Q2 2024 Dorian LPG Ltd Earnings Call
Okay.
[music].
Speaker 1: I.
Speaker 1: The itation.
Yeah.
[music].
Speaker 1: The.
Speaker 1: you
Speaker 1: The for for.
Welcome to the Dorian LPG second quarter 'twenty 'twenty four earnings conference call. At this time all participants are in listen only mode. A brief question and answer session will follow the formal presentation.
Speaker 2: Welcome to the Dorian LPG second quarter 2024 earnings conference call. At this time all participants are in listen only.
Speaker 2: A brief Q&A session will follow the formal presentation.
Speaker 2: As a reminder, this conference is being recorded. Additionally, a live audio webcast of today's conference call is available on Dorian LPG's website, which is www.dorianlpg.com.
As a reminder, this conference is being recorded. Additionally, a live audio webcast of today's conference call is available on Dorian Lpg's website at Www Dot Dorian LPG Dot Com I would now like to turn the conference over to Ted Young Chief Financial Officer. Thank you. Mr. Young. Please go ahead.
Speaker 2: I would now like to turn the conference over to Ted Young, Chief Financial Officer.
Thank you Asher good morning, and thank you everyone for joining us for our second quarter 2024 results Conference call with me today are John how would you what terrorists chairman President and CEO of Dorian LPG, John <unk>, John Mcreynolds, Chief Executive Officer of Dorian LPG, USA, and Tim Hansen, our Chief commercial officer.
Speaker 3: Thank you, Asha. Good morning and thank you everyone for joining us for our second quarter 2024 Results Conference call. With me today are John Hajibat-Terris, Chairman, President and CEO of Doreen LPG, John Likourous, Chief Executive Officer of Doreen LPG USA, and Tim Hanson, Chief Commercial Officer. As a reminder, this conference call webcast in a replay of this call will be available through November 9th, 2023.
As a reminder, this conference call webcast and a replay of this call will be available through November nine 2023.
Many of our remarks today contain forward looking statements based on current expectations. These statements may often be identified with words, such as expect anticipate believe or similar indications of future expectations.
Speaker 3: Many of our remarks today contain forward looking statements based on current expectations.
Speaker 3: The statements may often be identified with words such as expect, anticipate, believe, or similar indications of future expectations.
Speaker 3: Although we believe that such forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors, as well as general economic conditions.
Though we believe that such forward looking statements are reasonable we cannot assure you that any forward looking statements will prove to be correct. These forward looking statements are subject to known and unknown risks and uncertainties and other factors as well as general economic conditions should one or more of these risks or uncertainties materialize or should underlying assumptions are.
Speaker 3: one or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those weeks rest today.
Estimates proved to be incorrect actual results may vary materially from those we express today.
Speaker 3: Additionally, let me refer you to our unotteted results for the period ended September 30th, 2023 that were filed this morning on Form 10Q. In addition, please refer to our previous filings on Form 10K, where you'll find risk factors that can cause actual resource to differ materially from those forward-looking states.
Additionally, let me refer you to our unaudited results for the period ended September 32023 that were filed this morning on Form 10-Q. In addition, please refer to our previous filings on forms on Form 10-K, where you'll find risk factors that could cause actual results to differ materially from those forward looking statements.
Speaker 3: Finally, you may find it useful to refer to the investor highlights slide posted this morning on our website as we go through our prepared remarks. With that, I'll turn over the call that John Hodge of Attarists.
Finally, you may find it useful to refer to the industrial highlight slide posted this morning on our website as we go through our prepared remarks with that I'll turn over the call to John Hunter for terrorists.
Thank you Ted.
Speaker 4: With a very strong quarter and recordy bidat, a board declared another dollar per share dividend.
With a very strong quarter and record EBITDA, Our board declared another dollar per share dividend.
The strength of our balance sheet with net debt to total capitalization of about 30% and attractive financing conditions.
Speaker 4: The strength of our balance sheet would debt to total capitalization of about 30% and attractive financing conditions enabled us to return about 650 million dollars to shareholders since our IPO, while also pursuing a conservative fleet renewal policy and continuing to invest in fleet operational efficiencies and decarbonization initiatives.
Conditions enabled us to return about $650 million to shareholders since our IPO, while also pursuing a conservative fleet renewal policy of continuing to invest in fleet operational efficiencies and decarbonization initiatives.
Yeah.
Speaker 4: We installed scrubbers on two additional ships and plans to install a scrubber on one more in calendar year 2024 Bringing our total scrubber fleet to 16 ships including one time charter in and with our four dual fuel ships Being up under in under our operation 20 of the 25 ships in our fleet reflect investments in greener technology
We have installed scrubbers on two additional ships and plan to install a scrubber on one more in calendar year 'twenty to 'twenty four bringing our total scrubber fleet to 16 ships, including one time charter in and with our four dual fueled ships being under and under our operation 20 of the 25 ships in our fleet.
Investments in Greener technology.
Speaker 4: We're at the forefront of the new environmental regulations and continue collaborating with Chaudarest to ensure compliance while optimizing our fleet operational utilization.
