Dorian LPG Ltd. (LPG) Q3 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call shows a strong financial position with record-high global LPG trade and a substantial dividend payout. The positive market outlook and environmental compliance efforts further bolster sentiment. However, concerns about fleet absorption challenges and unclear management responses during the Q&A temper expectations. The market cap suggests a moderate reaction, leading to a positive prediction for stock price movement.
Key Financial Performance
Dividend declared $0.70 per share totaling $29.9 million, marking the 18th dividend payment. Total dividends distributed exceed $725 million, with total capital returned to shareholders since IPO at $961 million. No year-over-year change mentioned.
TCE per available day $50,333. No specific year-over-year change mentioned, but chartering results were strongest in October, followed by a dip in November and early December.
Daily OpEx $9,558, excluding dry docking-related expenses. This was flat compared to the prior quarter. No year-over-year change mentioned.
Time chartered-in expense $18.2 million, equivalent to an average charter hire of about $33,000 per day. No year-over-year change mentioned.
Total G&A $10.8 million, with cash G&A at $8.7 million. Core G&A remained steady at $6.7 million. No year-over-year change mentioned.
Adjusted EBITDA $74.2 million. No year-over-year change mentioned.
Cash interest expense $6.8 million. No year-over-year change mentioned.
Free cash $294.5 million, up about $25 million from the prior quarter. No year-over-year change mentioned.
Debt balance $516 million, with debt-to-total book capitalization at 32.2% and net debt-to-total cap at 13.8%. No year-over-year change mentioned.
Global seaborne LPG trade Reached a new quarterly record of over 37 million tons, with North American exports hitting a record of over 18.5 million tons. No year-over-year change mentioned.
Scrubber savings $1,116,000 or about $933 per calendar day, net of all scrubber operating expenses. Lower oil prices and lack of geopolitical events led to lower savings.
Fuel differentials High-sulfur fuel oil vs. very-low-sulfur fuel oil averaged $57 per metric ton. LPG as fuel vs. very-low-sulfur fuel oil stood at $104 per metric ton. No year-over-year change mentioned.
Annual efficiency ratio (AER) 6.24%, which is 10.4% better than the IMO required target for 2025 of 6.96%. No year-over-year change mentioned.
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Operating Highlights
New VLGC Delivery: A 93,000-cubic meter VLGC new-building, capable of carrying ammonia, will be delivered in March 2026 from Hanwha in South Korea. This vessel is LPG dual-fuel and fitted with a hybrid scrubber and Alternative Marine Power.
Global LPG Trade Growth: Global seaborne LPG trade reached a new quarterly record of over 37 million tons, with North American exports hitting a record 18.5 million tons.
Market Volatility: Freight markets were impacted by lower-than-expected Saudi contract prices and retaliatory port service fees in China, but recovered by the end of the quarter.
Dry Docking Completion: 12 dry dockings were completed in the past year, with one more scheduled, completing the docking cycle for the fleet. Most ships are now fitted with energy-saving devices and silicone paint, reducing costs and emissions.
Scrubber and Dual-Fuel Vessel Savings: 16 scrubber-fitted vessels and 5 dual-fuel LPG vessels achieved savings of $1,116,000 in the quarter, with LPG proving economically attractive as a fuel.
Dividend Distribution: Declared a $0.70 per share dividend, totaling $29.9 million, bringing total dividends distributed to over $725 million since IPO.
Regulatory Preparedness: The company is investing in fuel efficiency and emission reductions, aligning with IMO's delayed regulatory changes and preparing for future net-zero frameworks.
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Risk or Challenges
Freight market volatility: The freight markets were challenged by lower-than-anticipated Saudi contract prices and retaliatory port service fees implemented in China, which created uncertainty and slowed market activity.
Geopolitical risks: Geopolitical impacts on the world market seem likely, which could affect the VLGC market and LPG trade.
Regulatory uncertainty: The delay in approving changes to the MARPOL Annex VI by the IMO creates uncertainty in regulatory compliance and future operational adjustments.
Fleet absorption challenges: A total of 36 VLGCs, including one from Dorian LPG, will require absorption in the market in 2026, potentially impacting freight rates and market balance.
Fuel cost fluctuations: Lower oil prices and fuel differentials have impacted scrubber savings and the economic attractiveness of LPG as a fuel.
Port service fees in China: The sudden implementation of retaliatory port service fees in China caused disruptions and additional costs for vessels en route to China.
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Guidance & Outlook
Fleet Growth and Renewal: The company expects to take delivery of a new ammonia-capable VLGC in March 2026, with a payment of approximately $62 million in cash at closing. Financing for this payment is expected to be secured through a loan facility.
Market Trends and Freight Rates: The global seaborne LPG trade is projected to remain strong, with a total of 36 VLGCs, including one from Dorian LPG, expected to be absorbed into the market in 2026. The attractiveness of LPG as a commodity and the agility of the VLGC market are expected to mitigate risks and capture upside potential.
