Dorian LPG(US:LPG)2020-05-27 20:30Financial Data and Key Metrics Changes - The financial year 2020 concluded on March 31 was the best since 2016, with total adjusted EBITDA of $232.8 million, the highest in company history, and adjusted net income of $130 million [12][36] - Total utilization for the quarter was 91.7%, with daily TCE revenue over operating days of $51,888, yielding a utilization adjusted TCE of about $47,594 [13][27] - Reported adjusted EBITDA for the quarter was $67.2 million, a significant increase from $14.1 million in the same quarter last fiscal year [31] Business Line Data and Key Metrics Changes - The Helios Pool, encompassing about 35 ships, recorded a spot TCE of approximately $51,500 per available day for the quarter [28] - Daily operating expenses for the quarter were $8,556 per day, excluding dry-docking costs, reflecting a modest increase compared to the previous quarter [29] Market Data and Key Metrics Changes - Global LPG volumes during Q1 2020 totaled 26.9 million metric tons, a 3.6% year-over-year increase, while U.S. seaborne export volumes reached a record high of 11 million metric tons, over a 30% increase from the same period last year [42] - Year-to-date seaborne exports of LPG from the U.S. were 5.3% higher than last year, while the Middle East saw a 16.3% reduction year-on-year [43] Company Strategy and Development Direction - The company remains optimistic about the fundamentals of the LPG trade and is confident in its position to provide safe and reliable transportation for customers [18] - Dorian LPG has a young ECO fleet and a strong balance sheet with low leverage and good liquidity, having completed two significant financing transactions to increase liquidity and reduce financing costs [17][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the potential headwinds from the coronavirus but emphasized the resilience of the freight market and the company's operational safety [9][10] - The company is closely monitoring the impact of OPEC+ cuts on LPG trade, noting that while there may be some reductions in U.S. LPG volumes, high inventories may offset production cuts [60][62] Other Important Information - The company repurchased $32.2 million of stock since the last report, totaling $49.3 million worth of stock, or roughly 8% of shares outstanding prior to the buyback announcement [35] - The company has a sustainability feature in its financing that allows for a reduction in interest margin based on improvements in average efficiency ratios [24][80] Q&A Session Summary Question: Inquiry about refinancing and cash unlocked - Management confirmed that annual repayments are now approximately $53 million, down from $64 million, and this includes the leaseback [58][59] Question: Impact of OPEC cuts on LPG trade - Management indicated that OPEC cuts are expected to affect LPG volumes from the U.S., but the exact impact is uncertain due to high inventories [62] Question: Details on scrubber retrofits and LPG propulsion - Management stated that the cost differential for adding scrubbers is significant, and they remain interested in LPG as an alternative fuel but are cautious about the economics [91][78] Question: Time chartering strategy and rates - Management explained that the strategy involves balancing charter-out coverage with new ships, and current rates for time charters are above the market but not by much [106][112] Question: Sustainability metrics related to financing - Management clarified that the sustainability metric is based on IMO guidance, targeting a 2.7% reduction in emissions per year [127][129]