We're at the forefront of the new environmental regulations and continue collaborating with charterers to ensure compliance while optimizing our fleet operational utilization.
Speaker 4: Our fleet performance and new tech teams evaluate and have deployed energy-saving devices and silicon paints, resulting in significant savings and consumption and reduction of our carbon footprint.
Our fleet performance of new Tech teams evaluate and have deployed to energy saving devices and shouldn't call. It paints, resulting in significant savings in consumption and reduction of our carbon footprint.
Speaker 4: The record rates in the spot market indicated tonnage supply demand equilibrium, a defective absorption of the order of both bulge in 2023.
The record rates in the spot market indicators tonnage supply demand equilibrium and effective absorption of the order book Bulge in 'twenty to 'twenty three.
Speaker 4: We're cautiously optimistic about the market in 2024, supported by US production and exports, and by demand in Asia and PDH demand in China.
We are cautiously optimistic about the market in 'twenty 'twenty four supported by U S production and exports and by demand in Asia and P. D H demand in China.
Speaker 4: Our caution relates to geopolitical and trade tension.
Our caution relates to geopolitical and trade tensions.
Speaker 4: To the list of unknowable issues, we recently added the climate impact on Panama Canal Trends.
So the list of the unknowable issues. So we recently added the climate impact on Panama Canal transits.
Yeah.
Speaker 4: We're closely following and evaluating prospects for future trades, including ammonia. The outlook for transportation of ammonia is shangwin, and manufacturers claim to be progressing their plans for a deployment of engines capable of using ammonia as a propulsion fuel.
We're closely following in evaluating prospects for future trades, including ammonia.
The outlook for transportation of ammonia Shanklin and manufacturers' claimed to be progressing that plans for deployment of engine capable of using ammonia as a propulsion fuel.
Speaker 4: As members of the All-Aboard Alliance, we have participated with a group comprising 11 leading maritime companies in the launch of an initiative to promote diversity and inclusiveness and equity on board, with a view to broadening the appeal of the seafaring profession and increasing the participation of women who currently make up less than 2% of the workforce. And with this, I'm passable.
As members of the all aboard Alliance, we participated with a group comprising 11, leading maritime companies into the launch of an initiatives to promote diversity and inclusiveness and equity on board with a view to broadening the appeal of the shoe ferring profession, and increasing the participation of women who current.
They make up less than 2% of the workforce.
And with this I pass on to Ted Young.
Speaker 3: Thanks, John . My comments today will focus on capital allocation, our financial position and liquidity, and our unaudited second quarter result.
Thanks, John.
My comments today will focus on capital allocation, our financial position liquidity and our unaudited second quarter results.
Speaker 3: At September 30th, 2023, we reported a 192 million of free cash, which was a significant increase from the 155.5 million reported at the end of June .
September 30th 2023 we reported 192 million of free cash, which was a significant increase from the $155 5 million reported at the end of June.
Speaker 3: As of November 1, we had an unrestricted cash balance of 171.7 million, which is net of the $40.3 million dividend payment made today.
As of November one we had an unrestricted cash balance of $171 7 million.
Which is net of the $43 million dividend payment made today.
Speaker 3: With a debt balance, a quarter end of 637.1 million.
With a debt balance at quarter end of $637 1 million.
Speaker 3: Our debt to total book capitalizations fitted at 40.8% and our net debt to total book capitalization at 28.5%.
Our debt to total book capitalization stood at 48% and our net debt to total book capitalization at 28, 5%.
Speaker 3: With well-structured and attractively priced debt capital, an undrawn revolver, and one debt-free vessel, coupled with our strong free cash balance, we enjoy a comfortable measure of financial flexibility.
It was well structured and attractively priced debt capital and Undrawn revolver, and one debt free vessel, coupled with our strong free cash balance we enjoy a comfortable measure of financial flexibility.
We currently expect our cash cost per day for the coming year to be approximately $25000 per day, excluding capital expenditures for dry docking and scrubbers.
Speaker 3: We currently expect our cash cost per day for the coming year to be approximately $25,000 per day, excluding capital expenditures for dry docking and scrubber.
Speaker 3: For the discussion of our second quarter results, you may also find a useful refer to the investor highlights slides posted this morning on our website.
For the discussion of our second quarter results. You may also find it useful to refer to the investor highlight slides posted this morning on our website.
Speaker 3: I would also note that my remarks today will include a number of terms such as TCE, operating days, available days, and adjusted EBITDA. Please refer to our filings for the definitions of these terms.
I would also note that my remarks today will include a number of terms such as T. C. Operating days available days and adjusted EBITDA. Please refer to our filings for the definitions of these terms.
Speaker 3: For our second quarter chartering results, we achieved a TCE of $65,128 per operating day with a total utilization of 96.5%, yielding utilization adjusted TCE of about $62,818.
For our second quarter chartering results, we achieved a TCE of $65128 per operating day with a total of with a total utilization of 96, 5% yielding utilization adjusted TCE of about $62818.
Speaker 3: This TCE result represents the second best in the company's history.
