Dorian LPG Ltd. Announces Fourth Quarter and Full Fiscal Year 2018 Financial Results
STAMFORD, Conn., June 15, 2018 /PRNewswire/ -- Dorian LPG Ltd. (NYSE: LPG) (the "Company" or "Dorian LPG"), a leading owner and operator of modern very large gas carriers ("VLGCs"), today reported its financial results for the three months and fiscal year ended March 31, 2018.
Highlights for the Fourth Quarter and Fiscal Year Ended March 31, 2018
-- Revenues of $39.0 million and $159.3 million for the three months and
year ended March 31, 2018, respectively.
-- Daily Time Charter Equivalent ("TCE")((1) )rate for our fleet of $24,695
and $21,966 for the three months and year ended March 31, 2018,
respectively.
-- Net loss of $(3.5) million, or $(0.06) earnings/(loss) per basic and
diluted share ("EPS"), and adjusted net loss((1)) of $(9.8) million, or
$(0.18) adjusted diluted earnings/(loss) per share ("adjusted
EPS")((1)), for the three months ended March 31, 2018.
-- Net loss of $(20.4) million, or $(0.38) EPS, and adjusted net loss((1))
of $(32.9) million, or $(0.62) adjusted EPS((1)), for the year ended
March 31, 2018.
-- Adjusted EBITDA((1)) of $18.2 million and $74.5 million for the three
months and year ended March 31, 2018, respectively.
((1) )TCE, adjusted net income/(loss), adjusted EPS and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of revenues to TCE, net income/(loss) to adjusted net income/(loss), EPS to adjusted EPS and net income/(loss) to adjusted EBITDA included later in this press release.
Key Recent Developments
-- Entered into a memorandum of understanding with Hyundai Global Service
Co., Ltd. to research and conduct preliminary engineering studies on
ways to upgrade the main engines of up to 10 of our VLGCs to dual fuel
technology utilizing liquefied petroleum gas as fuel in anticipation of
the upcoming environmental regulations aimed at reducing sulphur
emissions.
-- Anticipate entering into new financing arrangements to repay all
outstanding amounts under the DNB Capital LLC bridge loan agreement
("2017 Bridge Loan") before the end of the quarter ending June 30, 2018.
There can be no assurances that such financing arrangements will be
completed, whether timely or at all.
John Hadjipateras, Chairman, President and Chief Executive Officer of the Company, commented, "Despite experiencing lower fleet utilization due to a weak LPG arbitrage environment in our fourth fiscal quarter, our VLGCs continue to earn a demonstrable premium. We believe this premium may become more pronounced following the implementation of new regulations to reduce sulphur emissions, and we are taking additional steps to optimize our fleet in advance of these regulations. We continue to strengthen our balance sheet without decreasing our exposure to a potential market recovery. In the near term, we remain cautiously optimistic about the outlook for the LPG tanker sector as industry fundamentals improve."
Fourth Quarter Fiscal Year 2018 Results Summary
Our net loss amounted to $(3.5) million, or $(0.06) per share, for the three months ended March 31, 2018, compared to net income of $2.0 million, or $0.04 per share, for the three months ended March 31, 2017.
Our adjusted net loss amounted to $(9.8) million, or $(0.18) per share for the three months ended March 31, 2018, compared to adjusted net income of $1.0 million, or $0.02 per share, for the three months ended March 31, 2017. We have adjusted our net income for the three months ended March 31, 2018 for unrealized gains on derivative instruments of $6.4 million. Please refer to the reconciliation of net income/(loss) to adjusted net income/(loss), which appears later in this press release.
The $10.8 million change in adjusted net income/(loss) for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 is primarily attributable to a reduction in revenues of $8.6 million, a $3.5 million increase in interest and finance costs, and a $0.9 million increase in general and administrative expenses, partially offset by a $0.9 million decrease in realized loss on derivatives, a $0.7 million decrease in vessel operating expenses, a $0.3 million decrease in voyage expenses, and a $0.2 million increase in interest income.
The TCE rate for our fleet was $24,695 for the three months ended March 31, 2018, a 0.1% increase from the $24,677 TCE rate from the same period in the prior year, reflecting continued subdued market conditions. Please see footnote 6 to the table in "--Financial Information" below for other information related to how we calculate TCE. Total fleet utilization (including the utilization of our vessels deployed in the Helios Pool) decreased from 96.3% in the quarter ended March 31, 2017 to 79.2% in the quarter ended March 31, 2018.
