility, having returned nearly $500 million to shareholders since its IPO [8][10] - The company is preparing for the 2023 IMO emission regulations, including retrofitting energy-saving devices and developing new software to manage fuel consumption [19] Management's Comments on Operating Environment and Future Outlook - The outlook for the final quarter of 2022 is positive, with estimates for U.S. LPG exports pointing to further growth in 2023 and 2024 [18] - Management acknowledges that while the market is currently strong, volatility makes it difficult to predict medium-term freight market conditions [10] Other Important Information - The company has seen an increase in the number of ports allowing crude changes compared to the previous period, despite challenges in handling crude changes [12] Q&A Session Summary Question: How was the $1 irregular dividend determined? - The board made the decision for the dividend based on visibility of a strong current quarter, considering various factors without a formulaic approach [24] Question: What is the outlook for fleet deployment given new deliveries next year? - The company believes that increased U.S. production and delays will help absorb the new tonnage coming into the market, maintaining a positive outlook for 2023 [34] Question: What is the potential uplift in LPG demand from Korea and Japan? - The company estimates about four VLGCs lifting a month to Europe and additional demand from Japan and Korea for winter stockpiling [40] Question: How does the company view the potential LPG pipeline across the Panama Canal? - Management does not see the pipeline as a game changer due to its limited capacity and applications, with no recent updates on its progress [46]