This T. C result represents the second best in the company's history.
Since we only have two vessels trading outside the Helios pool, both of which are on time charter.
Speaker 3: Since we only have two vessels trading outside the Helios pool, both of which are on time charter, the spot results that Helios reports are the best measure of our spot chartering performance.
<unk> results for the Helios reports of the best measure of our spot chartering performance.
Speaker 3: For the September 30 quarter, the Helios Pool earned a TC of $78,643 for its spot and COA voyages, which is the highest spot rate the pool has ever earned for a quarter.
For the September 30 quarter, the Helios pool earned a TCE of $78643 for its spot and Coa voyages, which was the highest spot rate the pool has ever earned for a quarter.
Speaker 3: Well, we've always provided information on the number and length of our time charters in our filings. For convenience, we have replicated that information on page four of our Investor Highlights materials.
Well, we've always provided information on the number and length of our time charters in our filings for convenience, we have replicated that information on page four of our investor highlights materials.
Speaker 3: Based on that information, you can see that we have eight Dorian vessels on time charter within the pool, indicating a spot exposure of about 70% for the 27 vessels in the Helios pool.
Based on that information you can see that we have eight dorian vessels on time charter within the pool, indicating a spot exposure of about 70% for the 27 vessels in the Helios pool.
Speaker 3: Turning to the quarter ending December 31, 2023, i.e. the current quarter, we are pleased to report that we have 69% of the available days in the Helios pool booked at a time charter equivalent in excess of $85,000 per day.
Turning to the quarter ending December 31, 'twenty to 'twenty three I E that the current quarter. We are pleased to report that we have 69% of the available days in the Helios pool booked at a time charter equivalent in excess of $85000 per day.
Speaker 3: which obviously reflects a very strong freight market. Please note that the $85,000 includes both spot fixtures and time charters.
Which obviously reflects very strong freight market. Please.
Please note that the 85000 includes both spot fixtures and time charters.
Speaker 3: Opex per calendar day for the quarter, excluding dry docking related costs, was $10,399, which was up somewhat sequentially. Sequentially, crew costs were down while lubricants and spares stores were increased modestly.
Opex per calendar day for the quarter, excluding dry docking related cost was $10399, which was up somewhat sequentially sequentially crew costs were down while lubricants and spares stores were increased modestly.
Speaker 3: Our time charter in expense for the five time charter in vessels came in at $12.1 million, consistent with our guidance last quarter.
Our time charter in expense for the five time charter in vessels came in at $12 1 million consistent with our guidance last quarter.
Speaker 3: That number reflects three vessels for the whole quarter, one TCN vessel that was redelivered at the end of August and the crystal ball, which delivered July 10th, 2023.
That number reflects three vessels for the whole quarter. One T. C. In vessel that was redelivered at the end of August and the Crystal ball, which deliver July 10 2023.
Total G&A for the quarter was about $13 $6 million in cash G&A.
Speaker 3: Total GNA for the quarter was about $13.6 million, and cash GNA, that's GNA excluding non-cash comp expense, was about $9.4 million.
SG&A, excluding noncash comp expense was about $9 4 million.
Speaker 3: Within that amount was $3.4 million of cash bonuses paid during the quarter. Therefore, our core G&A came in at roughly $6 million, which is consistent with our expectations.
Within that amount was $3 4 million of cash bonuses paid during the quarter.
Therefore, our core G&A came in at roughly $6 million, which is consistent with our expectations.
Speaker 3: Non-cash compensation expense was higher this quarter because US GAAP requires us to book all service-based grants at the prevailing stock price on grant date. Thus, while the number of shares granted was flat versus the prior year, the price was virtually double, which explains the increased expense. Going forward, we expect non-cash comp expense to be around $1.4 million per quarter.
Noncash compensation expense was higher this quarter because U S. GAAP requires us to book All service based grants at the prevailing stock price on grant date.
Thus, while the number of shares granted was flat versus the prior year. The price was virtually double which explains the increase the expense going forward, we expect noncash comp expense to be around $1 $4 million per quarter.
Speaker 3: A reported adjusted EBITDA for the quarter was $104.6 million, which is the best quarterly adjusted EBITDA in our corporate history. Our adjusted EBITDA for the last 12 months is over $350 million, nearly $360 million.
Our reported adjusted EBITDA for the quarter was $104 6 million, which was the best quarterly adjusted EBITDA in our corporate history.
Our adjusted EBITDA for the last 12 months, it's over 350 million nearly $360 million.
Turning to debt service, our cash interest expense, which we calculate as the sum of the line items interest expense, excluding deferred financing fees and other loan expenses and realized gain loss on interest rate swap derivatives for the quarter was $7 7 million a decline of about 200000 from the prior quarter, reflecting lower.
Speaker 3: Turning to debt service, our cash interest expense, which we calculate as the sum of the line items, interest expense, excluding deferred financing fees and other loan expenses, and relayed gain loss on interest rate swap derivatives for the quarter was $7.7 million, a decline of about $200,000 from the prior quarter, reflecting lower average debt and our all-in debt cost of about 4.7%, which we note is below the current floating SOFR rate.