Vessel operating expenses per day decreased to $8,027 during the three months ended March 31, 2018 from $8,363 in the same period in the prior year. Please see "Vessel Operating Expenses" below for more information.
Revenues
Revenues of $39.0 million for the three months ended March 31, 2018, including net pool revenues--related party, voyage charters, time charters and other revenues earned by our vessels, decreased $8.6 million, or 18.0%, from $47.6 million for the three months ended March 31, 2017. The decrease is primarily attributable to relatively flat TCE rates coupled with a decrease in utilization from 96.3% for the three months ended March 31, 2017 to 79.2% for the three months ended March 31, 2018. The decline in utilization during the three months ended March 31, 2018 was driven by a weaker LPG arbitrage environment.
Voyage Expenses
Voyage expenses were $0.3 million during the three months ended March 31, 2018, a decrease of $0.3 million, or 43.3%, from $0.6 million for the three months ended March 31, 2017. Voyage expenses are all expenses unique to a particular voyage, including bunker fuel consumption, port expenses, canal fees, charter hire commissions, war risk insurance and security costs. Voyage expenses are typically paid by us under voyage charters and by the charterer under time charters, including our vessels chartered to the Helios Pool. Accordingly, we mainly incur voyage expenses for voyage charters or during repositioning voyages between time charters for which no cargo is available or traveling to or from drydocking. The decrease in voyage expenses for the three months ended March 31, 2018, when compared to the three months ended March 31, 2017, was mainly attributable to a reduction in bunker expenses.
Vessel Operating Expenses
Vessel operating expenses were $15.9 million during the three months ended March 31, 2018, or $8,027 per vessel per calendar day, which is calculated by dividing vessel operating expenses by calendar days for the relevant time period for the vessels that were in our fleet, a decrease of $0.7 million, or 4.0%, from $16.6 million, or $8,363 per vessel per calendar day, for the three months ended March 31, 2017. The decrease in vessel operating expenses was primarily the result of a reduction in crew related costs of $0.6 million, or $308 per vessel per calendar day, when comparing the three months ended March 31, 2018 with the three months ended March 31, 2017.
General and Administrative Expenses
General and administrative expenses were $6.7 million for the three months ended March 31, 2018, an increase of $0.9 million, or 16.4%, from $5.8 million for the three months ended March 31, 2017. The increase was mainly due to an increase of $0.5 million in salaries, wages and benefits and a $0.5 million financial advisory fee during the three months ended March 31, 2018 that we did not incur during the three months ended March 31, 2017. Other general and administrative expenses decreased $0.1 million during the three months ended March 31, 2018 as compared to the three months March 31, 2017.
Interest and Finance Costs
Interest and finance costs amounted to $10.9 million for the three months ended March 31, 2018, an increase of $3.5 million, or 46.4%, from $7.4 million for the three months ended March 31, 2017. The increase of $3.5 million during the three months ended March 31, 2018 was mainly due to (i) an increase of $2.0 million resulting from the accelerated amortization of deferred financing fees from the refinancings of the Concorde and Corvette, (ii) an increase of $1.3 million in interest incurred on our long-term debt, primarily resulting from an increase in LIBOR and the fixed interest rates of the $65.0 million sale and bareboat charter arrangement for the Corsair ("Corsair Japanese Financing"), $70.0 million sale and bareboat charter arrangement for the Concorde ("Concorde Japanese Financing") and $70.0 million sale and bareboat charter arrangement for the Corvette ("Corvette Japanese Financing") during the three months ended March 31, 2018 being higher than floating rates on our long-term debt during the three months ended March 31, 2017, partially offset by a decrease in average indebtedness, and (iii) an increase of $0.2 million in loan expenses. As of March 31, 2018, the outstanding balance of our long-term debt, excluding deferred financing fees, was $775.2 million.
Unrealized Gain on Derivatives
Unrealized gain on derivatives amounted to approximately $6.4 million for the three months ended March 31, 2018, compared to a gain of $1.0 million for the three months ended March 31, 2017. The $5.4 million increase is primarily attributable to changes in the fair value of our interest rate swaps due to changes in forward LIBOR yield curves along with reductions in notional amounts.
