Dorian LPG(US:LPG)2019-11-04 23:35Financial Data and Key Metrics Changes - The reported adjusted EBITDA for the quarter was $67.3 million, a significant increase from the prior quarter's $38.4 million and substantially stronger than the $19.6 million reported during the same quarter last year [19] - Total utilization for the quarter was 92.9% with a daily TCE of $47,623, yielding a utilization adjusted TCE of about $44,241 [15] - Cash outlays for dry-dockings were approximately $3.6 million, or $1,719 per fleet day [21] Business Line Data and Key Metrics Changes - Spot TCE for the Helios Pool was $51,613 per day with a utilization of 91.5% [16] - Daily operating expenses for the quarter were $8,594, an increase from the previous quarter's $8,052 [16] - Total G&A for the quarter was $5.9 million, with cash G&A at about $5 million [17] Market Data and Key Metrics Changes - Seaborne LPG has grown 15% year-to-date over 2018, with U.S. export volumes recently surpassing those from the Middle East [29] - U.S. propane inventories are at the high end of their five-year range, hitting 100 million barrels, which is 22% higher than the same time last year [32] - The order book remains stable, representing 13% of the current fleet, with expectations for increased demolitions due to IMO 2020 compliance [33] Company Strategy and Development Direction - The company is focused on capitalizing on the price differential between low-sulfur and high-sulfur fuel oil, with plans to have 12 out of 23 vessels equipped with scrubbers by the end of the third quarter of 2020 [11][34] - The company is committed to thoughtful capital allocation, as evidenced by the $50 million stock buyback program [12] - The management remains optimistic about the market outlook, supported by strong fundamentals and a contained order book [12][27] Management's Comments on Operating Environment and Future Outlook - Management noted that the market's seasonality is becoming less predictable, with a shift in dynamics due to new supply and terminal developments [38] - The company expects to continue generating solid cash returns for shareholders, maintaining a constructive view on business prospects [27] - Management highlighted the importance of monitoring inquiries for longer-term deals from charterers, indicating a gradual return to maturity in the market [39] Other Important Information - The company has repurchased $6.7 million of stock in accordance with its buyback authorization [12] - The cash flow and liquidity remain strong, with restricted and unrestricted cash increasing by about $13 million to over $96 million since the quarter-end [23] - The company has decided to postpone the installation of three scrubbers to take advantage of strong market rates [25] Q&A Session Summary Question: What is causing the strength in the VLGC market as winter approaches? - Management indicated that the seasonality aspect of the market is being distorted, with less predictability in seasonal patterns due to new supply and terminal developments [38] Question: What is the inquiry looking like for longer-term deals from charterers? - Management noted that inquiries for two to three-year deals are beginning to emerge, although nothing actionable has been seen yet [39] Question: How should investors think about cash dividends versus buybacks in modeling for 2020? - Management stated that they are evaluating the most efficient way to return value to shareholders, including the possibility of dividends alongside the buyback program [47] Question: What is the status of scrubber installations? - Management confirmed that while the original schedule was to have all 12 scrubbers done by January 1, now nine are expected to be completed by that date, with delays due to specific issues at a Chinese shipyard [49][50]