Dorian LPG(US:LPG)2021-02-02 21:05Financial Data and Key Metrics Changes - The company reported a free cash balance of $149.3 million as of January 29, 2021, up from $133.6 million at year-end 2020, reflecting strong chartering results [16] - Adjusted EBITDA for the quarter was $60.1 million, with steady month-over-month increases [24] - Total cash interest expense for the quarter was $6 million, a reduction of $900,000 from the previous quarter [24] Business Line Data and Key Metrics Changes - Total utilization for the quarter was 96.2%, with a daily Time Charter Equivalent (TCE) revenue of $42,298 [20] - Spot TCE per available day was approximately $41,754, while the Helios Pool reported a spot TCE of about $45,237 per available day [21] - Daily operating expenses (OpEx) were $9,189, down sequentially due to strong cost containment efforts [22] Market Data and Key Metrics Changes - Global seaborne LPG volumes fell by over 2% year-on-year to 106.8 million tons in 2020, with U.S. export volumes increasing by 16% to 46 million tons [32] - The Baltic Market Index averaged $76 per metric ton in the last quarter, with rates increasing from $55 per ton at the beginning of the quarter to over $100 per ton in December [34] - U.S. propane storage levels are tracking well below last year's levels, indicating a tight supply situation [38] Company Strategy and Development Direction - The company announced a $100 million self-tender offer to return cash to shareholders, indicating a commitment to shareholder value creation [8][30] - The management emphasized a focus on returns over growth, prioritizing shareholder returns rather than acquiring new ships at this time [68][81] - The company plans to continue investing in environmental technologies and efficiency improvements for its fleet [46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market environment, stating that while rates have fallen from peak levels, the market remains promising and sustainable [12] - The ongoing COVID-19 pandemic has led to increased digitalization and remote monitoring, enhancing operational efficiency [10] - The company anticipates that drydocking and maintenance on the global fleet will have a stronger impact this year than last year, with many vessels expected to undergo maintenance [49] Other Important Information - The company plans to fit two ships with scrubbers, completing its scrubber program, with expected outlays of $6 million to $8 million over the next couple of quarters [43] - The current fleet order book remains at reasonable levels, supporting the VLGC market for the medium term [50] Q&A Session Summary Question: Regarding the large buyback and return of capital to shareholders - Management indicated that the buyback authorization will be evaluated based on various factors, including share price and market conditions [54] Question: On the utilization spike among different vessel categories - Management noted that there is some seasonality in the increased utilization, but overall, delays in the Panama Canal are expected to continue [59] Question: About reinvesting in the business versus returning capital to shareholders - Management stated that while growth is not excluded, the focus is currently on returns to shareholders rather than acquiring new ships [68] Question: On the spot market and time charter activity - Management acknowledged limited long-term deals but noted some activity for short-term time charters [71] Question: Regarding U.S. exports and market share - Management expressed that U.S. exports could replace lost Middle Eastern cargoes, leading to increased ton-mileage [75]