Realized Gain/(Loss) on Derivatives
Realized gain on derivatives amounted to approximately $0.1 million for the three months ended March 31, 2018, compared to a realized loss on derivatives of $0.8 million for the three months ended March 31, 2017. The $0.9 million change is primarily attributable to realized gains on interest rate swaps related to the $758 million debt financing facility that we entered into in March 2015 (the "2015 Debt Facility") caused by increases in floating LIBOR.
Fiscal Year 2018 Results Summary
Our net loss amounted to $(20.4) million, or $(0.38) per share, for the year ended March 31, 2018, compared to a net loss of $(1.4) million, or $(0.03) per share, for the year ended March 31, 2017.
Our adjusted net loss amounted to $(32.9) million, or $(0.62) per share, for the year ended March 31, 2018, compared to an adjusted net loss of $(28.9) million, or $(0.54) per share, for the year ended March 31, 2017. We have adjusted our net loss for the year ended March 31, 2018 for unrealized gains on derivative instruments of $8.4 million and gain on early extinguishment of debt of $4.1 million. We have adjusted our net loss for the year ended March 31, 2017 for unrealized losses on derivatives of $27.5 million. Please refer to the reconciliation of net income/(loss) to adjusted net income/(loss), which appears later in this press release.
The change of $4.0 million in adjusted net loss for the year ended March 31, 2018 compared to the year ended March 31, 2017 is primarily attributable to a reduction in revenues of $8.1 million, a $6.7 million increase in interest and finance costs, and a $4.5 million increase in general and administrative expenses, partially offset by a $12.5 million reduction in realized loss on derivatives, a $1.8 million decrease in vessel operating expenses, and a $0.8 million decrease in voyage expenses.
The TCE rate for our fleet was $21,966 for the year ended March 31, 2018, a 0.3% decrease from the $22,037 TCE rate from the prior year, reflecting continued subdued market conditions. Please see footnote 6 to the table in "--Financial Information" below for other information related to how we calculate TCE. Total fleet utilization (including the utilization of our vessels deployed in the Helios Pool) decreased from 93.6% in the year ended March 31, 2017 to 89.1% in the year ended March 31, 2018.
Vessel operating expenses per day decreased to $8,009 in the year ended March 31, 2018 from $8,233 in the prior year. Please see "Vessel Operating Expenses" below for more information.
Revenues
Revenues, which represent net pool revenues--related party, time charters, voyage charters and other revenues earned by our vessels, were $159.3 million for the year ended March 31, 2018, a decrease of $8.1 million, or 4.8%, from $167.4 million for the year ended March 31, 2017. TCE rates of $21,966 for the year ended March 31, 2018 were relatively flat when compared to $22,037 for the year ended March 31, 2017. During the year ended March 31, 2018, the board of the Helios Pool approved a reallocation of pool profits in accordance with the pool participation agreement. This reallocation resulted in a $260 increase in our fleet's overall TCE rates for the year ended March 31, 2018, due mainly to favorable speed and consumption performance of our VLGCs operating in the Helios Pool compared to other VLGCs operating in the Helios Pool. Excluding this reallocation, TCE rates declined $331 when comparing the year ended March 31, 2018 with the year ended March 31, 2017. Spot market rates were slightly higher when comparing the year ended March 31, 2018 with the year ended March 31, 2017. The Baltic Exchange Liquid Petroleum Gas Index, an index published daily by the Baltic Exchange for the spot market rate for the benchmark Ras Tanura-Chiba route (expressed as U.S. dollars per metric ton), averaged $27.455 during the year ended March 31, 2018 compared to an average of $26.243 for the year ended March 31, 2017. Increased bunker costs and other voyage expenses, which are deducted from gross revenues when calculating TCE rates, drove the decline in TCE rates (excluding the reallocation). This slight decline in TCE rates coupled with a reduction in utilization from 93.6% during the year ended March 31, 2017 to 89.1% during the year ended March 31, 2017 drove the reduction in revenues.