Our average debt and our all in debt cost of about 4.7%, which we note is below the current floating so for rates.
Speaker 3: Quarterly principal amortization remains steady at $13.3 million.
Quarterly principal amortization remained steady at $13 $3 million.
Speaker 3: Our trailing 12-month income is approximately $256 million, and with a booked shareholders' equity at September 30, 2023 of roughly $923 million, we generated a 27.7% return on shareholders' equity.
Our trailing 12 month income is approximately $256 million and with a book shareholders' equity at September 30th 2023 of roughly $923 million, we generated 27.7% return on shareholders' equity. We are proud of this result, because it not only reflects the strong profitability that our our.
Speaker 3: We are proud of this result because it not only reflects the strong profitability that our platform is capable of generating, it also shows that we've managed to keep our shareholders' equity at an appropriate level, balancing retention of necessary earnings with paying out meaningful dividends to our shareholders.
Is capable of generating it also shows that we've managed to keep our shareholders equity at an appropriate level balancing retention of necessary earnings with paying out meaningful dividends to our shareholders.
Speaker 3: Although we currently hold a roughly 86% economic interest in Helios, we do not consolidate its P&L or balance sheet accounts, which has the effect of understating our cash and working capital somewhat.
Although we currently hold a roughly 86% economic interest in Helios, we do not consolidate its P&L or balance sheet accounts, which has the effect of understating, our cash and working capital somewhat.
Speaker 3: Thus, to provide some additional insight, we note that on Wednesday, November 1, 2023, the pool held roughly $38 million of cash.
Thus to provide some additional insight we note that I know Wednesday November <unk> 2023, the poll at the pool held roughly $38 million of cash.
One dollar per share dividend declared in early October and paid today brings our total dividends paid to $10 50 per share or nearly $425 million in the aggregate.
Speaker 3: The $1 per share dividend declared in early October and paid today brings our total dividends paid to $10.50 per share, or nearly $425 million in the aggregate. We underscore again that these dividends are irregular dividends, reflecting the irregular nature of VLGC rates.
We underscore again that these dividends are irregular dividends, reflecting the irregular nature of VLCC rates.
Speaker 3: Together with our open market stock repurchases and our $113.5 million self-pender offer, we have returned over $650 million to our shareholders since our IPO.
Together with their open market stock repurchases and 113 and a half million dollar self tender offer we have returned over 650 $650 million to our shareholders since our IPO. Our board remains committed to enhancing total shareholder returns as John has mentioned on numerous occasions also recognize the importance of retaining capital.
Speaker 3: Our board remains committed to enhancing total shareholder returns, and as John has mentioned on numerous occasions, also recognize the importance of retaining capital to renew and expand the fleet as market opportunities present themselves. These goals are balanced against the market outlook, the operating and capital needs of the business, and an appropriate level of risk tolerance given the volatility in shipping.
To renew and expand the fleet as market opportunities present themselves. These goals or gallon are balanced against the market outlook, you're operating and capital needs of the business and an appropriate level of risk tolerance, given the volatility in shipping.
Speaker 3: With strong LPG trade fundamentals, we remain cautiously optimistic about our cash flow generation over the coming months. With that, I'll pass it over to Tim Hansen.
With strong LPG trade fundamentals, we remain cautiously optimistic about our cash flow generation over the coming months with that I'll pass it over to Tim Hansen.
Okay.
Speaker 5: Thank you, Chad, and good day, everyone. The second quarter of fiscal year 2024 is primarily characterized by record highs being registered on the Baltic indexes for VFDCs during September . The primary driver of the frame rate market was the widening US arbitrage vessel delays and subsequent vessel routing decisions to best handle the widening arbitrage and delays. First, when looking at the arbitrage,
Thank you Chad and good day everyone.
The second quarter physical years 'twenty to 'twenty four is primary characterized by record highs being registered on the Baltic Index is from your disease. During September the primary driver of before I'm afraid Margaret where the widening U S arbitrage vessel delays and subsequent worsen routing decisions to best handle.
The widening arbitrage and Denise.
First when looking at the arbitrage.
Speaker 5: Continued weak domestic demand in North America, coupled with record-breaking production of natural gas liquids, continued to increase inventories, which resulted in lower export prices.
Weak domestic demand in North America, coupled with record breaking production from natural gas liquids continue to increase your adventures, which resulted in lower export prices.
Speaker 5: Meantime, in anticipation of the seasonal stock building, typical in the autumn months, Asian importers bid off the import prices, widening the price arbitrage.
Meantime in tubes, she patient after seasonal stock building typical in the ultra months Asian import or paid off the import prices widening price arbitrage, which should continue to increase the closer that the conversion of wood working with Doe gets through the winter months.
Speaker 5: should continue to increase the closer that the commercial working window gets to the winter.
Speaker 5: The widening arbitrage was therefore a reality over the quarter, as were the delays. Delays for translating the Panama Canal increased compared to the prior quarter, with an average waiting time up on both the new Panamaxes and the old Panamax locks. As important as the actual increase of average waiting time was, the increased volatility in the projected waiting time in August and September further strengthened the arbitrage.
