Dorian LPG Ltd.

Good morning and welcome to the Dorian LPG third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. Additionally, a live audio webcast of today's conference call is available on Dorian LPG's website, which is www.dorianlpg.com. I would now like to turn the conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.

Thank you, Raisa. Good morning, everyone, and thank you all for joining us for our third quarter 2026 results conference call. With me today are John Hajibateras, Chairman, President, and CEO of Dorian LPG Limited, John Lukouris, Head of Energy Transition, and Tim Hansen, Chief Commercial Officer. As a reminder, this conference call webcast and a replay of this call will be available through February 12, 2026. Many of our remarks today contain forward-looking statements based on current expectations. These statements may often be identified with words such as expect, anticipate, believe, or similar indications of future expectations. Although we believe that such forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors as well as general economic conditions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those we expressed today. Additionally, let me refer you to our unaudited results for the period ended December 31, 2025 that were filed this morning on Form 10-Q. In addition, please refer to our previous filings on Form 10-K where you'll find risk factors that could cause actual results to differ materially from those forward-looking statements. Finally, I would encourage you to refer to the investor highlight slides posted this morning on our website during our remarks. With that, I'll turn over the call to John Hadjibateris.

Thanks, Ted.

Good morning, and thank you for joining us. Before my colleagues provide you with detailed comments on our financial results, our market outlook, and our operational progress, I'd like to highlight the following. Our dividend declared last week of $0.70 per share, totaling $29.9 million, will be our 18th dividend payment, bringing total dividends distributed to over $725 million and total capital of $961 million returned to shareholders since our IPO. The VLGC market remained strong in the fourth calendar quarter, with spot earnings well above long-term mid-cycle despite some volatility. Indeed, as we speak, demand and freight rates continue to be strong. Last quarter, global liftings were up 3% year-over-year, measuring 36.8 million tons. The new record level of LPG exports highlights the attractiveness of LPG as an energy source for domestic, commercial, and industrial uses. Tim will elaborate on the VLGC market and our outlook. On the operational side, we completed 12 dry dockings this past year and have one more scheduled for this month, which will bring to completion the docking cycle for our fleet. After this last docking cycle, most of our ships will have been fitted with energy-saving devices and silicon paint, resulting in meaningful cost savings and emission reductions. We have a 93,000 cubic meter VLAC new building delivering in March from Hanwha in South Korea. John L. will give you more information on the progress made in our docking program, ammonia retrofits, and new building delivery, as well as the regulatory environment. Ted will now present our quarterly financial overview. Ted?

Thanks, John. My comments today will focus on our unaudited third quarter results, capital allocation, and our financial position and liquidity. For the discussion of our third quarter results, you may also find it useful to refer to the investor highlight slides posted this morning on our website. I'd also remind you that my remarks will include a number of terms such as TCE available days and adjusted EBITDA. Please refer to our filings for the definitions of these terms. Turning to our third quarter chartering results, we achieved a TCE per available day of 50,333. Charting results were strongest in October, followed by a small dip in November and into the first part of December. Tim will elaborate more on the current rate environment, which is substantially improved. As our entire spot trading program is conducted through the Helios pool, spot results are the best measure of our spot charting performance. For the December 31 quarter, the Helios pool earned a TC of $50,500 per day for its spot in COA voyages. On page four of our investor highlights material, you can see that we have three vessels on time charted within the pool, indicating spot exposure of about 90% for the 29 vessels in the Helios pool. We will provide forward booking information later in the quarter in order to make it more useful for the investment community. as the impact of rate volatility is best managed by providing information when more of the quarter is booked. Daily OPEX for the quarter was $9,558, excluding dry docking related expenses, which was more or less flat with the prior quarter. We are encouraged by the lower OPEX, excluding dry docking over the last two quarters. Our time charter in expense for the TCN vessels came in at $18.2 million. consistent with our guidance and equivalent to an average charter hire of about $33,000 per day, reflecting full quarter contributions from both the Crystal Listeria and the BW Tokyo. The Tokyo is jointly chartered in with MOL Energia and deployed into the Helios pool, and thus we account for 100% of the revenues and time charter expense on our P&L. The new line item, profit sharing expense on our income statements, reflects the 50% of the net chartering result that is due to our partner. For the March quarter, we estimate TCI expense continue to be in the $18 to $19 million range, again, for the quarter. Total G&A for the quarter was $10.8 million, and cash G&A, that's G&A excluding non-cash comp expense, was about $8.7 million. Included in that $8.7 million was about $2 million of quarterly expense under our cash incentive plan, thus our core G&A remained steady at roughly $6.7 million. Our reported adjusted EBITDA for the quarter was $74.2 million. Total cash interest expense for the quarter was $6.8 million. Our current debt cost is about 5%, which reflects the heavily hedged and fixed nature of our various pieces of debt. We closed the quarter on December 31, 2025, with $294.5 million of free cash which was up about 25 million from the prior quarter, which is a particularly good result as we paid the dividend and an installment on our new building during the quarter. As announced last week, we will pay 70 cents per share as an irregular dividend, or roughly $30 million in total, on or about February 24th, 26, to shareholders of record as of February 9th, 2026. With a debt balance at quarter end of $516 million, Our debt-to-total book capitalization stood at 32.2% and net debt-to-total cap at 13.8%. With an undrawn $50 million revolver and a $100 million accordion feature in our existing loan agreement, our strong free cash balance and one debt-free vessel, we feel well-capitalized for fleet growth and renewal or for whatever challenges might arise. We expect our cash cost per day for the coming year to be approximately $27,000 per day, excluding capital expenditures for dry docking and scrubbers. During the quarter, we completed three dry dockings and anticipate one dry docking for this quarter currently ending March 31. That will complete the dry docking program for our 2014 to 2016 built vessels. As John mentioned, we expect to take delivery of our new building, ammonia-capable VLGC, at the end of March 2026, and we expect to pay about $62 million in cash at closing. We expect to enter into a loan facility to finance that payment. The irregular dividend declared last week of $0.70 per share brings to $17.65 per share in irregular dividends that we have paid since September 2021. While many investors and analysts like to suggest that these dividends are no longer irregular, we underscore that they are indeed irregular and subject to the discretion of our board. VLGC rates are not regular, and thus we don't think our dividend policy should be either. Looking at our dividends in a more traditional context, our net income since June 30, 2021, that's the quarter immediately prior to our first irregular dividend, has been approximately $754 million, Well, including the dividend to be paid later this month, we will have returned approximately $725 million in dividends. In total, we have returned over $960 million in cash to our investors since their IPO. We will continue to maintain a steady balance between dividends, deleveraging, and fleet investment.

