Dorian LPG Ltd. Announces First Quarter 2015 Financial Results - MSNewsNow.com - Jackson, MS

Dorian LPG Ltd. Announces First Quarter 2015 Financial Results

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SOURCE Dorian LPG Ltd.

STAMFORD, Conn., Sept. 3, 2014 /PRNewswire/ -- Dorian LPG Ltd. (NYSE: LPG) (the "Company" or "Dorian LPG"), a leading owner and manager of modern very large gas carriers ("VLGCs"), today reported its financial results for the three months ended June 30, 2014.

Dorian LPG Ltd. logo.

Highlights – First Quarter

  • Took delivery of the first vessel under our VLGC newbuilding program, the Comet, from Hyundai Heavy Industries Co. Ltd. ("Hyundai"), which began a five-year time charter with Shell on July 25, 2014.

  • Captain John NP recorded time charter equivalent ("TCE") rate of $64,340 for the three months ended June 30, 2014 (see definition below). 

  • Chartered the Captain Markos NL to Shell for five years beginning on or about November 1, 2014.

  • Pooling arrangement with Phoenix Tankers of Japan expected to commence January 1, 2015.

John Hadjipateras, Chairman, President and Chief Executive Officer, commented, "We are pleased to begin 2015 with the delivery and immediate charter of the first VLGC vessel from our newbuilding program of 19 VLGCs. The U.S. has shifted from being a small player in the export market to becoming a significant player in the industry and is now the world's leading exporter of LPG. We believe this change has created a fundamental shift in our business and with the remaining 18 vessels in our VLGC newbuilding program and we are well positioned to take advantage of this significant opportunity."

First Quarter 2015 Results Summary

Revenues of $15.9 million for the three months ended June 30, 2014 represent charter hire and voyage charters earned for our three VLGC vessels and our pressurized 5,000 cbm vessel. Revenues from the Captain John NP, which operated in the spot market, amounted to $8.3 million, or a time charter equivalent ("TCE)" rate of $64,340, for the three months ended June 30, 2014. Revenues from time charter hire earned for our two VLGC vessels and the Grendon amounted to $7.6 million, of which $3.2 million represented profit sharing. The Grendon, which ended its time charter at the end of May 2014, had $0.6 million of revenues and 60 operating days for the three months ended June 30, 2014.

Voyage expenses were approximately $2.8 million during the three months ended June 30, 2014 and mainly related to bunkers of $2.1 million, port charges of $0.2 million, brokers' commissions of $0.2 million, security costs of $0.2 million, and other voyage expenses of $0.1 million.

Vessel operating expenses are influenced by the age and size of the vessel, the condition of the vessel and other factors, as discussed above. Vessel operating expenses were approximately $3.5 million during the three months ended June 30, 2014, or $9,569 per vessel per calendar day, which is calculated by dividing vessel operating expenses by calendar days for the relevant time period. This included approximately $0.4 million relating to training of additional crew on our operating VLGC fleet in anticipation of newbuilding deliveries. The Grendon, which ended its time charter at the end of May 2014, had $0.6 million of vessel operating expenses and 60 operating days for the three months ended June 30, 2014.

Management fees expensed for the three months ended June 30, 2014 represent fees charged by our vessel manager, Dorian (Hellas), S.A. ("Dorian Hellas"), a related party, amounting to approximately $1.1 million, representing $93,750 per vessel per month in accordance with our management agreement entered into with Dorian (Hellas). The management fees are charged on a monthly basis per vessel and the total fees are affected by the number of vessels in our fleet.

Depreciation and amortization was approximately $2.5 million for the three months ended June 30, 2014 and mainly relates to depreciation expense for our operating vessels.

General and administrative expenses were approximately $0.8 million for the three months ended June 30, 2014 and represent expenses not covered under our management agreement with Dorian (Hellas) including expenses related to audit and accounting fees, professional and legal fees and investor relations.

Interest and finance costs amounted to approximately $0.2 million for the three months ended June 30, 2014. The interest and finance costs consisted of interest incurred on our long-term debt of $0.6 million, and amortization of financing costs of $0.3 million, less capitalized interest of $0.7 million. The average indebtedness during the three months ended June 30, 2014 was $128.1 million and the outstanding balance of our long-term debt as of June 30, 2014 was $127.4 million.

Loss on derivatives-net, amounted to approximately $1.4 million for three months ended June 30, 2014. The net loss on derivatives was primarily comprised of a realized loss of $1.4 million relating to interest rate swaps which convert the Company's debt from a floating to a fixed rate.

Market Outlook Update

The LPG shipping market enjoyed a favorable first-half market environment. Increased U.S. exports, due to growth from shale gas and oil production, and demand from India and China, in addition to traditional Asian markets, have driven the demand for LPG shipping and created a tight shipping market. With only nine vessels being delivered in 2014 into the global VLGC fleet (mostly in the second half of the year), we believe the outlook for LPG seaborne trade remains favorable. Spot charter rates reached all-time high levels during the first half of the year, and such rates remain strong, though off the all-time high levels seen earlier in 2014. There can be no guarantee that rates will remain at these levels.