The widening arbitrage was therefore, a reality over the Florida, that's where the delays related to translating the Panama canal increased compared to the prior quarter with an average waiting time.
A new panamaxes and the old Panamax locks.
As important as the actual increase of average waiting time was the increased volatility in the projected waiting time in August and September for those strengths in the arbitrage.
Speaker 5: While the volatility and occasionally two-weeks-plus waiting time at Panama Canal falls in September already created market inefficiencies, this was escapated by the delays in the Far East resulting from three particularly violent typhoons that happened in short succession of each other over the August .
While the volatility and occasionally two weeks plus waiting time at Panama Canal August and September already created market inefficiencies.
This was a script aided by the delays in the far east.
Falling from three particularly violent typhoons that happened in short succession of each other over the August months ship owners had.
Speaker 5: ship owners has particular difficult time anticipating vessel availability for loading in August and September , depending on the loading in next loading area. But ship owners looking to load in the US Gulf, the Panama de laise added to the complex.
Difficult time, anticipating basically liberty dependency for loading in August and September depending on the loading Nick's looking area.
But ship owners looking to load in the U S Gulf the Panama delays added to the complexity.
These factors contributed to movie as he sees avoiding balancing towards Panama or together.
Speaker 5: These factors contributed to more VLDCs avoiding ballasting towards Panama altogether.
On average the quarter ending September 2023 had about 13 five.
Speaker 5: On average, the quarter ending September 2023 had about 13.5 VLTCs ballasting to the US via Suez per month.
You'll just see us balancing to the U S b of Suez for months.
Speaker 5: This compared to an average of 7.5 years disease per month on the quarter prior.
This compares to an average of seven five year disease for months on the quiet board of Pryor.
Speaker 5: Ballast routes via the Cape of Good Hope were also higher compared to the quarter prior for vessels commencing their ballast from the Asia during early August .
Dallas routes via the Cape of good who were also higher compared to the quarter prior vessels commencing the palace from the Asia doing really August.
Speaker 5: Mobile disease balancing to the US calls not only increased the ton miles in the market, but also decreased the number of presumed low-ready vessels in the US call of in September . Both factors contributed to the benchmark of Schuzen's sheep array known as a BLPT-3, which reached a record high of $253 per metric ton.
Moving to just use pallets things with the U S calls not only increase the.
Ton miles in the market, but also decrease the number of resumes load ready versus in the U S. Gulf in September those factors contributed to the benchmark jousten cheaper rate knowing that G III, which reached a record high of 253.
All of them are metric tons, which is about $150000 a day chichi onboard the ship.
Speaker 5: which is about $150,000 a day, GCN Unable to Ship.
Speaker 5: We have so far focused mainly on the US Far East Avatross and Associates that causes and the effects on the Western faith market for users.
We have so far focused mainly on the U S far east arbitrage and associate.
The cultures and the effects on the restaurant freight market sees what the Prime mentioned factors also had a significant impact on their reason golf to Asia market.
Speaker 5: But the prime engine factors also had a significant impact on their even goals to HM.
Speaker 5: Because the increased number of ELGCs passing through the US via Swiss canal of Cape Scotto, from Asia region, in August , the number of theoretically available vessels for loading in the Arabian Gulf.
Because of the increased number of Vlccs got us into the U S via Suez Canal, Okay. Good scope from Asia region.
In August the number of theoretically available vessels for loading in the Arabian Gulf increased the position there. So of course in the Arabian Gulf was therefore in phases.
Speaker 5: The position this for August in the Arabian Gulf was therefore inflated. But by the time the market fully understood the implications and we're struggling to secure a chance in the Arabian Gulf during September , the benchmark rate, Russia and the achiever known as the PLPG1, reach record levels with a peak of US$183 metric tons. That's about 170,000.
By the time the market fully understood the implications and and we're struggling to see across China in the Arabian Gulf During September the benchmark rate rushed into achiever donuts.
<unk> reached record levels with a peak.
All 183 metric tons, that's about $170000 per day.
Speaker 5: To wrap up, about 30-year disease have been delivered in January through September 2023, including our own new buildings, and about 12 more are forecasted to deliver through the last quarter, the last calendar quarter of 23, although the number represents a significant increase in investment supply, increasing sea bone trays, healthy products.
To wrap up about hundred about 30 ish.
These have been deliver January through September 2023, including our own your buildings and about 12 more full cost it's a believer during the last quarter.
The last calendar quarter of 'twenty three although the number represents a significant increase in vessel supply increasing seaborne trade healthy per Doc product fundamentals well the G and inefficiencies in the market altogether supported affirmed trade market levels and even allowed for records to be set during the call.
Speaker 5: product fundamentals, well the G and inefficiencies in the market, or together supported a firm trade market levels, and even allowed for records to be set to.
Uh huh.