With that, I'll pass it over to Tim Hanson.

Thank you, Chet, and good day, everyone.

For the quarter ending December 31st, 2025, the global seabourn LBG trade increased again to a new quarterly record. It was reported to be more than 37 million tons for the first time. North American export contributed significantly, hitting a new quarterly export record of more than 18.5 million tons. The Middle East exports were the second highest quarterly export volume on record. The expanded seaborne trade witnessed over the quarter speaks to the attractiveness of LTG as a commodity, but the whole freight markets were challenged by external factors. The key external factors impacting the freight markets were lower than anticipated Saudi contract prices or Saudi CP for October and the retaliatory port service fees implemented in China. Starting with the lower than anticipated Saudi contract prices, It should be remembered that the Saudi CP influences the pricing of the Far East Index or FEI and therefore impacts product price economics. The Saudi CP for October was lowered to be price competitive against U.S. exports for a tender into India and to demonstrate some commercial flexibility on the part of Saudi Aramco. The price increase was unexpected because the Saudi CP is historically in contango throughout the fourth calendar quarter of any year, and Far East imports increase in anticipation of winter heating demand. The drop in the Saudi CP and Far East index created an uncertain trading environment for a few weeks and narrowed the arbitrage, slowing and weakening the freight markets. Amidst the slower freight market activity, The reciprocal port service fees were announced in China to impact the U.S.-related vessels on the 10th of October. The timing was key, as the announcement felt on a Friday before a three-day weekend, with implementation happening on the 14th of October to match the USTR Section 301 port service fees. The immediate impact was for vessels with cargo on board and en route to China, setting in motions to discussions and rerouting of some vessels as additional costs would be incurred, and there were ambiguous teeth as to the scope of the impacted vessels. The shock of sudden cost negativity impacted the market and had another knock-on effect on the wider Far East cargo market. by prompting owners with vessels scheduled to load in the Arabian Gulf and U.S. target cargoes not bound for China and price those aggressively. Normalcy returned to the market at the end of October when the U.S.-China summit in Busan found an agreement to suspend the port service fees for both countries until the 9th of November, 2026, and the market corrected upwards again. The third calendar quarter demonstrated VLDC's players to respond with agility when the USTR Section 301 port services was announced, and the fourth calendar quarter reaffirmed this. Once the backlog of unfixed vessels was cleared through November, the freight market improved through December to capture value from the west to east arbitrage that returns to normal levels. The quarter ending December 31, 2025 ultimately traded amidst a lower average Baltic index than the quarter prior, but found upwards momentum heading into 2026. For 2026, a total of roughly 36 VLTCs, including one of our own, will require absorption in the market. and geopolitical impacts in world markets seems likely, but the agility of the VLTC market and the fundamental attractiveness of LPG as a commodity support the belief that the risk can be mitigated and upside successfully captured.