Export infrastructure and fractionation capacity in the U.S. has grown, and both Targa Resources and Sunoco / Energy Transfer Partners are expected to open additional capacity during the second half of 2014. U.S. sourced LPG continues to enjoy a price advantage over LPG sourced from the Middle East, thereby creating more demand for U.S. LPG in the important Asian markets.

Seasonality

Liquefied gases are primarily used for industrial and domestic heating, as a chemical and refinery feedstock, as a transportation fuel and in agriculture. The liquefied gas carrier market is typically stronger in the spring and summer months in anticipation of increased consumption of propane and butane for heating during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and the supply of certain commodities. As a result, demand for our vessels may be stronger in our quarters ending June 30 and September 30 and relatively weaker during our quarters ending December 31 and March 31, although 12-month time charter rates tend to smooth these short-term fluctuations. To the extent any of our time charters expires during the relatively weaker quarters ending December 31 and March 31, it may not be possible to re-charter our vessels at similar rates. As a result, we may have to accept lower rates or experience off-hire time for our vessels, which may adversely impact our business, financial condition and operating results.

Fleet

Our operating fleet currently consists of five LPG carriers, including one fuel-efficient 84,000 cbm VLGC, three modern 82,000 cbm VLGCs and one pressurized 5,000 cbm vessel. In addition, we have newbuilding contracts for the construction of 18 new fuel-efficient 84,000 cbm VLGCs with Hyundai and Daewoo Shipping and Marine Engineering, Ltd., both of which are based in South Korea, with scheduled deliveries between September 2014 and January 2016.

Each of our newbuildings will be an ECO-design vessel incorporating advanced fuel efficiency and emission-reducing technologies. Upon completion of our VLGC Newbuilding Program in January 2016, 100% of our VLGC fleet will be operated as sister ships and the average age of our VLGC fleet will be approximately 1.6 years, while the average age of the current worldwide VLGC fleet is approximately 10 years.


Capacity

 (Cbm)

Shipyard

Sister

 Ships

Year Built/

 Scheduled

 Delivery(1)

ECO

 Vessel(2)

Charterer

Charter

 Expiration(1)

OPERATING FLEET








VLGC








Captain Nicholas ML(3)

82,000

Hyundai

A

2008

-

Spot

-

Captain John NP(3)                                             

82,000

Hyundai

A

2007

-

Spot

-

Captain Markos NL(3)(4)

82,000

Hyundai

A

2006

-

Statoil

Q4 2014







Shell

Q4 2019

Comet(5)                                            

84,000

Hyundai

B

2014

X

Shell

Q4 2019









Small Pressure








Grendon                                            

5,000

Higaki


1996

-

Spot

-

 

NEWBUILDING VLGCs








Corsair(6)                                            

84,000

Hyundai

B

Q3 2014

X

-

-

Corvette                                            

84,000

Hyundai

B

Q4 2014

X

-

-

Cougar                                            

84,000

Hyundai

B

Q2 2015

X

-

-

Cobra                                            

84,000

Hyundai

B

Q2 2015

X

-

-

Continental                                            

84,000

Hyundai

B

Q2 2015

X

-

-

Concorde                                            

84,000

Hyundai

B

Q2 2015

X

-

-

Constitution                                            

84,000

Hyundai

B

Q2 2015

X

-

-

Commodore                                            

84,000

Hyundai

B

Q3 2015

X

-

-

Constellation                                            

84,000

Hyundai

B

Q3 2015

X

-

-

Cresques                                            

84,000

Daewoo

C

Q3 2015

X

-

-

Cheyenne                                            

84,000

Hyundai

B

Q4 2015

X

-

-

Clermont                                            

84,000

Hyundai

B

Q4 2015

X

-

-

Chaparral                                            

84,000

Hyundai

B

Q4 2015

X

-

-

Commander                                            

84,000

Hyundai

B

Q4 2015

X

-

-

Cratis                                            

84,000

Daewoo

C

Q4 2015

X

-

-

Copernicus                                            

84,000

Daewoo

C

Q4 2015

X

-

-

Challenger                                            

84,000

Hyundai

B

Q1 2016

X

-

-

Caravel                                            

84,000

Hyundai

B

Q1 2016

X

-

-

Total                                            

1,847,000











(1)

Represents calendar year quarters.



(2)

Represents vessels with very low revolutions per minute, long-stroke, electronically controlled engines, larger propellers, advanced hull design, and low friction paint.



(3)

Restricted cash of $4.5 million pledged against these VLGCs as of June 30, 2014. Each of the vessels is secured and cross-collateralized by first priority mortgages.