Speaker 5: And while more new buildings will have to bear up short going forward and macroeconomic and geopolitical concerns also exist, optimism remains on the VLGC segments by removing deeper into the inventory building season. Thank you.
And one more new buildings will have to pay up so going forwards and macroeconomic and geopolitical concerns also exist optimism remains on the V O E segments.
But as we move deeper into the inventory building season.
Thank you that's all.
Pos or what's really driving the courage.
Yeah.
Thank you Tim.
Speaker 6: This quarter of the daily savings realized when our scrubber vessels stood at 2938 per day, providing improved voyage economic.
This quarter daily savings realized on our scrubber vessels stood at 2938 per day, providing improved voyage economics.
Speaker 6: The fuel cost of the parental between high self-of-pew alloy and very low self-of-pew alloy labor is about $162 per metric.
The pure cost differential between high sulfur fuel oil and very low sulfur fuel over the average.
$162 per metric ton.
During the third quarter of 2023, the average price spread between the high sulfur fuel oil and the very low sulfur fuel oil now compared to second quarter due to supply and demand factors.
Speaker 6: During the third quarter of 2023, the average price spread between the high sub of your law and the very low sub of your lawyer narrowed compared to second quarter due to supply and demand facts.
Speaker 6: The pricing differential of LPG versus the loss out for fuel oil, like Houston's student, about $200 per metric ton for the third quarter, which is useful for dual fuel engine bass.
The pricing differential of LPG versus the last half of pure alloy like Houston stood at about $200 per metric ton for the third quarter, which is a useful for dual fuel engine vessels.
Speaker 6: We have recently completed another scrubber retrofit during the recent dry docking, which brings the total number of scrubber-owned vessels in the fleet to 14.
We have recently been completed and a lot of scrubber retrofits during the recent dry docking, which brings the total number of scrubber owned vessels in the fleet.
2014.
Speaker 6: We plan to retrofit another vessel with a scrubber unit during calendar 2024.
We plan to retrofit it another vessel with a scrubber unit you in calendar 2024.
The installation of energy saving devices and cynical how coatings on our vessels have provided significant performance improvements in fuel savings and the reduction of the fleet C O two emissions.
Speaker 6: The installation of energy saving devices and silicon how coatings on our glasses have provided significant performance improvements in pure savings and a reduction of the fleet CO2 emissions.
Speaker 6: The implementation of engine power limitation across our fleet in line with a 2023 EXI regulations is almost completed. As we have also completed the main engine upgrades, both of which result in better fuel efficiency and improved FII rated.
The implementation of engine powered limitation across our fleet in line with that 2023 Exa regulations is almost completed.
As we have also completed the main engine upgrades, both of which result in better fuel efficiency and improve C. I a rating.
The updated I am more greenhouse gas strategy adopted in July 2023 accelerated transition to net zero and will shed more stringent annual emission reduction targets.
Speaker 6: We updated IAMO greenhouse gas strategy adopted in July 2023, accelerates transition to net zero and will set more stringent annual emission reduction target.
Speaker 6: This will speed up the update of alternative low carbon and zero carbon fuels, as well as novel emission reduction technologies, such as on board carbon capture and storage.
This will speed up the uptake of alternative low carbon and zero carbon fuels as well as novel emission reduction technologies, such as onboard carbon capture and storage.
Speaker 6: In the long run, we see the solution as key to meeting the IMO greenhouse gas accelerated reduction ambition.
In the long run we see this solution as key to meeting the I M O greenhouse gas accelerated reduction ambitions.
Speaker 6: The EU mission trading system regulation, which becomes effective on January 1, 2024, and will apply to all cargo and passenger ships over to 5,000 gross tenants, calling that you, you, you, you, you, ports, will have shipping companies surrendering their first EU allowances by September 2025.
The E U.
Emission trading system regulation, which becomes effective on January 1st 2024, and will apply to all cargo and passenger ships about 5000 gross ton lunch called.
Calling that you you courts are will have shipping companies surrendering their first EU allowances by September 2025.
Speaker 6: which will reflect all their emissions reported in 2024.
Which would reflect older Michigan reported in 2024.
Speaker 6: We, Adoreans, have prepared to meet those new requirements.
We are doing and have prepared to meet the new requirements.
Speaker 6: The Global Maritime Forum last month in Athens brought together all the major stakeholders in shifting to discuss challenges and opportunities as governments and industries look to adopt global and regional decolonization strategies and regulation.
The global Maritime Forum last month and that was brought together all of the major step stakeholders in shifting to discuss challenges and opportunities.
As governments and industries look to adopt global and regional decarbonization strategies and regulations.
Speaker 6: The solutions range from new fewer types to continued operating and technical improvements, but all these options come with a range of different considerations ranging from fuel and the liability to worker safety and train.
These solutions range from new fuel types through continued operating and technical improvements, but all of these options come with a range of different considerations ranging from Hewlett have a liability to worker safety and training.
Speaker 6: We expect that shipping will be able to tackle the the carbonization challenges that the world has put in front of.
We expect that shipping would be able to tackle the decarbonization and challenges that the world has put in front of it.