Voyage Expenses
Voyage expenses were $2.2 million during the year ended March 31, 2018, a decrease of $0.8 million, or 25.4%, from $3.0 million for the year ended March 31, 2017. Voyage expenses are all expenses unique to a particular voyage, including bunker fuel consumption, port expenses, canal fees, charter hire commissions, war risk insurance and security costs. Voyage expenses are typically paid by us under voyage charters and by the charterer under time charters, including our vessels chartered to the Helios Pool. Accordingly, we mainly incur voyage expenses for voyage charters or during repositioning voyages between time charters for which no cargo is available or traveling to or from drydocking. The decrease for the year ended March 31, 2018 when compared to the year ended March 31, 2017 was mainly attributable to a reduction in port charges and other related expenses and decreases in war risk insurance and security costs due to a reduction of transits in high-risk areas.
Vessel Operating Expenses
Vessel operating expenses were $64.3 million during the year ended March 31, 2018, or $8,009 per vessel per calendar day, which is calculated by dividing vessel operating expenses by calendar days for the relevant time period for the vessels that were in our fleet. This was a decrease of $1.8 million, or 2.7%, from $66.1 million, or $8,233 per vessel per calendar day, for the year ended March 31, 2017. The decrease in vessel operating expenses was primarily the result of a reduction in crew related costs of $0.9 million, or $115 per vessel per calendar day, when comparing the year ended March 31, 2018 with the year ended March 31, 2017, along with a $0.9 million, or $113 per vessel per calendar day, reduction in insurance costs.
General and Administrative Expenses
General and administrative expenses were $26.2 million for the year ended March 31, 2018, an increase of $4.5 million, or 20.5%, from $21.7 million for the year ended March 31, 2017. The increase was mainly due to an increase of $3.3 million in salaries, wages and benefits and an increase of $0.8 million in stock-based compensation. The increase in salaries, wages and benefits was primarily due to $2.3 million in cash bonuses to various employees that were approved by the Compensation Committee of our Board of Directors and expensed and paid during the year ended March 31, 2018. We had no significant expense for cash bonuses during the year ended March 31, 2017 since cash bonuses of $3.0 million to various employees paid during the year ended March 31, 2017 were approved by the Compensation Committee of our Board of Directors and expensed prior to the year ended March 31, 2017. Additionally, we incurred a $0.5 million financial advisory fee during the year ended March 31, 2018 that we did not incur during the year ended March 31, 2017. Other general and administrative expenses were comparable during the years ended March 31, 2018 and March 31, 2017.
Interest and Finance Costs
Interest and finance costs amounted to $35.7 million for the year ended March 31, 2018, an increase of $6.7 million from $29.0 million for the year ended March 31, 2017. The increase of $6.7 million during the year ended March 31, 2018 was mainly due to (i) an increase of $3.8 million resulting from the accelerated amortization of deferred financing fees from the refinancings of the Corsair, Concorde, and Corvette along with the amortization of the 2017 Bridge Loan deferred financing fees during the year ended March 31, 2018, (ii) an increase of $2.7 million in interest incurred on our long-term debt, primarily resulting from an increase in LIBOR and the fixed interest rates on the Corsair Japanese Financing, Concorde Japanese Financing and Corvette Japanese Financing during the year ended March 31, 2018 being higher than floating rates on our long-term debt during the year ended March 31, 2017, partially offset by a decrease in average indebtedness, and (iii) an increase of $0.2 million in loan expenses. Average indebtedness, excluding deferred financing fees, decreased from $810.4 million for the year ended March 31, 2017 to $754.1 million for the year ended March 31, 2018. As of March 31, 2018, the outstanding balance of our long-term debt, excluding deferred financing fees, was $775.2 million.
Unrealized Gain on Derivatives
Unrealized gain on derivatives amounted to approximately $8.4 million for the year ended March 31, 2018 compared to an unrealized gain of $27.5 million for the year ended March 31, 2017. The $19.1 million decrease was primarily attributable to changes in the fair value of our interest rate swaps caused by changes in forward LIBOR yield curves, reductions in notional amounts, and an $8.1 million unrealized gain as a result of the termination of interest rate swaps related to our since repaid loan facility with the Royal Bank of Scotland (the "RBS Loan Facility") during the year ended March 31, 2017 that did not recur during the year ended March 31, 2018.
Realized Loss on Derivatives
Realized loss on derivatives amounted to approximately $1.3 million for the year ended March 31, 2018, a decrease of $12.5 million, or 90.4%, from a realized loss of $13.8 million for the year ended March 31, 2017. The decrease is attributable to (i) the realized loss on interest rate swaps related to the termination of the RBS Loan Facility during the year ended March 31, 2017 that did not recur during the year ended March 31, 2018, (ii) the realized loss on interest rate swaps related to our since repaid RBS Loan Facility prior to their termination during the year ended March 31, 2017 that did not recur during the year ended March 31, 2018 and (iii) a decrease in realized loss on interest rate swaps related to the 2015 Debt Facility primarily resulting from increases in floating LIBOR.
