Q2 2026 Dorian LPG Ltd Earnings Call
Good morning and welcome to the Dorian LPG. Second quarter 2026 earnings conference call.
At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation.
As a reminder, this conference is being recorded. Additionally, a live audio webcast of today's conference call is available on Dorian lpgs website which is www.dorian.com.
I would now like to turn the conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young, please go ahead.
Thank you.
Chelsea, good morning everyone, and thank you all for joining us. For our second quarter 2026 results conference call with me today are John Hydro, verus chairman president and CEO of Dorian LPG, limited John lurrus head of energy, transition and Tim Hansen. Chief commercial officer as a reminder this conference call webcast and replay of this call will be available through November 13, 2025
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. 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.
Should 1 or more of these risks are uncertainties, materialized, or should, underlying assumptions, or estimates proved to be incorrect. Actual results May Vary materially from those we express today.
Additionally, let me refer you to our un other the results for the period ended. September 3022 that were filed this morning on form, 10 Q in addition. Please refer to our previous filings on Form. 8, 10K, where you'll find risk factors that could cause actual results to differ materially from these forward-looking statements,
I'd also encourage you to review the investor highlights posted this morning as we go through our remarks with that, I'll turn over the call to John haters.
Thank you, Ted.
Good morning and thank you for joining Ted, John Tim and me my colleagues will provide you with detailed comments on our financial results, our Market Outlook and our emissions. Reductions and operational progress.
Our dividend declared today of 65 cents. Per share a total length, 27.8 million, reflects our commitment to returning, Capital to shareholders in a manner, that is disciplined, and aligned with market conditions.
This will be our 17th dividend payment. Bringing to Total dividends distributed to over 695 million at total capital of almost 925 million returned to shareholders.
The VGC Market improved on the third calendar quarter, the Baltic index 1, average 68,000 per day up from 48,000 and the second quarter and 33,000 in the first quarter more than doubling from the start of the year.
The index peaked at just under 80,000 per day in mid August and then Eve back towards the mid-50s by the end of September.
Global seaborne, LPG, lifting made a record high at 37.21% by record, quarterly exports from North America, and from Saudi Arabia.
We believe that modern fuel-efficient VGCs, like ours, are well positioned to benefit from the constructive freight environment.
Tim will elaborate on the fundamentals, driving the VGC market, and our Outlook.
On the operational side, we're almost done with 10 of our 12 dry dockings planned for 2025.
This year, we had an unusually large number of dry dogs and our ship. As our ships reached their 5 and 7 and a half year docking Cycles.
during the quarter, we also published our 2024 corporate responsibility report
On the course, will provide an update on the progress made in our docking program and ammonia retrofits.
And Ted will now present our quarterly Financial overview.
Ted.
Thanks.
Today I'll focus on our unaudited second quarter results, capital allocation, financial position, and liquidity.
To discussion of our second quarter results You may wish you may find it useful. Refer to the investor highlights slides posted this morning on our website.
I remind you that my remarks will include a number of terms such as tce available days and adjusted ibida. Please refer to our filings for the definitions of these terms.
Looking at our second uh quarter chartering results. We achieved tce Revenue per available day of 53725, which reflected the strong rate environment. Interestingly each month's tce during the quarter was sequentially better than the prior months. Again, underscoring, the favorable market dynamics.
We generated over 30 million dollars, in free, cash flow to equity during the quarter.
As our entire spot trading program is conducted through the Helios pool. Helios is reported spot results. Are the best measure of our spot chartering performance.
For the September 30th quarter, the Helios pool earned a TC of 53,500 per day for its spot in COA voyages.
On page 4 of our investor highlights material. You can see that we have 2. Dorian vessels on time Charter within the pool. Indicating spot, exposure of about 90% for the 30 vessels in the, in the Helios pool.
Turning to the quarter ending December 31 2025.
We currently estimate that. We have fixed, just over 75% of the fixable days in the quarter at a tce.
Of about 57,000 per day.
The rate includes both spot fixtures and time charters in the Helios pool only.
Given the difficulty in predicting loading rates, which has a huge effect on Revenue recognition, this port options in some Charters and the complexity of some of our coas. Uh, these estimates, we quote during these calls and the rates actually realize can vary.