(4)

Currently on time charter at a base rate of $500,000 per month and a 100% profit share based on average spot market rates between the base rate of $500,000 per month and a maximum rate of $1,050,000 per month. Commencing on or about November 1, 2014, on time charter to Shell at a rate of $850,000 per month for a period of 5 years.



(5)

Delivered on July 25, 2014 and on time charter beginning July 25, 2014 at a rate of $945,000 per month.



(6)

Restricted cash of $30.9 million pledged against this vessel as of June 30, 2014. The vessel will be mortgaged as security upon delivery.

 

Financial Information

The following table presents selected financial data and other data of Dorian LPG Ltd. as of June 30, 2014.  See the Company's interim condensed consolidated financial statements and management's discussion and analysis included as an exhibit to the Company's Current Report on Form 6-K filed on September 3, 2014 for additional financial information for the three month period ended June 30, 2014.



For the three

months ended

 June 30, 2014




(in U.S. dollars, except fleet data)






Statement of Operations Data




Revenues                                                                      


$

15,853,840


Expenses





Voyage expenses                                                          



2,785,998


Vessel operating expenses                                



3,483,123


Management fees-related party



1,125,000


Depreciation and amortization



2,466,942


General and administrative expenses



792,506


Total expenses



10,653,569


Operating income                                                                 



5,200,271


Other income/(expenses)





Interest and finance costs                                                                      



(178,540)


Interest income                                                                      



107,355


Loss on derivatives-net                                                                      



(1,388,144)


Foreign currency loss-net



(73,693)


Total other income/(loss), net



(1,533,022)


Net income                                                                     


$

3,667,249


Earnings per common share, basic and diluted


$

0.07


Other Financial Data





Adjusted EBITDA(1)                                                               


$

7,700,875


Fleet Data





Calendar days                                                                     



364


Available days 



364


Operating days



333


Fleet utilization



91.5%


Average Daily Results





Time charter equivalent rate (2)


$

39,243


Daily vessel operating expenses


$

9,569







 


As of

June 30, 2014


As of

March 31, 2014



(in U.S. dollars)


Balance Sheet Data





Cash and cash equivalents  


$

375,149,323



$

279,131,795


Restricted cash, current  



30,948,702




30,948,702


Restricted cash, non-current  



4,500,000




4,500,000


Total assets  



998,662,136




840,245,766


Current portion of long-term debt



9,612,000




9,612,000


Long-term debt – net of current portion



117,828,000




119,106,500


Total liabilities  



149,100,310




148,046,334


Total shareholders' equity



849,561,826




692,199,432


 

 

(1)

Adjusted EBITDA represents net income before interest and finance costs, loss on derivatives-net and depreciation and amortization and is used as a supplemental financial measure by management to assess our financial and operating performance. We believe that adjusted EBITDA assists our management and investors by increasing the comparability of our performance from period to period. This increased comparability is achieved by excluding the potentially disparate effects between periods, and depreciation and amortization expense, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. We believe that including adjusted EBITDA as a financial and operating measure benefits investors in selecting between investing in us and other investment alternatives.




Adjusted EBITDA has certain limitations in use and should not be considered an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance presented in accordance with U.S. GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income. Adjusted EBITDA as presented below may not be computed consistently with similarly titled measures of other companies and, therefore might not be comparable with other companies.




The following table sets forth a reconciliation of net income to Adjusted EBITDA (unaudited) for the periods presented:

 



For the three

months ended

 June 30, 2014





(in U.S. dollars)


Net income                                                                


$

3,667,249



Interest and finance costs                                                                  



178,540



Loss on derivatives-net                                                                  



1,388,144



Depreciation and amortization                                                                  



2,466,942



Adjusted EBITDA                                                                  


$

7,700,875










(2)

Time charter equivalent rate, or "TCE rate", is a measure of the average daily revenue performance of a vessel. TCE rate is a shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (such as time charters, voyage charters) under which the vessels may be employed between the periods. Our method of calculating TCE rate is to divide revenue net of voyage expenses by operating days for the relevant time period.

About Dorian LPG Ltd.

Dorian LPG is a liquefied petroleum gas shipping company and a leading owner and operator of modern VLGCs. Dorian LPG currently owns and operates four modern VLGCs and one pressurized LPG vessel. In addition, Dorian LPG has 18 ECO VLGC newbuildings under construction. Dorian LPG has offices in Connecticut, USA, London, United Kingdom and Piraeus, Greece.

Forward-Looking Statements

This press release contains "forward-looking statements." Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "may," "should" and similar expressions are forward-looking statements. These statements are not historical facts but instead represent only the Company's belief regarding future results, many of which, by their nature are inherently uncertain and outside of the Company's control. Actual results may differ, possibly materially, from those anticipated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect future results, see the discussion in the Company's annual report on Form 20-F, under the heading "Risk Factors." The Company does not assume any obligation to update the information contained in this press release.

Contact Information

Ted Young; Chief Financial Officer: Tel.: +1 (203) 674-9695 or IR@dorianlpg.com

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