Gain on early extinguishment of debt
Gain on early extinguishment of debt amounted to $4.1 million for the year ended March 31, 2018 and was attributable to the repayment of the RBS Loan Facility, net of deferred financing fees. There was no gain on early extinguishment of debt for the year ended March 31, 2017.
Fleet
The following table sets forth certain information regarding our fleet as of June 11, 2018. We classify vessel employment as either Time Charter, Pool or Pool-TCO.
Capacity Sister ECO Charter
(Cbm) Shipyard Ships Year Built Vessel(1) Employment Expiration(2)
---- -------- ----- ---------- -------- ---------- ------------
VLGCs
Captain Markos NL 82,000 Hyundai A 2006 - Time Charter(4) Q4 2019
Captain John NP(3) 82,000 Hyundai A 2007 - Pool-TCO(5) Q3 2018
Captain Nicholas ML 82,000 Hyundai A 2008 - Pool-TCO(5) Q2 2018
Comet 84,000 Hyundai B 2014 X Time Charter(6) Q3 2019
Corsair(3) 84,000 Hyundai B 2014 X Pool(7) -
Corvette(3) 84,000 Hyundai B 2015 X Pool(7) -
Cougar 84,000 Hyundai B 2015 X Pool(7) -
Concorde(3) 84,000 Hyundai B 2015 X Pool(7) -
Cobra 84,000 Hyundai B 2015 X Pool-TCO(5) Q3 2018
Continental 84,000 Hyundai B 2015 X Pool(7) -
Constitution 84,000 Hyundai B 2015 X Pool(7) -
Commodore 84,000 Hyundai B 2015 X Pool(7) -
Cresques 84,000 Daewoo C 2015 X Pool(7) -
Constellation 84,000 Hyundai B 2015 X Pool(7) -
Cheyenne 84,000 Hyundai B 2015 X Pool-TCO(5) Q2 2018
Clermont 84,000 Hyundai B 2015 X Pool(7) -
Cratis 84,000 Daewoo C 2015 X Pool(7) -
Chaparral 84,000 Hyundai B 2015 X Pool(7) -
Copernicus 84,000 Daewoo C 2015 X Pool(7) -
Commander 84,000 Hyundai B 2015 X Time Charter(8) Q4 2020
Challenger 84,000 Hyundai B 2015 X Pool(7) -
Caravelle 84,000 Hyundai B 2016 X Pool(7) -
------
Total 1,842,000
_______________________
(1) Represents vessels with very low revolutions per
minute, long?stroke, electronically controlled
engines, larger propellers, advanced hull design,
and low friction paint.
(2) Represents calendar year quarters.
(3) Operated pursuant to a bareboat chartering agreement.
(4) Currently on time charter with an oil major that
began in December 2014.
(5) "Pool-TCO" indicates that the vessel is operated in
the Helios Pool on a time charter out to a third
party and receives as charter hire a portion of the
net revenues of the pool calculated according to a
formula based on the vessel's pro rata performance
in the pool.
(6) Currently on a time charter with an oil major that
began in July 2014.
(7) "Pool" indicates that the vessel is operated in the
Helios Pool on voyage charters with third parties
and receives as charter hire a portion of the net
revenues of the pool calculated according to a
formula based on the vessel's pro rata performance
in the pool.
(8) Currently on a time charter with a major oil company
that began in November 2015.
Market Outlook Update
Growth in seaborne LPG volumes has extended from the beginning of 2018 to date. U.S. export volumes in 2018 have been hampered by poor arbitrage economics and a series of weather-related closures of the Houston ship channel, which constrained exports in February 2018. The year-on-year decrease in export supply from the U.S., however, has been offset by robust exports from the Middle East, which exported approximately 1.5 million metric tons of LPG in the first calendar quarter of 2018.