Daily Opex for the quarter was 9,474, excluding dry docking related expenses, which was down over 6% from the prior quarters 101008 virtually all major C cost. Cost categories declined, which was certainly a good effort by our technical management team.
Our time Charter inexpensive for our TCN vessels came in at 13.7 million or slightly less than 30,000 dollars per day.
The quarters TC and expense reflected, the addition of the crystal Asteria at the end of June, while the BW Tokyo entered on the last day of the quarter to minimal p&l effect.
The crystal stair and the BW Tokyo.
Total GNA for the quarter was 12 million and cash GNA. That's GNA, excluding non-cash. Compensation expense was about 7 million dollars, reflecting our core GNA. We had noted last quarter that we expected an approximately 3 million dollar increase in stock comp expense due to the share grants made during the quarter,
that will not recur for the rest of the year.
A reported adjusted ebit da, for the quarter was 85.7 Million.
Total cash interest expense for the quarter was 7 million of which we capitalized about 600,000.
Our current debt cost is, is about 5.1% reflecting, the heavily, hedged and fixed nature of our various pieces of debt.
As of September 30, 2025, we reported $268.4 million in free cash, which was down about $10 million from the prior quarter, largely due to the payment of a new building installment in September.
as John touched on. And as we disclose this morning, we will pay a 605% per share irregular dividend or roughly 28 million in total, will honor about December 2nd to Sheryl is a record as November 17th.
With a debt balance at quarter, end of 530 million.
Our debt to total book capitalization stood at 33.2% and net debt to Total cap at 16.4.
With an undrawn $50 million revolver and a $100 million accordion feature in our existing loan agreement, strong free cash, balance and 1 debt-free vessel, we feel well, well capitalized for Fleet load growth and renewal or for whatever challenges may arise.
During the prior quarter, we completed 3 docking dry dockings, anticipate 2 more dry dockings during November and December.
Um, that will complete the dry docking program for 20 for our 2015, built vessels.
also, um, in addition to the new building payment we made in September, we will make an additional roughly 12 million dollar payment, during the quarter ending, December 3120, 2, 0 2,
The Irregular dividend declared last week brings to uh, $16.95 per share. In a regular dividends that we have paid since September 2021.
Again, some investors and analysts like to suggest that these Dividends are no longer your regular. We underscore that they are indeed irregular and subject to the discretion of our board.
The LGC rates are not are not regular and neither is the geopolitical environment as recent weeks have shown. And thus we don't think our dividend policy should be either.
Looking at our dividends in a more traditional context, our net income since June 30202, that's the quarter immediately prior to our first irregular dividend, uh, has been cumulatively about 700 million dollars while including the dividend to be paid paid next month.
We've returned, approximately 695 million in dividends to in, in total to our shareholders and cumulatively including share BuyBacks, and our open market or Tender offer over 925 million. We will continue to maintain a steady balance between dividends deleveraging and Fleet investment.
With that, I'll pass it over to Tim Hansen.
Thank you, Chad. Good day, everyone.
Uh, the quarter ending in September 30th, 2025 show, an average Freight Market Improvement compared to the quota prior with less volatility. If you to see Market fundamentals, remain firm through the quarter with a higher inventory, build in the US states in the United States keeping on Belleview prices attractive for Far, East importers and supporting the west to east Arbitrage.
Us monthly exports have uh, LPG and vtcs were in the 4.6 to 5.1 million tons per month, range and Improvement on the quarter. Prior Middle East, we do see exports for the quarter. Also improved compared to the quarter prior growing by about 200,000 metric, tons, for the third car, on the quarter.
The VTC Market fundamentals were impacted in the third calendar quarter by 2 factors 1 was positive for Freight and 1 negative. The rate positive factor was a shortened spike in Panama congestions and a subsequent increase in auction fees to Transit
That was seen from the end of July to early August, although the increased congestion added cost to the industry and complicated, Voyage spendings delays absorbed capacities from the market and prompted more vgc's to better, see the Cape of Good, Hope to the US Gulf.
Tightening investment supply for the loading, uh, in September in October.
