DorianG (LPG) Q4 2026 Earnings Transcript

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DATE

Wednesday, May 20, 2026 at 10 a.m. ET

CALL PARTICIPANTS

- Chairman, President, and CEO — John C. Hadjipateras

- Chief Financial Officer — Theodore B. Young

- Chief Commercial Officer — Tim T. Hansen

- Head of Energy Transition — John C. Lycouris

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Full Conference Call Transcript

Theodore Young Thanks, Madison. Good morning, everyone. Thank you all for joining us for our fourth quarter 2026 results conference call. With me today are John C. Hadjipateras, Chairman, President and CEO of Dorian LPG Limited John C. Lycouris, Head of Energy Transition and Tim T. Hansen, chief commercial officer. As a reminder, this conference call webcast and a replay of this call will be available through May 27, 2026. 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, 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 or uncertainties materialize or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those we express today. Additionally, let me refer you to our unaudited results for the quarterly and annual periods ended March 31, 2026, that were filed this morning on Form 8-K.

In addition, please refer to our previous filings on Forms 10-K and 10-Q, where you will find risk factors that could cause actual results to differ materially from those forward looking statements. Please note that we expect to file our full 10-K no later than May 29, 2026. Finally, I would encourage you to review the investor highlight slides posted this morning on our website.

John C. Hadjipateras With that, I will turn over the call to John C. Hadjipateras. Thank you, Ted, and thanks for joining us today. My colleagues will share some useful and interesting information about the quarter and our views of the market. First, I would like to say a few words on capital allocation. And provide some historical context on fleet development which relates to risk management and a volatile market with a view to capturing upside. Today's price for a new building VLGC at approximately $115 million reflects an increase of approximately 2.5% per annum. Over the cost of our first VLGC which was delivered to our predecessor company 20 years ago.

She was ordered for a price of approximately $65 million in 2004. When she was delivered in 2006, the new building replacement cost was over $90 million. From 2009 to 2012, the new building price hovered in the low $70 million range And the next order we placed was in 2012 for advanced echo type series at just under $70 million each. The newbuilding prices stayed in the $70 million range until 2021. The total VLGC fleet in 2005 comprised 102 ships. Today, the total fleet is 427 VLGCs and there are about 124 ships on order representing nearly 30% of the existing fleet. Compared to the all time high of more than 50% in 2007.

Our owned fleet comprises 18 Ecotype with efficiency enhancing features and 2 new dual fuel ships. The average age of our fleet is 10.3 years. In the next few years, we hope to expand our fleet by adding new ships and expect that the catalyst for our investment in replacement tonnage will be innovation in the design and efficiency of new buildings. The advent of ultra long stroke electronic engines informed our investment decision in 2012. And the development of dual fuel engine supported our decisions for our investment in the Captain Marcos delivered in 2023 and the Rio De Janeiro delivered a couple of months ago.

We have witnessed the volatility I have described, and we have been the beneficiaries of a tremendous increase in the volume of seaborne trade of LPG in both absolute terms and in ton mile terms. We have confidence in the further expansion of this trade. And our intention is, as always, with our capital allocation to proceed judiciously mindful of our steadfast commitment to maintaining a solid balance sheet. We believe that this is the rule by which we can earn the best return for our investors and continue to provide top quality services to our customers and a safe and fair working environment for our people at sea and onshore. And now I will pass you on to Ted.

Theodore Young Thanks, John. My comments today will focus on capital allocation, our financial position and liquidity and our unaudited fourth quarter results. We have been active since the beginning of calendar 2026 in growing our business and rewarding shareholders. First, we took delivery of the Arianne in late March our fully ammonia capable 93 thousand cbm VLGC. As you would expect, she immediately started contributing to earnings but we will not see the P&L impact until the first quarter of our fiscal 27. The most recent irregular dividend of $1 per share a significant increase from the prior quarter's reflected the strong underlying market and our board's commitment to creating shareholder value.

Second, we completed the sale of the 2020-built COBRA in May paying off $16.5 million of debt in the process. We expect to generate a gain on sale of approximately $30 million. From her sale. And I would note that her sale price was actually greater than her contract price in 2015. Finally, we will complete the repurchase of the Corsair for her sale leaseback before month end which will require a payment of about $24.2 million in total and positions us to be flexible with any potential opportunities. At March 31, 2026, we reported $327.4 million of free cash, which was sequentially up from the previous quarter. Cash flow from operations was $82 million or nearly $2 per share.

And as we noted in our press release, we borrowed $62.9 million upon closing of the delivery of the Arianne. Covering the final payment to the yard. As we disclosed then, the Arianne loan has 2 tranches, 1 7 years and 1 12 years. We have an average of over 10 years. And a weighted average for margin between the 2 tranches of 125 basis points over SOFR. We closed the fiscal year, therefore, with a debt balance of $565.8 million But given the payoff of the debt in connection with the sale of the COBRA and the Corsair repurchase, the pro forma balance would be $524.7 million.

Based on our stated book, however, at quarter end of $565 million of debt, Our debt to total book cap stood at 33.2% and net debt to total cap of 14.0%. We continue to have well structured and attractively priced debt capital with a current all in cost of about $5 million an undrawn revolver of $42.9 million and 1 debt free vessel. Coupled with our strong free cash balance, we have a comfortable measure of financial flexibility. We expect our cash cost per day for the coming year to be approximately $26 thousand per day, excluding capital expenditures for the drydocking of Captain John, which is currently planned for our fourth fiscal quarter.

For the discussion of our fourth quarter results you may find it useful to refer to the investor highlight 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 EBITDA. Please refer to our filings for the definitions of these terms. Looking at our fourth quarter chartering results, since our entire spot trading program is conducted through the Helios Pool, its reported spot results are the best measure of our spot chartering performance. For the March, the Helios Pool earned a TCE per day for its spot and COA voyages $65.6 thousand per day reflecting more favorable VLGC market conditions.