Speaker 6: And now I would like to pass it over to John Hedget, but there's for closing remarks.
And now I would like to pass it over to John has it but theres for closing remarks.
Yeah.
Speaker 4: Thank you, John . Thank you all. We're happy to take questions. Asha, if you...
Thank you John and thank you all we're happy to take questions and I'll show you a Houston.
Can handle that for us please.
Thank you.
Speaker 2: Thank you. We will now begin the question and answer session. To join the question two, you may press star then one on your telephone keypad. You will hear tone acknowledging your request. If you're using a speaker phone, please pick up your handset before pressing any.
We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad.
He had told acknowledging your request.
If youre using a speakerphone please pick up your handset before pressing any keys to Vitale. Your question. Please press Star then two.
Speaker 2: To withdraw your question, please press star, then two. The first question comes from Omar Noqda, who's from Jeffreece. Please go ahead.
First question comes from Omar.
That's from Jefferies. Please go ahead.
Speaker 7: Thank you, take care. It's good morning. And congratulations again, another strong quarter, and clearly, and obviously, the outlook continues to get even stronger.
Thank you Hey, guys. Good morning, and congratulations again on another strong quarter in coli and obviously the outlook continues to get even stronger.
Speaker 7: This week has been pretty big, obviously, with the latest Panama Canal restrictions and how that looks at least to on the face of it, caused more disruption. But there's a couple of questions on that. Well, obviously, you're on set, I think you may.
Yeah. This week has been pretty bad obviously with the Panama Canal restrictions.
Oh that looks at least two.
But.
Caused more disruption.
Questions on that well, obviously, Todd I think you mentioned Oh, okay from the presentation.
Speaker 7: Are you okay with the presentation? The pool has gotten 69% cover that 85,000 now. So you've already gotten that type of rate. And this is before the Panama Canal situation that's kind of really gotten more restrictive now. But just wanted to ask in a big picture, what do you think happens to VLGC now? Are VLGC's gonna get shut out completely from using the Canal here in the near term?
Paul has gotten <unk> 69 per cent covered at 85000 miles, though we've already gotten that type of rate and this is before the Panama Canal situation, that's kind of really more of a system now, but just wanted to ask maybe big picture. What do you think happens to the LG now.
He's gonna get shut out completely from using that can now here in the near term and how do you think that overall will affect the supply picture in the coming months.
Speaker 7: And how do you think that overall will affect the supply picture in the coming months?
So Omar the Panama Canal situation has been has been.
Speaker 4: So Omar, the pan-wakanal situation has been developing, let's say. It's only hit the press in a big way in the last two days, but the...
Developing let's say, it's the only hit the press in a big way in the last two days, but the the what you see now is not it didn't happen overnight.
Speaker 4: What you see now is not, it didn't happen overnight.
Speaker 4: So the coverage that Ted mentioned.
So the coverage that that Ted mentioned.
Speaker 4: reflects, of course, rates that have been...
It reflects of course.
Rates that are have been.
Speaker 4: you know, fixed during the course of the past few weeks, but, but it also reflects the anticipation of the canal difficulties. As for getting shot at-
Fixed during the course of the past few weeks, but but it also reflects the anticipation of the 10 now difficulties.
As far getting shut out completely.
Speaker 4: For VLGC's being getting shut out completely from the canal, it's impossible for us to tell what will happen. There's, there, there are very specific,
For Vlccs being getting shut out completely from a 10 hour it's impossible for us to tell.
What will happen there is that they're very specific.
Speaker 4: restrictions that are being planned, and that does not include shutting out BLGC. It just makes it harder to book and fewer transits.
The restrictions that are being planned and that does not include shutting out V. O D. C. It just makes it harder to broken and fewer transit.
Speaker 4: and Tim can give you the detail of what they are if you're interested but but at the moment there's no there no plan to shut out BLGCs and you know who knows
And then Tim can give you the detail what they are if you're interested but but at the moment. There's no. There are no plans to shut down the L. D CS.
And you know.
Who knows [laughter], who knows.
Speaker 4: If it does happen, of course, it would have a very meaningful impact on the freight rate.
If it does happen of course, it would mean, even a great but you know it would have a very.
A meaningful impact on the freight rate I expect.
Yeah Yeah.
Speaker 7: Yeah, thanks. So I mean, it clearly, I mean, I guess you could say there's a bit of a squeeze, but that's taken place here over the past few days. I know the FFA don't necessarily have the best indicator and there's not that much liquidity, but they did bike.
Yeah. Thanks, Thanks, Brian Yeah, I mean, clearly I mean, I guess, you could say, there's a bit of a squeeze but that's taken place here over the past ebay I know the FFA aren't necessarily yet.
The best indicator and there's not that much liquidity, but they did like over the past couple.
Speaker 7: over the past couple of days, where now expectations are for rates to continue to push higher here into the well into the hundreds for the next couple of months. And so, you know, just just on that.
A couple of days right now expectations are for rates will continue to push higher here into the well into the hundreds of next couple of months. So yeah, just just on that now.