Although a definite answer to why the Panama Canal so much congestion remains elusive, several Market commentators have suggested that the front loading on container ships. Prior to the terrorists, coming into effect
C Market was Pro, uh, about by actions or reactions on repositioning. Uh, vessels for those preparing for the US Post service fees effective on October 14th around around the start of September here. You see, owners and operators considering the risk of being deemed related, uh, to China by usdr section, 301 regulations, uh, with China and balance to the US low TOS, began to Discount Freight to ensure login and carros that would allow the vessel to load and sail from the US.
Before 14th of October, the discount offers, put a downward pressure on the west to each East fake Market. Meantime the same owners and operators. Also stopped balancing more ships towards serious Golf. And those vessels added VTC supply to the Middle East and the increase uh, Supply in Balance the market in the east.
If the second quarter tested, the resilience of the LTG Market fundamentals, the third quarter,
Uh reaffirmed that it was not a 1-off export from the US. United States continued to flow to a more diverse range of important countries and Chinese importers were able to find some alternative to cover the reduced impulse from the United States, the spike in Panama Canal, congestion, demonstrated the tight Supply demand balance for your disease, when geopolitical factors
Not complicating the picture.
And when a geopolitical or external factor causes shocks, we have seen the VTC players respond to this with accuracy.
The quarter ended ending September 30th, 2025 continued. The improvements in Freight from the quarter, prior with both East and West markets up about 28%. The delivery schedule of new building remains limited for the rest of the year. And the agility of the VTC markets demonstrate, an ability to capture options, that may appear going forward,
Furthermore, although the disruptive factor of poor fees, uh, added fake positive inefficiencies uh to the market, the later, we post the fees, uh, together with the seemingly relaxation in trade tensions between the US and China, uh, we believe will be supportive, uh, for the for dimensions of the LPG and we'll see Freight markets going forward.
With that note, pass it over to John the curse.
Thank you, Tim.
Adore and LPG, we are committed to continuing to enhancing Energy Efficiency, and promoting the sustainability of both our operations in our vessels.
My scrubber vessel savings for the second fiscal quarter of 26 amounted to 1,363,000 or about 1,140 per calendar day per vessel. Net of all scrubber operating expenses.
Overall savings were affected. This quarter due to the dry docking of several vessels and the heightened Market volatility stemming, from Global tariff announcements and geopolitical uncertainties.
fuel the differential, between High, south of fuel oil, and very low, south of fuel oil average, 74 dollars, per metric, ton
While the differential lpgs fuel versus the very low south of fuel oil. Stood at about 132 dollars per metric. Ton making LPG economically attractive for a dual fuel vessels.
We Now operate. 16, scrubber fitted. Vessels and 5 Duo fuel LPG vessels.
During the current quarter.
2 vessels undergoing, special survey and dry docking including 1. That is also being upgraded for the carriage of ammonia cargos.
Since the beginning of the calendar year, 10 vessels were successfully completed with their special survey and dry docking. And this reflects our continued commitment to maintaining a modern efficient and environmentally adaptable Fleet.
Our dry docking problem program for 2015, built vessels, is now largely complete by the end of this calendar year.
Driven by stronger market conditions in 2025 vessels in balance.
Generally operated at higher speeds compared to 2024.
Despite the increase in speed which typically has an adverse effect on CI ratings, The DPG Fleet remains well within compliance limits.
Continuous performance, monitoring combined with operational enhancements have significantly improved the emission profile of our Fleet.
Forecast extending through 2030 based on the Imo's, revised CII reduction Target. Indicate our Fleet is well positioned to maintain compliance and continue demonstrating, strong environmental performance.
EI is the carbon intensity index, which assesses the operational efficiency of our vessels and their contribution to greenhouse gas emissions.
At Dorian, we leverage Advanced Digital platforms and dashboards to drive performance and efficiency and enhance data, validation and engine analytics. Support optimize operations and result in Energy savings.
The fleet remains fully compliant with evolving emission Frameworks including EU ETS, CII exi and fury. Um Maritime and our Fleet performance team was closely with chartering to optimize fuel consumption during the voyagers
The average fleet for the third quarter of 2025 was 9.3% lower than the IMO required target for 2025.
R is the annual efficiency rate ratio metric, which calculates the carbon intensity of our vessels operations.
The 1 year postponement of the Imo's decision to implement the Net Zero. Framework does not change dorian's commitment to invest in fuel efficiency, improved performance and decrease greenhouse gas emissions.