Regulatory Environment: The IMO's Marine Environmental Protection Committee has delayed approving changes to MARPOL Annex VI by one year, providing the industry more time to prepare for regulatory changes. Dorian LPG remains committed to meeting future regulatory requirements and improving fuel efficiency.
Operational Efficiency: The company has completed the dry docking cycle for its 2014-2016 built vessels and expects cost savings and emission reductions from energy-saving devices and silicone paint. The average fleet AER for 2025 was 10.4% better than the IMO's required target.
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Shareholder Return Plan
Dividend Declared: $0.70 per share totaling $29.9 million, bringing total dividends distributed to over $725 million since IPO.
Irregular Dividends: $17.65 per share in irregular dividends paid since September 2021, emphasizing their discretionary nature.
Total Capital Returned: Over $961 million returned to shareholders since IPO, including dividends.
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Key Q&A
Q:What has been driving the counter-seasonal strength in the spot market, and what does it mean for the year ahead?
A:The counter-seasonal strength is driven by reduced activity in the last quarter of 2025 due to uncertainties, fog in the U.S., and adjustments to Saudi pricing. Increased production levels and efficient U.S. terminal operations have also contributed. The rest of the year is expected to remain strong with continued activity.
Q:Can you provide details on the Chaparral ship's TCE into 2027 and its rate compared to other ships on charter?
A:The Chaparral was chartered for a little more than a year starting this quarter, with the deal made in October/November. While specific rates were not disclosed, it is comparable to spot market earnings from the last quarter. The management refrained from providing detailed guidance due to market volatility.
Q:How does the company plan to fund the new-building vessel with $62 million left to spend?
A:The company plans to finance the remaining payment, with more details to be provided later.
Q:To what extent can the VLGC fleet speed up if rates remain solid, considering environmental regulations?
A:The ECO portion of the fleet can increase speed by 1-2 knots, but older ships are capped by environmental regulations. Bad weather during winter has also limited speed increases.
Q:What improvements have energy-saving devices resulted in, and what is the payback period?
A:Energy-saving devices, including silicone paints, provide around 5% improvement in energy savings, with a payback period generally within a year. Scrubbers have a longer payback period.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the Chaparral ship's TCE rate and deferred giving forward bookings guidance due to market volatility. Additionally, they did not elaborate on the financing specifics for the new-building vessel, stating that more details would be shared later.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AER
Dorian LPG
East Index
Far East
Hanwha
LPG commodity
Marine
Section port
Tokyo
USTR Section
VLAC
agility
agreement
attractiveness LPG
change
completion
contract price
dividend week
docking cycle
fee China
implementation
information
loan
market calendar
market world
meter
port service
price CP
record ton
service fee
session
vessel month
week share
world market
LPG Transcript
Dorian LPG Ltd. (LPG) Q3 2026 Earnings Call Transcript
Positive2-5
The earnings call shows a strong financial position with record-high global LPG trade and a substantial dividend payout. The positive market outlook and environmental compliance efforts further bolster sentiment. However, concerns about fleet absorption challenges and unclear management responses during the Q&A temper expectations. The market cap suggests a moderate reaction, leading to a positive prediction for stock price movement.
Dorian LPG Ltd. (LPG) Q2 2026 Earnings Call Transcript
Positive11-6
The company's earnings call summary reflects strong financial performance with high TCE revenue and free cash flow, efficient cost management, and a solid shareholder return plan. The Q&A section supports this with management providing clear guidance and explanations. Despite some operational challenges, the overall sentiment is positive, with strategic plans for VLGC market expansion and environmental compliance. Given the market cap, the stock price is likely to react positively, within the 2% to 8% range, over the next two weeks.
Dorian LPG Ltd. (LPG) Q1 2026 Earnings Conference Call Transcript
Unknown8-1
The earnings call reveals mixed signals: strong dividend distribution and a healthy financial position, but challenges from geopolitical tensions and dry docking impacts. The Q&A highlights uncertainties in freight rate dynamics and market volatility. Despite positive revenue expectations and shareholder returns, risks like tariff escalations and regulatory costs persist. The market cap suggests moderate sensitivity, leading to a neutral stock price prediction, as positive and negative factors balance each other out.
Dorian LPG Ltd. (NYSE:LPG) Q4 2025 Earnings Call Transcript
Unknown5-23
The earnings call reveals a mix of challenging factors: missed EPS expectations, significant freight rate volatility, and trade tensions impacting the LPG market. Despite some positive elements, such as improved cash flow and consistent dividends, the negative aspects outweigh them. The Q&A section indicates management's reluctance to provide clear guidance on dividends, adding to uncertainty. With a market cap of $1.78 billion, the stock is likely to react negatively, potentially falling between -2% to -8% over the next two weeks.
LPG Slides
Dorian LPG Q3 FY26 presentation slides: Strong cash flow despite earnings miss2026-02-05
Dorian LPG Q2 FY26 slides reveal mixed performance as stock drops 7%2025-11-06
Dorian LPG Q1 FY26 slides: profit slumps 80% despite growing global volumes2025-08-01
Dorian LPG Q4 FY25 slides reveal 90% profit decline amid growing LPG volumes2025-05-22
LPG Report
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