Dorian LPG Posts 2Q Profit

 

Dorian LPG Ltd. a leading owner and operator of modern very large gas carriers today reported its financial results for the three months ended September 30, 2015.

Highlights – Second Quarter 2016

Revenues of $74.9 million
Net Income of $41.2 million; Earnings Per Share of $0.72
Adjusted EBITDA of $57.7 million*
Took delivery of five vessels under our ECO-design VLGC newbuilding program, the Continental, the Constitution, the Commodore, the Cresques, and the Constellation
Repurchased 352,100 shares of our common stock for $4.3 million
To date, hedged interest rate risk on $464.3 million of debt under our new facility in both bullet and amortizing structures
* See reconciliation of net income to Adjusted EBITDA included in this press release

John Hadjipateras, Chairman, President and Chief Executive Officer, commented, "We took the delivery of five new Eco-design VLGCs this past quarter and are nearing the completion of the build-out of our fleet.  We continue to find prompt employment out of the yard for our newbuildings, which highlights the underlying strength of the VLGC freight market and the success of the Helios LPG pool.  The strong rate environment and our young, quickly-growing fleet have allowed us to generate results ahead of our expectations.  Our cash flow generated from operations has allowed us to repurchase 478,200 shares of our common stock to date for $5.7 million under the board's previously announced authorization of up to $100 million.  Going forward, we anticipate higher profits and cash generated from operations as a result of our larger fleet, assuming continued favorable market conditions.  We will continue to evaluate ways to best return that cash to our investors, underscoring the commitment of both the board and management to increasing shareholder value." 

Second Quarter 2016 Results Summary

Revenues of $74.9 million for the three months ended September 30, 2015, which represent net pool revenues—related party, voyage charters and time charters earned by our VLGCs and our pressurized 5,000 cbm vessel, increased $54.6 million, or 268.1%, from $20.4 million for the three months ended September 30, 2014.

The increase is primarily attributable to $47.6 million of revenues contributed by eight of our newbuilding VLGCs that were delivered subsequent to September 30, 2014 along with an increase of $4.6 million of revenues related to a VLGC that was delivered at the end of September 2014.

An increase of $1.2 million from the three months ended September 30, 2014 to September 30, 2015 was due to an increase in VLGC rates and operating days for four VLGCs operating in both three month periods. The Grendon's revenues increased $1.0 million to $1.2 million on 88 operating days for the three months ended September 30, 2015 from $0.2 million on 14 operating days and 10 days in drydock for the three months ended September 30, 2014.

Voyage expenses were $3.5 million during the three months ended September 30, 2015, a decrease of $0.9 million, from $4.4 million for the three months ended September 30, 2014. This decrease was mainly attributable to a decrease in VLGC bunkers of $1.6 million resulting from lower bunker prices, partially offset by an increase in VLGC port expenses of $0.2 million and other voyage expenses of $0.2 million. The Grendon's voyage expenses increased $0.3 million to $0.6 million on 88 operating days for the three months ended September 30, 2015 from $0.3 million on 14 operating days and 10 days in drydock for the three months ended September 30, 2014.

Vessel operating expenses were $9.5 million during the three months ended September 30, 2015, or $8,663 per vessel per calendar day, which is calculated by dividing vessel operating expenses by calendar days for the relevant time period. This was an increase of $4.3 million from $5.2 million for the three months ended September 30, 2014. Vessel operating expenses per calendar day decreased $3,101 from $11,764 for the three months ended September 30, 2014 to $8,663 for the three months ended September 30, 2015. The gross increase was primarily the result of an increase in the number of vessels operating in our fleet during the three months ended September 30, 2015 compared to the three months ended September 30, 2014.

The decrease in vessel operating expenses per day of $3,101 is primarily attributable to lower costs per day related to additional crew on our expanded operating VLGC fleet in anticipation of newbuilding deliveries and the reduced operating cost of our ECO-design VLGCs compared to the 82,000 cbm VLGCs in our fleet. The Grendon's vessel operating expenses decreased $0.4 million to $0.6 million for the three months ended September 30, 2015 from $1.0 million for the three months ended September 30, 2014 due mainly to a decrease in repairs and maintenance of $0.3 million and spares of $0.1 million.

Depreciation and amortization was $8.3 million for the three months ended September 30, 2015, an increase of $5.3 million from $3.0 million for the three months ended September 30, 2014 that mainly relates to depreciation expense for our additional operating vessels.

General and administrative expenses were $5.3 million for the three months ended September 30, 2015, an increase of $1.0 million from $4.3 million for the three months ended September 30, 2014, mainly due to an increase of $1.0 million for certain non-capitalizable costs incurred prior to vessel delivery. General and administrative expenses for the three months ended September 30, 2015 were comprised of $2.2 million of salaries and benefits, $1.3 million for costs to prepare new vessels for operations, $0.9 million of stock-based compensation, and $0.9 million of other general and administrative expenses.

Interest and finance costs amounted to $0.9 million for the three months ended September 30, 2015, an increase of $0.9 million from less than $0.1 million for the three months ended September 30, 2014. The increase of $0.9 million during this period was mainly due to a $1.0 million increase in interest incurred on our long-term debt, amortization and other financing expenses from $0.8 million in the three months ended September 30, 2014 to $1.8 million in the three month period ended September 30, 2015. These increases were offset somewhat by a $0.1 million increase in capitalized interest from $0.8 million in the three months ended September 30, 2014 to $0.9 million in the three months ended September 30, 2015. The average indebtedness during the three months ended September 30, 2015 was $415.3 million compared to $125.8 million during the three months ended September 30, 2014. The outstanding balance of our long term debt as of September 30, 2015 was $528.3 million.

Gain/(loss) on derivatives, net, amounted to a net loss of approximately $6.3 million for three months ended September 30, 2015, compared to a net gain of $0.3 million for the three months ended September 30, 2014. The net loss on derivatives for the three months ended September 30, 2015 was comprised of an unrealized loss of $5.1 million from the changes in the fair value of the interest rate swaps primarily from new swaps entered into during the period, and a realized loss of $1.2 million. For the three months ended September 30, 2014, the net gain on derivatives was primarily comprised of an unrealized gain of $1.7 million from the changes in the fair value of the interest rate swaps, partially offset by a realized loss of $1.4 million.

During the quarter, we repaid $7.5 million of bank debt under our loan facilities and we finished the quarter with $80.3 million of unrestricted cash. As of September 30, 2015, we had $405.5 million of remaining payments due under our VLGC Newbuilding Program.