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Dec 31, 2021
Dorian LPG Q3 2022 Earnings Report
Dorian LPG's financial performance decreased compared to the same period last year, but the company returned capital to shareholders and authorized a new share repurchase program.
Key Takeaways
Dorian LPG Ltd. reported a decrease in revenues and net income for the three months ended December 31, 2021, compared to the same period in 2020. However, the company completed the refinancing of Constellation and Commander, repurchased Captain John NP, declared a cash dividend, repurchased Captain Nicholas ML, and authorized a $100 million stock repurchase program.
Revenues decreased to $68.6 million compared to $88.5 million in the same period last year.
Net income decreased to $16.6 million, or $0.41 earnings per diluted share, compared to $35.8 million, or $0.71 per diluted share, in the same period last year.
Adjusted net income decreased to $13.5 million, or $0.34 adjusted earnings per diluted share, compared to $35.3 million, or $0.70 per diluted share, in the same period last year.
The Board of Directors authorized the repurchase of up to $100.0 million of the company's common shares.
Dorian LPG
Dorian LPG
Forward Guidance
Dorian LPG anticipates increased PDH capacity and is optimistic about the market outlook for 2022. However, the VLGC orderbook stands at approximately 22% of the current global fleet, which could impact future market dynamics.
Positive Outlook
- Crude oil prices rose substantially at the start of the fourth calendar quarter of 2021.
- Propane demand for PDH plants in China rose from approximately 2.2 million tons in the third calendar quarter to 2.6 million tons in the fourth calendar quarter.
- More PDH capacity is expected to be added as we move into 2022.
- The Baltic VLGC index averaged approximately $59 per metric ton during the fourth calendar quarter of 2021, $17 per metric ton above the performance of the Baltic Index during the third calendar quarter of 2021.
- US exports in October 2021 remained at a similar level to September 2021 at 4.0 million tons.
Challenges Ahead
- Towards the end of the quarter however, the prices of crude oil, propane and butane all decreased.
- Naphtha prices remained firmer compared to propane resulting in the propane-naphtha spread in North-Western Europe turning negative in December.
- Imports into China, historically the largest importer, decreased throughout the fourth calendar quarter of 2021 declining from 2.15 million tons in August and September to approximately 2.05 million tons in October and November before falling further in December to 1.9 million tons.
- Currently the VLGC orderbook stands at approximately 22% of the current global fleet.
- An additional 70 VLGCs equivalent to roughly 6.2 million cbm of carrying capacity are expected to be added to the global fleet by calendar year 2024.