Dorian LPG(US:LPG)2022-05-26 16:10Financial Data and Key Metrics Changes - The Baltic VLGC index averaged about $57 per ton for the period January through March, improving to $94.8 per ton as of the call date [8] - The company reported $236.8 million of free cash at March 31, 2022, with a debt balance of $670 million, resulting in a debt to total book capitalization of 42.1% [19][20] - Adjusted EBITDA for the fourth quarter was $54.1 million, including a $3.8 million gain on the sale of the Captain Nicholas [26] Business Line Data and Key Metrics Changes - Total utilization for the quarter was 89.3%, with a daily TCE revenue of $43,372 [23] - Daily OpEx for the quarter was $9,370, which increased due to higher crew costs driven by travel and medical expenses [24] - Time charter earnings from the U.S. Gulf to Asia averaged about $36,700 per day, down from $45,300 per day in the previous quarter [35] Market Data and Key Metrics Changes - Global LPG exports are expected to grow 6% in 2022 and 15% in 2023, driven by production growth and lower domestic demand [10] - North American LPG exports continue to increase, with the first quarter of 2022 demonstrating the highest global seaborne LPG transport on record [31][32] - The average spread between heavy fuel oil and low sulfur fuel oil is currently around $230 per ton, benefiting the company's investment in scrubbers [9][45] Company Strategy and Development Direction - The company is focused on a balanced capital allocation strategy, returning over $400 million to investors since the IPO, including a recently announced $2.50 per share dividend [15][28] - The company is evaluating various technologies for emissions reduction and compliance with new regulations, including retrofitting existing ships and exploring carbon capture technologies [47][55] - The company aims to improve its greenhouse gas footprint and reach a zero emissions target, positioning its fleet to meet future demands [56] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about cash flow generation in the coming months, despite the ongoing geopolitical tensions and their impact on fuel prices [29] - The company noted that the invasion of Ukraine has caused significant volatility in crude oil and gas prices, impacting the global LPG market [44] - Management highlighted the importance of maintaining operational flexibility and adapting to changing market conditions, including the potential for increased demand for LPG in Europe due to the conflict [60][62] Other Important Information - The company has completed four refinancings during the quarter, enhancing its financial flexibility with longer tender profiles [18] - The company has a significant measure of financial flexibility with no refinancings until 2025 and a debt-free vessel [20] - The company is actively participating in initiatives aimed at promoting sustainability and diversity within the maritime industry [14] Q&A Session Summary Question: Impact of Russian invasion of Ukraine on global LPG flow - Management noted an increase in demand for LPG in Europe, with a shift from rail and truck transport to seaborne demand, estimating around four VLGC cargos per month to cover new demand [61] Question: Future propulsion technology considerations - Management indicated that they are keeping options open for dual-fuel technology while currently benefiting from scrubbers, with ongoing evaluations of the bunkering market amid supply difficulties [64][66]