Further supply growth is anticipated in the second half of the year as incremental production in the U.S. reaches the export market. According to the U.S. Energy Information Administration, the U.S. averaged approximately 1.95 million barrels per day of LPG production in the first quarter of 2018 while total gas plant production in the U.S. is expected to grow by approximately 9% in 2018 versus the previous year. Additional LPG supply is also expected from Australia in the second half of the year as the Ichthys and Prelude LNG projects exit their respective commissioning phases.
Demand in the East continues to ramp up due to increased consumption from both the retail and petrochemical markets. Chinese imports totaled roughly 4.7 million metric tons in the first three months of 2018, 20% higher than in the same period last year, while imports into Japan were flat. India recorded import growth of approximately 4% in the first quarter while full year 2018 imports are conservatively estimated to grow by approximately 1 million metric tons as new infrastructure comes onstream. Further demand growth is also expected to emerge from Southeast Asian countries such as Indonesia and the Philippines.
In northwest Europe, the petrochemical market has driven increased demand for LPG in 2018 as cracking margins for LPG remain strong relative to naphtha. Propane's spread to naphtha has favored propane by $114 per metric ton in 2018 to date versus $45 per metric ton in 2017.
At the Panama Canal, LPG vessels remain frequent visitors at both the old and new locks with VLGCs traveling from the U.S. Gulf to the Far East boasting the highest transit numbers. The LPG segment represents around 25% of all traffic through the new locks.
The VLGC orderbook stands at 12.5% of the current fleet with another three ships scheduled for delivery this year. A further 30 VLGCs, equivalent to approximately 2.5 million cbm of carrying capacity, will be added to the fleet by year end 2020.
In 2018, there has been an increase in both the demolition and second-hand resale markets. Three VLGCs are reported to have been scrapped between January and April this year, partly reflective of higher scrap values. However, the global fleet has an average age of approximately nine years, and it is unlikely that scrapping levels will be sufficient to offset supply growth. In the sale and purchase market, five VLGCs have changed hands as buyers in Asia emerge with appetite for older tonnage.
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 LPG shipping market historically has been 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. Demand for our vessels therefore 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 and recent LPG shipping market activity has not yielded the expected seasonal results. To the extent any of our time charters expire during the typically weaker fiscal 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.
Financial Information
The following table presents our selected financial data and other information for the periods presented:
Three months ended Year ended
------------------ ----------
(in U.S. dollars, except fleet data) March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017
-------------- -------------- -------------- --------------
Statement of Operations Data
Revenues $39,034,678 $47,585,174 $159,334,760 $167,447,171
Expenses . .
Voyage expenses 312,170 550,691 2,213,773 2,965,978
Vessel operating expenses 15,892,536 16,558,807 64,312,644 66,108,062
Depreciation and amortization 16,105,764 16,113,304 65,329,951 65,057,487
General and administrative expenses 6,694,250 5,751,400 26,186,332 21,732,864
--------- --------- ---------- ----------
Total expenses 39,004,720 38,974,202 158,042,700 155,864,391
Other income-related parties 643,489 633,883 2,549,325 2,410,542
------- ------- --------- ---------
Operating income 673,447 9,244,855 3,841,385 13,993,322
Other income/(expenses)
Interest and finance costs (10,894,624) (7,441,354) (35,658,045) (28,971,942)
Interest income 292,571 56,350 440,059 137,556
Unrealized gain on derivatives 6,368,402 951,683 8,421,531 27,491,333
Realized gain/(loss) on derivatives 89,838 (816,761) (1,328,886) (13,797,478)
Gain on early extinguishment of debt - - 4,117,364 -
Foreign currency loss, net 4,371 (39,503) (234,094) (294,606)
----- ------- -------- --------
Total other income/(expenses), net (4,139,442) (7,289,585) (24,242,071) (15,435,137)
---------- ---------- ----------- -----------
Net income/(loss) $(3,465,995) $1,955,270 $(20,400,686) $(1,441,815)
----------- ---------- ------------ -----------
Earnings/(loss) per common share-basic (0.06) 0.04 (0.38) (0.03)
Earnings/(loss) per common share-diluted $(0.06) $0.04 $(0.38) $(0.03)
Other Financial Data
Adjusted EBITDA(1) $18,237,423 $26,521,977 $74,515,790 $83,279,670
Fleet Data
Calendar days(2) 1,980 1,980 8,030 8,030
Available days(3) 1,980 1,980 8,028 7,976
Operating days(4)(7) 1,568 1,906 7,153 7,464
Fleet utilization(5)(7) 79.2% 96.3% 89.1% 93.6%
Average Daily Results
Time charter equivalent rate(6)(7) $24,695 $24,677 $21,966 $22,037
Daily vessel operating expenses(8) $8,027 $8,363 $8,009 $8,233
As of As of
(in U.S. dollars) March 31, 2018 March 31, 2017
-------------- --------------
Balance Sheet Data
Cash and cash equivalents $103,505,676 $17,018,552
Restricted cash, non - current 25,862,704 50,874,146
Total assets 1,736,110,156 1,746,234,880
Total debt including current portion-net of deferred financing fees of $16.1 million and $20.1 million 759,103,152 749,964,248
as of March 31, 2018 and 2017, respectively.