Our utilization improved sequentially to 97.8% this quarter from 94.6% in the prior quarter as the last of our dry dockings for the 2014 to 2016 class was completed. The overall TCE result for the pool of nearly $63.3 thousand per day reflects that very strong rate environment as well as our time charter out portfolio. On Page 4 of our investor highlights material, you can see that we have 6 Dorian vessels on time charter within the pool indicating spot exposure just over 80% to the 31 vessels in the Helios pool.

Dorian's reported TCE revenue per available day for the quarter was about $63.6 thousand which is the second highest TCE rate we have earned in our corporate existence. For the year, we earned $52.2 thousand per day, with the fourth quarter completely offsetting our sector's relatively slow start to the fiscal year. The current rate environment remains healthy. So Panama Canal transit fees are having an impact on realized rates, We note that most posted TC rates do not include auction fees for VLGCs transmitting the canal, which have ranged from $200 thousand to as high as $4 million in the last weeks.

And, also, they do not include the effect of ballasting around the Cape Of Good Hope, which can also have a significant impact on realized TCEs. We plan to issue our forward booking information in the near future. Daily OpEx for the quarter was $9.55 thousand excluding drydocking related expenses, which was virtually flat with the prior quarter's $9.56 thousand. Our gross time charter in expense for the 6 TCN vessels came in at $18.4 million or about $34.1 thousand per TCN day Thus, those vessels contributed positively to our quarterly profits.

As a reminder, the profit sharing expense on our P and L represents MOL Energia's portion of the net chartering profit as the charter hire earn less the charter hire expense on the BW Tokyo. Total G&A for the quarter was $13.3 million and cash G&A, which is G&A excluding non cash compensation expense was about $11 million This amount included accruals under our bonus plan of $3.5 million the payment of which is subject to completion of our annual audit. $200 thousand of statutory noncash accruals and $300 thousand of predelivery costs related to the Arianne. Excluding those amounts, our G&A was about $7.1 million, which reflects a level that we believe is sustainable for the near term.

Reported adjusted EBITDA for the quarter is $106.6 million Total cash interest expense for the quarter was $6.6 million which is down sequentially from the prior quarter. Principal amortization remained steady at around $13 million We expect the full quarter interest cost of the Arianne to be $800 thousand in the coming quarter. The irregular dividend declared at the beginning of the month of $1 per share is our 10th and brings to $18.65 per share in a regular dividend that we have paid since September 2021. The increase in the dividend versus the prior quarter is consistent with our previous discussions around the topic.

It reflects a balanced mix between results and the long term needs and prospects of the business. Including the irregular dividend to be paid this month, we have paid nearly $770 million of dividends and have generated net income of $835 million since June 30, 2021. Which is the quarter immediately prior to our first irregular dividend. As we have discussed, our Board weighs current earnings, our near term cash forecast future investment needs and the overall market environment among a number of factors in making its determination of the appropriate level, if any, for our dividends. As John Hadjipateras has already mentioned, our sector can be a volatile 1 and our dividend policy needs to reflect that.

The $1 per share irregular dividend certainly reflects a constructive market outlook while also allowing the company the flexibility for future fleet reinvestment. We continue to be on the lookout for fleet renewal opportunities will be judicious with our free cash flow, working to balance shareholder distributions, debt reduction, and fleet investment. With that, I will pass it over to Tim T. Hansen.

Tim T. Hansen Yes. Thank you, Mr. Ted, and good day, everyone. The quarter ended March 31, 2026 ultimately carried the positive momentum from the quarter prior and saw higher freight indices for the VLGC freight markets. Closed my remarks from the quarter prior about likely geopolitical impacts and the VLCC market's ability to demonstrate agility to capture the opportunities that arise from just challenges. We believe both have materialized and that the company has been a key actor in that story. The quarter ending March 31, 2026 is best understood by looking at the period as before hostilities in Iran started and the period after hostilities commenced and to look at them separately.

While Global Seaboard LPG transport was down for the quarter, to levels not seen since the first calendar quarter in 2024. The decline was driven by the de facto closure of the Strait of Hormuz. The decline marks the results of record high production levels from the North America which hits a new record high of exports near the 20 million tons mark. The favorable fundamentals of LPG production and accompanying seaboard transport prior to the closure of the Strait Of Hormuz further supported a first calendar quarter seeing a wide West-East arb in charge and persistently high freight activity levels. This does not mean the freight markets only source new sailing, however.

Prior to the closure of the Strait of Hormuz, industry players were analyzing potential impacts from the removal of President Mato in Venezuela. Microeconomic concerns brought on by the rhetoric threatening the end of NATO and the US Supreme Court striking down Ayrshire tariffs. It is not uncommon to see softness in the first calendar quarter. In the freight markets with lower activity where the imports reduce imports as spring approaches or due to a slowdown in the Far East around the lunar New Year holidays. This was not the case in 2026.

Activity was strong through the holiday season, to compensate for the disruptions we saw in October and November during the port service fee spat between The US and China. Furthermore, the winter in the Far East was long and cold, while cold snaps in the North America was not severe enough to weaken production levels. The west to east arbitrage was therefore applying an VLGC freight was supported by the fundamentals. There were significant challenges to capture the value in the market, however, and periods of uncertainty because of developments in the Israeli fierce protesting in Iran, and worries about NATO cohesion. While none of these factors imply directly impacted the VLGC LPG market, the microeconomic picture was certainly complicated.

If 1 subscribed to the argument that more internationally tradable Venezuelan oil was positive for the world economy. The caveat was if the Chinese economy would suffer by losing near mono