Dorian LPG(US:LPG)2024-10-31 18:25Financial Data and Key Metrics Changes - For the quarter ending September 30, 2024, the company reported EBITDA of $46.2 million and net income of $9.4 million, with net debt to total capitalization remaining at approximately 14% [7][21] - The debt balance at quarter end was $583.7 million, with a debt to total book capitalization of 34.9% and net debt to total capitalization at 13.4% [15][21] - Free cash flow for the quarter was $44 million, reflecting an irregular dividend of $42.8 million [14][21] Business Line Data and Key Metrics Changes - The company achieved time charter revenue per available day of about $37,000, which was lower than the previous quarter, but still generated over $40 million in free cash flow [18] - The Helios pool reported a TCE of $38,019 per day for spot and COA voyages, with approximately 80% spot exposure across 30 vessels [18][22] Market Data and Key Metrics Changes - The VLGC freight market experienced initial strength at the beginning of the quarter but softened mid-quarter due to weather-related disruptions and limited export capacity [8][25] - Despite challenges, August saw a record high for LPG exports from the U.S. at about 6 million tons, helping to clear a backlog of VLGCs [26][29] Company Strategy and Development Direction - The company is focused on returning value to shareholders while maintaining a strong balance sheet and investing in optimization and decarbonization initiatives [6] - The company plans to retrofit existing ships to carry ammonia and has one VLGC/VLAC scheduled for delivery in 2026 [10][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about near and mid-term market prospects, particularly with upcoming terminal expansion projects expected to enhance capacity [9][38] - The company anticipates that the efficiency of canal transits will be a significant factor affecting VLGC rates, rather than terminal capacity alone [41] Other Important Information - The company has added an eighth board member, Mark Ross, who brings extensive experience in global energy and shipping markets [11] - The company has completed three dry dockings and plans to dry dock three more vessels, including upgrades for ammonia cargo capabilities [21][33] Q&A Session Summary Question: Impact of U.S. terminal capacity on VLGC spot rates - Management indicated that the efficiency of canal transits is more critical than terminal capacity restrictions in determining VLGC rates [41] Question: Expectations for U.S. LPG inventory and winter consumption - Management noted predictions of a colder winter, which could increase U.S. consumption and impact the ARB [43] Question: Current bookings and TCE for the upcoming quarter - The company has fixed just over 60% of available days for the quarter ending December 31, 2024, at a TCE in excess of $40,000 per day [46] Question: Year-to-date decline in Middle Eastern exports - Management confirmed that Middle Eastern LPG exports are correlated with OPEC output, and an increase in production would likely lead to higher exports [49] Question: Timeline for ammonia trade development - Management suggested that while the green ammonia trade is developing slowly, it could suddenly gain momentum, positively impacting VLGC trade [50]