Total liabilities 776,696,794 770,233,162
Total shareholders' equity $959,413,362 $976,001,718
____________________
(1) Adjusted EBITDA is an unaudited non-GAAP
financial measure and represents net income/
(loss) before interest and finance costs,
unrealized (gain)/loss on derivatives,
realized gain/(loss) on derivatives, gain
on early extinguishment of debt, stock-
based compensation expense, impairment, 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 of derivatives, interest and
finance costs, gain on early extinguishment
of debt, stock-based compensation expense,
impairment, 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/(loss)
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/(loss), operating
income, cash flow from operating activities
or any other measure of financial
performance presented in accordance with
GAAP. Adjusted EBITDA excludes some, but not
all, items that affect net income/(loss).
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/(loss) to Adjusted EBITDA (unaudited) for the periods presented:
Three months ended Year ended
------------------ ----------
(in U.S. dollars) March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017
-------------- -------------- -------------- --------------
Net income/(loss) $(3,465,995) $1,955,270 $(20,400,686) $(1,441,815)
Interest and finance costs 10,894,624 7,441,354 35,658,045 28,971,942
Unrealized gain on derivatives (6,368,402) (951,683) (8,421,531) (27,491,333)
Realized (gain)/loss on derivatives (89,838) 816,761 1,328,886 13,797,478
Gain on early extinguishment of debt - - (4,117,364) -
Stock-based compensation expense 1,161,270 1,146,971 5,138,489 4,385,911
Depreciation and amortization 16,105,764 16,113,304 65,329,951 65,057,487
---------- ---------- ---------- ----------
Adjusted EBITDA $18,237,423 $26,521,977 $74,515,790 $83,279,670
----------- ----------- ----------- -----------
(2) We define calendar days as the total
number of days in a period during which
each vessel in our fleet was
commercially managed. Calendar days are
an indicator of the size of the fleet
over a period and affect both the amount
of revenues and the amount of expenses
that are recorded during that period.
(3) We define available days as calendar days
less aggregate off hire days associated
with scheduled maintenance, which
include major repairs, drydockings,
vessel upgrades or special or
intermediate surveys. We use available
days to measure the aggregate number of
days in a period that our vessels should
be capable of generating revenues.
(4) We define operating days as available
days less the aggregate number of days
that the commercially-managed vessels
in our fleet are off?hire for any reason
other than scheduled maintenance. We use
operating days to measure the number of
days in a period that our operating
vessels are on hire (refer to 7 below).
(5) We calculate fleet utilization by
dividing the number of operating days
during a period by the number of
available days during that period. An
increase in non-scheduled off hire days
would reduce our operating days, and,
therefore, our fleet utilization. We use
fleet utilization to measure our ability
to efficiently find suitable employment
for our vessels.
(6) TCE rate is a non-GAAP 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, which may not be calculated the
same by other companies.
The following table sets forth a reconciliation of revenues to TCE rate (unaudited) for the periods presented:
Three months ended Year ended
------------------ ----------
(in U.S. dollars, except operating days) March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017
-------------- -------------- -------------- --------------
Numerator:
Revenues $39,034,678 $47,585,174 $159,334,760 $167,447,171
Voyage expenses (312,170) (550,691) (2,213,773) (2,965,978)
-------- -------- ---------- ----------
Time charter equivalent $38,722,508 $47,034,483 $157,120,987 $164,481,193
----------- ----------- ------------ ------------
Pool adjustment* - - (1,857,575) -
--- --- ---------- ---
Time charter equivalent excluding pool adjustment* $38,722,508 $47,034,483 $155,263,412 $164,481,193
----------- ----------- ------------ ------------
Denominator:
Operating days 1,568 1,906 7,153 7,464
----- ----- ----- -----
TCE rate:
Time charter equivalent rate $24,695 $24,677 $21,966 $22,037
------- ------- ------- -------
TCE rate excluding pool adjustment* $24,695 $24,677 $21,706 $22,037
------- ------- ------- -------
* TCE rate adjusted for the effect
of a reallocation of pool profits
in accordance with the pool
participation agreement due to
favorable speed and consumption
performance for our vessels
operating in the Helios Pool.