Speaker 7: You know, we've always talked about the community picture for LPG. Do you think it's based off of the back drop that we have now? When you look, I guess, the conversations you're having with chargers and whatnot, is that community going to be skipped this year? And are we looking at basically just continues strengthening throughout the season?
We've always talked about the seasonality picture for LPG, you think just based off of the backs up that we have now.
When you look I guess, the you know the conversations you're having with charterers and whatnot is.
Is that seasonality going on this year.
And are we looking at basically just continued strengthening throughout the it seasonally weak.
Speaker 7: you just worried about the instruments you only arrive in.
But you're right.
And the next.
Four months.
Tim do you have an opinion on that.
Speaker 5: I think I mean, normally coming into the winter, we are seeing the delays in Panama go up, even without these reductions to the drop there. So we normally see the strengths of the market coming here and the delays going up in Panama with the Black Friday coming up and and Christmas coming up for the container ships so there will be more places. So I think we will see
Yeah, I I think I think of I mean normally coming into the to the winter season distillation tend to go up even without these reductions to the drop there. So so we normally see the strengths of the of the market.
Tell me here on the debate's going off patent back with the Black Friday coming up on Christmas coming up with a container ship. So there'll be more pressure. So I think we're going to see.
Speaker 5: more difficulties to get through than we've seen before. I think we're so far touched with we've been lucky enough to manage to get through. But I think we are definitely considering sending ships the other way as well. We are capable and as I mentioned before, others have been doing so. So I think that indicates a strong winter and it could be a prolonged
More.
Difficult to use to get through that machine before I think we so far so much wood, we've been we've been lucky enough to manage to get through them, but I think we are definitely considering sending ships.
The other way as well.
Your cable she wishes I mentioned before this has been doing so so I think that.
That indicates a strong a strong winter and it could be a prolonged.
Speaker 5: period as well for this and with the high inventories in the U.S. still going into the winter then.
The period as well for this and and with the high inventories in the U S still going into the winter then.
Speaker 5: Then the product option should be looked to be open throughout the round to win.
And the product should be the book to be open throughout.
Throughout the throughout the winter.
Yeah.
Speaker 7: Thank you, Tim. And maybe just one final one, just in terms of how the market's been reacting here recently, obviously it's been strong for some time and you've just now gotten even tighter. In terms of say, charter attitudes, do you see some of the scrambled happening? Are we seeing time charter opportunities come the way? And do you see an opportunity to stick into this strength?
Thank you Tim and maybe just one final one just in terms of how the market's been reacting here recently, obviously, it's been strong for some time and you're just now gotten even tighter.
In terms of state charter attitudes you see somewhat of a scramble happening are we seeing a time charter opportunities coming your way and you can see an opportunity to fix into this but into the strength.
Yeah.
Speaker 8: Yeah, him say that. Yeah, sorry.
Yeah, Tim say that yeah, sorry, yeah.
Speaker 5: It's always kind of this time of the year where renewals happen because contracts on product side is renewed as well. But we have seen the last couple of months a little bit of a standoff between owners and charters, what the rate should be.
I mean, it's always kind of is this time of the year, where renew was happened because contracts.
On the product side is renewed as well, but we have seen the last couple of months a little bit of a standstill between.
Standoff between illness and in childhood was what what the rate should be in them.
Speaker 5: As much as I think, nervousness of like missing out or getting it wrong, because it's been very, very difficult to read with some high swings on the phrase, even day to day, both up and down. But I think more, more chauvers is coming to the mind.
As much as I think.
Nervousness of like missing out Oh, okay. They get it wrong, because theres been been very very difficult to read with some high swing Sunday on the freight even even day to day Boes hopping oven down Oh, thank them all.
Ball childless is coming to the market now as you see in them.
Speaker 5: and asking and raise a definitely the pointing off which for the for the terms for next.
And asking rates are definitely be.
Pointing upwards for the true for next year.
Right Oh that sounds exciting.
Speaker 7: Great. All right, well, sounds exciting. I'll turn it over. Thanks, guys.
I'll turn it over thanks guys.
Okay.
Yeah.
Speaker 2: Once again, if you have a question, please press star then one.
Once again, if you have a question. Please press Star then one.
Wow.
Yeah.
Yeah.
The next question comes from Nick and then.
Speaker 2: This concludes the question and answer session. I would now like to turn the conference back over to John Hedgett-Terris for any further remarks.
This concludes the question and answer session I would now like to turn the conference back over to John How did the test for any closing remarks.
Speaker 4: Thank you, Asha. And thank you everybody for attending our call this time. And we look forward to the next time and meantime, keep safe and be well. Thank you, bye bye.
Thank you Sasha and thank you everybody for attending our call. This this time and we look forward to the next time and meantime, keep safe and that'd be well. Thank you bye bye.
Speaker 2: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Okay.
Okay.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Okay.
Yeah.
Yeah.
Yeah.
Yeah.
Yes.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.
Okay.
Yes.
Okay.
Yeah.
Yeah.
Yeah.
Yes.
Yeah.
Yeah.
Yeah.
Yeah.
Yeah.