This delay May heighten regulatory uncertainty and reinforce Reliance on Regional schemes further. Fragmenting the global regulatory landscape.
We are confident that our company and Fleet are well equipped and fully prepared to meet any regulatory challenges ahead.
And now, I would like to pass it over to John heeds for his comments.
Head. Um, Chelsea, we can open for questions if anyone has any questions. We're here.
Yes, sir.
at this time, if you would like to ask a question, please press star 1 on your telephone keypad,
You may remove yourself from the Queue at any time by pressing star 2.
Once again, that is star 1 to ask a question.
And our first question will come from Omar nocta with Jeffrey's. Please go ahead.
Thank you.
Hi, guys morning. I
Nice quarter. Obviously in terms of you know how much stronger do you realize rate? Um has come up especially relative to the past and before 5 quarters
I just wanted to get a sense, you know, the, the overall rate of say 53 54,000 was a bit lower than what we were thinking. Um, and just wanted to ask I know Ted you've you do a very good job of giving us sort of the bookings on a, you know, the bookings to date, you know, each quarter. If I recall you had gotten something over 60,000, uh, for 70%, uh, of the quarter last time around and just wanted to get a sense of what, what caused the the the final figure to be lower because it looked like vlgc spot rates remained fairly, you know, firm. Those are just simply an accounting treatment. Is it low to discharge? Is it dry docks? Yeah. Any any color you're able to give the, uh, helpful. Yes, we'll do that. I'll let's head, um, expand on it of obviously. Um, but it is really the, the, the discrepancy was from, um, uh, timing. Um, and, uh,
In terms of into we obviously try to give you the best and and when we give when we give the, um, guidance, it is it reflects what we have booked but there are often sort of timing discrepancies uh, arising from uh more off higher days. Sometimes uh later loading slippage into from a 1 quarter to the next at 10. You you take it.
Docking days affect the um, clearly not only the amount of Revenue, but obviously drives. The the, it has an effect on the TCU rate as well. So, um, you know, we're we're
Like John said, we we're always, you know, we try to give the best information. Um, we you know, we we didn't quite work out as well, this quarter. Um, but again, with the end of the dry docking program largely. Um, you know, we feel like the the guidance that we just gave, uh, should be, um, much more uh, on target for the coming quarter or the current quarter.
Okay, all right thanks, Ted. Yeah so it sounds like a bit of a 1-off with a few uh, moving uh, different factors last time around. So the 57,000 I think that you gave us earlier that uh, all else sequel. That should be a fairly good barometer of what to expect.
For we, we believe. So we we believe so Omar. Yeah.
Okay, great. And then maybe just a, you know, a second question or a follow-up we've been seeing here, spot rates have have really got a bit of momentum here, um, and it's maybe at a unique time. I guess of the on the calendar seems like we're heading into the the part of the seasonality where things start to come off and and they put downwards pressure on rates. But now, we're seeing things pick up, are you able to give kind of a perspective on what's behind this latest move?
Yes, I Tim.
Yeah, I think I think there is a lot of uh, wait and see here before, uh, us and and China met in in Korea. So I think, I think there is like a end or or hold on on fixing activity, where you saw the, the rates, uh, drop until uh uh until recently. And, and then it's kind of catching up. So um people who are really waiting for this to uh, to kind of at least have some direction. What what the, what the trades, uh, uh, disputes or, or agreements was going to be. And, and then, of course, also, the the, um, postponement of the uh, of the port fees have have put like a relief to the market, uh, and, and give people some
Room to work and some at least a horizon where where they can take decisions going, further forward. So on top of the
Coming into the winter. Then then this this this this helped, uh, activities to Kickstart again.
Okay, very good. Thank you. Thank thanks. Tim Ted and John, thank you as well.
Thank you very much. Thanks Omar.
Thank you.
And as a reminder, that is star 1 to ask a question.
And at this time, there are no further questions in the queue.
Thank you, Chelsea. Thank you, everyone and Omar. Thanks for your questions and we look forward to picking up again. Next quarter.
Thank you. Bye bye.
Thank you, ladies and gentlemen. This concludes today's program and we appreciate your participation. You may disconnect at any time.