(7) We determine operating days for each
vessel based on the underlying
vessel employment, including our
vessels in the Helios Pool, or Our
Methodology. If we were to
calculate operating days for each
vessel within the Helios Pool as a
variable rate time charter, or
Alternate Methodology, our
operating days and fleet
utilization would be increased with
a corresponding reduction to our
TCE rate. Operating data using both
methodologies since the inception
of the Helios Pool is as follows:
Three months ended Year ended
------------------ ----------
March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017
-------------- -------------- -------------- --------------
Our Methodology:
Operating Days 1,934 1,941 5,585 5,558
Fleet Utilization 95.6% 98.4% 92.3% 92.7%
Time charter equivalent $22,833 $17,796 $21,199 $21,131
Alternate Methodology:
Operating Days 1,980 1,971 6,048 5,995
Fleet Utilization 97.9% 99.9% 100.0% 100.0%
Time charter equivalent $22,303 $17,525 $19,576 $19,591
We believe that our methodology
using the underlying vessel
employment provides more
meaningful insight into market
conditions and the performance
of our vessels.
(8) Daily vessel operating expenses
are calculated by dividing
vessel operating expenses by
calendar days for the relevant
time period.
In addition to the results of operations presented in accordance with GAAP, we provide adjusted net income/(loss) and adjusted EPS. We believe that adjusted net income/(loss) and adjusted EPS are useful to investors in understanding our underlying performance and business trends. Adjusted net income/(loss) and adjusted EPS are not a measurement of financial performance or liquidity under GAAP; therefore, these non-GAAP financial measures should not be considered as an alternative or substitute for GAAP. The following table reconciles net income/(loss) and EPS to adjusted net income/(loss) and adjusted EPS, respectively, for the periods presented:
Three months ended Year ended
------------------ ----------
(in U.S. dollars, except share data) March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017
-------------- -------------- -------------- --------------
Net income/(loss) $(3,465,995) $1,955,270 $(20,400,686) $(1,441,815)
Unrealized gain on derivatives (6,368,402) (951,683) (8,421,531) (27,491,333)
Gain on early extinguishment of debt - - (4,117,364) -
--- --- ---------- ---
Adjusted net loss $(9,834,397) $1,003,587 $(32,939,581) $(28,933,148)
----------- ---------- ------------ ------------
Earnings/(loss) per common share-diluted $(0.06) $0.04 $(0.38) $(0.03)
Unrealized gain on derivatives (0.12) (0.02) (0.16) (0.51)
Gain on early extinguishment of debt - - (0.08) -
--- --- ----- ---
Adjusted earnings/(loss) per common share-diluted $(0.18) $0.02 $(0.62) $(0.54)
------ ----- ------ ------
Conference Call
A conference call to discuss the results will be held today, June 15, 2018 at 10:00 a.m. ET. The conference call can be accessed live by dialing 1-877-407-9716, or for international callers, 1-201-493-6779, and request to be joined into the Dorian LPG call. A replay will be available at 1:00 p.m. ET the same day and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The pass code for the replay is 13680788. The replay will be available until June 22, 2018, at 11:59 p.m. ET.
A live webcast of the conference call will also be available under the investor relations section at www.dorianlpg.com.
About Dorian LPG Ltd.
Dorian LPG is a liquefied petroleum gas shipping company and a leading owner and operator of modern VLGCs. Dorian LPG's fleet currently consists of twenty-two modern VLGCs. Dorian LPG has offices in Stamford, Connecticut, USA, London, United Kingdom and Athens, 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," "will," "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 more information about risks and uncertainties associated with Dorian LPG's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of Dorian LPG's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. 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) 674-9900 or IR@dorianlpg.com
Source: Dorian LPG Ltd.
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SOURCE Dorian LPG Ltd.