With that, I will pass it over to Mr. John DeCourish.

Thank you, Tim.

At Dorian LPG, we are committed to continually enhancing energy efficiency and promoting the sustainability of both our operations and our vessels. We operate 16 scrubber fitted vessels and five dual fuel LPG vessels. Scrubbers neutralize sulfur oxides from fuel oil while reducing significantly particulate matter and black carbon emissions. For the third fiscal quarter of 2026, Vessel savings amounted to $1,116,000, or about $933 per calendar day, net of all scrubber operating expenses. Lower oil prices and a lack of geopolitical events led to lower bunker prices, which resulted in our lower savings for the scrubbers. Fuel differentials between high sulfur fuel oil and very low sulfur fuel oil, averaged $57 per metric ton, while the differential of LPG as fuel versus very low sulfur fuel oil stood at about $104 per metric ton, making LPG economically attractive for our dual-fuel vessels. During the last quarter, three vessels completed special survey and dry docking, including one upgraded for the carriage of ammonia cargos. With the completion of the special survey and dry dock of the last of our C-type vessels this month, we will have completed the entire dry docking cycle for our 2014-built, 2016-built vessels. Next month, we take delivery of the Hanwha Ocean 93,000 cubic meter new building, which is a VLGC and VLAC combined, which will join a Dorian LPG fleet. This LPG dual-fuel vessel is fitted with a hybrid scrubber and with alternative marine power. Annual efficiency ratio, or AER, is the metric which calculates the carbon intensity of our vessel's operations. The average Dorian LPG fleet AER for the full year 2025 was 6.24%, which is 10.4% better than the IMO required target for 2025 of 6.96%. In late 2025, the IMO's Marine Environmental Protection Committee met for a second extraordinary session. Member states decided to delay approving changes to the Marple Annex VI by one year. Despite this delay, Dorian remains fully committed to investing in fuel efficiency, improved performances, and decreased greenhouse gas emissions. We view the delayed IMO changes as a very positive step, allowing more time for input and review on many outstanding technical issues, capabilities, procedures, and implementation details. This also gives our industry time to prepare and adjust expectations. for realistic targets for the net zero framework guidelines and toward gradual development of alternative fuel. The MEPC84 session is scheduled to take place in the spring of 2026. We expect this session to focus on finalizing critical implementation guidelines that will give more clarity on the net zero framework and to consider additional proposals. We are confident that our company and fleet are well equipped and fully prepared to meet regulatory changes ahead. And now I would like to pass it over to John for his final comments.

Thanks, John.

And we'd love to open up for questions if anyone has joined us and like to, who's joined us would like to ask any questions. Operator, please.

At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. Once again, to ask a question, that is star 1. We'll take our first question from Omar Nocta with Clarkson Securities. Your line is open.

Thank you.

Hey, guys. Good morning. Thanks for the update. I do have a couple of questions. maybe one on the market, and then just wanted to get into Dorian specifically, but maybe broadly on the market. I know, Ted, you mentioned you'll wait a bit to give us guidance on how the quarters bookings are looking, but just in general, what we've seen here in the spot market, rates seem to be quite strong. They're at two-plus-year highs, and it's interesting in terms of you know, how this is happening and somewhat defying, you know, the typical seasonal norms. And so just wanted to ask from your perspective, you know, what's been driving this kind of counter seasonal strength? And then from that sense, what do you think that then means for how the year's going to look in general?

Thanks for that question. Is this Omar? I didn't catch the introduction.

Yep, it's Omar.

Omar, congratulations on your new position. I'm happy to have you back in the industry.

Thank you, sir. I appreciate that. Thank you.

Thank you. Tim, can you take that question, please?

Yeah. Yes, it's unusual that the first quarter actually goes stronger as we get into the quarter. But as I mentioned, the last quarter of 2025, there was a lot of uncertainties and people held back on the activity. So there was a little bit less cargoes lifted. There was some fog as well in the U.S. and so on. And once all the USTR was cleared, once the fog had lifted and everything, and people had gotten used to these Saudi pricing, the market came back. So I think it was a spur from that kind of lack of activity in November that has gone into first quarter also. And then the production levels have kept on increasing and surprising to the upside. So we have seen more cargoes and the US terminals have been able also to get these cargoes out of the terminals and onto the water. So we see that production continuing on the upside and hopefully continue to surprise on the upside compared to the levels advised from the US. So we do see the rest of the year should be strong and continue in this kind of activity.

So we're pretty positive for 2026. Okay, yeah, thank you. Very good.

And then just maybe a follow-up just in terms of how you've been deploying the fleet. You've obviously got a good amount of spot exposure via the pool. I did notice that one of the ships, I think the Chaparral maybe, has been put on a TC into 2027. Anything you're able to share on what that rate looks like? I know you tend to not give specifics, but anything you can give or perhaps maybe in relation to what that would be earning relative to the other ships on charter?

I let Tim again answer because I think probably we have a PNC clause, but Tim and Ted can also tell you what we can tell you, put it that way. Tim, do you want to start and then Ted can take over?

Yeah, as you mentioned, we don't give out the rates. It is reported in the market. It was a deal that was done back in October, November, and just going on charter this quarter for a little more than a year's charter. So on... We do our charm like more opportunistic when we see possibilities. Of course, the market has since then surprised us based on the upside of the spot market. But I think it's at levels compared to the earnings we do in the spot market over the last quarter.

But Ted, maybe this is a good time to say something about guidance.

Well, yeah, I think... picking up on that, the topic of guidance, like we said, Omar, we think it's probably more useful to give the overall forward bookings information later in the quarter, just because there's so much volatility in the business, in the sector, just as, as, uh, Tim alluded to. Uh, and so the, the information coming out later is going to be better. Um, you know, and I, and so I think that, you know, so we'll leave it in there, but I think, you know, Tim did a good job of giving you the overview, um, You know, I also think it's probably, you know, was reported, which I think is interesting, that it's business for Brazil, which I think is pretty exciting because of what it says about Brazil as a potential growth market.

Got it. Thank you.

Thanks. That's quite helpful. And then just a final one maybe for you, Ted, just on the new building that you're taking delivery of here in the next few weeks. Looks like, I think, from the filing, there's $62 million left to spend. You have $294 million of cash, so quite a bit of flexibility to do what you want. But do you have any specifics on how you plan to fund that vessel? Will you borrow or just pay cash?

Yeah, I alluded to it briefly in our remarks. We do plan to finance the rest of the payment and more detail will be forthcoming when we get there.

Okay. All right. Thank you. Thanks, guys.

And thanks, John. I'll pass it back.

Okay, thank you, Omar. Thank you very much for joining us. And everybody else, do we have any other questions, Raisa?

We do. Our next question comes from Climate Mullins with Value Investors Edge. Your line is open.

Hi, good morning, and thank you for taking my questions.

This is kind of a follow-up on Omar's first question. Despite rates being very solid, so far we haven't seen a significant increase in the average speed of the overall VLCC fleet. To what extent do you believe the fleet can speed up if rates remain solid? Older vessels are, let's say, capped by the environmental regulations, but to what extent could the echo portion of the fleet speed up?

That's another one for Tim, a very good question.

Yeah, there is a bit of leeway in speeding up still, but most of the non-LPG-fueled ships, so the equal type from the majority of the 2015, they are still capped by the by the environmental regulations and the reductions of power done years back. So there's maybe like a not or two more in it, not a half. And for the older ship, there's really nothing. So it's not a significant additional speed that we can do. You'll probably see when we come into the summer months, if the market is strong, we can go a bit slower. bit faster, but at the moment also we have seen quite a lot of bad weather here over the winter, so even if there we could go faster, it's hard to actually do it.

That's helpful. Thank you.

And as a follow-up, in your prepared remarks, you talked about the energy-saving devices you've installed on your vessels, resulting in meaningful savings. Could you talk a bit further on what kind of improvements that has resulted relative to previous consumption levels? And what kind of IRR are these investments generating? I know giving an exact figure may not be easy, but any color would be helpful.

Yeah, John will answer that. I think we've mentioned something specific, and he could give you as an illustration perhaps the payback on scrubbers. That should give you a bit of a color on the whole picture. John?

Yes. The energy-saving devices that we use and we mention – usually provide an improvement of around 5%. That's the ballpark figure for most of the energy-saving devices in most of the ships. And silicon panes also provide a similar kind of number, about 5% improvement in the energy savings. So the payback is generally pretty fast. It is generally within a year.

So I think that answers your question.

It does.

That, of course, does not apply to scrubbers specifically. The payback in scrubbers is a bit longer than that. But most of the other devices are low cost with those producing the 5%. at low cost, so that's why we have a quick payback.

Thank you, John.

Yeah, makes sense. Thank you, guys. I'll turn it over. Thank you for taking my questions.

Thank you.

It appears we have no further questions at this time. I'll turn the program back to the speakers for any additional or closing remarks.

Thank you all for joining us, and have a good summer.

This concludes today's program. Thank you for your participation, and you may disconnect at any time.